Staff Writer
With an eye on a troubled economy, University Hospital's board approved an austere budget for next year that will include an average 1.8 percent rate hike and a tough line on expenses.
The economy was on the budget planners' minds "every step of the way," said Lisa Ritch, the director of finance for University. "Every single time we were looking at budgets, we were saying, 'OK, we've got to figure other ways that we can manage these costs out.' "
It was the department heads who came to budget planners with restrained requests and ideas on how to keep down expenses, she said.
"We see the economy, we know what it is doing to our organization," Mrs. Ritch said. "We know what it is doing to our community."
Board member Hugh Hamilton applauded the budget's restraint on increases.
"I salute you for essentially putting a cap on that," he said.
The budget still aims for a 5 percent year-end margin that is critical to maintaining the hospital, said J. Larry Read, the CEO of University Health Care System.
The rate increase will actually vary from no increase up to 12 percent in different areas with an eye on trying not to pass along additional expenses to patients, Mrs. Ritch said.
The hospital's charges will still be within the range of its peers, she said.
Even so, the hospital is planning to see increased additional charity and indigent expenses and is trying to be more selective about which bad debt it pursues.
"You don't put in an aggressive collection plan for people who absolutely have nothing that they can pay you," she said.
The budget was made with the idea that there will not be a quick economic turnaround and included only a modest amount for income from investments. That reality was driven home by what University reported Thursday as an unrealized loss from investments for September -- $22 million.
"And I emphasize 'unrealized,' " Chief Financial Officer Dave Belkoski told the board. That loss would only happen if University sold those securities now, which it has no plans to do, he said.
Reach Tom Corwin at (706) 823-3213 or tom.corwin@augustachronicle.com.
