Originally created 06/07/01

MCG Health announces big surplus



The numbers aren't in yet, but MCG Health Inc. expects to clear between $16 million and $20 million in its first year of operation, well above projections.

The nonprofit operating company for Medical College of Georgia Hospital and Clinics still faces a number of challenges in its second year, including replacing its successful sports medicine program. Jewell Duncan, the program's founder, is going into private practice after failed negotiations with MCG Health and says he is taking most of the staff and patients with him.

MCG Health's board met Wednesday, its last meeting before the end of the fiscal year June 30. Although the final numbers for May aren't in, preliminary figures show the hospital and clinics are on target, said MCG Health President and CEO Don Snell. With those projections, the surplus will be at least $16 million and as high as $20 million, Mr. Snell said.

MCG Health has pledged to give 40 percent of the surplus, or between $6 million and $8 million, back to the school, Mr. Snell said. With many academic medical centers struggling, "I think we're going to be a model for folks across the country," he said.

More patients are coming in, and the hospital system is also carrying about 350 unfilled positions.

The goal for next year is to achieve a 5 percent surplus again and to continue lowering costs, even if it becomes more difficult in the second year, Mr. Snell said.

The last of those participating in MCG's early-retirement plan must leave by July 1 under the rules of the program, which in some cases could have left clinics and surgery programs in a difficult position. But at least four critical doctors are going to continue working at the hospital and clinics through a management services organization, in which they will buy support services but continue at MCG, Mr. Snell said. Others are volunteering their time, he said.

Sports medicine is not one of the programs where doctors are staying. Dr. Duncan said the sports medicine faculty could not accept MCG's terms to stay and will set up Sports Medicine of Augusta near Doctors Hospital. Most of the staff, including operating-room staffers, is coming with them, as are the patients, he said.

"I haven't had anybody who wanted to remain there for treatment," Dr. Duncan said. MCG Health is recruiting nationally to replace the faculty and will have other faculty cover the service, along with the remaining staff, Mr. Snell said. MCG Health is also talking to the Houghston Clinic in Columbus about providing services, Mr. Snell said. He predicted MCG would keep about half of the $7.5 million a year in volume.

"It's going to be a pretty equal split of the volume," he said.

But a lot of that business is built on the personal relationships patients have with the staff, Dr. Duncan said.

"This is about a relationship with the community," Dr. Duncan said. And because of that, he says, most of the business will leave with them, despite what Mr. Snell said.

"He will retain no more than 10 percent - max," Dr. Duncan said. "This is painful, but I wasn't given any options."

Reach Tom Corwin at (706) 823-3213 or tomc@augustachronicle.com.