Memorial is holding on in recession

Belt-tightening at Memorial Health System in recent months has meant fewer hours for employees and the loss of about 200 jobs through attrition, but such efforts have helped it weather the recession without layoffs or more drastic measures.

Memorial, like other hospitals nationally, has had fewer patients and more unpaid bills, and its investment portfolio is in sharp decline. But aggressive tactics to slash expenses and squeeze out revenue have made its bottom line surprisingly healthy in such hard times.

The city-owned hospital system earned more than $6 million in profit in December, said Chief Financial Officer Mike Scialdone, and it broke even in January. December was the first time the hospital system made money since May, when it netted $1.1 million.

With Memorial's investments continuing to slide, February is not expected to end in the black, but Scialdone said the system should be able to deal with the loss with the same tactics it has used so far.

That's different from what's happened with the city of Colorado Springs and El Paso County, which have laid off dozens of people and are slashing core programs.

Penrose-St. Francis Health Services, the city's other hospital system, has also avoided layoffs and has scaled back hours, and it recently closed the 10th floor of Penrose Hospital to save money.

For the past several months employees at Memorial Central, Memorial Hospital for Children, and Memorial North have had their schedules set partly based on how many patients they've had to care for. That's meant fewer hours for some nurses and other staff members who work in departments where patients are in short supply. At the same time, only 40 of the 240 employees who have left the hospital since November have been replaced.

Although that's meant smaller paychecks and heavier workloads for Memorial's workers, those measures contributed to the hospital coming in $5 million under budget for its operating expenses in December, perhaps the largest contributor to its $6.1 million in revenue. In January, expenses were $4.3 million under budget. Although the hospital made just $48,000 in January, Scialdone considers it a good month compared to what might have otherwise been a few million in the red.

Scialdone said the hospital is also being more aggressive with insurance companies to get them to pay on time and at proper reimbursements.