The health system is contractually obligated to give 43 percent of its fiscal year-end margin to the university, which will be used for growth initiatives such as high-level recruits or new programs like the Institute for Regenerative and Reparative Medicine, GHSU President Ricardo Azziz said,
“The purpose of the health system is not just to include itself and take care of patients but also to support the university,” he said.
While it had budgeted a margin of $3.8 million for the first quarter of its fiscal year, the health system actually lost nearly $4 million, Interim Chief Financial Officer Dennis Roemer said. Inpatient admissions were nearly 5 percent below budget for the hospital and there was a higher number of uninsured patients across the health system.
“It’s about volumes and payor mix,” Roemer said.
The same forces are affecting hospitals across the country, Azziz said.
“Those of us in leadership are not terribly surprised because the recession continues, people are not getting jobs and the health care reform mandates are coming into play,” he said.
In fact, it could take nearly three years “before things finally take off,” Azziz said.