Memorial Hospital at Gulfport (Miss.) has laid off two executives, demoted five leaders and chosen not to renew its CFO's contract.
Hospital CEO Kent Nicaud confirmed April 5 that the hospital's chief medical officer and vice president of system development had been laid off. The following day, the Sun Herald reported that the CFO's contract would not be renewed and that two hospital chief administrative officers and three senior executives had been demoted.
Regarding the layoffs, Mr. Nicaud said the hospital is facing financial challenges, such as increased labor costs, and is aiming to return to an organizational structure it had three or four years ago. He said the decision not to renew the CFO's contract wasn't related to the reorganization plan, according to the Sun Herald.
The 328-bed hospital's financial challenges were detailed in an August report from Fitch Ratings. At that time, the credit rating agency downgraded the hospital's rating to "BBB-" from "BBB" and revised its outlook to negative from stable.
Fitch said the downgrade reflected deterioration of the hospital's operating margins due to the COVID-19 pandemic. Memorial Hospital at Gulfport was facing significant staffing pressure, which led to high agency nursing costs and revenue shortfalls, Fitch said.
"These pressures have led to significant operating losses and a diminishment in balance sheet resources, which has strained MHG's financial flexibility as it continues to navigate the pandemic," Fitch said.
Fitch noted that it expected the hospital's operations to improve in the medium term.
Memorial Hospital at Gulfport is jointly owned by the City of Gulfport and the Gulfport-West Harrison Hospital District. Despite the partial municipal ownership, the hospital does not benefit from tax support.