fiscal health may be illusory
By Dan Heuchert
If the U.Va.
Medical Center were a patient, its chart might say, "Outwardly
healthy, but exhibits a number of risk factors. Monitor closely."
was the impression given July 14, when the University Board
of Visitors' Health Affairs Committee met in Richmond.
Fitzgerald, the U.Va. Health System's chief financial officer,
told the committee that reaching a 4.2 percent operating margin
for the fiscal year that ended June 30 looks probable. He estimates
that puts U.Va. in the top 10 percent of academic medical centers
outstanding, quite frankly," he said. However, that success
may be somewhat illusory. Overall patient volume was mostly flat
compared to a year ago, and three one-time revenue gains that
had not been anticipated in preparing the budget accounted for
nearly $13 million -- or roughly the same amount as the margin
of revenues over expenses, he reported.
payments involved Congressional restoration of some 1997 Medicare
funding cuts, as well as changes in how Medicaid payments were
made, Fitzgerald reported.
a future revenue source, the board is pursuing legislation to
allow the Medical Center to keep the interest earned on operating
fund balances, which is currently turned over to the state treasury.
The Medical College of Virginia already has similar authority.
U.S. Rep. Thomas Bliley, a board member, promised that he would
write to the governor's office in support of the proposal.
great concern to hospital officials and committee members is a
shortage of nurses and other health professionals, including pharmacists,
lab technicians and physical therapists. Overall turnover approaches
23 percent annually, compared to a national average of about 15
percent. Currently, 100 of 1,300 registered nurse positions at
the Medical Center are vacant, plus 46 positions in allied health
and 62 patient care assistants.
Staffing shortages have led to the closure of 24 beds, six in
intensive care units and 18 in acute care units, according to
figures supplied to the board.
"Despite our challenges, we do not feel we are compromising
patient care," said ICU nurse Donna Markey, president of
U.Va.'s professional nursing staff.
salaries appear to be reasonable, said Ronald Bouchard, chief
administrative officer. A bigger factor seems to be the volume
and intensity of the workload, he and Markey agreed.
noted that as more nurses depart and fewer are hired to take their
places, the demand on the remaining nurses increases. Many are
working mandatory overtime, which can be a major drag on a workforce
with an average age that is climbing into the mid-40s -- higher
in some specialties.
nursing school enrollment is declining, and more nurses are looking
to practice their professions outside of hospital settings, in
part to maintain a better balance between their personal and professional
lives, Markey noted.
questioning from board members, Markey agreed that the "organizational
culture" at U.Va. -- especially collegiality between nurses
and doctors and among nurses and their supervisors -- was a factor
in the shortages.
Medical Center has stepped up recruitment efforts, with more multi-media
advertising, direct mail and job fairs at colleges and high schools
-- and in areas where nurses have been laid off, Bouchard said.
The University is offering sign-on bonuses, and has begun to search
for recruits internationally, he said.
the short-term, the Medical Center is seeking to retain its workforce
through salary adjustments, more flexible scheduling, the hiring
of an employee ombudsperson, and conducting exit interviews. Long-term,
it needs to look at redesigning processes and improving the quality
of work life, Bouchard said.
don't know necessarily that there's a magic bullet,² he said.
Med School has
School dean Dr. Robert M. Carey presented the school's strategic
plan, with a particular eye toward increasing research efforts.
plan outlines 10 areas of particular focus, chief among them cancer,
cardiovascular disease and neuroscience, and Carey said that he
would seek $300 million in new investment over the next five years
to support those efforts. The funds, he said, would come from
roughly doubling the school's annual fund-raising to $60 million
a stretch goal for us, but I think it's reasonable. ... There
is tremendous untapped capacity," he said later.
private dollar invested could yield as much as $10 in research
grants, Carey said. Eventually, research findings can spin off
revenue-producing enterprises as well, he noted.
Central to the strategic plan is the construction of another research
building, currently dubbed "MR-6." (MR-5 is under construction.)
The building has an estimated price tag of $50 million, half of
which Carey hopes can be raised privately, with the balance to
come from the state.
board members questioned Richmond's willingness to directly fund
"It depends on the state's revenue position going in"
to the General Assembly session, said President
John T. Casteen III. Legislators generally pay for such projects
out of surplus funds, he said.
Debt financing may not be out of the question, he added. "There's
always the possibility that this is the year for a general obligation