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Medical Center reports increased revenue

Regardless of a nation-wide trend of drastic medical school financial losses, the University Medical Center reported yesterday that while it had a strong fiscal year, the Center still is struggling to harness ever-growing expenses.

The Center's 1999 fiscal year financial report was presented at yesterday's meeting of the Board of Visitors' Health Affairs Committee.

Larry L. Fitzgerald, who becomes the Center's chief financial officer Sept. 20, said patient admissions to the Medical Center in FY99 increased 4 percent, up to 28,984 from 27,923 in FY98.

"This is outstanding," Fitzgerald said. "Nationally admissions tend to be flat. These numbers represent capturing market share from competing facilities," such as Martha Jefferson Hospital and the Medical College of Virginia.

He said that the average patient's length of stay dropped over a half day, from 6.0 days in FY98 to 5.4 days in FY99.

"Our length-of-stay numbers are very strong," he added. "We compare favorably to institutions across the country."

Fitzgerald said while the drop in length of stay should reduce revenues, savings from expenses keep the Medical Center from experiencing losses.

"When length of stay is down, revenue tends to drop slightly," he said. "However, length of stay increases expenses greatly.

"Our success at the end of the day will rest on our ability to control our costs, not on our ability to manage our revenue," he added.

Net patient revenue also rose in FY99, from $450.8 million to $458.9 million.

Despite these positive signs, Fitzgerald said there still are areas of significant financial concern at the Medical Center.

Operating expenses climbed 4 percent from FY98, topping out at $460.4 million, compared to $442.5 million in FY98 and $401.7 million in FY97.

Board members expressed concern over the steadily increasing costs.

"It seems to me that you need to identify areas to cut expenses," Board Member William H. Goodwin Jr. said.

During the meeting, Fitzgerald and Dr. Robert W. Cantrell, vice president and provost of the Health Sciences Center, also expressed concern over the effect of the federal Balanced Budget Act on Medical Center revenue.

"We're facing $107 million in losses in funding" in the five-year period that began Oct. 1997, Cantrell said. "We cannot allow this to continue."

Other teaching hospitals throughout the country, including the University of Pennsylvania, have experienced steep financial losses in the past several years.

Cantrell said he is involved in an effort to make Congress aware that the BBA is having adverse effects on the Medical Center and other institutions that receive federal funding.