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Meeting Information

HEALTH AFFAIRS COMMITTEE

Friday, March 27, 1998
10:30 - 11:00 a.m.
East Oval Room, The Rotunda


Committee Members:

Charles M. Caravati, Jr., Chair
John P. Ackerly, III
William G. Crutchfield, Jr.
William H. Goodwin, Jr.
T. Keister Greer
C. Wilson McNeely, III
Albert H. Small


AGENDA

REPORTS BY THE VICE PRESIDENT AND PROVOST FOR HEALTH SCIENCES (Dr. Cantrell)

A. Medical Center Financial Report (as of December 31, 1997) (Dr. Cantrell to introduce Mr. Halseth) (Mr. Michael J. Halseth to present)

B. Vice President's Remarks

MEDICAL CENTER FINANCIAL REPORT (as of December 31, 1997)

BACKGROUND: The University of Virginia Medical Center prepares a quarterly operating and financial report for management and Board review. These reports are reviewed with the Executive Vice President and Chief Financial Officer before they are sent to the Health Affairs and Finance Committees of the Board of Visitors.

DISCUSSION: At mid-year, the Medical Center is experiencing strong levels of inpatient occupancy, outpatient activity, and very high patient acuity. These factors have resulted in higher revenues, expenses, and staffing than originally projected.

New accounting procedures and systems allow the Medical Center to report actual revenues and expenses in a more timely and effective way. Through December, total operating revenues have exceeded budget by $4.5 million, and contractual allowances from third party payors have increased substantially as the result of Medicare reimbursement cutbacks and growth in managed care. These increased contractual allowances reduce the Medical Centers total operating revenues.

Through December, total operating expenses, due to growth in volumes and acuity, have exceeded budget by $6.4 million, driven primarily by growth in the use of high-tech drugs and medical supplies. Programs aimed at more aggressive medical management of high cost drugs and supplies are underway.

Projections for the remainder of the fiscal year assume continued strong volumes of activity, continued growth in managed care, and a reasonable operating margin. The Medical Center is implementing further cost reduction and revenue enhancement strategies.
REQUIRED ACTION: None.

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