UMC may face additional county oversight

Adrienne Packer

Wednesday, Oct. 9, 2002 | 11:15 a.m.

Anticipating University Medical Center will draw millions of dollars from Clark County's general fund to make up for budget shortfalls, commissioners might place the hospital's administration under the county manager's watch.

The hospital lost $1.8 million in August. Government officials said the county may have to take between $20 million and $40 million from its general funds to keep UMC operating.

The climbing deficit and unexpected hit to county coffers has commissioners scrambling to identify methods to resolve the financial problems and protect their general fund.

Earlier this month county commissioners approved an interlocal agreement with the hospital to expand its involvement in UMC's finances.

Clark County Manager Thom Reilly confirmed Tuesday he has spoken with UMC administrators about even further increasing the county's oversight and role at UMC. One likely option is to have hospital Chief Executive Bill Hale report to Reilly instead of directly to the commission.

"I'm supportive of a more increased oversight and even a direct reporting relationship," Reilly said.

Former UMC Chief Financial Officer Dennis Morris, who resign last month reportedly under pressure, told commissioners in August that the hospital is $9 million in debt.

Whether the hospital is in further debt than Morris described is in question. Deloitte & Touche is completing an audit of the hospital's end-of-the-year budget and sources said the report will show a bigger deficit.

Both the audit and the commission's subsequent decision on whether to take more direct control of UMC's administration is expected to be considered during the commission's Nov. 5 meeting.

Most commissioners agree some action must be taken.

"Talk about hits the county is taking with the detention center, the Regional Justice Center and now this," Commissioner Chip Maxfield said, making reference to the $33 million the county had to unexpectedly pitch in to the new courthouse to finish the project.

"This is tens and millions of dollars; we need questions answered. We have other needs. We're a growing community."

When asked for the hospital administrators' position on whether the county manager's office should be charged with overseeing UMC's actions, spokesman Rick Plummer said the decision is solely up to commissioners, who double as the hospital's board of trustees.

"They are the decision-making body of UMC and they have the ultimate say about what happens at UMC," Plummer said.

Hale was out of town and could not be reached for comment.

Hospital officials say the debt is because most UMC beds are filled with uninsured patients, leaving little room for those who can pay. Similar shortfalls in the early 1990s forced the county to provide UMC $17 million in subsidies.

When the hospital struggles financially, the county is legally required to bail it out because it is mandated to treat all county residents regardless of whether they have health insurance.

UMC operates on an enterprise fund, approves agendas without the county manager's input and doesn't submit reports during the county budgeting process.

Reilly is recommending UMC's budget be tied to the county and proposed hospital action first be approved by his office. The new set-up would be similar to that of McCarran International Airport, which has a designated section on the commission's regular agenda.

Keeping closer track of the hospitals spending will give the county a better indication of whether its general fund will take a hit. Balancing hospital subsidies with the county's other needs -- new roadways, parks and more police officers and firefighters -- is a difficult task.

"Obviously I'm concerned like everybody else," Commissioner Myrna Williams said. "We have to do what's right because we have service obligations and in order to meet those obligations we have to make sure we're making the most of every dollar."

Commission chairman Dario Herrera said because of the significant dollar figure attached to the hospital's debt, the county should be more involved.

"I think with the slow in economy and UMC providing much more uncompensated care, we're considering subsidizing the shortfall at UMC," Herrera said. "We're essentially using county dollars at UMC to meet the existing level of care. We should have a more active role in the day to day operations."