Dr. Owen Addresses University
Hospital’s
Projected Operating Losses
William F. Owen, Jr., MD
President, University of Medicine and Dentistry of New Jersey
Members of our finance team have finalized their
analysis of UMDNJ-University Hospital’s operational
results for the first six months of the fiscal year.
Based on their deliberate and thoughtful work, we
believe that University Hospital will post a deficit
from operations through December 31, 2007 that may
approach $32 million.
There are several reasons behind this shortfall,
but the largest contributing factor stems from our
decision to revise our accounts receivable models
to reflect the highly fluid conditions in our marketplace.
Additionally, University Hospital's current financial
condition reflects many factors that impact hospitals
in New Jersey: increasing volumes of charity care
patients, more bad debt, flat funding for charity
care, decreasing reimbursement from a majority of
private and public payers, growing numbers of undocumented
international patients, and increasing patient health
and social needs due to poor health status.
With complex
patient referrals from throughout New Jersey, University
Hospital is the largest provider of charity care
services to the State. Certainly the difficulties
for essential, urban health providers like University
Hospital, have been demonstrated by the recently
announced closings of Columbus and St. James Hospitals
in Newark, and Barnert Hospital in Paterson.
We have been working with President Darlene Cox
to undertake a top to bottom assessment of the hospital's
clinical and administrative costs, and will determine
all appropriate next steps. University Hospital is
a critical state asset and therefore, UMDNJ is cautious
of the negative impact that any service changes may
have on the people we serve. Although we aim to minimize
any impact on our patients, and the thousands of
dedicated faculty and staff of UMDNJ and University
Hospital, we must do better. To develop a forthright
action plan, we will engage in discussions of a broad
array of options with our stakeholders.
We appreciate your continued support and pledge
to keep all members of our University community informed
as our plans progress.
Sincerely,
William F. Owen, Jr., M.D.
President
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