Friday, March 14, 2014

UAMS weighing additional budget cuts for College of Medicine

Posted By on Fri, Mar 14, 2014 at 2:31 PM

click to enlarge Dean Richard Smith: The College of Medicine is having a 'hard time making ends meet.'
  • Dean Richard Smith: The College of Medicine is having a 'hard time making ends meet.'

Department chairs at the College of Medicine of UAMS have rejected layoffs and salary cuts in their efforts to trim $22.5 million from its 2015 budget. They plan to achieve the reduction by cutting 8 percent from operations and growing clinical volume by 3 percent, a move that should help UAMS' reach its goal of a 3 percent overall reduction in its 2015 budget of $1.25 billion.

The chairs voted last Monday after it was determined that the College of Medicine, which had found ways to cut 6 percent of its budget, needed to find  $9.5 million more. The COM budget is roughly $500 million. Other options under discussion were to lay off 100 employees (except tenure track and trainees), find another 4 percent to cut from operations, or reduce salaries by 3 percent across the board for employees earning more than $50,000.

In the session just ended, the legislature cut $14.5 million from its annual state aid to UAMS for 2015, dollars that would have gone to education and research. The cut was made in anticipation that UAMS' clinical revenues would rise thanks to the increase in insured Arkansans under Medicaid expansion and the health insurance exchange created under the Affordable Care Act.

The 2015 budget reduction follow a $9 million budget cut in the second half of 2014. A reduction in federal dollars —  because of Congress' sequestration of funds in 2013 and its slashes to the budget of the National Institutes of Health — and the end of one-year stimulus grants created a $29 million deficit for UAMS in 2013, Chancellor Dan Rahn explained to the Board of Trustees in January. He said at the time that to do nothing would push the deficit to $40 million in 2015.

COM Dean Richard Smith said the budget numbers were reached after "54 budget meetings, a back-breaking experience." Half the College of Medicine's budget is restricted funds, such as grant money and resident salaries, so cuts could not be found there. The College of Medicine used to be a profit center for UAMS, Smith said, but declining reimbursements from insurance companies, cuts in private and federal grants (both in number and value), and uncompensated care has changed that. Also, while it costs $108,000 to educate each student. tuition and state aid only covers less than half that amount. "It's hard to make ends meet," Smith said.

UAMS has predicted that if there's a 7 percent increase in insured patients, that could help the campus' bottom line by $27 million in 2015. It shouldered a total of $140 million in uncompensated care last year.

The cuts come at a time when UAMS is creating a new physicians assistant program within the College of Public Health Health Professions [thank you, Kelli Hall!]. Rahn said that program will pay for itself and not produce a deficit.

The UAMS budget is a moving target, thanks to certain unknowns, such as reimbursements and new grant dollars. "It's a work in progress," Rahn said. "No final decisions have been made." He'll present the budget to the Board of Trustees in June.

 

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