Federal relief funds inadequate to cover losses, hospital CEO says

Federal COVID-19 relief funds did not come close to covering Memorial Hospital at Gulfport’s increased costs during the pandemic, resulting in a net loss for the year, the hospital’s CEO told employees at a press conference Wednesday.

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

Memorial CEO Kent Nicaud said the $47.6 million in COVID-19 relief provided through the CARES Act was woefully insufficient to address the hospital’s loss attributed to COVID-19 of $134.2 million through February 2022.

He said Memorial hopes to receive further assistance from FEMA, but that even if Memorial receives the full amount of relief available, the hospital will still be $56 million short of a balanced budget.

Nicaud spoke for around half an hour to an audience of hospital staff and media in the atrium of Memorial’s Medical Office Building and did not take questions. His appearance followed a Sun Herald story this week on the hospital’s finances.

He began on a somber note, acknowledging the active shooter situation then ongoing in Gulfport.

Nicaud thanked the assembled hospital staff for their endurance through the tribulations of the pandemic, and noted that many had lost loved ones, including his own mother, who died of COVID-19.

Nicaud said the blame for the hospital’s losses did not rest on Memorial’s recent expansion, which included the purchase of Stone County Hospital and a number of other facilities in 2019 and early 2020.

He said the first quarter of 2020, immediately prior to the outbreak of COVID, was the strongest in Memorial’s financial history.

Citing reports from the ratings agencies Moody’s and Fitch, Nicaud said the costs of COVID-19 were largely due to rising labor and supply costs felt nationwide during the pandemic, and the hospital’s decision to prioritize patient care.

“We are a health system; we are not a business model. Patients come first,” said Nicaud.

“It was a daily struggle even at these increased costs to find workers,” Nicaud said. He noted that, while many hospitals saw heavy increases in their nurse-to-patient ratios during the pandemic, Memorial’s increased from 4:1 to just 5:1.

On April 13, credit rating agency Moody’s affirmed Memorial’s prior bond rating of Baa2, but revised its outlook (an assessment of likely future changes in the credit rating) from stable to negative, citing the risk that high labor costs will decline slower than predicted.

As the press conference came to a close, the audience rose to give Nicaud a standing ovation.

“OK,” said the CEO. “Let’s go back to work.”

This story was originally published April 28, 2022 at 7:10 AM.