Mercy Medical Center: Income loss won't hurt care

yamaro@mercedsunstar.comNovember 13, 2012 

— Mercy Medical Center officials say the hospital remains committed to serving the community, despite its parent company, Dignity Health, seeing a huge loss in its net income in the last fiscal year.

Dignity Health posted a net income of $132.5 million at the end of 2012 fiscal year, compared to $917 million the previous fiscal year, according to financial documents.

At the same time, Dignity reported providing about $1.6 billion in community benefit in the areas it serves and in care to the poor. Mercy reportedly gave $26.5 million in community benefit.

Officials say Dignity Health, like other organizations, wasn't immune to the ripple effects of fluctuations in the volume of people seeking care, changes in how its paid and reimbursements, the poor economy and a weak investment market.

"The majority of the drop in income was a decrease in investment earnings which is directly related to poor performance in the stock market overall," said Michael Blaszyk, senior executive vice president and chief financial officer for Dignity Health.

Officials will have to change the way they operate to remain viable, he said.

"The economic turbulence we've seen has been impacting all areas of business, including health care. California has among the highest unemployment rates in the United States and Merced is among the highest in the state," Blaszyk said.

"We are committed to continuing our service, but we also need to change if we are going to remain successful in the future," he said.

With that in mind, officials are putting an emphasis on growth by diversifying services, enhancing existing programs, entering new service areas and increasing the number of commercially insured patients who chose Dignity Health for their care.

Officials at Mercy said they're not allowed to discuss the finances for the hospital. But Mercy, like all hospitals in the state, has seen a decline in the number of patient admissions this past year, according to Bob McLaughlin, hospital spokesman.

"However, in Merced, the patient volume in the ER has remained strong, showing a small increase over last year and the number of surgeries performed at Mercy in October was the highest for 2012," he said.

"We remain dedicated to our mission and will continue to work hard to serve the Merced community -- providing high quality health care services for everyone," McLaughlin stressed.

Memorial Hospital Los Banos, the only other hospital in the county, also saw a decrease in patients in recent years. The hospital last month laid-off 15½ full-time employees.

Staffing decisions for Dignity Health hospitals are made on a local level and are based on demand for services, according to Blaszyk.

McLaughlin said he can't predict what might happen with staffing in Merced.

Meanwhile, Dignity Health officials remain hopeful that with the improving economy, they'll see some increase in patient volume and improvement in reimbursements.

"The real work ahead is in preparing for the full implementation of the health care reform," Blaszyk said. "We are strong supporters of the (Affordable Care Act) because it will allow more people to carry insurance and will be an incentive for all of us to modernize the health care system."

Reporter Yesenia Amaro can be reached at (209) 385-2482 or yamaro@mercedsunstar.com.

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