UMC may need to be bailed out by county

Adrienne Packer

Friday, Aug. 2, 2002 | 10:41 a.m.

Clark County leaders are concerned they might have to tap into general funds to subsidize University Medical Center, which has lost nearly $6 million this fiscal year, officials said Thursday.

Bothered by the hospital's chronic financial troubles, County Manager Thom Reilly asked UMC administrators and financial staff to appear before commissioners Aug. 20 to deliver a presentation outlining their expenses and revenues.

"Aside from the medical malpractice crisis, their financial outlook has been troubling," Reilly said. "Every indication shows we will have to subsidize them."

UMC officials were criticized in the late 1980s for their financial woes when state funds dwindled and the county had to pitch in $17 million to bail the hospital out of debt.

Reilly requested the presentation to determine whether the hospital must tap into county funds to survive. If so, Reilly said, he will ask that UMC's financial needs be built into the county's budget so the general fund -- coffers used for public services and programs -- will not be affected.

"The county needs to be prepared if this is the case," Reilly said. "We need a plan and (to) take necessary action or build it in our budget so we can plan where we're going to come up with it."

County Finance Director George Stevens said UMC's situation had been stable for nearly a decade.

"It's been a long time since we've had bad problems," Stevens said. "If they're overburdened with non-pay patients, this is what happens. The county has to kick in money to pay the vendors."

At the closing of last fiscal year, the hospital made $2.6 million, Stevens said. UMC's budget is $440 million a year.

The hospital's revenues are up from a cash standpoint, but since the Sept. 11 terrorist attacks and subsequent economic downturn, UMC has treated more patients who have no health insurance. Not all patients are considered indigent and therefore the hospital is not always eligible for indigent funds.

"People with insurance offset the people without insurance," UMC spokesman Rick Plummer said.

UMC also took a hit last spring when a new formula determining how Disproportionate Indigent Share Hospitals (DISH) funds are disseminated was developed. UMC shares its $14 million in state-issued DISH funds with Lake Mead Hospital.

The not-for-profit hospital's financial woes weren't helped by a federal lawsuit in which UMC had to pay $1.2 million. The suit involved fraud charges that stemmed from UMC requesting higher reimbursement rates from the federal government for Medicaid patients.

"That money could have gone to pay other bills," Stevens said.

Critics have also questioned why the struggling hospital agreed this year to sign a $1.9 million public relations contract. Commissioner Yvonne Atkinson Gates, who also serves as the vice chairwoman of the hospital's board of trustees, defended the contract.

"That's how we drum up business," she said. "That's how we get people to know about what we do and how well we do it. It's cheaper to hire a company than have a staff to do it."