Mercy Health System said it will start furloughing employees next week, eliminate positions and make other cost-cutting moves as a result of the upheaval brought by COVID-19.
Mercy, which has hospitals in Berryville, Fort Smith and Rogers, will furlough workers as needed through the end of July across its four-state service area, according to a statement to Arkansas Business. Mercy of Chesterfield, Missouri, also will eliminate "positions at every level of the organization, impacting every department and every community we serve."
Mercy also has dozens of clinics in northwest Arkansas, and locations in Missouri, Oklahoma and Kansas.
Mercy said it couldn’t say how many employees would be impacted "as we are still working to keep as many co-workers employed as possible."
In addition, all managers will receive up to 26% drop in pay compared to last year, with the most significant cuts coming at the senior level. Employees also won’t have contributions made to their retirement accounts this year. And annual merit raises for employees also might be delayed.
"No one will be hired into open positions for the foreseeable future without approval of Mercy’s senior leadership," Mercy said.
Mercy is the latest hospital system to announce layoffs caused by the global pandemic as patients stayed away from hospitals while expenses climbed. Gov. Asa Hutchinson, asked about the Mercy furloughs during his daily press briefing Friday, said the move is another example of a lack of revenue-generating work at Arkansas hospitals amid the pandemic.
"And so that is a very difficult circumstance that we hope can be remedied very quickly because, as the elective surgeries are increasing, we would hope that these health care workers would be brought back into work very quickly, and that the demand is there that they will be able to return to work," he said. "And we'll be doing more business as usual in the coming weeks, so hopefully any layoffs will be very short term in length."
The Arkansas Hospital Association said in an April 30 report that all hospitals have reported substantial reductions in patient volumes starting in late March.
In April, hospitals reported outpatient and emergency department visits dropped by 35% and 47%, respectively, compared to April 2019. The declines came as patients stayed away from hospitals amid the pandemic, and Arkansas instituted a temporary ban on electric procedures. The state began lifting the ban on April 22.
The patient declines cost Arkansas hospitals an estimated $271 million in March and April, the report said.