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Finances improving at UAMS

Officials credit $23.7M in CARES Act funds as stabilizer by Kat Stromquist | May 29, 2021 at 3:40 a.m.
The University of Arkansas for Medical Sciences' Little Rock campus is shown in this file photo.

University of Arkansas for Medical Sciences continues to perform better than expected financially this year, but hasn't fully recovered from the pandemic's impact, officials said Thursday.

In remarks to the University of Arkansas System board of trustees, UAMS leaders highlighted improving patient volumes at its hospital, UAMS Medical Center.

By April's end, the campus as a whole made money for the first time in several months, finishing about $20 million to the positive, Chief Financial Officer Amanda George said.

The presentation suggested a much brighter outlook than anticipated at this point last year, when UAMS brass projected a loss of as much as $45 million for the health system in fiscal 2021. Instead, "we are doing much better than we thought we would be doing at this point," George said.

Fiscal 2021 for state agencies ends June 30.

George said the stabilization is partly due to $23.7 million in federal relief funds from the Coronavirus Aid, Relief and Economic Security Act. UAMS' main hospital also tightened billing practices and saw more people whose illness or injury was serious, meaning financial reimbursements for care kept pace despite slightly fewer patients overall.

Still, clinic visits remain down about 11% and inpatient discharges are down about 6% from what was budgeted, and emergency-department visits haven't completely bounced back, George said. The numbers matter because patient services are a primary way UAMS makes money.

Health industry experts say that hospitals, doctors' offices and other care centers saw drops in their number of visits over the past several months as they suspended services and patients postponed care because of the global health crisis.

UAMS' budget for fiscal 2022 forecasts a fuller rebound and growth because of several new programs and clinical sites. Trustees formally approved the budget at Thursday's meeting.

The balanced $1.7 billion budget for the coming year anticipates a roughly 10% revenue increase due to continued success in pharmacy programs, slight gains in grant funding and a boost of $23.3 million in state appropriations (supporting, in part, UAMS' effort to become a National Cancer Institute designee), documents show.

Expenses will grow by about 9% due to compensation, medical supply and drug costs.

One recent trouble spot for the health system has been in hiring and maintaining environmental services (cleaning and maintenance) workers, UAMS Medical Center chief executive Steppe Mette told trustees during Thursday's meeting. That division's staffing has been "inadequate," and turnover has been as high as 100% annually.

The problem is dragging down internal patient experience scores related to cleanliness in the main hospital, Mette said.

UAMS Chancellor Cam Patterson said there is "wage inflation" in central Arkansas for that kind of work. Despite pay improvements within the health system over the past two years, "we are being outcompeted at the salary level," he said.

When presenting its fiscal 2020 budget in May 2019, UAMS officials announced a plan to raise its minimum wage to $14 to help retain staff. The system is Arkansas' largest public employer, with more than 10,000 employees.

Trustees also heard updates Thursday on a $156 million project to add a power plant between Cedar and Pine streets at the UAMS Little Rock campus. The project aims to generate an estimated $450,000 per month in energy savings, which will go toward deferred maintenance projects officials have framed as badly needed.

After breaking ground in 2019, the project is now six months ahead of schedule and $3 million under budget, Patterson said.

A few trustees said they'd recently toured the project site. Trustee and joint hospital committee chairman Sheffield Nelson praised its design and efforts to mitigate noise pollution in the surrounding neighborhood.

"It's not going to be just a sore thumb out there," he said.

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