Page 2-The Michigan Daily/New Student Edition - Thursday, September 6, 1990
Budget rises as...
prepare for the future
by Karen Akerlof
Daily NSE Contributor
University Hospitals and the
health care organizations which
come under the governance of the
Regents, comprise a large fraction of
the University's budget and com-
mand a large amount of the Univer-
sity's administrative attention.
"The hospital is the largest single
piece of the University's budget,"
said history professor Nicholas Ste-
neck, who teaches a class on the his-
tory of the University, "and if you
get attention in accordance to how
important you are...."
Although the hospitals operate
,nder a separate budget from that of
the rest of the University, they are
.part of the University and are incor-
porated under the Regents.
Regent Paul Brown, (D-
.Petoskey), who has served on the
Board since 1971 when the plans for
the new hospitals were in infancy,
said the Board of Regents does not
spend any more time overseeing
University Hospitals than it did ten
and fifteen years ago.
However, Brown admitted that
one of the reasons the Regents do
not spend any more time adminis-
trating University hospitals than in
the past has been due to the creation
in the early eighties of a new admin-
istrative position, vice-provost for
Medical care at the University of
Michigan extends past merely physi-
cal care: MCARE, the University's
insurance company, started approxi-
mately four years ago as the Univer-
sity looked to, and sought to dupli-
cate, the lucrative insurance plans
such as that of fellow teaching insti-
tution Henry Ford Hospital, which
operates Health Alliance Plan, said
Associate Hospital Director of Fi-
nance David Southwell.-
While the non-care giving side of
the University's health services
grows, conversely the number of
full-time, non-care giving employees
has shrunk in the past two years, ac-
cording to a report presented to the
Regents this summer.
The rise in the number of hospi-
tal employees resulted from the
physical expansion of the hospitals
as well as the addition of programs
such as MCARE. The additional ca-
pacity and attractiveness of the new
University hospitals' facilities have
drawn an increasing number of pa-
tients each year, and caused a steady
increase in the hospitals' budget,
Under the 1989-90 budget Uni-
versity hospitals projected expendi-
tures of approximately $440 mil-
lion, roughly a third of the projected
costs for the rest of the University.
In January 1986, the new adult
and psychiatric hospitals were com-
pleted to a tune of $242 million.
The maternal and child health care
center, currently under construction,
will cost some $48.9 million.
"The new hospital was not ex-
pected to be as successful as it is,"
Southwell said. Brown added that the
early projections for the hospital
were purposefully pessimistic.
Though both Brown and Southwell
would not speculate what the effect
on the rest of the University would
have been had the new hospital gen-
erated insufficient revenues to repay
the construction debts, Steneck said
the University took quite a risk at a
time when it was experiencing fi-
One of the goals of the costly
new hospital facilities has been to
increase the national ranking of the
University's medical school. Accord-
ing to the Gourman Report, a rank-
ing of graduate and professional pro-
grams, the new facilities have not af-
fected the medical school's standing.
For the past thirteen years the report
consistently ranked the school tenth
in the nation.
Brown faulted the Report for
inadequately reflecting the status of
the University's medical school, and
said that before the building of the
new facilities, the medical school ac-
creditation board criticized the Uni-
versity for its horrible facilities.
Thomas Shope, Associate Dean
for Academic Programs at the medi-
cal school, could not say what effect
the building of the new hospital has
RU TH UII MANNUaiiy
An ambulance from University Hospitals fleet of emergency vehicles. In the past two decades, the University
created a giant in the medical care field.
had on the national standing of the
University's medical school, beyond
that the new facility "reflects an abil-
ity to teach effectively." Shope said
that admissions has not seen any
significant rise in applications which
can be tied to the building of the
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