UCLA Medical System revenue sees boost

CORRECTION: A previous version of this article incorrectly reported that the UCLA Medical System generated $5.6 billion in revenue during the 2008-2009 fiscal year. The correct figure is $1.5 billion, and the $5.6 billion number actually refers to the revenue yielded by all medical facilities across the UC system.

Driven by a brand-new facility and numerous local hospital closures, the UCLA Medical System posted record-breaking revenues in the last fiscal year.

In the 2008-2009 fiscal year, the medical system boasted revenues at nearly $1.5 billion with $100 million in surplus funds.

Roughly half of the surplus money was reinvested back into the hospital infrastructure, while the other half was given to the David Geffen School of Medicine.

The hospital’s success amid a background of hard economic times has to do with the source of its funding, said Dr. David Feinberg, chief executive officer and associate vice chancellor of the UCLA Hospital System.

The medical center is primarily funded by commercial insurance companies and only receives $9 million per year in state funds. This, Feinberg said, is why statewide cuts have not had a noticeable impact.

Feinberg said the hospital system’s record-breaking success was the result of a combination of factors.

He pointed to extremely high patient satisfaction and the opening of the new Ronald Reagan UCLA Medical Center, as well as the closure of numerous small community hospitals.

“No one wants to get sick, but if you hurt yourself and need to go to the ER, people are saying, “˜Let’s go try the new one at UCLA,'” Feinberg said.

The David Geffen School of Medicine has not been free from the effects of state funding cuts, though, according to Dr. Alan Robinson, associate vice chancellor of medical sciences and executive associate dean of the School of Medicine.

More than $53 million was given to the School of Medicine in 2008-2009, which helped the school to maintain its robust programs, he said.

A significant portion of the funds allocated to the medical center was used to support the community physician network, a series of small clinics staffed with UCLA doctors and medical residents, he said.

These clinics function as a training tool for medical residents, who are able to get invaluable first-hand medical experience. The other half of the medical center’s surplus money was reinvested into the infrastructure of the hospital system itself.

Amir Dan Rubin, the chief operating officer for the UCLA Hospital System, said the funds were used to convert to electronic medical records, upgrade patient rooms and invest in medical technology aimed at patient safety.

The most ambitious and costly upgrade to the hospital will be electronic medical records, Rubin said.

For the next few years, $180 million will be dedicated to the endeavor.

The new electronic records will aid in patient safety, preventing things like duplicate testing, Rubin said.

Feinberg said he is aware that there will be struggles ahead, however.

In April, the University of California will reinstate pension contributions, which have thus far been self-funded by a well-performing stock market.

This will force departments as well as employees to start paying into the system.

Feinberg expects this will imply significant costs, requiring a minimum 4 percent contribution per year by the medical center. The percentage, he added, may face increases.

National health care reform looms in the distance for Feinberg as a potential challenge as well, but he said he was unsure what the specific effects would be.

Notwithstanding these challenges, Feinberg remains optimistic.

“If we take care of our patients, they will make sure that we survive,” Feinberg said. “We don’t need to worry about what’s coming. We need to focus about what is right in front of us.”