2/13/2009 - The nation's health care landscape will not survive the ongoing recession unscathed, but a renewed focus on belt-tightening and essential expenses on campus is keeping Vanderbilt Medical Center's workforce of 16,000 intact, said Harry Jacobson, M.D., vice chancellor for Health Affairs.
Jacobson's annual State of the Medical Center Address on Wednesday to a standing-room-only crowd in Langford Auditorium was confident and upbeat despite the economy and focused, in part, on what lies ahead for the Medical Center and its employees.
“We brought down spending quickly and efficiently, with no disruption to patient care, education or research,” he said.
“If we act prudently and spend carefully, we will make it through this stronger than ever. We can make it through this better, smarter and stronger.”
Operations for fiscal year 2008 were on par with projections but investment losses brought numbers down for an otherwise successful year.
The Medical Center experienced a loss of $24 million in investment income as of Dec. 31, 2008, leading to delays in major capital projects.
“We are going to meet our goals for operations,” Jacobson said. “But investment losses are really hitting us.”
Other potential consequences could be a lower demand for elective surgeries, higher rates of charity care delivered, and potential TennCare cuts.
VMC delivered $238.6 million of uncompensated care in fiscal year 2007; $245.3 million in fiscal year 2008; and is already projected to reach between $286-$290 million in fiscal year 2009.
Jacobson said he received news from Vanderbilt representatives in Washington, D.C., on Wednesday of a consensus agreement between the House and Senate on the economic stimulus package that “looks very good for us” in terms of helping to alleviate some TennCare cuts proposed at the state level.
A stimulus plan at the federal level would help mitigate the proposed state cuts while adding crucial federal funding for women's health services, research and information technology.
The package would send $1.2 billion to Tennessee to assist with Medicaid, children's health, research, graduate medical education (GME) funding and COBRA - which would give a $30.3 billion extension of coverage to the unemployed.
“It looks like, if the vote of consensus goes through, we are looking at a better future with respect to TennCare,” Jacobson said.
Tennessee Gov. Phil Bredesen had proposed a three-tier plan of TennCare funding reductions that would negatively impact the state's safety net hospitals, but some of those cuts may now be avoided.
The first tier proposes to cut essential access payments by 50 percent, cut GME payments by 50 percent and cut $14.5 million in state funding to Vanderbilt.
The second tier would cut the remaining 50 percent of both GME and essential access payments, reduce rates for hospitals and Vanderbilt Medical Group by 7 percent, and add an additional $34.9 million cut to Vanderbilt.
The third tier represented an additional 1.5 percent rate reduction for hospitals and VMG and an additional $4.4 million cut to Vanderbilt.
Jacobson used the five elevate pillars to update attendees on performance in service, quality, people, growth and finance.
In response to the slumping economy, departments worked together this fiscal year to identify areas of cost savings and eliminate unnecessary spending in order to preserve the quality of workers throughout the campus.
Jacobson illustrated the “keeping the team together” concept in mentioning the Space and Facilities project management team, which collectively agreed to cut back to a 32-hour workweek rather than eliminate employees who had been planning for MRB V and the expansion of the Monroe Carell Jr. Children's Hospital at Vanderbilt, which are postponed due to the economy.
In the area of Growth, the new $169 million Critical Care Tower is scheduled for completion by September, with patient occupancy forecast to follow in November.
Vanderbilt Health at One Hundred Oaks is nearing completion, with a Vanderbilt employee's preview party scheduled for Feb. 17.
Quality goals were established for VMC to be in the 90th percentile in all components of the health care system in 2009.
Jacobson individually commended Vanderbilt University Hospital's 10 South, 5 South, 8 South and General Medicine for improved performance over the past six months, saying all are close to 100 percent in the survey category of “Willingness To Recommend.”
Vanderbilt's observed-to-expected mortality rate for the current fiscal year is .71, which is on target to match the University of Wisconsin Medical Center's top ranking last year. Vanderbilt placed seventh in the country in 2008 with a rate of .735.
The crowd applauded as Jacobson announced that VMC's combined community contributions for last year were nearly $200 million.
“In five years, that's a billion dollars,” he said. q©2013 Vanderbilt University Medical Center