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University of Mississippi Medical Center slashes nearly 200 jobs after $32 million drop in government funding

Faculty members at the teaching hospital have also taken pay cuts in response to the loss of funding, UMMC says.

Jeff Lagasse, Associate Editor

The University of Mississippi Medical Center is losing 195 jobs throughout its organization and eliminating vacancies totaling 85 positions in response to unanticipated reductions to patient care and other reimbursements to the tune of $32.7 million.

Faculty members at the teaching hospital have also taken pay cuts in response to the slash in funding.

Tom Fortner, chief public affairs and communications officer for UMMC, said most of the cuts are reductions in payments received from Medicaid through the Disproportionate Share Hospital program, totaling $24.5 million. The balance is a cut in state funding.

He said the hospital has been forced to make cuts before, but not on this scale.

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"We cut 115 positions in 2011," said Fortner. "That was really more driven by soft demand for healthcare services at the time. This time the primary drivers were the revenue reduction for Medicaid for our DSH reimbursement, and on top of that our state appropriation cuts.

"These have been mid-year cuts," he said. "There have been a total of about five since the start of the fiscal year last July. As state revenues from tax collections have not met projections and expectations, they have had to have a balanced budget -- in the state of Mississippi, you can't have deficit spending -- and they've made mid-year cuts to state agencies."

Hospital officials said in a statement they were focusing on cuts that didn't have a direct impact on the patient experience or on the integrity of its academic program. The employees who are impacted by the cuts represent all facets of the organization, including the health system, the academic, research and service areas and the faculty.

Much of the savings will come from restructuring, as the duties associated with multiple positions performing similar tasks have been consolidated into fewer positions, and a number of programs are being modified to run more efficiently.

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"We are executing a four-month plan to cut expenses and then generate additional revenue if possible to close the fiscal year ending in June, and realize a savings of $24 million," said Fortner. "Even though we are looking at some enhanced revenue opportunities, most of these will be cuts. What this is equivalent to is five percent of the run rate we would have had these four months, and that produced the $24 million. It's a lot to do in a short amount of time."

The plans to generate additional revenue, he said, represent small opportunities in a number of areas rather than one grand initiative.

Officials stressed that the financial challenges with UMMC's operations will have little or no effect on a $180 million children's hospital expansion, which includes a $100 million fundraising goal. Fortner said the hospital is raising most of the funds through private philanthropy and is more than halfway to its goal.

Twitter: @JELagasse

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