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Chancellor Dan Rahn, M.D., delivers the State of the University address.

UAMS Impact on Arkansas ‘Stronger Than Ever’

Feb. 26, 2016 | Feb. 26, 2016 | Pointing to measurements of academic, clinical and research productivity, UAMS Chancellor Dan Rahn, M.D., voiced optimism and pride at the work UAMS is doing in its health and health improvement mission for Arkansas during his annual State of the University report on Feb. 23.

However, the university is also facing several challenges including inadequate state funding and aging facilities.

“Our impact is demonstrably stronger than it has ever been,” he said. “And we will continue to advance our mission and our purpose in the midst of instability and uncertainty that we have today and we are not going to compromise our commitments to educational quality, to clinical quality and to the quality of research that is conducted here despite the challenges we face.”

The chancellor reflected on highlights across the institution. His presentation followed a 10-minute video profile of UAMS shown last month to the University of Arkansas Board of Trustees when they met at UAMS.

He closed the presentation by expressing optimism that UAMS can overcome the financial challenges it faces. “I am optimistic about our future,” he said. “I am proud of the work you do and confident in our future.”

Among the Academic highlights:

• Enrollment in the five UAMS colleges and graduate school has increased 8.9 percent in the past six years to an all-time high of 3,021 students in 73 academic programs.
• In 2015, UAMS graduated a record 925 students, the majority of whom stayed in Arkansas. “Enrollment matters but the issue is how many graduate, are licensed and go out and practice their profession,” the chancellor said.
• During the same period, UAMS has established 21 new programs — from the doctor of nursing practice to physical therapy — while absorbing reductions in its state appropriation.
• UAMS boasts a 73 percent on-time graduation rate. “That’s an incredibly important outcome measurement for our academic programs,” Rahn said.

Clinical highlights:

• More than 1 million patients seen each year by UAMS faculty at UAMS, UAMS Regional Programs, the Central Arkansas Veterans Healthcare System or Arkansas Children’s Hospital.
• Double-digit increases in the past six years for outpatient visits, surgical cases, ER visits and nursery discharges.
• The hospital is on track for another increase in patient care volume this year, with an estimated 23,000-24,000 discharges. “Patient volume has increased — dramatically in the past two years,” Rahn said.
• “This morning between the hospital, NICU nursery and beds in the Psychiatric Research Institute, we are full, with 479 inpatients,” he said. “And there are 16 awaiting beds and that’s not counting those patients waiting on transfer requests [to UAMS].”
• “We need to make more capacity available to meet the need of patients and that’s the challenge,” he said.
• Clinical Programs transitioned to the integrated clinical enterprise structure with patient-centered service lines.
• Neighborhood Clinics opened in west Little Rock and in Maumelle, while an orthopedic clinic opened in west Little Rock.
• UAMS is the first hospital to put physician ratings online.
• Formed Partnership for a Healthy Arkansas, a shared services organization, with three Arkansas medical systems and insurer Arkansas Blue Cross and Blue Shield to seek ways to improve quality while reducing costs.

Research highlights:

• While research funding has declined in recent years due to more competition for a reduced pool of funds, funding to UAMS researchers for the current fiscal year-to-date is 17 percent ahead of the same period last year.
• UAMS researchers have continued to earn significant grants, such as $10.5 million to a team led by Martin Hauer-Jensen to study the effects of radiation therapy and $5.5 million in support for the Center for Pacific Islander Health in northwest Arkansas.
• There are 200 open cancer clinical trials in the Cancer Institute.
• Publication of studies by UAMS researchers has increased 90 percent since 2005: from 799 articles in 2005 to 1,522 in 2015. “It’s not all about funding, it’s about the quality of work and the number of publications is a measurement of quality,” he said.

The chancellor said that despite the successes, UAMS continues to face “significant financial challenges.” Those challenges are a reason non-classified (salaried) employees at the state’s largest employer have not received cost of living increases in three of the past four years.

The buildings on its main campus include several that are decades old (the Central Building, aka the old hospital, was built in the 1950s; the Barton Research Building was built in the 1960s — both need major renovations to meet current fire codes).

Net state appropriation to UAMS represents only about 1.5 percent of its overall budget. Most state owned and operated teaching hospitals receive a direct appropriation to recognize their unique costs — operating as both a school and a hospital, Rahn said.

UAMS does not receive a separate hospital appropriation and is required to use its academic appropriation for the state’s share of Medicaid match program payments and for payment for disproportionate share payments, payment for the uninsured, a state contribution into Medicaid cost reports, and state funding for graduate medical education. Those transfers totaled $85 million in the past fiscal year that essentially reduced the state funding to UAMS from $106.4 million to $21.3 million. And, in addition to the $85 million UAMS uses for transfer payments, UAMS pays administrative fees of $9 million to the Department of Human Services on those transfer payments.

He compared the state funding to peer institutions in surrounding states. The University of Mississippi Medical Center received a state appropriation of $188.6 million in fiscal year 2015 that included no required transfers, compared to the $21 million UAMS received after required budget transfers.

Future fiscal uncertainties include potential Medicare reductions (that could total $32 million by 2021); reduced funding if the state’s Medicaid expansion is not continued and a reduction in the payments UAMS has received for the disproportionate amount of uncompensated care it provides.

“This is why we have these problems, it’s not because we’re asleep at the switch,” Rahn said, documenting internal cost reduction efforts.

These include:

• $82 million in savings over five years associated with changes recommended by Navigant Consulting
• More than $20 million in budget savings due to energy efficiency efforts and Lean projects
• A projected $23 million in savings from an array of projects including online procurement, telephone system conversion to Voice-Over-Internet-Protocol, print optimization and the contract management office.

Looking ahead, Rahn said UAMS would continue to work with state leaders on a strategy to increase core state funding to the institution. The university also will need assistance to deal with the deteriorating older buildings on campus.

UAMS will do these things while also focusing on institutional reaccreditation, the student information system, a dental school feasibility study (“But a dental school will not move forward without a business plan to support it.”), development of a joint occupational therapy program with the University of Arkansas and increased interprofessional education opportunities.

Research growth will be focused in areas of opportunity for growth, the chancellor said, including biomedical informatics, bone disease, nutrition/obesity, frailty and addiction. The Cancer Institute will continue its pursuit of National Cancer Institute (NCI) designation, and the Translational Research Institute will continue its work to reachieve funding, he said.

Looking ahead, Rahn said, “We have significant challenges to overcome but they are not new. The way our finances are structured here have been leading us to this point for a very long period

of time. It’s not going to change overnight but it will change with the strategic partnerships with our funding partners in the funding sector if we keep doing our jobs.

“I’m very optimistic about the future, “Rahn said. “I’m very proud of what you do, of what is accomplished every day and has been accomplished. I’m very confident about the future and I want to thank you for what you do and thank you for being here today.”