Report says UCLA Medical Center in red

By Timothy Kudo

Daily Bruin Staff

The UC Board of Regents listened to a report Wednesday that
generally outlined the sober financial situation of UC medical
centers, and of UCLA’s in particular.

To balance its budget, UCLA Medical Center spokesman David
Langness said layoffs were an option. If the university remains in
the red, administrators will be forced to streamline staff and
programs.

“It doesn’t mean layoffs necessarily,”
Langness said. “It means bringing together people of similar
areas of work and centralizing it.”

But, he added that layoffs are still a possibility.

“The need will depend on our budget and our patient
revenue,” Langness said.

“We have to stay in the black, so whatever adjustments we
need to make, we’ll do,” he said.

The Balanced Budget Act of 1997 has hurt hospitals throughout
the country by reducing Medicare reimbursements for hospital
services. And, it’s about to hurt UC hospitals even more,
according to Anne Broome, UC vice president of financial
management.

UCLA has a higher percentage of patients under Medicare than
other UC hospitals, Broome said.

The hospital covers the west side of Los Angeles, which
according to Langness, is an area with a particularly high
concentration of older people. Currently, Medicare is available to
people 67 years of age or older.

Because the act makes progressive cuts to Medicare, the next two
years will be even more difficult for the university, forcing it to
adapt.

“We are controlled and bound by our ability to generate
capital,” said William Gurtner, vice president of clinical
services development.

Maribeth Shannon, director of clinical services development,
told the regents that one reason for fiscal problems is the level
of care the university offers.

“We tend to attract some of the sickest patients in
California because of the nature of our operations,” she
said. “But that’s not something that’s taken into
account.”

Medicare reimburses the hospital a set amount for operation
costs, but that still leaves the university short. Since sicker
patients require more costly care, the university has to fork even
more money out of its pocket for treatments.

In general, “for every Medicare patient we treat, we lose
money,” Langness said.

But the hospital can’t just refuse Medicare patients,
especially since 54 percent of patients in the United States are on
Medicare.

In addition, reimbursements can’t always be expected, he
said.

“Often, especially now in this new era of managed care,
reimbursements are denied or delayed,” Langness said.

Another reason that UCLA is doing worse than other UC hospitals
is because the Davis, Irvine and San Diego campuses have county
hospitals. That designation entitles them to special reimbursements
from the government, Broome said.

In addition, the university medical centers compete on some
levels, such as for faculty and research money.

But Langness said he was optimistic and that the university was
working to relieve its financial problems.

“It looks good, we’re making a lot of
progress,” he said.

The regents will continue into the second and last day of their
bi-monthly meeting today.

On their agenda is a vote to increase non-resident tuition and
discussions of outreach and next year’s budget.