UIHC: Raised rates won't cover increased spending

BY ARIANA WITT | APRIL 29, 2011 7:20 AM

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The state Board of Regents voted unanimously Thursday to approve a 6 percent rate increase at the University of Iowa Hospitals and Clinics. 

But officials said the hospital's expenses are increasing more than their rates.

Ken Kates, the UIHC's chief executive officer, said hospital officials are working to ensure all clinical and non-clinical facilities experience financial growth, despite difficulties in the budget process.

He attributed the problems to inflation and the rising costs of drugs and medical supplies.

According to the report, the hospital has a budget of more than $1 billion for fiscal 2012, nearly a 4 percent increase from its fiscal 2011 budget. Additionally, officials projected a nearly $232 million budget for UI Physicians in fiscal 2012, a 6.4 percent increase. The Carver College of Medicine's projected budget for fiscal 2012 is nearly $613 million, a 4.5 percent increase.

At a regents meeting in March, the UIHC reported a revenue increase of more than 11 percent for fiscal 2011.

UIHC officials said a "key driver" for the revenue increase includes a projected 1.1 percent increase in inpatient volume during fiscal 2012.

Officials also said they projected a 6.1 percent growth in outpatient volume. Patient revenue for the hospital totaled more than $733,000 for the fiscal year through, up from roughly $664,000 in 2010.

Ken Fisher, the UIHC chief financial officer, said the next few fiscal years will be challenging for the hospital because the declining availability of Medicare and Medicaid, which are projected to increase by less than 2 percent.

Jean Robillard, the UI vice president for Medical Affairs, said officials take specific goals into account throughout the budget process.

"We're measuring our performance using a variety of different indicators," he said. "Among them, we want to be on the honor roll of the best hospitals on U.S. News & World Report. We're not there yet, but we're getting close to it."

Robillard said UIHC officials want the new Children's Hospital to be among the top 25 facilities in the country and for the Carver College of Medicine to be in the top 10 among medical schools.

Officials also said they hope for the hospital to continue to recieve substanial funding from the National Institute of Health.

"When we think about the budget of our entity, this is based with these goals in mind," Robillard said.

Regent Robert Downer said he thinks the UIHC and medical school are showing great strides for the university in terms of its medical outputs.

"We are certainly appreciative of the hard work and effort that goes into the work with our physicians, and students, and staff," he said. "This budget appears to reflect that, and I hope we can continue to see the entity grow."

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