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story.lead_photo.caption The University of Arkansas for Medical Sciences' Little Rock campus is shown in this file photo. - Photo by Benjamin Krain

The University of Arkansas for Medical Sciences will eliminate 124 more jobs, suspend a $45 million maintenance plan and make several other spending changes, the academic hospital's head of finance said Friday as officials addressed UAMS' budget crisis.

The new round of cuts will be made through attrition rather than layoffs and will raise the number of eliminated positions to 730, officials said at a specially called University of Arkansas board of trustees committee meeting nearly two months after UAMS laid off 258 workers and cut 600 jobs. The new total represents about 6.6 percent of the 10,900-person workforce.

UAMS is on track to finish the fiscal year ending June 30 with a budget deficit "no worse" than $39 million, the level that trustees authorized and nearly half the $72 million deficit projected at the time of the Jan. 8 layoffs, said Bill Bowes, senior vice chancellor for finance and administration.

The higher estimate would have drained all but about $5 million from the reserve account that officials can readily access. Bowes expects to have a "very clear picture" about the financial situation when February's numbers are finalized and presented to trustees in March, he said.

"We have, I think, accomplished a great bit in just about three months' time," interim Chancellor Stephanie Gardner said. "I think we have turned a corner, but it is incredibly important for our employees, faculty and staff to understand the message, that we're making progress."

Trustee John Goodson, who called for monthly meetings about the academic hospital's finances, asked that officials talk more about the effect of the cuts at the next presentation.

"We don't talk about what services we eliminated or what we can't provide as a result [of the cuts]," Goodson said. "If the answer is none, then we weren't lean enough. ... So we need to answer that question, and we need to be more transparent about what we had to eliminate."

Gardner said the potential effect of job cuts to revenue streams "can't be dismissed" and that officials have to "very carefully look at" the ramifications.

"We're having these very tough discussions for hours each week about what positions are most critical," Gardner said.

An estimated 80-100 employees leave UAMS every month, and all vacant positions are being reviewed before they are refilled, said Leslie Taylor, vice chancellor for communications and marketing. Jobs "critical to our mission" will be staffed, she said.

UAMS has operated on a deficit budget for three of the past four years, drawing from its unrestricted net assets to cover the difference between spending and income. That account had $154 million as of June 30, 2013; if the current deficit forecast holds, it will fall to about $38 million at the end of this fiscal year.

Goodson also requested comparisons to academic medical centers in neighboring states that include, among other things, the levels state funding at those institutions.

The state funded UAMS at a high of $120 million in fiscal 2014, but of late, funding is $107 million to $108 million, and about $21.5 million of that is "pass-through or designated" funding, leaving UAMS with about $86 million.

"I want the board and the public to see exactly how we stack up among our surrounding states," Goodson said.

To address the budget woes, UAMS is targeting at least $93.6 million in combined additional revenue and reduced spending in fiscal 2019, which begins July 1, Bowes said. Most of that, about $54.4 million, would be savings from the eliminated jobs.

Photo by Benjamin Krain
UAMS interim chancellor Stephanie Gardner

The plan also includes $1.4 million in savings from reorganizing clinical trials, a $1 million cut in equipment spending and a $2 million cut to the travel budget, according to Bowes' presentation.

The hospital anticipates saving $28 million from increased efficiency based on what an outside firm, Chicago-based Huron Consulting Group, has estimated, he said.

Shelving a $45 million maintenance plan that was scheduled to begin in the current fiscal year will save $4 million a year, Bowes said. Taylor said the board of trustees previously authorized UAMS to obtain loans to cover work and repay them over a period of up to 10 years, but that won't be pursued at the moment.

"This is work we will need to do at some point, but we don't feel like this is something we should undertake right now," Taylor said.

Urgent maintenance, such as a leaky roof, will be addressed. But $25 million in equipment projects and $5.8 million in work at the UAMS Central Building are among the items that will be delayed.

Officials are also considering, but have not finalized, a host of other changes that would add on to the $93.6 million in projected savings and increased revenue. Among them are potential changes to employee benefits, such as long-term disability and paid leave, Bowes said.

UAMS' benefit package exceeds those offered at other Arkansas health care institutions, but it is similar to other teaching and research hospitals in neighboring states, Gardner said.

Trustees expressed concern that reducing benefits could frustrate workers who are already shaken by the ongoing cuts. Sheffield Nelson, of Little Rock, cautioned against "misleading ourselves" on how such reductions would be received.

"I think people may be a little more upset than you might think once it's taken away from them and they realize it," Nelson said.

Dr. Richard Turnage, vice chancellor for clinical programs and chief executive of the UAMS Medical Center, said changes to long-term disability benefits could prompt "dissatisfaction," but he said it is typically ranked lower than other benefits, like health insurance and retirement, by employees.

"I think that the faculty -- it's just now beginning to be discussed -- and so I think the faculty by and large aren't aware of this yet," Turnage said. "There will certainly be some dissatisfaction. But I think also, given the things that we've gone through and the issues we face, I think people understand we have to look at things like this."

Information for this article was contributed by Aziza Musa of the Arkansas Democrat-Gazette.

A Section on 02/24/2018

Print Headline: UAMS to erase 124 more slots, slash spending; Jobs to go by attrition; cuts will halve deficit, exec says

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  • NoUserName
    February 24, 2018 at 9:46 a.m.

    I'm not sure why the ADG doesn't just update the previous blurb from last night rather than post a completely new article. Having said that, here's what I said yesterday:
    .
    1. Word on the street, from a source who would know, is that there will be faculty layoffs coming.
    2. UAMS has run a deficit for like the last 10 years now. So, this shouldn't be news.
    3. UAMS has INCREASED revenue by 40% since 2014 yet the expenses have increased at the same or even a higher rate. That is MISMANAGEMENT.
    4. Why the heck does Dan Rahn have his name on a building when the guy left UAMS in shambles?
    5. Good to see Pope just jumped ship.
    6. I could talk about hiring practices where job postings are manipulated to get friends into positions.Or jobs being promised to people before the postings are even approved. But that wouldn't get anywhere.
    7. Or where research is effectively stymied (try to get IRB approval, for instance).
    .
    UAMS is a poorly run institution. The administration is clueless. The workers haven't had raises in forever but have seen benefit cuts. Morale is low. People just don't realize how bad the place is run. Unless they go for medical care and get a -usually- incorrect bill.
    Instead they'd rather the state throw money at UAMS because, well, it's UAMS and that's got to be good, right? I feel bad for the employees who have to put up with this s**t.
    .
    Speaking of Turnage, who cares little for research and more for how much money can be put into a surgeon's pocket, the position he now holds - Vice Chancellor for Clinical Programs - had a $100k salary increase put through the day he took over for Roxanne. In addition, there are FACULTY benefits and PEON benefits. Two different things.

  • KingCoyote
    February 24, 2018 at 11:10 a.m.

    It is amazing how people and the U of A will throw money at a terribly lousy football team but not donate to medicine.

  • drs01
    February 24, 2018 at 11:12 a.m.

    Any organization that cuts as many jobs as UAMS is the victim of severe mismanagement. My wife was a volunteer there until recently when she became frustrated with the lack of management oversight and the attitude of some employees.
    I wonder just how much $$$ is in the advertising budget. They spend a ton of taxpayer $$$ that is needless expense.
    UAMS is a two headed monster. The academic/research side is deserving. The business side is questionable. Both need stronger competent management. The public is directed to focus on the healing/research side. Recently bleeding hearts have come out in support. Few if any look at the business model and its failures. Thanks NoUser for giving us some real factual information.

  • NoUserName
    February 24, 2018 at 4:36 p.m.

    Speaking of Central Building maintenance, UAMS miscalculated the scope of the roof replacement this summer. Turned a 6 week job into a 3 month job. In addition, the company hired to do the work, not an Arkansas company I believe, had to start and stop and restart because they didn't have enough workers to even do the job.

  • Bob99
    February 24, 2018 at 8:36 p.m.

    NoUserName is spot on!
    WHY doesn't anyone investigate the total mismanagement and corruption at UAMS?!??
    Disgusting and sad.....

  • hillcrest05
    February 24, 2018 at 10:17 p.m.

    How much state funding is actually Medicaid match? And how much is funding of operations?

  • TheGoodNurse
    February 25, 2018 at 3:37 a.m.

    As a former nurse at UAMS, this is so obviously a managerial issue. The "new" culture at UAMS is the one of "prestige" & "ranking" rather than quality care with cost containment. The corporate section of UAMS is like Boardwalk & the actual hospital inpatient area is like the ghetto. Most of the nurse managers are absentee landlords with no managerial experience; solely nursing experience. I was and am proud of this institution but I left before the "purge". I refused to watch people who dedicated 20+ years of their lives only to be cut without warning or justification; simply an avenue lined with the mirage of compassion to avoid any potential lawsuit(s).
    How about you cut the salary of the so called elite white collar section that work 9-5, M-F for $500,000/year?
    Because you can't but hey, it's the state of Arkansas who foots the bill so I'm sure they don't care.
    Smells like embezzlement on the corporate level....

  • Bob99
    February 25, 2018 at 4:05 p.m.

    One sad aspect of this is that the staff working in the trenches won't see a wage increase for another 10 years which puts UAMS pay below the local job market. When they cut benefits how will they attract quality staff? What is guaranteed is those non-essentials working M-F 9-5 making 6 figures will not receive any pay cut, if anything they will get an increase or bonus. The big losers are the citizens of Arkansas which voted the clowns in office that run this circus.

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