Message from President Owen
Regarding UMDNJ & University Hospital
William F. Owen, Jr., MD
President, University of Medicine and Dentistry of New Jersey
Dear Members of the UMDNJ Community:
Those
of you who have attended my recent town halls or
public sessions of our Board of Trustees meetings
should be well aware that UMDNJ is at a critical
juncture. For several years, The University Hospital
(UH) has operated with annual operating losses that
increasingly threaten its ability to provide essential
clinical services and which in turn undermine UMDNJ’s
critical statewide missions. The situation has now
reached a tipping point requiring intervention.
I want also to underscore that, with appropriate
levels of financial support, The University Hospital
can not only survive but will continue to meet all
its missions for the residents of New Jersey.
Let
me first remind you of the unique and special role
UH plays not just for residents of Newark and surrounding
Essex County, but for UMDNJ and New Jersey. UH is
northern New Jersey’s only level one trauma
center and the state’s largest provider of
charity care services. In 2007, UH had 221,371 outpatient
visits and 22,192 admissions. Of that total, 35%
of those patients are from outside Essex County.
The hospital is also of vital importance to UMDNJ’s
four-fold mission as an academic health center: research,
healthcare, community services and especially education.
It plays an essential role in the training of residents
for New Jersey Medical School. The same holds true
for New Jersey Dental School, the state’s only
school of dentistry. In fact, UH is the state’s
largest source of post graduate medical and dental
education.
A
major reason for the financial loss at UH has to
do with the balance of needed, more costly medical
services and the hospital’s payer mix. Nearly
three-quarters of the hospital’s patients are
charity care, uninsured, Medicaid/ Medicaid HMO or
self-pay. Reimbursement for their care, if any, does
not cover the cost of necessary health services provided.
Our
fiscal crisis is by no means unique to UMDNJ. Many
hospitals, particularly public hospitals committed
to serving those at special risk or in great financial
need, are facing similar fiscal challenges. These
challenges promise to only worsen because public
hospitals must depend on public funding at a time
when the federal and state governments are grappling
with a severe economic downturn and more patients
are likely to be without insurance. The hospital
crisis is especially acute in New Jersey. Last year,
according to the New Jersey Hospital Association,
half of all hospitals in the state lost money, five
filed for bankruptcy, and three shut down completely.
So far this year, five acute care hospitals closed
their doors. Because we are both a university and
a hospital owner, adversity in one sector can severely
impact the other.
We
are not idly sitting by while the situation worsens.
The Deans directly affected by this situation and
the hospital’s leadership have put in place
operational enhancements that have dramatically cut
the anticipated 2008 operating losses by half. We
have achieved significant savings by limiting the
length of patient stay. We’ve also announced
a transformational new agreement with University
Physicians Associates that promises to move us towards
a more productive and collaborative relationship
at the New Jersey Medical School. This should result
in the development of new programs and the ability
to attract new patients. But even with these
improvements, hospital revenue won’t be at
the level needed to assure high quality service and
UMDNJ’s stability.
We’re
moving aggressively to help our many constituencies
both understand the crisis and assist us in identifying
solutions. We have already met with key local and
state officials and are planning meetings with community
leaders. We are reaching out to those in leadership
positions who view the University’s vitality
as inseparable from that of Newark, Essex County
and the whole of New Jersey. We want the public to
know what’s at stake for both University Hospital
and UMDNJ and the timeline for finding answers. Internally,
we will continue to make efforts to help leadership
at our various campuses— faculty and student
groups, heads of unions — clearly understand
the risks.
Our
Board of Trustees and The University Hospital Board
of Directors are deeply involved in assessing the
situation and providing us with input that will help
us weigh possible solutions. There is agreement among
our Trustees that University Hospital’s operating
losses are non-sustainable; quality of care may erode
without intervention. There is also a consensus that
we must do what we can to protect the missions of
the University as a whole.
We
expect to be closer to identifying workable solutions
at the Board of Trustees meeting on December 16,
2008. As we move forward, I will continue to reach
out to you and keep you informed.
William F. Owen, Jr., M.D.
President
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