MCG Health sees 'rocky' path

'Complex care' income may offset stalemate in government programs

Facing an uncertain future with a "rocky" state revenue outlook, the company that runs Medical College of Georgia Hospital and Clinics is looking at a budget that sees little help from government programs and relies on strong growth in clinical services such as cardiovascular health and transplantation, officials said Wednesday.

The health system is facing a new reorganization under incoming MCG President Ricardo Azziz and MCG Health Inc. Interim CEO Sandra I. McVicker said continuing greater cooperation is needed. Some MCG Health board members are also seeking greater oversight over capital spending by the health system.

The Executive Committee of the board met Wednesday to take a first look at the budget for next fiscal year, which begins July 1. The board will vote on a final revised budget at its June meeting. The budget for next year calls for a final margin of only 1.25 percent, or about $6 million, at the end of next fiscal year. And that's hoping the state budget doesn't take a turn for the worse, said Chief Financial Officer Dennis Roemer. "The state budget situation is just going to be a little bit rocky for a while," he said.

A slight increase in Medicaid funding will be mostly offset by a small cut in Medicare, which accounts for a lot of the health system's business, Roemer said. "So on 60 percent of our business we are going to get a whopping net $2 million payment increase," he said.

The health system will benefit from some increased payments from managed care contracts, and about $16 million is expected from increased revenue from particular clinical services.

The system is planning on 3 percent to 5 percent growth, particularly in "complex care," Roemer said, such as inpatient and outpatient cardiology and kidney and pancreas transplantation.

Some board members balked, however, on the more than $27 million in capital requests without greater information about the projects, such as how they would justify the investment and over what time period.

Board member and University System of Georgia Chancellor Erroll B. Davis Jr. said it was "sort of a 'trust me' approach. I am not sure that really meets a standard of oversight for a modern board in terms of governing." He said he would work with management on a modified approach.

The administration of the health system, the school, and Physicians Practice Group, which represents its doctors, have been working more closely for months to better coordinate efforts and that will certainly be needed going forward, McVicker said.

"It is going to take the physician group, the college, as well as us, all agreeing on the same things and the same initiatives that we all move forward together on," she said. "And I don't think I can emphasize that enough."

What's next

Unification of Medical College of Georgia, its health system and the physicians group might take another step forward today as attorneys for all sides gather on a conference call to try to come up with a timeline.

The University System of Georgia Board of Regents is reviewing plans to unite the three under a board chaired by incoming MCG President Ricardo Azziz. Attorneys will be looking over the governing documents with Regent Felton Jenkins, who is chairing the ad hoc committee, Chancellor Erroll B. Davis Jr., and Azziz.

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