Despite some remaining obstacles, the University Health System recently announced some financial successes and plans to expand.
The system surpassed its expected operating income of $48.9 million last year. Coupled with a $15 million one-time adjustment, the system ended up earning $74.4 million.
Larry Fitzgerald, associate vice president for Business Development and Finance, said the increased operating income was "the result of a strong effort to control expenses."
Most of this effort, he said, centers on supplies and pharmaceuticals. In addition, with half of the health system's costs coming from labor, officials focused on hiring only essential individuals. As a result, the health system has been able to continue the clinical mission without any employee reductions, Fitzgerald said.
This financial success occurred despite the obstacles posed by current economic conditions. The hospital is experiencing a decrease in its overall number of patients, along with lower numbers of births and surgeries. Fitzgerald said the number of patient admissions began to drop in April 2008 before starting to recover in January 2010. By July, the number had recovered fully, he said. Nevertheless, admissions at the hospital are down 7 percent from their preferred figure, he said.
The drop in admissions is not unique to the University Health System. Fitzgerald said hospitals nationwide are experiencing similar reductions, also largely because of general economic conditions.\nPeter Jump, director of public relations for the health system, said when faced with a recession, many possible patients tend to delay coming to the hospital for elective procedures. These decisions lead to a decrease in hospital admissions across the board.
A second factor in declining admissions, Fitzgerald said, is the occasional lack of bed space.
"We would have more admissions if we could take all patients," he said.
Fitzgerald said a new hospital tower is being constructed in response to the growing need for space. The addition to the hospital, set to be completed in fall 2011, will provide between 72-75 additional private patient rooms.
To ensure future success, the University will have to continue navigating the economic environment, Fitzgerald said. He spoke of plans to monitor all activities, evaluating expenses and contracted services as required.
"When business activity grows, we will expand to meet that demand," Fitzgerald said.
Looking forward, Fitzgerald said, it is difficult to prepare fully for the surge in primary care needs that may accompany federal health care changes, especially once 32 million more individuals become insured in January 2014.
Fitzgerald said the health system does not have "the best financial status of all hospitals," but he nevertheless noted that it does possess a very solid financial base.
"We are a strong financial entity and have been able to invest in the clinical enterprise," Fitgerald said.
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