UAMS Operating Loss May Top $46 Million

by Mark Friedman  on Monday, Oct. 6, 2008 12:00 am  

The University of Arkansas for Medical Sciences will open its $150 million nine-story hospital in January. The Patient Tower will feature larger patient rooms, an emergency department, a clinical lab and a a radiology department.

"We talked strategically about how we have to have a new hospital to continue to train residents," she said.

Johnson said he relies on the experts at the school to relay vital information for a project.

"I, for one,  ... just feel after six years on the board that all pertinent information is not being shared, and that I stand by that," he said.

Wilson said it is almost impossible to break down the finances of one department in UAMS because so many revenue streams are connected and aren't earmarked for one particular department.

Still, Wilson said, UAMS has always tried to give the UA trustees everything they need to make decisions and UAMS' books have always been open for inspection.

John Ed Anthony of Hot Springs, a member of the UA Board of Trustees, said he wasn't on the hospital committee, but that from the reports he has seen, the UAMS budget is sound.

"In the early stages of start-up ... there will be increased costs, [but] we will be able to cover them without undue stress," Anthony said.

The financial implications of building a new university hospital are difficult to project, said Robert Dickler, chief health care officer for the Association of American Medical Colleges of Washington, D.C.

"When that new facility comes on line, the depreciation has to be expensed and that typically adds fairly large increases in expense in the early years," he said. "These are expensive facilities, and that's a cost you didn't have up to that point in time."

Whether the hospital will make or lose money depends on a variety of factors, including the mix of patients and how they pay for health care, he said.

But the trend is for university hospitals to find a way to be profitable over time, Dickler said.

"Because no organization can lose money forever unless they have a subsidy that covers them," he said. "And even if they have a subsidy, it may not be sufficient."



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