UAMS Turns Corner, Slashes Annual Loss

by Mark Friedman  on Monday, Oct. 4, 2010 12:00 am  

"We also need to build our reserves in order to anticipate ... changes in the whole [health care] system over the next several years," Rahn said.

Also, UAMS will be part of the statewide trauma system, which is expected to be operational next year. Last week, UAMS was the first hospital in the state to receive a Level I designation from the Arkansas Department of Health for providing the highest level of trauma care.

UAMS Growth

Part of UAMS' financial trouble can be blamed on its growth and the sluggish economy. At the end of 2008, as the country fell into its worst recession since the 1930s, UAMS was wrapping up major expansions and new construction.

While other university hospitals around the country were freezing their payrolls and shelving capital projects, UAMS was in a growth mode. It had added 300 employees to operate its new 10-story, 540,000-SF, $200 million hospital in January 2009 and its six-story, $32 million Psychiatric Research Institute, which opened in December 2008. The hospital featured the latest medical technology, larger all-private patient rooms and neonatal intensive care units.

For fiscal year 2007, which began in mid-2006, UAMS spent $600.5 million on compensation and benefits. Two years later, those costs alone had risen to $707.1 million.

UAMS' former chancellor, Wilson, had lobbied for a new hospital for years, saying the one it had was too old and small.

When "we moved into the new hospital, it was a dramatic change," Rahn said. "There was lots of concern directed toward assuring that there was an adequate number of staff. The change in operations associated with moving into the new hospital coincided with general experiences we've all had with the economy."

He said those two forces "conspired to get us into negative territory more dramatically than was anticipated."

At the end of June 2009, the UAMS Medical Center had patient revenue of $1.2 billion and a loss of $28 million.

 

More Losses

 

 

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