BOARD TOLD of virus’s financial hit to UAMS.
University of Arkansas for Medical Sciences was hardhit by coronavirus losses, and financial impact is expected until at least the fall, its chancellor told UA trustees at a special meeting Monday.
The academic medical center is among many Arkansas health providers reporting stress after pausing procedures and spending reserves to prepare for patients with covid-19, the illness caused by the coronavirus.
A “dramatic reduction” in visits — including as much as a 60% decline in surgical cases — plus costs including personal protective equipment and testing supplies have weighed on UAMS, Chancellor Cam Patterson said.
While the situation is not unique to the system, “the brunt of the impact, with the remainder of the fiscal year, is yet to hit,” he told the board.
Monday’s report marks the first signs of financial pressure after UAMS’ climb back from a $72 million projected deficit and layoffs in 2018, which was followed by a much better outlook in recent months.
Patterson said UAMS began March $6 million ahead of its budget, but the month ended with a $16.7 million loss because of unexpected costs and revenue shortfalls related to covid-19.
Right now, UAMS is losing about $1 million a day, and officials anticipate losses will go on through the first quarter of fiscal 2021, which starts in July — or longer,
if there is a “surge” of cases this fall, as some scientists predict, Patterson said.
To trim costs, officials extended a hiring freeze through May, adjusted some employees’ hours worked and asked for voluntary reductions from others. Officials have not furloughed or cut pay for rank-and-file workers.
While those steps aren’t totally off the table, “we didn’t feel it was fair for employees,” many of whom are working far more than they typically do, Patterson explained. Senior leadership instead volunteered to take a 20% pay cut.
However, two members of the board on Monday said that they would oppose such a move if presented with UAMS’ annual budget later this month, citing UAMS’ role in the state pandemic response.
“Good leaders lead by example. I think what you’ve done by reducing your salary is an incredible example,” said Trustee Ed Fryar, but “if it comes to a vote, I’m going to vote against it.”
UAMS officials also will try to maximize the institution’s receipt of federal funding related to the crisis, including working with the state’s finance agency to determine which costs might be reimbursable by the Federal Emergency Management Agency.
It received roughly $15 million from an early federal assistance initiative, and will likely receive more from $1.2 billion allocated to Arkansas in a subsequent package, Patterson said.
“We are considering every possible funding opportunity to help mitigate the damage that this is doing,” he said.
A $156 million project that began last summer, the largest part of which will build a power plant to help reduce energy costs, won’t be affected, a UAMS spokeswoman wrote in an email.
Across the UA System, President Donald Bobbitt said at Monday’s meeting that he expects overall budgets to be down across campuses by about 10% for the coming fiscal year.
Patterson’s presentation on Monday also highlighted the effects covid-19 has had on the UAMS workforce. The health system is the state’s largest public employer, with roughly 10,500 workers.
Overall, 160 employees have been quarantined due to possible exposure to covid-19, he said. Nineteen employees have tested positive, though none of those were thought to have contracted the illness while on the job.
Patterson also cheered 11 nurses and respiratory therapists who volunteered to travel to work in NewYork-Presbyterian Hospital, at the outbreak’s epicenter.
The chancellor was a senior vice president and chief operating officer at that hospital before arriving at UAMS, according to a biography.