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MeritCare Reduces Work Force

Today, MeritCare announced a major realignment and reduction in its work force in response to its financial situation. The health system reduced its work force by approximately 90 associates. In addition to those associates, approximately 90 associates will have their hours reduced and an additional 120 positions have either been vacant and will be eliminated or they are pending resignations. The combination of these work force changes is 300 positions and equals approximately $9.2 in salaries and benefits. MeritCare had 7,588 associates; it now has 7,498. The reduction represents 1.2 percent of MeritCare's work force. Displaced staff have been invited to apply for the 135 positions that are currently open, and they are being provided with severance and outplacement services. (Of these positions, 38 are registered nurse positions and 11 are licensed practical nurses.)

Today, MeritCare announced a major realignment and reduction in its work force in response to its financial situation. The health system reduced its work force by approximately 90 associates. In addition to those associates, approximately 90 associates will have their hours reduced and an additional 120 positions have either been vacant and will be eliminated or they are pending resignations. The combination of these work force changes is 300 positions and equals approximately $9.2 million in salaries and benefits. MeritCare had 7,588 associates; it now has 7,498. The reduction represents 1.2 percent of MeritCare's work force. Displaced staff have been invited to apply for the 135 positions that are currently open, and they are being provided with severance and outplacement services. (Of these positions, 38 are registered nurse positions and 11 are licensed practical nurses.)

"It is with great sadness and concern for our employees that we are making this reduction in our work force," said Dr. Roger Gilbertson, president and CEO. "MeritCare has been through a number of tough times over its 100-year history and has always emerged a stronger organization."

The changes will reduce operational costs and will have no impact on patient care. "Patient care remains what is most important at MeritCare," said Gilbertson. "Reassessing our operating structure and realigning the way we work will allow us to shift resources to patient care."

MeritCare's challenges are the same as those faced by other health systems in the U.S., but it does have some challenges that are unique to North Dakota and the region. MeritCare talked about its financial challenges in early May and did not foresee a reduction in work force at that time. Since then, there have been changes in its external and internal environments. The changes externally include: as a hospital in North Dakota, MeritCare is reimbursed by government payors at a much lower rate than other hospitals across the nation for the same procedures. There is also a 17 percent differential between what BCBS of North Dakota pays the health system compared to what BCBS of Minnesota pays for the same service.

Internally, MeritCare has experienced an 8-9 percent growth in patient volumes, but its work force costs have still outpaced that rate of its growth. The scope of the corrections that are needed, as well as the pace of the changes that need to be made, are greater than the organization originally anticipated.

In addition, the costs of providing services are up; the amount of money earned by investments is down; and the added cost of caring for patients who are uninsured and underinsured continues to increase.

Reducing its work force to bring costs back into balance is part of the immediate solution. MeritCare is also implementing longer-term solutions including improved access to services, improved efficiency of work processes, better alignment of management systems to achieve measurable results and rigorous improvement of care and service.

Additional information:
  • MeritCare is actively recruiting doctors, nurses and other positions in patient care areas.
  • MeritCare has 18 regional clinics and one regional hospital in Minnesota; eight regional clinics in North Dakota; and 17 locations in Fargo/Moorhead/West Fargo.
  • MeritCare will close its clinic in LaMoure, N.D., effective June 30, 2008.
  • MeritCare clinics in Twin Valley and Ulen, Minn., will remain open, but they will be open less days.
  • Earlier this year, two MeritCare clinic locations in Thief River Falls, Minn., consolidated as did two MeritCare clinics in East Grand Forks, N.D.
  • No decisions have been made yet re: consolidating or closing any clinics in Fargo-Moorhead, or any other clinics in the region at this time.