Mercy Health Partners on Friday announced a combined $51.9 million loss in operations for 2000, after taking an unanticipated one-time cut of $40 million to account for lower-than-expected revenue.

        The red ink means employees can expect more staff and budget cuts, consumers could see more service changes, and the business community will be pressured to pay more for health benefits. These changes would occur over the next 18 months for Mercy, which already has eliminated more than 100 staff and executive jobs, seen its chief executive retire and announced plans to close its hospital in Hamilton.

        However, as part of an evolving turnaround effort, the Mercy group plans to aggressively expand services at its Fairfield hospital, including continuing plans to begin open-heart surgery services, said interim president and chief executive David Jimenez.

        “The fact is, we've joined the rest of the health-care organizations in the Cincinnati market” that also have lost millions in recent years, Mr. Jimenez said. “And that ought to awaken the people in this community to the reality of the Cincinnati market as it relates to health care. We are the lowest-paid market in Ohio and among the lowest in the United States.”

        Mercy Health System is one of the Tristate's biggest health-care organizations, along with the Health Alliance of Greater Cincinnati and TriHealth. Mercy runs six hospitals, six nursing homes, two fitness centers, three social-service agencies and a variety of satellite medical services.

        Last year, Mercy officials had predicted an operating loss exceeding $10 million, which they blamed largely on the costs of absorbing the purchase of its hospitals in Mount Airy and Western Hills. .

        After completing the final accounting for 2000, that loss was restated Friday at $11.9 million. In addition, Mercy revealed an additional $40 million in losses.

        Mercy's executives made “unrealistic” revenue projections, Mr. Jimenez said. They underestimated declines in revenue caused by managed-care contracts and lower government reimbursements under the Balanced Budget Act of 1997. They also had more bad debt (unpaid bills from uninsured people and others) than expected.

        For an organization that collects more than $800 million a year in total revenue, a $51.9 million loss amounts to about 6 percent of its budget.

        The Mercy group plans to eliminate its operating losses by making numerous changes over the next 12 to 18 months, Mr. Jimenez said.

        Unprofitable services will be reviewed. More jobs could be eliminated. Spending cuts will be pursued throughout the system.

        The health-care group also will seek better reimbursements from managed-care insurers and will continue to expand in Fairfield, even beyond adding open-heart services.

        “We're going to aggressively move forward in Fairfield with a full master campus plan over the next three to five years. Fairfield is just busting at the seams,” Mr. Jimenez said.

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