Update on Budget Issues

William F. Owen, Jr., MD
President, University of Medicine and Dentistry of New Jersey

April 3, 2009—I welcome this opportunity to update you on how the University is faring in this uncertain economic environment. I know that many of us are closely following the Governor’s budget messages, particularly with regard to their references to hospitals and institutions of higher learning. Given the enormity of the country’s economic challenges, I share your justifiable concerns about how the State economy will impact UMDNJ.

The State’s proposed FY 2010 budget is still awaiting approval. However, we are deeply appreciative that the proposals acknowledge UMDNJ’s combined academic and clinical missions as a unique State asset. In many ways, the administration’s budget recommendations are a vote of confidence in our commitment to our four-fold missions of education, research, healthcare and community service.

UMDNJ is unlike any other university in the State, just as we are unlike other healthcare institutions. We are a major University with a major hospital. UMDNJ is by far the State’s largest provider of education and training in the health fields. This includes the State’s only medical, dental and public health schools. We are also the State’s principal provider of the physical, mental and dental care for our most vulnerable citizens. Furthermore, The University Hospital is the primary source of trauma care for residents from Newark and northern New Jersey.

The Governor’s budget proposals include an allocation of funds that will help put the University in a more stable position, thus allowing us to avert the financial crises that loomed in recent months.

What does all this mean for the University? The additional funds will allow us to narrow the gap between the cost of services we provide to the needy and the actual amount that we are reimbursed for these services. Not only will this mean that our missions remain intact but it also greatly assists us as we continue to improve our operations in ways that will have a positive influence on the education and training we provide.

These budget recommendations do not mean our challenges are over. We continue to face threats from our local and national economy and their deleterious impact on the State budget. Even with additional funding, we still must make difficult choices in our pursuit of operational excellence. For example, at University Hospital we are identifying ways to strategically restructure some services without eroding the quality of patient care.

We are concerned about the economy’s impact on wages and employment at UMDNJ. As I have often stated, we want to preserve jobs and avoid layoffs as much as possible. As for the wage freezes and furloughs currently under discussion, we are now in the process of determining exactly how these proposals apply to us. The Governor’s request for furloughs for State employees applies only to those in Civil Service, not UMDNJ employees. It has been suggested that the University follow suit, but no decision has yet been made.

In the meantime, we will continue to carefully study all employment and wage issues in the context of our budget, while recognizing our role as an academic health center vital to the well-being of New Jersey residents and to the education of the healthcare providers.

Best regards,

William F. Owen, Jr., M.D.
President