Health system had no layoffs despite drop in revenue
Memorial Hospital has weathered the COVID storm to date, but not without significant heartburn.
In early March, Memorial Health leaders would have spoken glowingly about 2020. The organization was having a great year, with strong volumes ahead of projections and continuing on its growth trajectory. The new Memorial 2020 facilities were scheduled to open later in the year and Epic, an electronic medical record that would unite all systems across the hospital and physician practices, would be launching.
Epic is now scheduled to launch later this month, a few months later than intended due to the COVID response, and next month both the inpatient and outpatient pavilions of the Memorial 2020 project will open.
The financial picture, though, hit a significant bump with COVID. Around the country hospitals were significantly affected by the government’s decision to halt the majority of elective surgeries and other services, coupled with widespread stay-at-home orders. Like many industries, patient/customer volumes were abruptly turned off.
“These decisions were warranted in light of the pandemic and the associated unknowns related to its progression,” said Chip Hubbs, Memorial Health CEO/President. “But all hospitals took a major hit and it caused us all to scramble on next steps. As in many other industries, some hospitals will never be able to recover, but I am happy to report that Memorial will. And that is good for our team members, as well as this region we serve.”
While many hospitals around the state and country furloughed or laid off employees, Memorial took a different path. Instead of layoffs, the system asked employees to pitch in and share in duties, which they were not necessarily hired.
“Our now 1,000 plus employees have been the backbone of our success and our amazing growth in the region,” Hubbs said. “We knew that we would need every single one of them when volumes started to increase again.”
The athletic trainers, who didn’t have school teams to support, instead took their turns at screening tables at Memorial Health facility entrances. With fewer surgeries to perform, surgery team staff cross-trained to care for patients in the event of a surge.
“Our team has stepped up in these months to carry us forward. As long as they are willing to be responsive team members, we want to protect their jobs,” Hubbs said.
While the regional health system has not reduced its workforce, corrections on costs had to come from somewhere. Tactics like a hiring freeze, the delay of some capital expenditures, voluntary use of “absent by consent” time by employees without enough work, and general expense reduction have all been part of the formula in weathering the storm.
“We just wrapped up August financials,” Memorial Health CFO, Jeff Ehlers said. “Last month we were at 97% of budgeted gross revenues. If you go back to March when we started seeing the effects of the COVID retraction, we sat at 87% of revenues compared to target; April was 55%; and May 72%. June was 96% and July 103%, but much of that jump seems to be related to deferred healthcare needs that needed to be taken care of.”
One of the concerns of local health officials is that people are avoiding getting the care they need.
“In many cases, waiting is not a good option,” Victor Trianfo, DO, Chief Medical Officer for Memorial Health said. “Delaying screenings like mammograms and colonoscopies, or ignoring that dull pain, can result in the progression of disease and expense of intervention. I hate to see people suffer more either emotionally, physically, or financially out of fear.”
Relative to that fear, encouraging people to engage their healthcare providers, whether associated with Memorial or not, was crucial.
“We have thoroughly and thoughtfully put steps in place to protect our patients and staff from exposure,” Trianfo said. “Many industries are invested in doing this right, and I would submit that Memorial may lead the pack because it is what we do every day.”
At no point during the ongoing pandemic has Memorial been overrun with COVID patients requiring treatment that necessitated hospitalization. The system developed a surge plan and in the early months was ready for a flood of patients, but thankfully, that never came. Leaders give much of the credit to the individuals in communities they serve for “being smart” about reducing the chances of spread.
“We’ve had patients requiring our care for a myriad of symptoms related to COVID both during their infection and in the days and months after due to the lingering effects,” Trianfo said. “But to this point, it has only been a patient here and there, never an abundance that tested our limits. We were ready, but I’m glad it has proven to be an exercise and I hope it stays that way.”
Looking ahead is what Ehlers is focusing his attention on now as CFO. Memorial Health’s fiscal year follows the calendar year so it is budget time.
“So far, September is trending close to our target so we are hopeful to see a more normalized remainder of the year. That will also help us feel more confident about the development of our 2021 budget.” Ehlers said.
The CFO noted that many unknowns related to COVID, the economy, employment growth, and the election cycle, make projections difficult.
One element that the system can plan for in the near future is the opening of the new inpatient and outpatient facilities on the main campus.
“These spaces are extraordinary,” Hubbs said. “We’ve long said that our older facilities didn’t match the level of technology and care provided by our team. We are now fixing that concern and we look forward to proving it to thousands of patients each week starting later next month.”