The Medical University Hospital Authority is in better shape financially than it was six months ago, when it had less than $30 million to cover expenses, but administrators say they are still exploring cost-cutting measures to improve their bottom line, including adjusting some employees’ hours.
The $30 million balance in early January wasn’t even enough to operate for 10 days, because it costs about $3 million to run the hospital each day, and $13 million to meet its biweekly payroll. A recent cash projection report shows the hospital now has about $50 million in the bank, which would cover less than three weeks worth of operating expenses.
“I’d like that to be 90 days,” said MUSC President Ray Greenberg. “There’s no question that good business practice would be to have a lot more money.”
This data does not include the financial assets of the university or the physicians’ group, which are managed separately from Medical University Hospital.
“As a state agency, unlike a business, it’s very hard to accumulate cash, and probably you should live by different rules than you would running a business or a private hospital or something like that,” Greenberg said.
“Ninety days in cash would be about $270 million. I promise you if, day in and day out, we had about $270 million sitting in an account, people in Columbia would look at that and sort of say, ‘Well, why don’t we just move a little money around here or there?’”
Dr. Pat Cawley, vice president of clinical operations and the executive director of the Medical University Hospital Authority, said the hospital has little savings to fall back on.
“We have very, very little. There are some hospitals that have a lot of investments and make money off investments, but we at Med U do not,” Cawley said.
The General Assembly appropriated $58 million for MUSC for the upcoming fiscal year, which is a small fraction of the hospital’s $1.1 billion annual budget. The hospital authority is expected to turn a $26 million profit next year.
Even so, the hospital has commissioned a consulting firm to identify and implement cost-cutting measures to save money.
Greenberg said that includes adjusting workforce hours as needed and reducing workforce size through attrition.
“We have not been looking at massive layoffs as a strategy,” he said. “Understandably, people are always concerned when you talk about financial performance. Labor cost is part of that, but that’s not the only thing.”
More patient admissions also help, he said.
“We’ve just been slammed busy,” Greenberg said. “I’ve been doing this a while, trying to figure out what drives volume in a hospital. It’s very hard to understand.”
Sometimes it’s easy, though, he said. For example, it’s not hard to predict admissions will spike during a severe flu season, he said.
“But we’re not in flu season now and the hospital is jammed.”
On average, Medical University Hospital admits 100 new patients a day.