Updated: July 9, 2020
Central Mass. hospitals ran $95M in the red as pandemic was starting
Photo | Grant Welker
Clinton Hospital
By Grant Welker
Hospitals across Massachusetts showed significant financial losses in the first quarter of the year, capturing a time mostly before the coronavirus pandemic hit in full force, according to new state data released Thursday.
UMass Memorial Health Care in Worcester ran an $81-million deficit in the quarter ending March 31, a margin in the red of 6.1%, according to the Center for Health Information and Analysis. Heywood Healthcare, which runs Athol and Gardner hospitals and an affiliated medical group, had a deficit of $5.8 million, or 6.4%.
Among others in Central Massachusetts, Harrington HealthCare said it lost $3.9 million, with a large loss in its physician services unit offset by a gain of $2.2 million at Harrington Hospital. Milford Regional Medical Center said it ran at a slight operating profit, but its physician group ran in the red by $3.3 million.
Nashoba Valley Medical Center in Ayer ran a deficit of $1.5 million, or 10.4%. It was also one of three hospitals statewide to show a potentially troubling solvency risk: negative net assets in the quarter. Nashoba Valley's net assets were a negative $3.4 million.
Saint Vincent Hospital in Worcester and MetroWest Medical Center in Framingham and Natick, which are run by the Texas-based for-profit Tenet Healthcare, did not report financials.
Across Massachusetts, the median margin of financial loss at acute care hospitals was 2.7%, according to CHIA. Negative total margins were reported in 17 of the state's 21 hospital health systems, and all 21 reported a negative operating margin.
The data does not reflect federal aid given to hospitals to help through the pandemic but also doesn't include April, when cases across Massachusetts hit their peak. Hospital systems have warned of major financial losses as they've had to postpone many elective procedures and check-ups which generates much of their income.
“As we have witnessed over the last several months, COVID-19 has affected every facet of the commonwealth’s health care system,” Ray Campbell, CHIA's executive director, said in a statement. “This dataset presents early information on the financial toll the virus has taken on Massachusetts hospitals and CHIA looks forward to publishing additional COVID-related analysis in the coming weeks and months as more data becomes available.”
UMass Memorial Health Care President and CEO Eric Dickson committed in May to avoiding layoffs despite a significant budgetary hit the Worcester-based system has taken.
"While this decision to retain our caregivers did increase pressure on our financial health, we as a senior leadership team – with the endorsement of our board of trustees – felt that was the right thing to do," Dickson wrote in a staff memo.
UMass Memorial's federal financial aid was not nearly enough to cover costs related to the pandemic, Dickson said. UMass Memorial, though, is in a better position than many other safety-net hospitals, which tend to treat more patients on Medicaid, Medicare or without insurance, than others because of previous financial moves, he said.
Dickson said in late March a sale last summer of a pharmacy management joint venture has allowed UMass Memorial to weather the pandemic financially. The $208 million it brought in from that sale was planned to pay for equipment and facility upgrades, but the hospital network's investment committee hadn't met between the time of the sale and the pandemic hitting, leaving the money available for emergency use.
"That probably saved us $50 million or so," Dickson said in an online forum with UMass Memorial employees in March. "We can't go on forever in terms of our current condition, but we don't see any near-term problems," he added.
Hospitals and other healthcare centers in Central Massachusetts have received nearly $139 million in coronavirus-related funding, as the Worcester Business Journal reported in May.
In Worcester, UMass Memorial Medical Center received $52 million, and Saint Vincent Hospital got nearly $20 million, according to a review of federal health grants by the website COVID Stimulus Watch, a project of Good Jobs First, a group tracking federal business subsidies and tax incentives. All 26 Central Massachusetts healthcare grants were received in early to mid-May.
MetroWest Medical Center received nearly $19 million for its Framingham Union Hospital campus and another nearly $5 million for its Leonard Morse Hospital in Natick. Among other acute-care hospitals in Central Massachusetts, Milford Regional Medical Center and Clinton Hospital each received roughly $4 million.
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