By
Michelle McCollum
Arizona Daily Wildcat
Money is tight at university hospital, official says
The 175 layoffs that occurred at UMC over the past two weeks were last-resort actions to a serious problem of undercompensation for medical services, a hospital official said.
"We engaged in an extensive cost-cutting effort looking at all manners of operation, like supply saving costs, group purchasing opportunities, reduction in consumption in goods and services," said John Duval, UMC Chief Operating Officer. "But as a result of the inability to cure the issue by these saving means, we had to engage in a layoff."
The university hospital suffers from a dilemma that affects hospitals all over Southern Arizona - they are not being paid enough by federal, state, public and private organizations for the work they do.
For example, Arizona Health Care Cost Containment System, which is the health care plan for the impoverished, only pays 30 cents for every $1 UMC spends, Duval said.
"We cannot lay blame, but there are significant policy issues that the state will have to struggle with, that the federal government will have to struggle with, in order to turn this situation around," Duval said.
The undercompensation has left UMC with a $5-million deficit, and in order to restore the hospital to "profitable operations," Duval said, the layoffs were necessary.
"I would have taken a pay cut to a layoff," said Dr. Richard Lemen, whose 24 years of service to UMC were severed when the hospital board of directors decided his vice-president position should be eliminated.
Lemen, 58, was one of the 175 employees who were laid off in order to restore the hospital back to "profitable operations."
While Lemen agreed with the directors' decision to keep all nurses and bedside-care employees, he said he was disappointed that that decision left only management jobs for layoffs.
"I wanted to participate in finding a solution to these problems," he said. "And now I won't have that chance."
Lemen said he is very interested in the problems unique to Arizona hospitals, such as the large amounts of illegal entrants that pour into the hospitals looking for better health care. UMC spent approximately $8 million on foreign nationals last year, Duval said.
Lemen said that though he is disappointed that he won't be able to continue at UMC - where he has worked his entire medical career - he said is most worried about the community, which is losing two important facilities.
There are plans to stop funding to the Northeast Side Ventana Vista Clinic, which trains chaplains and provides 24-hour spiritual counseling, and to sell CardioWest Technologies, which produces a popular artificial heart.
To correct the $5-million problem, Duval said UMC is re-negotiating compensation contracts. He would not comment on the probability of the hospital closing or what would happen if UMC remained in deficit, but he said the hospital is watching spending very carefully.
"UMC, you understand, has to run like a business. We can't run at losses forever," said Duval. "We've affected 175, but that still leaves 2,500 individuals working at this institution. We carry a mission of care toward the patients and the community, and that's what matters."
