UMC, Children’s Hospital budget talks underway

County commissioners are meeting with the leadership of University Medical Center and El Paso Children’s Hospital to discuss their budgets for the next fiscal year.

This is the first budget process since EPCH has come under the control of UMC, happening as a result of the bankruptcy judgement. During the budget meeting, ABC-7 learned Children’s is paying its lease and bills again, but both hospitals are still working to overcome the past difficulties.

As a result, UMC is looking at a tax increase to the rollback rate for this year, up to about 23.5 cents per $100 of home value. That just over a 5 percent increase from about 22 cents in 2016. For the average home in El Paso County with a value of $112,000, that could be about a $15 increase for next year if fully approved.

County officials have warned that this would be a difficult year for UMC and EPCH. They are bracing for a lot of work ahead to fix the big problems like cash on hand.

“It is definitely something that we are all very concerned about,” said El Paso County Judge Veronica Escobar (D).

Even with the requested tax increase expected to bring in a few million dollars more, UMC reports there will be $629 million in expenses and only $611 in revenue, caused mostly by decreasing government funding. That’s a shortfall of $18 million that will eat into UMC’s cash reserves, leaving them with only 33 days of cash on hand. That metric is used as a way to measure the health of the hospital, and it’s been declining for a few years now for UMC.

“You want to have plenty of cash on hand, not just in case there’s an emergency,” Escobar said, “but it’s an important component of feeling like you have a safety net for your organization.”

For the first time the public is getting a look at El Paso Children’s finances, with CFO Tim Domain said is pretty much the first budget the children’s hospital has ever done like this. There are some shortfalls there as well – $101.4 million in revenue and $101.9 million in expenses expected next year. That gap and more will drain Children’s reserves down to just $3 million, only about 10 days of cash on hand for them.

“We’re going to look at working with Children’s leadership in terms of making sure that hospital is run and maintained properly,” said UMC President and CEO Jacob Cintron. “We’re going to set up times to jointly meet with our leader pediatricians, see how we can get our pediatricians to go back and support Children’s at a higher level to increase our inpatient and outpatient revenue.”

El Paso Children’s has its own revenue sources and is not a part of the UMC tax rate or budget.

This is the start of the UMC budget process which will be going on for the next month.

This is also the first time commissioners are working with new leadership of both hospitals.