UMC financials approved by county for 2015
University Medical Center had its budget and $20 million line of credit approved by county commissioners Monday. But will it be enough to keep the hospital out of financial trouble in the future?
UMC has seemed to be on rocky financial ground recently, laying off dozens of employees just months ago. But UMC CEO Jim Valenti said that this over $500 million budget and loan will place the hospital and district on solid financial footing.
“There are a lot of good things that are happening at UMC,” Valenti said. “We are projecting a positive cash flow of $18 million. We’re also looking at using capital expenditures of $45 million to upgrade our third floor, fifth, sixth and seventh floors.”
Valenti said all the items of UMC’s financials approved by commissioners set the hospital up for the foreseeable future.
The $20 million line of credit will allow UMC to secure federal funding to help recover costs from unfunded patients, an estimated payout of $45 million down the line.
The effective tax rate adopted will bring in the same amount of money to the $532 million budget as last year, costing the average homeowner about $7.68 more due to an overall drop in all property values, including commercial.
In addition, Valenti said changes from the federal level to Medicare reimbursements could solve some of the serious cash-flow issues UMC has experienced in the past.
County Judge Veronica Escobar isn’t as enthusiastic as Valenti, but she does see a future for UMC.
When the clinics are up and running, I think that things will be better for the bottom line,” Escobar said. “But I’m very cautious about where we’re headed as a state. I don’t know if we will have a governor in place in January who will accept Medicaid expansion. If we don’t, that does not bode well for county hospital districts.”
One other serious issue UMC has faced is unpaid debt from services it provides to El Paso Children’s Hospital. Valenti said that discussions with El Paso Childrens are ongoing, and he’s hopeful a resolution will be reached. But no details were available beyond that.
