Despite pandemic, UMass Memorial reported $9.6M quarterly operating profit

Photo | Grant Welker UMass Memorial Medical Center's Memorial Campus in Worcester

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By Grant Welker

UMass Memorial Health Care was not alone in having to marshal all of its resources to fight the coronavirus pandemic in the spring and to delay revenue-generating procedures until the worst of the outbreak had passed.

The Worcester-based health system, however, didn't have as bleak of a financial quarter as could have been expected. In fact, it turned a $9.6-million operating profit in the three months ending June 30, according to financial documents released last week.

It's a sharp turnaround from the early spring, when Michael Gustafson, the president of UMass Memorial Medical Center in Worcester, predicted what he called by far the worst financial year in the history of the health system. That included a $40-million to $45-million loss in April and a $25-million loss in March, he said in a Worcester Business Journal online forum in May.

UMass Memorial Medical Center, the largest of the system's hospitals, ran an $81-million deficit in the quarter ending March 31, according to numbers released in July by the state.

It took a pledge that month from Eric Dickson, the system's president and CEO, to not lay off or furlough any workers to calm the nerves of those working at the largest employer in Central Massachusetts.

Revenue didn't take as much of a continued hit as those earlier numbers would have suggested. Patient service revenue totaled $557 million in the quarter, helping the company to a $9.6-million operating profit. With significant gains on investments added, UMass Memorial ran a $54-million profit in the quarter.

The system actually ran a larger profit in the last three months ending in June than it did the last nine months combined — or even the same nine-month period a year prior. Three-quarters of the way through the fiscal year, UMass Memorial was running $17.5 million in the red in operating losses.

UMass Memorial, like other health systems, has been boosted heavily by federal CARES Act aid. For UMass Memorial, that includes $129 million in grants and $185 million in loans, according to the website COVID Stimulus Watch, a project of Good Jobs First, a group tracking federal business subsidies and tax incentives. State funding has also helped. The system received a $49-million increase in Medicaid supplemental funding from the Massachusetts Executive Office of Health and Human Services.

UMass Memorial also reported receiving a $228-million advance on Medicare funding in April.

UMass Memorial has been working since the peak of the pandemic passed to bring patients back for procedures and routine check-ups postponed during the spring, which is likely to be helping bring revenue back into the system. The system's newly released financials show how far numbers fell: in the last nine months ending in June, the system saw a 30% decline in surgeries, a nearly 9% drop in patient discharges and a nearly 16% drop in emergency room visits.

Throughout the pandemic, UMass Memorial has reported caring for more than 4,500 confirmed coronavirus patients and has discharged nearly 1,600 who received inpatient care. Roughly 250 beds were dedicated to coronavirus care, including many converted from other intensive-care use. It also oversaw a temporary field hospital at the DCU Center in Worcester that operated until mid-May.