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MEDICAL CENTER ENDS '95 $500,000 IN THE BLACK

Niagara Falls Memorial Medical Center made a profit of about $500,000 last year -- its fifth consecutive year of revenues exceeding expenses.

In round figures, the center's surplus for last year was in the range of $545,000 to about $562,000 according to its annual report, signed by former hospital President Timothy J. Finan and by Christopher H. Brown, chairman of the board of trustees.

They said Memorial's revenues in 1995 were about $65.5 million, and its expenses were about $64.9 million.

Memorial laid off about 40 employees early last year in anticipation of cuts in the state budget for health care, but it still is the largest employer in Niagara Falls with a staff of more than 1,400 people in the hospital and its affiliated facilities. Their salaries, benefits and payments for contract labor last year amounted to more than $38.5 million.

"As government and third-party payers curtail reimbursement, hospitals and health care providers are re-evaluating the manner in which they have traditionally operated," Finan and Brown said in a joint statement. They predicted that "significant changes lie ahead."

Finan resigned last month as president of the 228-bed general hospital while its trustees are trying to develop a "strategic alliance" with Mount St. Mary's Hospital of Lewiston. Such an alliance could cut costs for both institutions and could lead to an eventual relationship with the new Catholic Health Care System of Western New York.

Finan said he did not want to be part of the national search for someone to head that collaborative health-care system. Although he said he did not want the position as head of the proposed collaboration, Finan said he thought the idea of the hospitals getting together was "one of the best things to happen to ensure a viable, locally controlled health care system."

"Never before in our nation's history has there been greater consensus regarding the need for change within the health care system," according to the annual report. "The impact of managed care will have a profound effect on the future of health care delivery across the nation."

The report said medical and surgical admissions at the hospital increased by about 5 percent from the year before, but the average length of patient stay decreased by about 5 percent. Memorial admitted about 9,000 patients and it handled more than 280,000 outpatient visits in 1995. The average length of stay for patients admitted to the hospital is about eight days.

The half-million dollar surplus for 1995 compares with surpluses of $921,773 for 1994 and $605,479 for 1993.

The 1992 surplus was $445,021 and the 1991 figure was $707,445. Prior to 1991, Memorial had endured three consecutive years of red ink including a loss of nearly $3 million in 1990 -- the largest loss in its history.

The financial turnaround from 1990 to 1991 followed stringent cost-cutting efforts, broadening of the hospital's base of support, a reduction in the size of the staff and a change in management. Finan became president about 4 1/2 years ago, after having served 5 1/2 years as executive vice president of Sisters Hospital in Buffalo.

Memorial is a not-for-profit institution, so its financial performance usually is called a surplus or a deficit, instead of a profit or loss. The 1995 report, however, refers to the "fifth consecutive year of profitability."

After Memorial's proposed "strategic alliance" with Mount St. Mary's was announced in July, the religious order that operates the 179-bed Mount St. Mary's said that hospital's sponsorship would be turned over early next year to the Daughters of Charity.

The Daughters of Charity already sponsor four other hospitals in New York State, including Sisters Hospital in Buffalo.

Both Sisters and Mount St. Mary's are participating in the emerging Catholic Health Care System of Western New York. Other participants in that system are Our Lady of Victory Hospital in Lackawanna, Mercy Hospital in South Buffalo, Kenmore Mercy Hospital in the Town of Tonawanda, St. Joseph Hospital in Cheektowaga and St. Jerome Hospital in Batavia.

Pending its takeover by the Daughters of Charity, Mount St. Mary's is continuing to be operated by the Sisters of St. Francis based in Williamsville.

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