Memorial Maintains Strong Financial Position

Memorial Healthcare System ended fiscal year 2020 (May 1, 2019 through April 30, 2020) in a strong financial position. We remain one of a few comparable public healthcare systems with Aa3/AA or higher bond ratings by Moody’s and Standard & Poor’s, respectively. These achievements are the result of many factors, including strong cash flow from business operations, a strong balance sheet and key strategies to develop specialized services to attract patients from the primary market and beyond.

This solid financial base allows Memorial to help shoulder the financial burden of providing a high level of uncompensated care. It also enables the development and support of leading-edge facilities and services, recruitment of outstanding employees and the ability to uphold its mission as the safety-net healthcare provider in south Broward County.

Memorial’s financial strength also enabled its Board of Commissioners to continue its multiyear history of providing tax relief to the taxpayers in south Broward County. In September 2019, the Board of Commissioners voted to adopt a millage rate of 0.1260 for fiscal year 2020 — the lowest in Memorial’s history.

The millage rate for fiscal year 2020 resulted in a gross levy of $7.8 million and, after accounting for discounts on taxes paid early and uncollectible taxes, generated approximately $7.5 million in taxes paid by district residents. Memorial used the funds to pay the required matching funds for the Medicaid program, support community redevelopment agencies in several municipalities, and pay for property appraiser fees and revenue collection fees.

In fiscal year 2020, uncompensated care provided by Memorial reached approximately $1.388 billion, which was covered by operations.

Memorial has maintained a strong financial position that is exceptional in any healthcare sector — public, nonprofit or for-profit. This success allows Memorial Healthcare System to contribute more to the community, thereby creating a healthier community.

millage rate
Lowest in Memorial's History

Value Improvement Beats Its Goal

Starting in July 2018, Memorial’s Value Improvement Program (VIP) engaged more than 90 teams from across the healthcare system – clinicians, department leaders, finance staff, just to name a few – to work together to identify new opportunities for Memorial to reduce costs while still providing its nationally recognized brand of high-quality, patient- and family-centered care.

The goal: Find $120 million in cost savings or revenue enhancements by July 2020. (For example, in cases in which a least-expensive medical product is the safest, VIP ensures that Memorial purchases that. In cases in which a more-expensive product is the safest, VIP requires Memorial to renegotiate with the supplier.)

At the end of its first year, VIP accomplished its goal – and then some. The teams identified $93 million in savings, with an additional $30 million scheduled to come to fruition – putting the initiative just over its original $120 million objective.

“I could not be more thrilled with the success we’ve had,” said David Smith, Senior Vice President and Chief Financial Officer. “Finding and implementing these cost-saving opportunities means that Memorial has provided itself an additional four years of profitability – an important step for any responsible steward of taxpayer support, which is what we are.”

While other hospital systems have instituted similar programs, VIP is unusual in that it closely teams up Memorial’s clinical, operational and finance staffs in pursuing the same goal – and in determining how they are going to reach it.

“Everybody brings their expertise to the table,” Mr. Smith said. “It’s a testament to what happens when you get a lot of good minds in one room, who work to find ways Memorial can provide outstanding healthcare in the most cost-efficient way.”

While Memorial’s next iteration of the Value Improvement Program has been temporarily delayed by the coronavirus pandemic, plans are in place to launch it as soon as circumstances allow. “VIP 2.0 will continue to build on ideas from leaders across Memorial to promote a Value Improvement culture throughout the system,” Mr. Smith said.

Uncompensated Care

Patient Volumes