Medical Center budget
healthy, operating board told|
By Fariss Samarrai
Medical Center produced a 2003-2004 operating margin of
5.4 percent, surpassing the 5 percent goal
set by the Board
of Visitors. At the Medical
Operating Board’s first meeting of the fiscal and academic year on Sept.
financial officer Larry Fitzgerald reported that the operating margin — the
difference between the expenses to operate the center and the revenue earned
from services rendered — was nearly half a percentage point better than
the longer-term annual goal set by the board nearly two years ago.
This is the second year in a row that the Medical Center
has exceeded the board’s
expectations, and, according to Fitzgerald, the margin is among the top 10 percent
for academic medical centers.
Fitzgerald noted that July, the first month of the new
fiscal year, “started
on the same foot,” indicating that the Medical Center is on its way toward
another fiscally sound year with a comfortable operating margin.
The center’s expenses for the fiscal year totaled nearly $664 million and
the net revenue was more than $701 million. All income from the nonprofit Medical
Center, the 5.4 percent margin, is reinvested in the center for buying new equipment,
maintaining equipment, renovations of facilities and paying debts.
Fitzgerald also reported that the Medical Center reached
mark” on hospital admissions, with nearly 36,000 patients admitted during
the year, 3 percent above the previous year. The hospital is able to admit more
patients than in earlier years because of an increased number of beds and improvements
in the processes that allow for the care of more patients.
R. Edward Howell, vice president and chief executive
officer of the Medical Center, noted that the
U.Va. Hospital is ranked among the top
the nation and is
on the “leading edge” in the use of new technologies. He said a current
limitation to the center’s growth is a lack of physical space for the increasing
demand for care and services, but that the administration is working on increasing
He also noted that the hospital faces increasing challenges
as more patients are uninsured or underinsured
and are unable to pay their
This is a nationwide trend that is affecting the finances of hospitals
country. The Medical Center routinely budgets for lost income from
bad debt, but these write-offs continue to increase each year.
The board also endorsed, at the recommendation of the
Medical Center administration, changing the name
of the Children’s
Medical Center to the University of
Virginia Children’s Hospital. The new name, based on market studies, is
more distinctive and consistent with industry standards.
the meeting, some board members toured the newly renovated
Medical Center East Cafeteria,
which opened July 5.