THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, May 18, 1996 TAG: 9605180280
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 52 lines
Eastern Virginia Medical School has cut its budget for next year by about 2 percent, a reduction that school officials said is necessary to cope with changes in health care.
The school will save money in part by reorganizing administrative departments. It also will raise tuition about 4 percent - $500 for in-state students and $1,000 for out-of-state students.
The school has budgeted $114.5 million for next year, $2.4 million less than this fiscal year.
The cuts are an indication of how changes in the business of health care can affect the finances of medical schools, say school officials.
EVMS can't count on earning as much money from faculty members' practices, which bring in nearly 40 percent of the medical school's total revenue.
The drop in earnings - expected to amount to about $601,000 - is due to changes in insurance company reimbursement, school officials said.
Doctors who make up the full-time faculty at the school are part of two practices, EVMS Health Services and Pediatric Faculty Associates, with offices throughout Hampton Roads. The practices also serve as training centers for students.
But managed care has cut into that revenue, said David Thiel, the school's vice president for administration and finance. Managed care is a type of insurance that aims to reduce visits to doctors, particularly specialists.
The practices also have been hurt by cuts in Medicaid, the government health insurance program for the poor, he said.
School officials have been working to make the practices more efficient and attractive to patients, opening satellite offices and refurbishing the offices on campus. ``Clearly we have to protect ourselves. We need patients to teach students,'' said Thiel.
Money for research also is harder to come by these days. The school expects to lose half a million in federal grants, plus a quarter of a million dollars in private grants to EVMS's Diabetes Institute.
The school also lost about half a million from a fund given by the state to help pay for the care of poor people.
Several hospitals where the school's students practice are entitled to some of the money, but they had allowed the school to keep all the money. EVMS does not own a hospital. But now the hospitals, faced with budget problems of their own, are asking for their shares of the state money.
The Diabetes Institute's research division said last month it would lay off 10 people, but there probably will be no more layoffs as a result of the budget cut, Thiel said. by CNB