County commissioners reject making UMC a nonprofit entity

A bleak forecast that University Medical Center could close in three years if it doesn't change course didn't persuade Clark County commissioners Wednesday to transform the public hospital into a nonprofit entity.

A consultant presented a report to commissioners predicting that UMC will rack up a $100 million operating deficit by 2014. UMC lost more than $70 million last year, mostly because it treats indigent and uninsured patients.

UMC's best chance for survival is to become a public benefit corporation, known as a 501(c)(3), with an independent governing board, said representatives of FTI Healthcare, a Tennessee-based firm county officials hired last year to study the hospital.

UMC could operate more like a business, compete better with private hospitals and attract high-caliber doctors and paying patients, said Kerry Shannon, FTI's senior managing director.

"You don't have a whole lot of time," Shannon said. "You're at a crisis. I won't sugarcoat it."

Commissioners agreed that UMC is in a dire situation, but most said they were unconvinced that turning it into a nonprofit entity was the answer. They requested more information before making a decision.

Commissioner Chris Giunchigliani said a UMC advisory board was formed recently and has had little time to delve into the hospital's daily operations. Going the next step and creating a governing board doesn't seem like a cure-all, she said.

"Just changing the governance will not fix the funding part of UMC," Giunchigliani said.

Commissioners asked that the advisory board, hospital executives, medical staff, union leaders and others meet to discuss what could result from turning UMC into a 501(c)(3).

Clifford Stromberg, an attorney working with FTI, said there is a clear difference between a board that advises and one that governs. A governing board could make the decisions needed to aid UMC's transformation into a teaching and research hospital, he said.

The board could have business people, doctors, nurses, health care experts and a couple of commissioners, Stromberg said.

Commissioners Susan Brager and Mary Beth Scow supported FTI's proposed change.

Brager said people tend to view county hospitals as lower-tier. Converting UMC to a nonprofit business would boost its reputation and image, she said.

Commissioner Larry Brown asked county staff to research the impacts of UMC closing. For example, how would it affect patient care in the Las Vegas Valley, and how much would the county have to pay private hospitals for indigent services, he said.

Brown noted that labor is a key expense, along with serving uninsured patients. A public hospital might not be in the business of making money, but neither can the county afford to pay $80 million in subsidies, he said.

"The urgency has always been there," Brown said. "Unless something is done, it's unsustainable."