Two projects at the University of Arkansas for Medical Sciences will be more expensive than first planned, but the health system's finances are weathering the pandemic, its governing board learned at a meeting Friday in Fayetteville.
During the meeting, University of Arkansas System trustees approved revised estimates for two capital projects, one of which -- a radiation oncology center set to open around 2023 -- more than doubled in price, from $25 million to $65 million.
The increase is because of additions to the project, including another vault to house radiation therapy equipment and a walkway from the Winthrop P. Rockefeller Cancer Institute, UAMS Chief Operating Officer Christina Clark said. The project was first approved in January.
A committee and the full board signed off on the increased estimate without discussion Friday. Trustees also agreed to a $5 million bump in the expected price for a new surgical center at UAMS, to $85 million.
UAMS Chancellor Cam Patterson said revised plans for the radiation oncology center mean UAMS will be the state's only medical provider that can take part in studies and trials that involve proton beam therapy, a radiation treatment.
He called it a "spectacular" addition to the academic medical center's planned application for National Cancer Institute status, which is an oft-stated goal of its officials.
Both the radiation oncology center and the surgical center will be financed through a bond issue. Trustees tabled selection of underwriters for those bonds Friday in favor of revisiting the subject in December.
Patterson and a partner with external auditing firm KPMG also spoke briefly about UAMS' financial health and reporting practices. No significant findings appeared in an audit, the KPMG official said.
Patterson said managers and staff members with the health system are "continuing to work very hard to adapt to the additional burdens" created by covid-19. The financial picture has improved, but "there are many uncertainties that face us," he said.
In May, officials anticipated a pandemic-related $45 million deficit for the fiscal year that began July 1. UAMS leaders described a much stronger outlook at meetings and in financial documents this week.
Through Sept. 30, the reports show a $31.7 million operating margin for the year compared with a $30.9 million margin at the same point in the previous accounting period, and far surpassing an expected loss of more than $9 million in the first quarter.
However, expenses for salaries, benefits, supplies and drugs all were up from the previous year and what was budgeted.
Given the unprecedented nature of the health crisis, Patterson said UAMS plans to take a "conservative position" going forward.
"I think we have to be very careful that we are judicious in managing our expenses," he said.