University Hospitals in Iowa City needs to cut its budget for the next fiscal year by $45 million. Officials, however, won’t say yet how many of the medical center’s 6,600 employees will be cut later this month — through firings, attrition and retirement.
U-I vice president Jean Robillard says because more unemployed Iowans are receiving health care under the state’s "Iowa Care" and Medicaid programs, University Hospitals isn’t getting enough reimbursement to pay its expenses.
Robillard says the percent of reimbursements went from 45% last July to less than 42% this May. According to Robillard,each percentage point represents $20 million dollars.
Robillard says commercial health insurers are only paying about 41 percent of actual charges for health care, leaving the hospital with a $45 million dollar shortfall in next year’s budget, beginning July 1, 2009.
He says the trouble can be traced back to the number of unemployed Iowans who are coming in for health care and changing the hospitals’ reimbursement revenue.
According to Robillard, 260 hospital positions have already been eliminated from the staff and $23 million has been cut from the current fiscal year’s budget. University Hospital officials will be discussing the number of layoffs and reassignments at the State Board of Regents meeting next week in Ames.