CHIA: MetroWest Medical Center faces the most financial peril of Central Mass. hospitals

Photo | Grant Welker MetroWest Medical Center's Framingham Union Hospital

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MetroWest Medical Center in Framingham is in one of the most tenuous financial standings of all Central Massachusetts hospitals, according to a new report from the Center for Health Information & Analysis analyzing the financial stability of hospitals in the state.

The Massachusetts Acute Hospital & Health System Financial Performance report, released Sept. 19, details the financial metrics of 60 acute hospitals for fiscal 2019-2023.

The report comes in the same month Nashoba Valley Medical Center in Ayer was forced to close, after its Texas-based parent company, Steward Health Care, filed for bankruptcy and exited the state.

“As recent events illustrate, the financial health of Massachusetts hospitals and health systems has a direct impact on residents’ ability to access timely and quality care,” Lauren Peters, executive director of CHIA, said in a Thursday press release from the agency. “CHIA’s continued reporting promotes transparency and provides insights to stakeholders and policymakers monitoring the financial sustainability of hospitals serving communities across the Commonwealth.”

Unlike in previous years, CHIA incorporated additional liquidity and solvency measurements for health systems and hospitals into its HFY 2023 report, including current days cash on hand and debt service coverage ratio. While the performance of Central Massachusetts hospitals greatly varied in regards to these new metrics, MetroWest Medical Center in Framingham fell to the bottom of both rankings, including one in which it was the lowest ranking of all 60 acute hospitals analyzed.

CHIA defines the current days cash on hand metric as how long the hospital can operate without revenue and the strength of available cash relative to an entity’s operations. It defines a hospital’s debt service coverage ratio as the measurement of a hospital’s ability to cover current debt obligations with funds from both operating and non-operating activity; the higher the ratio, the better the hospital is able to meet its financing commitments.

Out of the 10 Central Massachusetts hospitals examined by CHIA, the region’s three hospitals with the most current days cash on hand were Milford Regional Medical Center with 38 days, UMass Memorial HealthAlliance-Clinton Hospital in Leominster with 27 days, and Athol Hospital with 13 days.

MetroWest Medical Center, Saint Vincent Hospital in Worcester, and the now-closed Nashoba Valley Medical Center in Ayer all had zero days cash on hand in fiscal year 2023.

The CHIA data comes after the Massachusetts Department of Public Health closed its investigation into Saint Vincent in March after receiving more than 600 complaints from the Massachusetts Nursing Association, the union representing the hospital’s nurses, citing union violations and concerns regarding staffing and quality of patient care. The complaints followed the longest nurses strike in the state’s history, lasting 301 days and ending in January 2022.

Tenet Healthcare, the Dallas-based parent company of Saint Vincent and MetroWest Medical Center did not return WBJ’s request for comment for this article.

When compared to all acute hospitals examined in the CHIA report, those in Central Massachusetts near neither the high nor low end of the number of days cash on hand, which were marked by Winchester Hospital with the most at 215 days and Cooley Dickinson Hospital in Northampton with the least at -44 days.

In regards to debt service coverage ratio, Marlborough Hospital had Central Massachusetts’ highest ratio of 25.4, followed by Southbridge-based UMass Memorial Harrington Hospital’s ratio of 18.3, with Saint Vincent Hospital having the third highest ratio of 14.5.

On the other end of the spectrum, the Central Massachusetts hospitals with the lowest debt service coverage ratios were MetroWest Medical Center with a -6.6 ratio followed by Gardner-based Heywood Hospital’s ratio of -2.7 and Worcester’s UMass Memorial Medical Center ratio of 0.8.

MetroWest Medical Center’s ratio was the lowest of the 60 Massachusetts acute hospitals examined by CHIA, while most of the region’s hospitals were part of the 45 of those hospitals with debt service coverage ratio of at least 1.0, which is the ratio showing the hospital’s average income would be just sufficient enough to cover current interest and principal payments on long-term debt.

The key financials for the 10 Central Massachusetts hospitals studied are below.

Athol Hospital:
- Current days cash on hand: 13
- Debt service coverage ratio: 9.8
- Fiscal 2023 operating margin: $1.0 million

Heywood Hospital:
- Current days cash on hand: 7
- Debt service coverage ratio: -2.7
- Fiscal 2023 operating margin: -$13.5 million

Milford Regional Medical Center:
- Current days cash on hand: 38
- Debt service coverage ratio: 1.8
- Fiscal 2023 operating margin: $500,000

Nashoba Valley Medical Center:
- Current days cash on hand: 0
- Debt service coverage ratio: 1.3
- Fiscal 2023 operating margin: $1.6 million

MetroWest Medical Center:
- Current days cash on hand: 0
- Debt service coverage ratio: -6.6
- Fiscal 2023 operating margin: -$16.4 million

Saint Vincent Hospital:
- Current days cash on hand: 0
- Debt service coverage ratio: 14.5
- Fiscal 2023 operating margin: $9.4 million

UMass Memorial HealthAlliance-Clinton Hospital:
- Current days cash on hand: 27
- Debt service coverage ratio: 9.7
- Fiscal 2023 operating margin: $7.6 million

UMass Memorial Marlborough Hospital:
- Current days cash on hand: 8
- Debt service coverage ratio: 25.4
- Fiscal 2023 operating margin: $7.1 million

UMass Memorial Harrington Hospital:
- Current days cash on hand: 2
- Debt service coverage ratio: 18.3
- Fiscal 2023 operating margin: $10.8 million

UMass Memorial Medical Center:
- Current days cash on hand: 12
- Debt service coverage ratio: 0.8
- Fiscal 2023 operating margin: -$68.9 million

Mica Kanner-Mascolo is a staff writer at Worcester Business Journal, who primarily covers the healthcare and diversity, equity, and inclusion industries.