University, GHSU holding their own, but dramatic cuts loom



The number of patients is fluctuating in some areas at Augusta’s two public hospitals, which are still holding their own financially. Looming overhead, however, are drastic federal cuts that could take $20 million to $25 million from each.

On Thursday, the board for University Hospital and the boards overseeing the health system for Georgia Health Sciences University convened in separate meetings.

At University, admissions, surgeries and cardiovascular interventions were below budget in September but births and visits to the Emergency Department were up, Chief Financial Officer Dave Belkoski said.

“September was a very busy month” for the emergency room, he said. Revenue was $13 million ahead of budget and was offset somewhat by expenses being almost $10 million over budget. Still, the hospital is $4 million above its budget and $8 million over last year, when volumes dipped sharply, CEO Jim Davis said.

“We are doing very well financially in the hospital,” he said.

GHSU’s health system in the first quarter of its fiscal year made about a $1 million margin, well below the $7.1 million margin it had budgeted but better than the nearly $4 million deficit at that point last fiscal year.

“We’re doing better than last year but not as well as we expected,” said GHSU President Ricardo Azziz, who leads the boards and is the CEO of the health system.

Admissions to the hospital, surgeries and outpatient clinic visits are all below budget, although some are ahead of the previous year. In fact, compared with last year, “it’s a much better picture,” said David Hefner, the executive vice president for clinical affairs.

That picture gets cloudy for both University and GHSU, however, when looming federal cuts are considered, officials said. That includes $1.2 trillion in automatic cuts, half from the Department of Defense and half from domestic programs, that would kick in as the result of Congress’ failure to reach a debt-reduction deal. Big cuts in Medicare and Medicare payments that support graduate medical education, a 31 percent reduction in Medicare payments to physicians, and a hit to research funding through the National Institutes of Health could mean as much as $20 million less to GHSU, its physicians and its health system, Azziz said. It could also mean the loss of up to 3,500 jobs at Fort Gordon and an unknown impact on Savannah River Site, he said.

“Either one are going to have a major impact on us,” Azziz said. That is, unless Congress acts to put them off, which is what some federal and state officials seem to be expecting, Hefner said.

“They don’t think it is going to happen,” he said. “It would be pretty dramatic. We’d have to have a lot of layoffs ourselves, and probably the whole region and the whole state. It would send us probably back into a recession.”

The effect of those cuts on University is less certain, although the 2 percent cut in Medicare funding would cost the hospital about $5 million a year, Davis said.

“What hits us much harder is the Affordable Care Act in general, which has about a $25 million impact,” he said. Those numbers take into account revenue from an expansion of Medicaid that Georgia Gov. Nathan Deal has already said he would not do.

“That’s not going to happen,” Davis said.

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A recently retired official at Georgia Health Sciences University is the first physician in Georgia to win a top honor from the group that represents U.S. medical schools, the group announced Thursday evening.

Dr. Ruth-Marie Fincher is the first Georgian and first female physician to win the Abraham Flexner Award for Distinguished Service to Medical Education from the Association of American Medical Colleges. Fincher retired in May as vice dean of academic affairs at GHSU, and the association cites her three decades of leadership in guiding students and creating development opportunities in medical education for the faculty. Nationally, she helped found two groups that promoted better clinical education, the association said in a news release announcing the award.

“That’s an extraordinary honor,” GHSU President Ricardo Azziz said.

– Tom Corwin, staff writer