Regents accept annual Medical Center budget

There was good and bad news to report on the status of the University Health System at the meeting of the University Board of Regents on June 21, which reviewed and passed the Medical Center's 1996-1997 budget proposal.

Although John Forsyth, outgoing executive director of University Health System, described the health center as "robust" compared to other academic health centers, it still plans to trim $60 million from its budget in accordance with its three-year plan to cut operating expenses by about $200 million.

"The good news is that we accomplished our 1996-97 objective of reducing FTEs (Full Time Equivalents) to a level comparable with the best peer academic medical centers," Forsyth said. "The bad news is that our cost-per-case is still significantly higher than that of local and regional hospitals."

Forsyth estimated that the University Health System's cost-per-case is about $2,698 higher than its competitors. He attributed this difference to several factors, including research support, and the educational mission of the hospital and salaries which are above the market.

"One of our many challenges is that society continually backs away from supporting the academic excellence we represent," Forsyth said. "The majority of (the higher cost-per-case) is because of our academic mission."

Forsyth also said that the patients at the Medical Center are sicker than patients admitted to other hospitals.

Forsyth said, however, that the hospital was not in financial trouble, but it is taking measures to try to make sure that it does not suffer financial problems.

The Medical Center will also cut the number of beds in service from 847 to 793. This reduction includes the elimination of 10 inpatient beds at the Kellogg Eye center and a 32-bed general care unit in the main hospital.

The reductions are all being made in an attempt for the Medical Center to become more cost-competitive with local, state and regional hospitals while maintaining quality health care.

Staff reductions will also continue to be made as originally announced. About 1,055 job positions are expected to be eliminated, but half of them will be made through attrition. Last month, the Medial Center distributed 541 reduction-in-force notifications to its employees. Many of those employees, however, had an opportunity to fill about 200 open positions in other areas of the Medical Center, and another 30 to 50 University positions.

07-03-96