Univ. of Iowa Health Care Could Lose $27 Million to Federal Changes

By Diane Heldt, Reporter

IOWA CITY, Iowa - University of Iowa Health Care could see a negative impact of more than $27 million combined from federal sequestration and changes due to national medical reform, university officials said Wednesday.

In a presentation to the state Board of Regents during a meeting in Ames, UI Health Care leaders said the two issues -- federal sequestration and medical reform that will change payments to Medicare and Medicaid providers -- could combine for a more than $27 million hit to various UI Health Care entities.

That breaks down to a $19 million impact alone on UI Hospitals and Clinics, a $1.4 million impact on payments to the UI physicians group and a possible $7 million loss for the Carver College of Medicine, UI Vice President for Medical Affairs Jean Robillard said.

Those funding losses include cuts to support for graduate medical education, grants and contracts from the National Institutes of Health and revenue that physicians obtain for providing care, he said.

Of that $27 million figure, just more than $20 million of it "no question" will impact the Fiscal Year 2014 budget, which begins July 1, Robillard said. The $7 million impact on the Carver College of Medicine is a little more flexible and unknown, since it depends on what grants are funded through the NIH, he said.

But officials are planning for the $20 million impact to the hospital and the physicians group in preparing the fiscal 2014 budget, Robillard said. Hospital leaders will bring that budget to the regents in April.

"We're talking about more efficiencies, talking about eliminating programs that don't need to be there. We're talking about all this," he said. "We're looking to make up $20 million dollars somehow."

Officials assured the regents they have been and will continue to monitor the shifting health care environment.

"We want to ensure that UI Health Care can and will remain the vital and essential resource for the people of Iowa," Robillard said.

UI Hospitals and Clinics is a "strong performer" in many areas, Chief Executive Officer Ken Kates said, but these financial challenges mean leaders must continue to identify efficiencies.
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