Memorial Health faces defaults, tries to avoid layoffs

Memorial Health System in Colorado Springs, Co., has seen losses exceed $7 million this year and is on the verge of defaulting on its debt, reports the Colorado Spring Gazette.

Memorial, which is owned by the local municipality, has been hit hard by a lower patient census, and its operators have been studying potential sale or privatization options since 2009.

"If you put a healthcare organization in play, the longer that goes on, the more it hurts the organization," said Memorial Health CEO Dr. Larry McEvoy.

McEvoy projected that Memorial would begin defaulting on its bonded indebtedness later this year if trends persist, as it's required to keep 184 days of operating cash on hand, the equivalent $256 million. The hospital could eliminate up to 10 percent of its 4,000-employee work force, but McEvoy is reluctant to do so.

"Cut three or four hundred people from our payroll and you're done," he said. "If you do this the wrong way, you end up with a financially solvent organization that is going to die anyway."

For more information:
- read the Gazette article
- read the Colorado Connection article