UT Health Center at Tyler to identify $5 million in budget cuts

Friday, January 28, 2005

UTHSCT President Dr. Kirk Calhoun announced today, Friday, Jan. 28, that The University of Texas Health Science Center at Tyler would begin the process of identifying $5 million dollars in budget cuts by August 31, 2005, the end of the institution’s fiscal year. The Health Center’s total operating budget is over $120 million annually.

Meeting with his management staff Thursday afternoon, Dr. Calhoun explained, “We are not alone in facing these challenges. Private insurance companies, Medicare, and Medicaid have significantly reduced the amount of reimbursement we receive for the patient care we provide. At the same time, we along with health care facilities throughout East Texas have seen a decline in patient numbers.”

“We are accountable to the state of Texas and to its taxpayers for spending our funds wisely and for operating an efficient organization,” he said. “We must balance our budget first through improved efficiency and increased productivity while remembering that our patients and the care we provide to them must come first. We will continue to provide patient care that is of the highest quality.”

According to Dr. Calhoun, UT Health Science Center has just ended one of its most successful years ever in the areas of biomedical research, medical education, and philanthropic support. Externally funded research from the National Institutes of Health (NIH) and other organizations that fund biomedical research has increased by almost 250 percent in the past year -- making the Health Center’s research program one of the fastest growing by percentage in the state.

The UTHSCT Center for Healthy Aging has garnered state-wide as well as local support, and several important construction projects are nearing completion, including an expansion of the Center for Biomedical Research, renovation of the Emergency Care Center, and completion of the fourth floor of the Ambulatory Care Center.

“The challenge we face as a state-assisted agency is how we are funded,” Dr. Calhoun said. When the NIH gives us money for our aging or pulmonary research, we can’t spend it on anything else. When a donor gives us money to support our aging initiative, we will not spend it on anything else. Our reductions must come from our daily operating expenses.”

In addition to seeking input from his management staff, Dr. Calhoun has created an institutional budget committee charged with considering efficiency, quality, productivity, financial good sense, and alignment with the Health Center’s mission. Last on the list, but necessary to achieve the critical budget target, will be reductions in management and staff.

“Any job loss is serious,” explained Dr. Calhoun. “However, our primary responsibility is to run our organization responsibly and that includes staying attuned to changes in the marketplace and adjusting our expenses and staff accordingly.

“As we work to resolve these challenges, we must keep our eyes focused on our mission, our vision, and our values,” Dr. Calhoun said to his managers. “We must be accountable for confronting and overcoming our financial and competitive challenges. We will face this as a team, and we will be a stronger organization for it.”

NOTICE: Protected health information is subject to electronic disclosure.