VCU’s MCV Hospitals Authority Board 2000-2001 budget

By Erin Lucero and Melissa Jones

RICHMOND, Va. — The board of Virginia Commonwealth University’s Medical College of Virginia Hospitals Authority today (June 13) approved the hospital’s 2000-2001 operating budget. The budget projects revenues of $434.5 million, representing a slight increase over the 1999-2000 fiscal year.

As part of the budget package, the board approved specific expense reductions including the elimination of a total of 101 staff positions at MCV Hospitals and MCV Physicians, the practice plan for university physicians. Hospital administrators expect that many of these employees will take other positions within the organization. The board also authorized abolishing 128 additional positions that are currently vacant.

Dr. Eugene P. Trani, chairman of the MCVHA board of directors and president of VCU, indicated that these reductions were necessary to maintain the financial viability of the hospital and to protect the hospital’s long-term commitments to patient care, research and teaching. He cited financial pressures resulting from managed care reimbursements as well as federal reductions in Medicare reimbursements resulting from the 1998-2002 Balanced Budget Act as playing roles in the budget cuts.

"Financial pressures and difficult choices are facing all health-care institutions at this time, particularly academic medical centers," said Dr. Trani. "In addition to these necessary budget cuts, we are also establishing the VCU Health System, which we believe to be our best opportunity for strengthening the hospital’s operations and financial viability."

Hospital administrators noted that the reductions were difficult to make with the hospital’s costs already among the lowest of its peer teaching hospitals. The expense cuts were carefully planned to minimize reductions in services and to ensure continuation of quality patient care, and the majority of employees affected are not directly involved in patient care.

Employees affected by the cutbacks will receive severance packages as well as job search resources. In one-on-one conversations with their managers, they will be given the option of receiving severance pay or working through their termination date.

In October 1999, the MCVHA board eliminated 43 filled positions and 106 vacant positions. More than half of the employees affected have since taken other positions within the organization.

With more than 5,000 employees, MCV Hospitals is the teaching facility of VCU and a regional referral center for the Mid-Atlantic region. MCV Hospitals is the region’s only Level I Trauma Center and provides a variety of other specialty services for the region.

Hospital administrators cited recent developments at MCV Hospitals that are expected to further bolster the hospitals existing strengths. Key faculty physician appointments in the departments of surgery and pediatrics as well as the Stony Point expansion and the addition of the Gateway Building are expected to bring opportunities for continued growth and development.