UMC asks county to cover $37 million debt

Adrienne Packer

Wednesday, Nov. 6, 2002 | 11:25 a.m.

University Medical Center officials announced Tuesday they need at least a $37 million subsidy from Clark County, an amount that could potentially wipe out the county's major project funds for the year.

Clark County commissioners were stunned at the debt and most members were further flabbergasted at hospital officials' plans to proceed with an expansion, which is already over budget.

"This is mind-boggling. The responsible thing for us to do is halt more building," Commissioner Mary Kincaid-Chauncey said.

Deloitte and Touche is performing an audit on the hospital and provided commissioners, who double as the hospital board, information on the deficit but offered no concrete reasons why UMC plummeted into debt.

Hospital Chief Executive Officer Bill Hale told the board uninsured patients occupy most beds, leaving few rooms for insured, paying customers.

The Sept. 11 terrorist attacks that left thousands of Clark County residents without jobs only exacerbated the problem. But Hale's explanation that the recession left public hospitals reeling nationwide gained him little empathy.

"I appreciate your comments but I'm not worried about other hospitals, I'm worried about UMC," Commissioner Yvonne Atkinson Gates said.

Because of the losses, UMC hasn't kept up with payments to vendors who provide medical supplies and equipment. The hospital is as many as four months behind, eliminating its eligibility for discounts.

Clark County will tap into its capital funds for a $20 million one-time subsidy to help the hospital catch up with bills. At least $17 million more is needed to cover monthly losses that have hovered around $2 million.

The $37 million, combined with the $33 million the county had to spend to cover unexpected cost overruns at the Regional Justice Center, takes money away from future parks and funds used to construct and maintain buildings.

The subsidies are in addition to $45 million taxpayers put into UMC transfers to the hospital through property taxes for indigent care and a state fund that supports a mandated emergency room admission program.

Hale and board chairwoman Erin Kenny opposed delaying the expansion of the Charleston Boulevard UMC campus. Kenny said construction of a new building will improve the quality of care and attract more paying patients.

"We need to enhance and grow our pay areas, become technologically advanced," Kenny said.

Hale defended moving forward with the expansion, saying the project is funded by a municipal bond issue, not county funds. Construction has yet to start and the expansion is about $20 million over what it was expected to cost.

Atkinson Gates said the overruns would be absorbed by the county's general fund.

"It's not fair for the other services we provide to offset UMC," Atkinson Gates said. "Financially, we're not as great off as we once were. We want to get more paying patients, but at the expense of everything else?"

Commissioners also questioned why they had not been forewarned of such a severe deficit. Kincaid-Chauncey said she learned of the debt from a political commercial. Lt. Gov. Lorraine Hunt used the hospital's struggles against Kenny, Hunt's opponent in her reelection bid.

Clark County Manager Thom Reilly was also bothered that UMC administrators didn't come forward sooner.

"The trends were there a year prior," Reilly said. "Trends should be forecasted and plans put into place to address them. That never happened."

Commissioners approved Reilly's request to place Hale -- who earns about $235,000 a year -- under his department's watch. The board is also moving forward with further analysis of the hospital's financial downfall and will ultimately assemble a citizens committee to determine what should be done.