Job cuts part of plan to trim costs at UMC

Wednesday, Feb. 5, 2003 | 11:24 a.m.

In a move to cut costs at University Medical Center, Clark County officials say they will cut jobs, eliminate open positions and look at other measures to ease the hospital's fiscal woes.

Clark County Manager Thom Reilly said the county is eliminating more than 100 vacant positions, many at the 13 area Quick Care Centers. The positions have been built into budget projections so will save money on paper, he said.

Reilly said this morning that he does not have the total number of layoffs, but the county should have more information later today.

"We're trying to avoid touching the core areas of trauma, neonatal and burn," he said. Those three centers are widely considered the centerpieces of UMC's medical services.

Reilly said the county's measures would save the hospital about $10 million a year, but he also warned that more steps will have to be taken to stop the hospital's ongoing losses of more than $2 million per month.

"This will by no means address the longer term issues that we will need to direct our attention to," Reilly said. Those problems prompted the Clark County Commission to authorize a $38 million cash infusion in December, including $20 million to pay debts.

He said layoffs will not affect "front-line employees," but senior administrators and mid-level managers at the hospital -- at least for now.

Staff members have warned that the measures could involve service cuts at UMC or the outsourcing of some hospital services.

Clark County Commissioners said this morning that they, too, do not know who will be laid off and how many people will be affected.

"Hopefully it will not affect the quality of care," Commissioner Yvonne Atkinson Gates said. "What's really important is that we're going to provide the care to the citizens, but this is a necessity."

Commission Chairwoman Mary Kincaid-Chauncey said Reilly has the authority to make "difficult decisions" in the best interests of the hospital.

"I regret having to do this, but I think we owe it to the public to get UMC in financial shape so we can provide the quality of care that we are charged with providing," she said.

She said the layoffs will affect management positions.

"The professional people, I think, have the ability to find other jobs, to land on their feet," Kincaid-Chauncey said.

Reilly said UMC's urgent care centers scattered around the county would continue to be a target of an army of consultants and a citizens task force looking into the financial problems at the hospital.

In two months, the Lewin Group's analysis could provide the basis for more staff cuts. Reilly said layoffs would follow the consultant's analysis only after a second review.

"The report will allow us to target certain areas first for further analysis before any more cuts," he said.

The 13 Quick Care Centers were designed to bring in patients and revenue to the hospital, but not all of them are performing, Reilly told the commissioners Tuesday. He said a review by the Lewin Group shows that collectively they are breaking even through direct cost recovery and referrals to the main hospital, but some are losing money.

The consultants are looking at individual Quick Care Centers and could identify the money-losing centers within a few weeks, he said. The consultants are comparing staffing levels at UMC's multiple departments to 68 other public hospitals, he said.

Union officials are taking a different approach.

"This is a preemptive strike that shouldn't be contemplated until they have all the facts," said Tom Beatty, executive director of the Service Employees International Union Local 1107. "There should not be a rush to judgment."

The union representing the hospital workers has not warmly received the suggestions, however. The union was to unveil a new plan today that the labor organizers argue would save the hospital without making the cuts.

The union plan argues that the county's private hospitals need to contribute more to unreimbursed "charity care."

Jim McNeill, an SEIU organizer, said private hospitals nationally average 6 percent of their total expenses to charity care, but the number is far lower -- just about 4 percent -- locally. The only exception would be for private Lake Mead Hospital in North Las Vegas, which contributes more than 6 percent.

UMC's total expenses on charity care equaled 14 percent in 2002, more than all other hospitals combined, McNeill said.

"UMC's unfair charity-care burden not only threatens its ability to deliver care to the uninsured, it threatens the vital services that UMC and only UMC provides to all Clark County residents," agreed Maryanne Salm, the union local's political director.

The union's plan would require the area's private hospitals to either provide care up to that 6 percent level or contribute to a fund until the hospitals reach an equivalent total.

McNeill said if the area's five private hospitals had met the 6 percent standard, they would have provided Clark County residents with an additional $16.5 million in charity care.

The difference would not have wiped out the hospital's deficit, but would have come close, according to county figures.

The private hospitals, however, generally do not like the proposals.

"We need to be careful in Las Vegas that we don't create more harm in the long term," said Becki Powell, spokeswoman for St. Rose Dominican, which has two hospitals in Henderson. She said her hospital provides 17.3 percent of net revenues to charity and uncompensated care, and the hospital has a thin 2.3 percent profit margin.

"Obviously, to run a business and keep it moving forward, you need to have that," Powell said.

Asking the private hospitals to contribute more would drive up hospital costs for insured patients, leading to more businesses dropping insurance, creating a bigger problem for UMC, which by law has to provide medical care for all, she said.

Ann Lynch, a spokeswoman for competitors Sunrise and MountainWest hospitals, said a 1987 law already requires private hospitals in Southern Nevada to pay for care for the indigent.

"That's what we already do," Lynch said. "We have to pay $2 million every year. If we do not, we have to pay the difference.

"Our indigent, just like UMC's, went up. We're doing more than our fair share."

Not quite, the union's McNeill said. He said the private hospitals have to pay .6 percent of their total revenue, similar to a gross revenue tax, to support indigent care.

But that only totals a little more than 4 percent of the total expenses, two-thirds of what the union wants to see the private hospital pay, he said.

Reilly, the county manager, said he has not seen the union's proposal but will look at it carefully.

"Part of the public dialogue that we want to have is: What is the responsibility of the other hospitals to the uninsured and underinsured?" Reilly said. "It's part of the public dialogue that I definitely think we should have."

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