These results reflect the leadership and focus at each medical center to provide high quality health care services and ensure economic sustainability.
Additionally, these results reflect leadership at the medical centers coming together as a system to learn from each other and benefiting from best practices lending to increases in operating efficiencies, increases in patient safety, savings from group purchasing and measures to enhance revenue.
Consistent with the concept of UC Health as an interdependent model of hospitals and health professional schools, the financial success of the hospitals allowed them to contribute additional monies to the health professional schools, mainly schools of medicine, to support their academic mission at a time when state monies for that mission are decreasing.
"Having healthy margins in UC Health's hospitals is important to the financial and academic vitality of the health professional schools," said Santiago Munoz, associate vice president for health sciences and services. "We continue to monitor challenges that could stress the financial position of the hospitals."
These challenges include:
• UC medical centers are investing heavily in capital projects from electronic medical records to state-mandated seismic-safety upgrades. Their capital needs are approximately $4.5 billion over the next five years.
• UC Retirement Plan contributions by the hospitals are scheduled to start in April 2010; costs would total $300 million annually based on a 10 percent employer contribution. UC hospitals receive no state support to offset these costs.
• UC hospitals must meet labor contract commitments, including $127 million in total wage increases over five years to patient care employees and $32 million this year to nurses.
• The impact of health care reform is unknown at this time. Any reduction in federal support for charity care provided by the hospitals would be deleterious to their financial vitality.
• UC Health's medical centers avoided the UC furlough program this year by generating the same amount of savings through an alternate plan. They are accomplishing savings through a variety of ways, including eliminating vacant positions, layoffs and reducing salaries for senior management.
"The management team and all employees in UC Health's medical centers have done a great job in tough financial times. We are cautiously optimistic about their continuing to successfully navigate challenges in the health care environment," Munoz said.