Figures for the first half of the 2003 fiscal year show solid financial improvement by the University's Medical Center compared to its performance in recent years and that of other academic hospitals.
In a report to the Medical Center Operating Board Committee of the Board of Visitors, Medical Center officials presented evidence that the 2003 fiscal year "continues to surpass expectations."
The Center's $20.8 million operating income for the six-month period brought a positive margin of 6.6 percent, according to Larry L. Fitzgerald, associate vice president for finance and chief financial officer for the University Health System.
Operating income is a key indicator of the financial health of an organization, according to Fitzgerald.
The margin for this year is significantly higher than the 0.4 percent positive margin of the 2002 fiscal year.
Calling the numbers exciting and promising, Chairman of the Medical Center Operating board committee, Edwin D. Vaughn, Jr., M.D. said he credited the marked improvement to good management and the skill of the Center's physicians and surgeons.
Fitzgerald also said there were three numerical factors that resulted in the increase in operating income.
"Our volume is slightly greater than budget, our revenue is slightly greater than budget and our expenses are exactly equal to budget," he said.
The Medical Center's current financial numbers surpass statistics of many peer academic hospitals.
"These [figures] reflect solid financial performance, both in comparison to other financial years and other academic institutions," said R. Edward Howell, Vice President and Chief Financial Officer for the Medical Center. "We've compared favorably to 124 academic medical centers."
Growing expenses are expected to reduce the Medical Center's figures for the second half of the 2003 fiscal year, according to Howell.
"It is my expectation we will finish the year with good numbers, but not as good as the first six months of the year," Fitzgerald said.
Officials agreed that even these initial financial figures will influence Medical Center investments in the future.
"Our capital budget for 2004 will be in excess of $50 million," Fitzgerald said. "We're able to make investments of that amount due to the financial figures we're expecting in 2003."
Howell expects investments to go towards upgrading capital equipment and instituting an adjusted pay plan for Medical Center employees.
"We will be spending a substantial amount of money to enhance the ability of the Medical Center to provide gold standard medical care to Virginia," Fitzgerald said.
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