Officials say UMC getting financial house in order

Wednesday, July 30, 2003 | 11:28 a.m.

Financial losses at Clark County's University Medical Center, which hit almost $3.8 million in February alone, are coming under control, county officials said Tuesday.

The losses were pegged at $714,000 in June, one-fifth the February number, and that indicates the tough recovery plan instituted earlier this year has been effective, the officials said.

County Manager Thom Reilly said the numbers are "incredibly good news."

He gave credit to the hospital system staff for cutting the losses, which required $38 million from the county to prop up the system in December. Reilly said staff members, many of whom did not support the staff cuts included in the recovery plan, have instituted many of the changes initially proposed to save money.

"Staff has put their noses to the grind and is knocking them out, implementing a multitude of recommendations," Reilly said.

Mike Walsh, UMC chief executive officer, agreed.

"From top to bottom, from the county manager to the employees working the floors, everybody seems to understand what the recovery plan is and what they need to do," Walsh said.

Among the cost-cutting measures that have already worked is a "reduction in force" of about three dozen employees, half of them in management, which has saved about $10 million. Walsh said that probably had the biggest impact on the staff, along with fears that more layoffs would come.

"Since then, nothing traumatic has happened, so generally people are past that," Walsh said.

The hospital also has negotiated with vendors for lower prices on drugs and equipment, has done better in getting payment information from patients, and reduced advertising expenses.

The county also has brought in more money from Medicaid and other federal programs. Cumulatively, the actions have cut the operating net loss in half from May and for the first time since May 2002 losses have been less than $1 million.

Hospital officials said they hope to have eliminated the losses by the end of this year, but they warned bad news could upset that projection.

"That is my goal, that is my hope, and absent some significant event we're not aware of, that trend should continue," Walsh said.

The officials made the announcement of the improving fiscal condition before a meeting of the UMC task force, a citizens' committee recommending new guidelines that they hope will save more money.

Reilly said the task force probably will come out with recommendations in October. The Clark County Commission will have to act on those recommendations, but setting new general guidelines for the county's medical services will likely save more money, he said.

"The UMC of October-November 2003 will be a different UMC from October 2002," he said.

Maryanne Salm, political director with the Service Employees International Union Local 1107, has been leery of plans that could lead to more staff cuts among the unionized hospital staff.

But she gave a qualified compliment to the administration's steps thus far.

"I think that the hospital administration has done a good job in addressing some inefficiencies," Salm said. She warned that the "vexing problem" of providing medical services to uninsured people, a problem that grew much worse after the Sept. 11, 2001 attacks led to layoffs in Las Vegas, is still present.

"We're going to have to continue to think of innovative ways to have employers provide access to health care for their employees," Salm said.

One recent change could improve the problem. The highly contentious tax plan passed by the Legislature and Gov. Kenny Guinn provides payroll tax credits for companies that provide health insurance.

That's "a step in the right direction" because more employers to provide basic coverage for their employees, she said.