The University Record, April 23, 1996
By Rebecca A. Doyle
The group charged with making recommendations to reduce the potential $60 million deficit facing the U-M Health system and Medical School in the upcoming fiscal year has begun to submit a tentative list of cost-cutting procedures to Medical School Dean Giles G. Bole Jr. and University Hospitals Executive Director John D. Forsyth.
The seven-member Redesign Coordinating Group, headed by Lloyd Jacobs, associate dean for clinical affairs, has been meeting twice a week for more than a month since they were charged with designing processes that would trim costs and increase income from the financially struggling Medical Center. They will submit final recommendations by June 1 in order to present them at the June Regents' meeting.
"There are broad, sweeping changes occurring across the country in the health care industry," Jacobs says. "This is not a situation that is unique to the University of Michigan Medical Center, nor is it an affliction shared only by teaching and research hospitals."
Jacobs says that the laws of supply and demand govern the health care industry as much as they do any other industry in the country, and that the supply of medical care is currently simply in excess of the demand.
"This is happening to everyone in the health care industry," he notes. "But it is true that academic health centers are hit the hardest." The costs of running a teaching hospital and a research facility are much higher than keeping a non -teaching hospital in the black. In addition, the U-M hospitals have the highest level of very sick patients but receive the same payment even though the patients require more care.
"We are more costly than [Henry] Ford [Hospital] or St. Joseph's," he says. "But this is a national problem. It is my belief that this Medical School is among the best in the world in the care and leadership here."
Jacobs acknowledges that there is a level of anxiety among employees at the Medical Center as well as patients who are aware that there are budget problems with the industry nationwide.
"Some anxiety and worry is reasonable," he says. "But I am confident that there is a level of intelligence and talent in this institution that will allow us to react to this crisis. Overall, this institution will prevail in the contest to be among the top institutions in the country for health care. We are in a position to be certain survivors in this world."
That won't happen without trimming in areas where there is an excess, Jacobs says, but "the vast, vast majority of employees will be here making contributions" after budget adjustments are made.
"Every dollar we save in areas where expenses are growing rapidly can help save someone's job. We are trying to deal with things that don't hurt individual people."
The Medical Center is preparing to assist employees who may need to search for jobs with support services from the Human Resources Department.
Each committee member, Jacobs says, "is hardworking, intelligent and recognizes the need to change. We are all interested in the survival of the institution in a competitive marketplace."
In addition to Jacobs, others in the Redesign Coordinating Group are H. David Humes, interim chair and professor of internal medicine; Beverly Jones, associate hospital director/chief of nursing affairs; N. Reed Dunnick, chair and professor of radiology; David J. Smith Jr., professor of surgery and associate chair and section head of plastic and reconstructive surgery ; David N. Southwell, senior associate director and hospital financial officer; and Larry Warren, senior associate hospital director and chief operating officer.
Med Center HRD offers services
The Human Resources Department in the Medical Center has a number of programs to help both departments and individuals deal with downsizing and job search procedures that may result from cutbacks in the Medical Center budget-trimming process. They offer:
Information sessions: Managing during organization change, dealing with loss during the change process, and renewing commitment to work and team.
Coaching and Facilitated Discussions : Consultation with managers to assess group needs and meetings with individuals or teams to understand the phases of change and deal with emotions.
Career Transition Services: Meetings to review reduction in force (RIF) status and resources available, executive and professional management program, job search skills workshops, job opportunities internally and externally.
Resource List: Listing of articles, journals, books, video and self-study materials on change, downsizing, layoffs and rebuilding teams.