LOCAL/S Medical Center announces plans to downsize OWN The Michigan Daily - Tuesday. September 3, 1996 - 5A State residents mark summer s end with parade ; sc; 7 t S x. { t 5 {l } + :} {: S } _ £ ' }, j . Py Jennifer Harvey and Katie Wang Daily Staff Reporters Later this month, the University Board of Regents will hear a recom- mendation for restructuring the University Medical Center and Medical School, interim President Homer Neal rid recently. ,"We can adopt one of two strategies: expand or reduce the Medical Center to a level at which it is self-sufficient, Neal said. "We want to have this done by September or October," said Regent Philip Power (D-Ann Arbor). "We have total confidence in the ability of our interim president to guide us through it." Attorney Geoffrey Shields, who has Arked on more than 200 hospital restructuring projects, laid out this sum- mer the benefits and drawbacks of a variety of changes the regents could make to the Medical Center and Medical School. "I'm here to offer you a look at struc- tures that may be able to make the University able to compete in the fast- changing medical world," Shields said. "There is a pressure out there to cram wn costs" The move to restructure comes on the heels of an April announcement by the Medical Center that it would undergo a three-year transformation, in which it plans to trim $200 million from its bud- get. Most of the monetary cuts will be made through staff reductions. The Medical Center has already dis- tributed 541 reduction-in-staff notices to its employees, with more to come. tany of those employees will have an opportunity to fill 200 open positions in the hospitals. "(The University), almost like every other health institution, is assessing societal demand to reduce costs of health care," said Associate Medical Shool Dean Lloyd Jacobs. "This is an mgoing attempt to respond to societal ids, including cost-efficient care." Jacobs supervised the committee, which approved departmental plans for the cuts in its respective workforce. Jacobs emphasized that the quality of health care would not be affected by the shifts in the staff. "We are committed to diversity in the work force, patient care and quality" Jacobs said. "I don't think this is a sad time in health care. We are learning to do things better." "We want to be leaner, not meaner," he said. Cheryl Johnson, Professional Nurses Council chair, said Jacobs was naive for neglecting how the quality of care would be affected by the cuts. "We're very unhappy with (the cuts) because we don't think they've been made on any input other than bottom line," Johnson said. "They're not looking at quality." Shields said the Medical Center could become a financial risk to the University if the hospitals are not finan- cially successful. He said academic medical centers must respond to the marketplace. "You cannot sit still," he told the regents. Shields said all the viable options necessitate some downsizing of the work force. He said half the beds the Medical Center currently uses will be necessary in five years. He cited the ever-increas- ing move to outpatient treatment as a reason for the drop in bed use and the resulting work-force downsizing. Shields said utilization drops as much as 69 percent in managed-care markets, and almost 20 percent of the population of Washtenaw County is currently enrolled in HMOs. Shields said increasing HMO enrollment in the area is another reason to restructure. "Hospitals will have to be low-cost to compete," Shields said. "The University is now the highest cost-per-case provider in its market. It must become the lowest-cost provider." Shields said the University must decrease business risks and increase business opportunity for the Medical Center while maintaining its academic 'Y r Ki l :