A Message to all Employees of URMC
From Bradford C. Berk, M.D., Ph.D., CEO of URMC
Thursday, November 6, 2008
Last week at a meeting of Medical Center Chairs, Center Directors, and SMH Department Heads Executive Committee, I reviewed the financial status and challenges facing the Medical Center. I spoke of the need for the Medical Center to maintain financial strength and flexibility amid a confluence of internal and external factors, including:
- Traditional external pressures such as the New York State budget and its impact on Medicaid reimbursement; the Federal budget and its impact on Medicare reimbursement and NIH funding,
- Internal pressures associated with limited capital reserves, limited debt capacity, limited bed capacity, increasing utility and operating costs, recruitment and retention commitments, aging facility and infrastructure costs, and
- The national financial crisis and its impact on our debt capacity, interest rates, endowment performance, philanthropy and investment income.
Our preliminary financial projections strongly suggest that to preserve our long-term financial vitality, we must set clear priorities and take immediate steps to conserve our cash – even though we don’t yet know exactly when the financial markets may stabilize and we don’t know exactly how deep cuts to Medicare, Medicaid, or NIH funding may be.
We are not in crisis, but we can and must take steps to avoid one. Every division of URMC – the hospitals, Health Affairs Division, Eastman Dental Center, the School of Nursing, the School of Medicine and Dentistry including the Medical Faculty Group – must participate in developing and implementing a cost reduction/process improvement program. Our approach must be intelligent and carefully implemented. We cannot compromise the quality or safety of patient care, nor will we concede scientific excellence.
Most components of the cost reduction/process improvement program will go into effect January 1, 2009, although there are some processes that we can and will implement sooner, including:
- The implementation of a more stringent and rigorous review process for approving new positions and/or filling vacant positions,
- The elimination of non-essential overtime,
- The implementation of a moratorium on job reclassifications, and
- The elimination of “extra compensation” for exempt staff without Division/Director approval.
In the past, the Medical Center has been successful because of our collective ability to anticipate threats to revenues and swiftly realign our expenses. I am confident that these proactive steps will preserve our stability and flexibility so that we can continue to take advantage of future opportunities.
We are facing unprecedented challenges. We need your help to manage through them. The guidelines to implement, control and monitor these new initiatives will be division-specific. Within the next week or so, you will receive more details from your respective divisions outlining the specific processes that will be used for implementation. Thank you in advance for your commitment and support.
Page updated 5/5/2009
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