UIHC looking at $5 million shortfall
CEDAR FALLS — UI Hospitals and Clinics will likely end fiscal 2009 $5 million in the red, which is less than 1 percent of the hospital’s $861 million budget.
But Associate Vice President for Finance Ken Fisher emphasized “lots of things could happen” in the remaining months of the fiscal year. The hospital has only been profitable in the months of October 2008 and March for fiscal 2009. Officials said April will also likely be profitable.
The regents, which governs the hospital, recommended approval for a 6 percent rate increase for UIHC patients at their meeting Wednesday at the University of Northern Iowa. Most patients will not pay that increase, as most are covered by Medicare and Medicaid, officials said.
Hospital officials hope to gain a 1 percent profit margin for fiscal 2010. UI Vice President for Medical Affairs Jean Robillard announced at the meeting that more than 500 employees have voluntarily agreed to take pay reductions or give back vacation time for fiscal 2010, following the example of senior leadership in the hospital.
These expense savings will make up for fiscal 2010 budget shortfalls, officials said. Robillard said the initiative would save more than $1 million in decreased expenses. These savings would add to the $2.6 million already saved by 40 senior hospital officials taking a 5 percent cut for fiscal 2009 and 2010, hospital officials told the regents.
The voluntary salary and vacation programs have generated $1 million from hospital employees and university faculty and staff, said Tom Moore, UIHC spokesman. On average, individuals have given $2,210 each.
The program’s deadline, originally April 30, has been extended to May 6.
“We also believe that if we explain to our staff clearly where we are, that they will come forward to help,” Robillard said.
Employees will not be fired if they choose not to participate in the programs, Robillard said on April 22. Both programs are confidential, he noted.
But the budget deficit still means there could be cuts.
“If units cannot make budget, other steps will happen,” Robillard said last week, adding mandatory furloughs and pay cuts could be a few of those options. Units can also decrease their supply, Robillard added.
Employees who have participated in the voluntary programs won’t get their salaries reduced further if UIHC officials make the pay reductions mandatory for all workers.
“If we don’t make budgets we want, it’s going to happen obviously,” Robillard said. “There is a level of reorganization that needs to happen.”
Regent President David Miles applauded UIHC officials for their cost-saving initiatives Wednesday.
“I want to thank you and your leadership team for the example you set and for the 500 employees,” Miles said to Robillard at the meeting. “It is an extraordinary statement of support for the institution.”
Meanwhile, two major UIHC searches have been put on hold, including the search for a executive director of the UI Children’s Hospital and a chief operating officer for UIHC. Further, officials said plans for a new tower for the UI Children’s Hospital are still necessary, but the planning has been slowed.
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