Despite pandemic, UMass Memorial sees patient revenue rise to $2.4B

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

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By Grant Welker

It's been about as challenging a year as a hospital could face: a pandemic requiring an all-out emergency response and pushing aside day-to-day procedures and appointments that normally help make ends meet.

But for UMass Memorial Health Care, the 2020 fiscal year improbably has ended with more revenue from patient services than the year prior, the Worcester-based system reported Tuesday. Patient revenue, at more than $2.4 billion, was up 1.6% in the 12 months ending in September.

That revenue, along with $178 million in CARES Act funding, was enough to give UMass Memorial an operational surplus for the year of $15 million, a margin of 0.5%. That breaks a two-year streak of operational losses.

"We will use this surplus to invest in our people, our patients, our facilities and our communities through our anchor mission program," President and CEO Dr. Eric Dickson and CFO Sergio Melgar said in a statement.

Non-operating expenses including a rise in pension obligations, however, carried the hospital system into the red. UMass Memorial finished with a $23-million deficit. That one-year pension cost will not be recurring, Melgar said, but was instead a maneuver called de-risking, in which the hospital assumes up-front costs but reaps savings in the long term.

UMass Memorial was able to keep patient revenue so high despite the pandemic in large part because it got off to such a great start to the fiscal year last fall, Melgar said. Through February, five months into the fiscal year, the hospital system was up $90 million over the previous year, he said. In a snap once the coronavirus pandemic hit, patient revenue fell by roughly $200 million.

CARES Act funding made up most of that shortfall, and the hospital system — which includes UMass Memorial Medical Center in Worcester, Marlborough Hospital, HealthAlliance and Clinton Hospital — was able to quickly restart many procedures and appointments over the summer when virus case numbers were far lower.

"We regained that momentum that we had earlier in the year," Melgar said in an interview.