For the first time in recent years, the University Medical Center reported a loss in revenue to the Board of Visitors' Health Affairs Committee Thursday night. Earnings for the first five months of fiscal year 2001-2002 are $7.7 million less than originally budgeted, said Larry Fitzgerald, health system vice president of finance.
Hospital administrators said they remain confident that patients will not suffer from the Medical Center's loss in revenue, and actually will benefit from the practices that are causing the reduced profits.
"What's occurring is a very good thing from the patient's perspective," Fitzgerald said.
The main cause of the revenue decrease is a reduction in the number of patients admitted to the hospital for longer than 24 hours. Short-term stays produce lower reimbursement income from insurance companies than patients admitted for extended periods.
The trend in nationwide healthcare is moving toward shorter, more effective hospital stays, Fitzgerald said.
To adjust for the change, hospital administrators are "going to have to examine operational structure for treating same day patients in a cost-effective, high quality manner," he said.
The revenue loss also stems in part from the hospital's initiative to maintain staff.
"The Medical Center has been focusing on increasing retention of healthcare professionals in the past year," Medical Center Spokeswoman Marguerite Beck said.
The hospital has had to increase costs by making salary and benefit adjustments in order to keep up with the market's demands, Beck said.
To compensate for the loss in revenue, the Medical Center plans to control costs and increase efficiency.
All salary adjustments have been deferred until May or June, but officials do not expect any layoffs.
"The major concern, as an administrator, is to make sure we have adequate staff to provide the high quality of care we're used to and really using our resources," Chief Clinical Officer Pam Cipriano said.
Hospital administrators want to bring in the maximum number of patients the Medical Center can handle. They may open additional same-day units within the Center to make more beds available, Fitzgerald said.
Efficiency strategies also include saving on supplies, carefully managing pharmaceuticals and readjusting staffing to best suit the needs of the hospital.
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