MUSC braces for budget storm
University, hospital freeze hiring, cut overtime and look for other ways to save
Letter to MUSC faculty, staff and students (5 page PDF)
Times are tough at the medical university and hospital.
To preserve jobs in a brutal economic climate, one of South Carolina's largest economic engines is slashing costs by instituting a hiring freeze, cutting overtime and using less paper and electricity.
The Medical University of South Carolina and the Medical Hospital Authority employ about 11,000 people. At the hospital, underfunded Medicaid services are on the chopping block, and the workforce is being adjusted through attrition.
Medical University President Ray Greenberg outlined some of the measures in an Oct. 9 letter to faculty, staff and students. "A principal driving force in our decision making was to protect jobs," he said. But he doesn't have a crystal ball. "I can't sit here and tell you today we won't have to deal with that."
Tommy Cockrell, chief operating officer of the S.C. Hospital Association, said that hospitals are not recession proof. The drying up of capital means delaying construction and large equipment purchases. Also, as people lose their jobs and insurance, hospitals acquire more bad debt.
The university, already underfunded, Greenberg said, now must work with even less after state budget cuts. Seven percent, or $100 million, of the university's operating budget comes from state appropriations. After the last two rounds of state budget cuts, that amount has been reduced by between $4 million and $5 million, Greenberg said Wednesday. And more cuts could be coming.
The total operating budget for the university and hospital is about $1.7 billion. Slightly more than half of that runs the hospital and just less than half pays for the university.
On the hospital side, a plateau in patient numbers, reduced Medicaid reimbursement and managed care plans are to blame for a $19 million loss for the 2007-08 fiscal year, Greenberg said, the first deficit in more than eight years.
"We can say we can't afford to do this anymore," he said, giving an example from the child and adolescent psychiatry unit, which took a big Medicaid hit mid-fiscal year. Reimbursement was slashed from $1,800 per day to $400 per day. "We can't break even," he said.
Medical University Hospital is by far the largest provider of Medicaid services in the state and received $10 million less in reimbursement than expected, he said.
"Medicaid-dependent services are at high risk," Greenberg said. Officials are currently compiling a list of such services and considering the effects of cutting them.
Also, the $275 million Ashley River Tower, which opened in February, is causing cash flow problems. "The overall patient census in MUHA (Medical University Hospital Authority) has not risen sufficiently to cover the cost of operating the new ART (Ashley River Tower)," Greenberg wrote in the Oct. 9 letter.
While patient levels have not dropped, they have not continued to rise as they have during the last seven years, he said. Some of that is people delaying elective surgery because of economic reasons and also national trends toward fewer heart surgeries and catheterizations, he said.
Ashley River Tower was projected to either lose money or break even the first year, he said. Start-up costs associated with the new hospital included using more expensive nurses from staffing agencies, a necessity to find experienced nurses quickly. In addition to attrition, staff reductions will come from using fewer nurses from staffing agencies, he said.
Meanwhile, three main construction projects, two already under way, will continue, he said. Money for the dental school, drug discovery building and bioengineering building is already allocated and cannot be used for other purposes, he said.
Further, since research is among MUSC's healthiest revenue streams, it would make no sense to stop them. "The only way to solve funding from the state is other revenue services," he said.
If all of this isn't enough, what really keeps Greenberg awake at night is what could happen with federal revenue streams after the $700 billion financial system bailout.
"That must affect discretionary spending," he said.
Three-quarters of research funding comes from the federal government, and the majority of that comes from the National Institutes of Health, he said.
Greenberg weathered the economic storm of the early 2000s that brought 30 percent state budget cuts, he said. "We're just at the beginning here. We have no idea how long or how deep this will go," he said.
Reach Jill Coley at 937-5719 or jcoley@postandcourier.com.
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Comments
This article has 16 comment(s)
Posted by willie08 on October 16, 2008 at 1:09 a.m. (Suggest removal)
We are so screwed. I want to thank Bush, and his administration for leaving the White House with a bang.
It's been 8 great years!
I don't think anybody else could have screwed things up worse.
Everyone I know is losing their jobs, Geologists, Architects, Bankers, Graphic Designers, and now teachers and MUSC will be laying people off.
I think it's time we give the Republicans a vacation. A very long one.
Posted by dadsemt on October 16, 2008 at 6:55 a.m. (Suggest removal)
willie08 you are an idiot. This all started because you bleeding heart liberals took over the congress and decided to spend more and open up lending to people who can't afford to purchase what they bought. Go back under the rock you crawled out of. NOOBAMA08
Posted by back2u on October 16, 2008 at 7:26 a.m. (Suggest removal)
Wow! We can't win for losing. They beg America to live healthier and when folks try to do that and have less need for medical attention, then they whine about having less customers/patients. Why is it that we all like to point fingers at the other person? It's not all conservatives problems nor is it all liberals problems -- it's everyones problem with all sides contributing. The cycle of life doesn't just apply to birth-life-death but to everything, including financial issues. Keep faith. This too shall pass.
Posted by LadyTarHeel on October 16, 2008 at 7:30 a.m. (Suggest removal)
Research funding has been in the tank since I started grad school in 2006. Funding is so hard to get it's ridiculous. I'm submitting a individual pre-doctoral fellowship application in December and I'm very nervous about it. The NIH has had to raise the requirements to get funding simply because we are over extended and science/technological advances are suffering because there is no money.
Posted by dogwoodroad on October 16, 2008 at 7:50 a.m. (Suggest removal)
I don't think they are going to start laying people off at MUSC - the article says they are absorbing losses through attrition...and truly, I know many, many employees that are leaving of their own accord.
The real problem is wasteful spending with no results. You can't blame wasteful spending on any one person...everyone has a hand in it - the president, the liberal congress, the state legislators, the president of the hospital, the mid level managers in the hospital...the CITIZENS who demand that their every little whim is a birthright...everyone is at fault.
Posted by counterpoint on October 16, 2008 at 8:05 a.m. (Suggest removal)
dadsemt (and willie08), EVERYONE drank the punch, directly or indirectly.
The good news we are in a necessary and relatively easy period of adjustment. As bad as things are, I'm not seeing any bread lines.
dadsemt, if you think Obama is a bad choice, take a look at McCain's health plan. Before the usual "damn socialism" objections are raised, consider that no matter what, we ALL pay for health care in the form of medicaid, high premiums, and high costs at hospitals to cover indigent patients; Obama's plan is the one that manages this situation head-on.
Posted by jeg111 on October 16, 2008 at 10:44 a.m. (Suggest removal)
Should have never built that ugly hospital, ART!! They could start by reducing the pay of some of the employees that take 1 or 2 hour lunch breaks, when they only have 30 minutes, and then do something about some of the ones that actually sleep at their desk. MUSC has actually written people up for sleeping on the job rather than getting rid of them or cutting their pay. Have you ever noticed that the nurses that work at night are usually overweight? Thats because they eat all night because of boredom!! People can be a patient at MUSC for four days before seeing the attending Physician. This place needs a drastic overhaul. They can save a bunch of money by getting rid of the dead weight, starting with some department heads right on down the line.
Posted by commonsence on October 16, 2008 at 11:03 a.m. (Suggest removal)
Anyone notice the hospital building spree during the past 5 years...maybe instead of being blinded by all the cheap money that was available for construction, some of those high priced execs should have seen the lean times coming and anticipated lower patient counts and reduced state funding.
Posted by Jessamine on October 16, 2008 at 11:06 a.m. (Suggest removal)
MUSC has had problems for years - decades even. This is not new. Even though I'm not fond of the current President (of the US, not MUSC), I do not blame this on him.
They had "reduction in force" a.k.a. FIRINGs just a few years ago, firing people for no reason other than they had no money to pay them. My friend was "RIF'd" after being employed there for 13 years. She was not fired for doing a bad job, just had "too many mouths to feed" so she was kicked out of the nest. Luckily she was rehired several months later but like I said, this is not the first time MUSC has frozen their budget or RIF'd folks.
When I worked there, I didn't received a raise (merit or cost of living) for 4 years. I was employed for 10 years (started in 1990). I did a good job and always received excellent evaluations but rarely received more than the 2% cost of living increase that came every other year or so. With "rewards" like this, it's a wonder MUSC has any employees at all. Morale was and is terrible.
Anyway, when I worked there, the uproar was over a hiring/wage freeze while the president (of MUSC) continued to enjoy his free home (which I'm sure is now worth a million plus), free car (at the time -1999- it was a Jaguar), and $750,000 salary. I do hope the administration looks at their own bottom line when making/demanding cuts and sacrifices from the employees.
Posted by Jessamine on October 16, 2008 at 11:27 a.m. (Suggest removal)
And, I just read that the president and vice president refused their cost of living increase. How honorable. Do they actually need to even give those to folks who make over a million a year???
Posted by blackwoman on October 16, 2008 at 11:56 a.m. (Suggest removal)
God forbid you or your family need a trauma center, but there is a top notch one right over the bridge. We are lucky to have such a great hospital in such a small city. Unfortunately, most people with gunshot wounds do not have insurance, but they will get lifesaving care regardless. Every business can stand to trim the fat these days, MUSC is no different and merely being proactive with their economic outlook. If you are in need of state of the art, top notch medical care where decisions are made hourly (as opposed to once a day) then MUSC is where to go. I would not be an inpatient anywhere else.
Posted by icunvme on October 16, 2008 at 1:25 p.m. (Suggest removal)
If they didnt spend millions on the new building they wouldnt be in this bind!!!!! GOD SPEED MUSC
Posted by Scottishchassc on October 16, 2008 at 7:07 p.m. (Suggest removal)
As a health care professional I have witnessed first hand the amount of pork in the hospital setting. You have nurses sitting around while low paying techs do all the work, you have to pay $50 for an aspirin, residents doing a majority of the physicians work and enormous student cost while professors make outragious salaries. The only thing that seperates MUSC from companies like ENRON and AIG is it is masked by a hospital sign
Posted by malman2100 on October 16, 2008 at 11:35 p.m. (Suggest removal)
All I can say is wow.
As a RN at MUSC I am shocked to see some of the negative comments aimed at nurses here. Nurses are on the front lines of the health care crisis in this country. Fighting for our patients and doing more work with less help with on one hand and fighting our own management to get what is needed for our patients on the other.
I dont see many nurses "sitting around" letting the techs do all of the work. Some of the other comments I am not even going to respond to. Too many people these days are caught up in cynicism and sarcasm and do not care who they aim it at.
Say what you will, we will be here to take care of you when you need us!
Posted by studley on October 17, 2008 at 12:58 a.m. (Suggest removal)
These post are interesting. The Bush defenders have their heads (up their a**es) in the sand. The demos did not take over congress - they have a majority in the house and it is 49 vs 49 in the senate with 2 independents (one of the "independents", Joe Lieberman, is a true political ho) and Darth Vader (the war criminal) as the tie breaker.
LadyTarheel (I'm a UNC Charlotte guy) your comment is very pertinent. It is funding of research grants that have lead to most of the progress we have made in most fields, especially medicine.
If you guys ever schedule us again in basketball we are going to whip you booties.
Posted by realman on October 17, 2008 at 9:45 a.m. (Suggest removal)
Raymond Greenberg Agency Head Medical University Of Sc $232,064
W. STUART SMITH EXECUTIVE DIRECTOR Medical University Hospital Authority $431,571