UMC’s financial picture improves

The neonatal intensive care unit, pediatric endocrine clinic and Lyons Burn Care Center are safe, for now. So are six other University Medical Center patient care services and programs mentioned earlier this year as possible closures to reduce the public hospital's swelling debt.

Kathy Silver, the hospital's interim chief executive officer, said there's no longer a need to keep the programs on the potential chopping block considering the hospital is doing better financially. Also, the results of two public forums, 14 focus group discussions and a survey of employees showed disapproval of such actions.

The McCarran Quick Care Center, one of the original programs proposed as a possible cut, closed last month.

During the commission meeting, Silver said it was time to put the issues to rest.

In the meantime, the Clark County Commission, acting as the hospital's board, dismissed five of six suggestions made earlier this year by the Lewin Group consulting firm on the future of UMC.

The suggestions included either leasing or conveying ownership of the hospital to a nonprofit, establishing a hospital advisory board, or establishing a separate entity to take over UMC. The hospital will instead remain under the board's control.

But the decision not to sell, change the hospital's governing body or do away with certain services is not an indication that UMC is financially out of the red.

"At the end of the day, we need to be more vigilant than we were,'' commission Chairman Rory Reid said about hospital administrators, county staff and the hospital's board continuing to closely monitor the medical facility's financial situation. "We have to remember that UMC is the only public hospital in this region. ... State law requires us to treat the indigent. No other hospital has that requirement.''

Overall, Reid said he was pleased services wouldn't be trimmed and that recent contract renegotiations, personnel changes and delaying some programs has saved the hospital more than $10 million.

Reid also praised county staff and UMC administrators for their jobs in obtaining information from the public, the hospital's employees and other health care providers on the future of UMC.

UMC administrators, in conjunction with Clark County staff, held a series of public forums and focus groups and initiated a survey of more than 5,000 hospital employees about how the hospital can improve its operations and policies, revenue opportunities and governance structure.

Those meetings came on the heels of bleak pictures painted by hospital administrators about UMC's finances and future.

In January, a report by Ernst and Young disclosed that UMC incurred an operating deficit of about $34.3 million for fiscal year 2006. Two months later, county staff projected the operating deficit could reach $60 million.

The county bailed the hospital out and, in the process, wiped out more than half of the county's budget to build parks, community centers and other discretionary projects. Then, in May, staff asked the commission for $41.4 million for UMC's 2007-08 budget, nearly three times the amount of previous annual requests.

The hospital ran $2.2 million in the red in April, an improvement compared to the operational loses of about $4 million each for February and March.

According to preliminary audit findings presented to the commission last month, the number of days patients spend in the hospital wasn't the driving force behind UMC's deficit. Professional fees charged by physicians and other costs have been larger contributors to UMC's financial woes the past two years, officials said.

Silver said hospital administrators have devised an action plan addressing areas of concern.

UMC employees' concerns centered around better communication between them and hospital administrators, making changes or upgrading UMC's admitting and billing processes and computer system, and addressing some staffing issues.

Fundraising was also an issue. Silver said administrators are working on resurrecting the hospital's foundation.

Members of the public and employees also had concerns about hospital contracts, including those pertaining to physicians and managed care.

None of the groups favored closing all of the services pitched by hospital administrators earlier this year.

Reid and commissioners Chip Maxfield and Chris Giunchigliani suggested that UMC administrators provide periodic reports on implementation of the "action plan," much like how the commission receives monthly UMC financial reports.

"I don't think you should just tell us what the action plan is,'' Reid said.

The commission also directed Clark County manager Virginia Valentine to begin a nationwide search for UMC's new CEO. Valentine said the process could take at least three to six months.