Friday, Oct. 11, 2002 | 9:50 a.m.
For most of University Medical Center's history, which dates back to 1931, it has lost money. Countless lives have been saved at the hospital and countless families have received care they otherwise could not have afforded. Money, however, has been an issue, as might be expected at a public hospital whose mission is to provide care for people regardless of their ability to pay.
In the 1980s the money issue intensified. The Clark County Commission, which acts as the hospital's board of trustees, grew increasingly frustrated with its annual hospital subsidy of $5 million or more. It fired one management company in 1988 and the succeeding administrator resigned in 1993 over issues of money and management. The county wanted three things from any new administrator: Facility improvements that would lead to greater efficiencies, better communication with commissioners, and a marketing strategy that would allow the hospital to break even or make money. Bill Hale, part of the new management team hired in 1993 and who became chief executive officer in 1994, delivered. By the mid-1990s, the hospital had begun to reduce its dependence on county subsidies. In 1998 it earned distinction as one of the nation's top 100 hospitals.
Two months ago, however, UMC's chief financial officer reported a $9 million loss for the fiscal year and in September he resigned. Now, as a private auditing firm is looking at the hospital's books, the fear is that the true loss may be $20 million or more. The county, which told Hale in 1993 it would stay off his back if he turned around the hospital's finances, is on his back.
We support County Manager Tom Reilly's push to have Hale answer directly to him rather than the County Commission. This would lead to greater oversight of the hospital's finances and would spare the county from being surprised at the amount of its subsidy. We also support close examination of the audit, which should reveal why the hospital once again needs a huge subsidy. If the audit shows reckless spending, poor controls, bad judgments, then pressure -- and lots of it -- should be brought to bear. But if it shows that the losses are due to the post-Sept. 11 economy, that the hospital necessarily treated an abundance of uninsured patients, then the subsidy should be paid without recriminations. Patient care will surely be affected if the hospital staff is sanctioned simply for fulfilling its mission.
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