KEITH ENRIQUEZ/Daily Bruin Senior Staff The UCLA Medical
Center has lost money in recent years.
By Hemesh Patel
Daily Bruin Contributor
After losing nearly $50 million over the last two years, the
UCLA Medical Center is continuing to make cuts at a potential risk
to the quality of patient care.
The net income of the university’s medical center took a
nose dive from $50 million in 1998 to $1.1 million last year.
Despite this loss, officials forecast a leap in productivity to
$10 million by end of the next fiscal year.
“The center had a strong month in July, with a $1.6
million operating gain. The expense cuts are beginning to take
effect and are in large part responsible for our improved
profitability,” said Dr. Gerald Levey, provost of medical
sciences.
Though Levey is optimistic, others say reaching $10 million in
one year won’t be easy.
“The goal is possible but it will be very hard,”
said William Pierskalla, professor and former dean of The Anderson
School at UCLA.
Some doctors said the cutbacks have hit them and they have to
try harder to maintain the quality of patient care.
“We have an overworked staff and things are a little
bureaucratic. I don’t think patient care has been compromised
but it is difficult because we are extremely busy,” said Dr.
Gary Schiller, associate professor of medicine.
Others agree but note that these changes are nothing unique to
UCLA.
“In hospitals around the country, resulting cuts in staff
and resources have affected patient care at the level of
convenience,” said Dr. Linda Demer, chief of cardiology at
the hospital.
Levey said cuts are being made in all areas, including the
budget and the administration, where inefficiencies existed.
He said the major cuts have already been made and that the
center will continue to make selective cuts throughout the
year.
Hospital officials said 280 employees were laid off this past
year, but they don’t think this will affect patient care.
“It is fair to say that the cuts impacted the
administration and management staff much more so than the patient
care staff,” said Mark Speare, the medical center’s
senior associate director for human resources.
Speare stressed the importance of preserving the quality of the
hospital and saw the cutbacks in staff as a last resort.
“We have to have a competitive cost structure,
that’s why we took the action we needed to,” he said.
“What has taken place in the last year has made us more
viable where we may be able to avoid further layoffs in the
future.”
Much of the medical community sees UCLA’s financial
downturn as part of a trend occurring throughout the United
States.
“In California, 70 percent of all hospitals are losing
money. We are facing these past losses and will come out stronger
in the end,” Levey said.
Pierskalla agreed this is a pattern with medical centers around
the country.
“This is a trend with a lot of parallel academic medical
centers to UCLA,” he said. “The University of
Pennsylvania lost $200 million (in the last fiscal year); they
should have seen it coming,” he said.
Demer said two things explain this decline in net income:
managed care organizations have cut their payments to hospitals in
general and Medicare reimbursement to hospitals has also been
significantly reduced.
About half of the $50 million loss can be attributed to the
Balanced Budget Act of 1997, which drastically cut Medicare
reimbursements, according to Medical Center officials.
Medical reimbursements do not necessarily cover all medical
expenses and as a result, the university loses money in many
cases.
In addition, improvements in patient care are costly and as a
result, large budgetary increases are necessary to have a
noticeable effect, Schiller said.
He compared patient care to a bottomless pit, where a
contribution of several million dollars would have a small
impact.
“The costs of patient care are high and historically
people believe it should be borne by the state,” Schiller
said.
In the coming years, the effects of the Balanced Budget Act may
mean difficult times for health care.
“We remain hopeful that the federal government will
realize that it has severely imperiled the financial health of the
major academic medical centers in the United States,” Levey
said.