Same as it ever was: UAMS' $39 million deficit gets a hearing, not a solution | Arkansas Blog

Wednesday, November 8, 2017

Same as it ever was: UAMS' $39 million deficit gets a hearing, not a solution

Posted By on Wed, Nov 8, 2017 at 6:34 PM

Cliff Gibson: Astounded by UAMS' FY 2018 budget, which includes a deficit of $39 million.
  • Cliff Gibson: Astounded by UAMS' FY 2018 budget, which includes a deficit of $39 million.
The University of Arkansas for Medical Sciences' presentation to the joint hospital committee of the University of Arkansas Board of Trustees today was pretty routine until board member C.C. "Cliff" Gibson III asked representatives of UAMS about an increase in uncompensated care of $44 million in 2017 over 2016. “That’s astounding to me,” Gibson said, as was the budgeted deficit of $39 million. He also expressed surprise that the deficit was included on the front end of the budgeting process.

He shouldn't have been surprised. This is the second year UAMS has budgeted a deficit. Trustee John Goodson reminded fellow trustees, meeting at UA Pulaski Technical College, that former Chancellor Dan Rahn laid out his estimate for this year's red ink and the next three at a meeting last January with trustees. Rahn told trustees then that the state needs to step up to the plate if it wants a first-rate, fiscally sound medical school.

UAMS receives $20 $100 million from the state, but typically uses all but $10 million as its Medicaid match. That means the hospital subsidizes education and research, spokeswoman Leslie Taylor said after the meeting. By contrast, Mississippi kicks in $160 million to its medical school.

Depreciation of its buildings — which stands at $65 million this year — accounts for some of the deficit. Expenses, including salaries, make up the rest. (The breakdown was not available Wednesday.) It’s money that will have to be made up from UAMS' cash reserves, which UAMS Vice Chancellor for Finance Jake Stover estimated at between $150 million and $250 million. Stover said the situation is not as dire as it was in 1999, when the hospital used up its reserves and had to operate on credit.

"That $65 million is the amount we need to reinvest" in UAMS' campus, Interim Chancellor Stephanie Gardner said after the meeting. She said UAMS had hoped to invest $40 million in the physical plant this year.

UAMS also reported that it has not met revenue growth budgeted for the first quarter; it’s lagging at about 4.4 percent instead of the 5.6 percent anticipated. Nevertheless, revenues are up compared to the same period in FY 2016. Part of the reason for the shortfall is that is when the budget was drawn up, UAMS expected to have 13 new hospital beds available on a renovated floor in the old hospital. The unit is still being built, and its construction required the hospital to shut down 13 beds on the floor above, Gardner said after the meeting. She anticipates the budgeted beds to be ready by February.

UAMS cannot continue to operate in the red, trustees and UAMS’ leadership acknowledged; the model, they said “not sustainable. “We knew this day would be coming,” Goodson said. Having said that, trustees did not say they would be running to their legislators for a fix.

Gardner assured trustees that she would be working every day with UAMS’ leadership to find ways to reduce the deficit, which could include cuts in areas not considered important to UAMS' mission and in staffing, though she said job cuts are not yet on the table. UAMS is also looking at ways to increase revenues; its new orthopedic clinic on Colonel Glenn Road has proved to be a boon to the bottom line.

In response to Gibson’s question the hike in uncompensated care, Chief Financial Officer Dan Riley explained that the $44 million does not represent one year but rather the accumulation of unpaid bills over time. The number of “real-time” insured patients, he noted, has risen since the private option Medicaid expansion that the Affordable Care Act brought about. In fact, UAMS’ uncompensated "real time" care has dropped from 14 percent before the ACA to under 3 percent, Riley said.

Gibson also wondered what would happen to UAMS’ bottom line when Arkansas Works, the Medicaid plan of Governor Hutchinson, kicks some 60,000 off the insured rolls. Riley said UAMS has not calculated that because it can’t know how many of those 60,000 would come to UAMS for care. (If Congress undoes the ACA, however, some rural hospitals may have to close or be unable to accept uninsured patients, thus sending those patients to UAMS.)

Tags: , , , , , , , ,

Sign up for the Daily Update email

Comments (8)

Showing 1-8 of 8

Add a comment

Subscribe to this thread:
Showing 1-8 of 8

Add a comment

More by Leslie Newell Peacock

  • High spirits at Rock Town

    The alcohol will really flow this weekend. In addition to the Great Arkansas Beer Festival and Queers & Beers, Rock Town Distillery gets in the spirit by celebrating its eighth anniversary with a grand opening of its new building in SoMa, at 1201 Main St.
    • Jun 22, 2018
  • Have yourself a beery little weekend, with GARBF, Beers & Queers

    A sudsy weekend in the river cities kicks off Saturday, June 23, at the Statehouse Convention Center with the Great Arkansas Beer Festival, at 4:30 p.m. (for V.I.P. ticketholders) and 5:30 p.m. for the hoi polloi. Then on Sunday, June 24, Argenta celebrates National Pride Day with Beers & Queers, 11 a.m. to 4 p.m. in front of Flyway Brewing in Argenta.
    • Jun 22, 2018
  • Digital kiosk to be unveiled Monday

    Mayor Mark Stodola will unveil on Monday a new digital engagement kiosk outside the Statehouse Convention Center that will provide a touchscreen for wayfinding, transit, weather, shopping and other advertisements and act as a free Wi-Fi hotspot.
    • Jun 22, 2018
  • More »

Readers also liked…

  • Arkansas Supreme Court refuses to rehear invalidation of marijuana act

    The Arkansas Supreme Court today denied a request to rehear its decision invalidating Issue 7, the medical marijuana initiated act.
    • Nov 3, 2016
  • Trump immigration protest at LR: Quick and fierce

    It was not even 24 hours ago that Sophia Said, director of the Interfaith Center; City Director Kathy Webb and others decided to organize a protest today of Donald Trump's executive order that has left people from Muslim countries languishing in airports or unable to come to the US at all — people with visas, green cards,a  post-doc graduate student en route to Harvard, Google employees abroad, families. I got the message today before noon; others didn't find out until it was going on. But however folks found out, they turned out in huge numbers, more than thousand men, women and children, on the grounds of the state Capitol to listen to speakers from all faiths and many countries.
    • Jan 29, 2017
  • Campus gun bill clears committee

    The so-called compromise amendment that will allow anyone 25 or older with a training certificate carry a concealed weapon on public college campuses was approved in a Senate committee this afternoon.
    • Feb 21, 2017

Most Viewed

Most Recent Comments



© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation