Members of the UA Board of Trustees and leadership of the University of Arkansas for Medical Sciences will hold open monthly meetings to track UAMS’ financial position, trustee John Goodson announced today, and he hopes the legislature, and their constituents, will pay attention.
UAMS has made “really great cuts for the bottom line,” considering its dire financial situation, Goodson said. But he wants to track whatever progress it is making toward a promised balanced budget in 2019 by seeing “actual dollar figures” reflecting where deficits are occurring. UAMS budgeted a $39 million deficit for 2018, but that has grown to $72 million. After the meeting, Goodson said that in hindsight, trustees should should not have OK’d the 2018 budget.
UAMS offers care “second to none,” Goodson said, “but I think we expanded and continued to give this quality of care at the expense of going through our unrestricted cash. That’s got to stop.” And the state of Arkansas has got to step up and increase its funding, he said.
Goodson made his remarks after a presentation by UAMS administrators and UA system auditor Jacob Flournoy on the $72 million deficit that was the medical campus’ position prior to the Jan. 8 termination of 600 positions (258 of which were filled) for a savings of $18 million this year and $43 million in the next fiscal year. Flournoy said UAMS informed him on Nov. 21 that if changes were not implemented, its unrestricted net position would be only $5 million by June 30, 2018.
“If UAMS Unrestricted Net Position goes negative,” Flournoy’s printed statement said, “it will cause concern for external auditors KPMG, our bond rating agency (Moody’s), and our accreditors. It also would begin to impact the System as a whole.”
Goodson said he had met with lawmakers and governors over the last “five or six” years to no avail. “We tried to make our case,” he said, but “I don’t think we did a very good job of explaining just how bad it is.”
Arkansas’s contribution to to UAMS, which turns out 80 percent of the state’s doctors, is $106.6 million a year. It once allocated $120 million, but the legislature cut the appropriation back after the passage of the Affordable Care Act in anticipation that the health care law would reduce UAMS’ cost of treating Arkansas’s indigent population. (The ACA, aka Obamacare, did reduce UAMS Medical Center’s unreimbursed costs, from 13 percent of its budget to 3.5 percent.) The $106.6 million number sounds like a generous sum until you consider that UAMS must use a great percentage as its match for Medicaid reimbursements. In 2017, the match was $85 million, leaving only $21 million in state support for the rest of UAMS’ mission, including education, research and technology development, and clinical services.
Goodson also asked for comparisons to Mississippi’s state support for its hospital campus. Mississippi, however, also made a huge reduction in force in 2017.