Memorial Hospital lost $61 million in latest fiscal year. Is COVID solely to blame?

When asked to explain the causes of the layoffs and demotions of several top administrators at Memorial Hospital at Gulfport, CEO Kent Nicaud said the staff shake-up was meant to ease the financial hit Memorial suffered during the COVID-19 pandemic.

A Sun Herald review of the hospital’s recent audits provides a closer look at Memorial’s financial troubles.

Memorial has sustained increasingly large operating losses in each of the last three fiscal years, and a net loss of $61 million during its 2021 fiscal year (which began in October 2020).

In 2020, Memorial had a net gain of $16.7 million, but this was largely due to an infusement of $41 million in federal funding through the CARES Act, which dropped to just $1.8 million in 2021. The hospital sustained operating losses of $33 million in 2020 and $66.8 million in 2021.

The reports show that while the coronavirus was the primary contributor to the recent losses, the origins of Memorial’s financial woes partly predate the pandemic.

In 2019 and early 2020, Memorial purchased Stone County Hospital, three nursing homes, two surgery centers and a number of clinics. The expansion was responsible for the growth in both revenues and expenses, according to the management analysis section of Memorial’s 2020 report.

Nicaud stressed to the Sun Herald that the increased labor costs due to the pandemic have been felt at hospitals nationwide.

“Across the country there is a severe nursing shortage and the cost of bedside care ... is not what it was prior to COVID,” he said.

Nicaud is expected to provide more details on the hospital system’s financial situation at a press conference on Wednesday.

An email announcement of the event said the CEO would discuss “Memorial’s COVID-19 journey and recovery including expenses, loan payments, bond ratings, administrative structure and more.”

(A previous version of this story contained incorrect information. The story was updated on the morning of April 28.)

This story was originally published April 26, 2022 at 4:21 PM.