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Increased demand, reduced length of average patient stay contribute to increase

The University Medical Center earned $180.4 million in net income during the last fiscal year, an increase of about $62.1 million from the preceding year, according to a presentation given last Thursday to the Medical Center Operating Board.

"We had a very good year from a volume perspective," said Larry Fitzgerald, associate vice president for business development and finance. "Admissions for our surgeries was up, outpatient services was up. We just had an increased demand for the services that [we can provide]."

The average length of a typical stay at the center was reduced from 6.19 to 5.93 days within the past year, said Michael Strine, executive vice president and chief operating officer, in an email. Strine explained that because the University Health System receives fixed payment for care, shortening stays drives operating results up, and also expands the hospital's capacity to serve patients. As a result of this increased efficiency, the center had the capacity to treat 20 additional patients per day.

Strine also attributed the overall health system's success last year to the quality care offered by University professionals.

"The very strong fiscal results reflect the strong community belief in and demand for the quality of care we provide across the commonwealth," he said. "[The results also] ultimately reflect the great work of the people of the health system, clinicians, faculty and staff, as well as the leadership and partnership [Medical School] Dean [Steven] DeKosky, [Nursing School] Dean [Dorrie] Fontaine and Ed Howell, [vice president and chief executive officer of the University Medical School], provide."

Fitzgerald echoed Strine's thoughts, adding that it was a challenging as well as a successful year.

"Computer conversions, three new buildings, and we opened a new hospital. So much of the success of the past year indicates great work on our employees," he said. "We didn't have a successful year by accident."

Part of the health system's increased revenue will go toward funding a new pediatrics hospital and expansions at the hospital and outpatient surgery center, Strine said. These developing projects are designed to build on the recent investments in the Emily Couric Clinical Cancer Center and the health system's acquisition of the HOPE group, which provides community-based diagnosis, treatment and care for the commonwealth, he added.

Regarding the long-term financial plan of the health system, Fitzgerald said the leadership "has projected out a level of profits into the future that is sufficient to meet the investment need of the organization." He added, however, that they are expecting considerable obstacles in the future, particularly relating to the federal debt ceiling cap.

"The future will be fine, but there will be numerous challenges in store," Fitzgerald said.

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