Countywide : UCI Medical Center Stabilizes Deficits

Although UC Irvine officials expect their debt-plagued medical center to record a $12-million deficit this fiscal year, one of its highest ever, they say the losses appear to have “stabilized.”

The 1989-90 figure is only slightly above last year’s $11.6-million deficit, deputy executive Herb Spiwak said Tuesday, but much better than the $15 million or $16 million operating loss that was once projected.

And when the current fiscal year ends June 30 and all revenue sources are counted, he said, the hospital is expected to record a slight gain--$425,000. Last year, even after a special $8-million state subsidy, the hospital was $325,000 in the red.

Spiwak and UCI Chancellor Jack Peltason offered their relatively optimistic assessment of the troubled, 493-bed teaching hospital in separate interviews recently.

“We’re a little better off,” Spiwak said. “We won’t be worse off. . . . We’ve been able to stabilize the loss.”

The bottom line, Peltason said, “is better than last year. . . . We are breaking even--even if we are not financially generating enough of it on our own.”

Spiwak said that overall hospital services have “stabilized” because he and Executive Director Mary Piccione have “tried to do a little better job in holding down expenses.”

For all the concern about cutting costs and wooing more private patients to the hospital, Spiwak noted that the number of Medi-Cal patients has actually increased this year to about 58,000, nearly 2,000 more than last year.

UCI’s hospital remains the only one of five UC hospitals expected to post an operating loss, a problem that its administrators regularly attribute to its heavy load of indigent patients. At UCI, about 60% of the patients are Medi-Cal patients or are covered by Orange County’s Indigent Medical Services program.

Spiwak noted that it typically takes 135 days from a patient’s date of discharge for the medical center to get paid by Medi-Cal and some forms of private insurance.

Because of these delays in payment, the hospital has had increased needs for “working capital,” money loaned from a UC investment pool for salaries and equipment purchases, Spiwak said.

The loan has fluctuated between $45 million and $48 million since December, he said.

UC officials last year had limited the medical center’s ability to borrow working capital to $47 million but on Friday, acting at the hospital’s request, the Board of Regents set a new borrowing ceiling of $52 million.

Peltason called the vote critical. “If they had said no, we wouldn’t have enough money to run the hospital,” he said.

Still, Spiwak called that higher limit “a contingency” in case delays in Medi-Cal and other payments continued. The medical center collects about $4 million a month in Medi-Cal payments, he said.

UC IRVINE MEDICAL CENTER DEFICITS

Amount Fiscal Year (millions) 1983-84 $3.0 1984-85 $9.6 1985-1986 broke even 1986-87 $1.0 1987-88 $8.6 1988-89 $11.6 1989-90 (projected) $12.0 (fiscal year July 1-June 30)

Source: UCI Medical Center