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Reorganization: Frequently Asked Questions

Updated: March 11, 2009

Below are answers to questions about the overall mission of Chicago BioMedicine, the reorganization designed to protect and sharpen the focus on that mission, and the response to the national economic downturn that has accelerated our efforts to preserve Chicago BioMedicine and to realize its vision.

Read answers to frequently asked questions about:

The Big Picture

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1. What forces at work in healthcare are leading to changes at the University of Chicago Medical Center?

There are two central, overlapping problems, the slow decay of the U.S. healthcare "system" and the rapid decline of the global economy. These come together in the hospital setting.

Our healthcare system is broken. The poor often lack access to basic healthcare, the field is fragmented and difficult to navigate, and costs continue to increase. At the same time, the economy is in what appears to be a profound and lasting recession. Healthcare was once thought to be immune from such fluctuations. This is no longer true. A November survey found that the median profit margin of U.S. hospitals fell to zero percent in the third quarter of 2008; approximately 50 percent of hospitals were unprofitable. One measure of fiscal stability, hospitals' cash-on-hand, reached an historic low in the third quarter of 2008, with a median value of 110 days.

Despite a recent history of strong financial performance, this directly affects UCMC. Patient volume and clinical revenue have declined, more patients are without insurance, and UCMC's investments have lost an estimated 30 percent of their value. Because of these pressures, UCMC made the tough decision to cut $100 million from its annual budget. Without addressing the effects of the downturn, the Medical Center cannot continue to invest in the equipment, techniques, research and facilities that allow Chicago BioMedicine to lead in patient care, education, and medical and scientific innovation, UCMC's core missions. Medical Center leadership took early and aggressive steps to deal with this downturn and remain in a position of relative strength. Although days of cash-on-hand, for example, at UCMC fell from 312 in fiscal year 2008 to 219 for the first half of FY 2009, that is still twice the median for hospitals in the November survey.

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2. What steps is UCMC taking to address these challenges?

Rather than sit back and wait for Congress to implement reform, UCMC is trying innovative efforts to make a difference now, reorganizing to increase the connections and focus our distinctive skills on treating serious conditions, providing outstanding education and performing leading-edge research that UCMC is uniquely positioned to provide. This means a comprehensive review of every aspect of operations to determine which activities contribute the most to the Medical Center's core missions and strategic priorities. Organized groups of Chicago BioMedicine leaders--faculty, staff, nurses, administrators, and others--participated in this review, which has resulted in a number of changes in personnel and in the organizational structure. The ongoing changes will make UCMC's organization somewhat smaller, but will strengthen the institution's commitment to quality, safety, and distinctive education and scholarship.

At the same time, UCMC is developing the Urban Health Initiative, a new tool to extend UCMC's high-quality patient care beyond its walls and move aspects of its research and teaching into the community. By organizing a network of high-quality providers--doctor's offices, clinics, and community hospitals--UCMC is working to increase access and reduce costs for those who live on the South Side, despite the economic crisis. This is being done in a way that benefits patients, brings financial stability to UCMC's collaborators, and enables the Medical Center to focus its resources on the types of high-technology care that only UCMC can provide.

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3. Does this affect your commitment to care for the poor?

No. UCMC provides a large amount of unreimbursed care and can honestly claim to be a national leader in providing medical care for the poor.

UHI enables the Medical Center to extend that commitment through a community-based healthcare network and make better use of the resources devoted to care for those with limited resources. Our community collaborators can provide routine care at a lower cost than UCMC. This partnership enables UCMC to provide care for patients who cannot get help anywhere else in the region, such as those who need treatment for severe burns, neonatal care, organ transplants, or innovative cancer care. This is a better way to focus limited healthcare resources rather than duplicating, at higher cost, the services available in the community.

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4. How does UCMC compare with other hospitals in Chicago in providing care for patients without insurance or covered only by Medicaid?

The chart below shows that UCMC is by far the most important source of care for patients covered by Medicaid of any academic medical center in Chicago. This chart compares the percentage of Medicaid admissions and the percentage of revenue devoted to charity care among the 10 largest Chicago hospitals, as measured by revenue.

Table: Percent Medicaid by Inpatient Admission for the 10 Largest Area Hospitals (Measured by Revenue), Plus "Pure" Charity Care as a Percentage of Revenues

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5. How does UCMC compare with other U.S. academic medical centers?

The chart below (2004 data) puts these data in a national context. It compares the percentage of government (Medicare and Medicaid) to private insurance at UCMC and peer institutions around the country. Academic medical centers represent only 2 percent of the nation's hospitals but provide 22 percent of all uncompensated care. At 60% government pay, UCMC is 20% (10 percentage points) higher than the national median of 50 percent. UCMC is 42 percent higher than the median for Medicaid, leading the pack, even among academic centers. The issue, as the Wall Street Journal recently summarized it, "touches on one of the most critical questions facing hospitals that serve low-income populations: How many patients on Medicaid insurance, and older patients on Medicare, can a hospital afford to serve?"

Bar graph: Government Activity as Percent of Total
View a larger version of this chart (108 KB)

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The Details

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6. What changes are occurring in Chicago BioMedicine?

Chicago BioMedicine is reorganizing to increase the connections between different parts of UCMC's organization, and to focus resources on using our distinctive skills and technology to treat serious conditions, provide outstanding education and perform leading-edge research that UCMC is uniquely positioned to provide. This means a comprehensive review of every aspect of operations to determine which activities contribute the most to UCMC's core missions and strategic priorities. Representatives of all components of Chicago BioMedicine--faculty, staff, nurses, administrators, and others--participated in this review, which has resulted in a number of changes in personnel and in the organizational structure.

For some time UCMC has embraced the idea that "distinction trumps size." The ongoing changes will make UCMC's organization somewhat smaller, but will strengthen UCMC's commitment to quality, safety, and distinctive education and scholarship. Many of UCMC's services, educational experiences and research activities can happen nowhere else but on this campus; other clinical, research and teaching service make better sense in the community setting. To mix the two jeopardizes our ability to do either.

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7. What is the reason for the changes?

In the short term, the changes are aimed at building a more integrated and focused organization that fulfills UCMC's mission at an even higher level of quality and excellence. This is a process that began two years ago but has been accelerated by the economy. The reorganization will increase administrative efficiencies, significantly reduce costs, match UCMC's expenditures to revenues, and ensure UCMC has the resources to invest in critical components of UCMC's core mission and strategic priorities.

In the long term, the changes are designed to preserve UCMC's leadership role in biomedical research; to ensure that UCMC continues to attract the best students, teachers and researchers; to maintain UCMC's unique contributions to the South Side of Chicago; and to provide the best possible care to the patients who need it most--those with serious illness who require a level of care, and often technology, beyond what a community or teaching hospital can provide. This is a task that, on the South Side of Chicago, only UCMC can perform. And it is the care of such illness that supports many of UCMC's other research, teaching and clinical missions.

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8. What principles underlie the decision-making process?

Decisions have been made in consultation with representatives drawn from the breadth of Chicago BioMedicine. All decisions, including staffing levels, have been based on UCMC's commitment to maintain the highest quality of patient care and safety, outstanding educational environment, and academic excellence. UCMC is reducing expenditures in a targeted and strategic way in order to protect and enhance the quality of its strongest programs. That means ending or scaling back activities that contribute less to UCMC's core mission and strategic priorities.

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9. Why are you targeting specific areas for cuts rather than simply making across-the-board reductions?

Making strategic cuts is essential to the future of UCMC's institution. If UCMC were to cut a set percentage of every activity, quality would suffer across the organization. By choosing to emphasize UCMC's core missions while stopping or scaling back other activities, UCMC is able to maintain the highest levels of performance and quality in those crucial areas.

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10. Overall, how is the $100 million target in budget reductions being achieved?

Many areas of Chicago BioMedicine will be affected by budget cuts. UCMC is reshaping its physical bed capacity by closing a general medicine unit; reducing and redistributing capacity in the intensive care units; streamlining the emergency room process; reducing personnel in shared support areas such as communications, facilities and finance; not offering further appointments when some faculty terms end; further reducing spending on consultants; cutting back on capital spending for construction and renovation projects; and tightly controlling administrative expense and salary levels across the enterprise.

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11. What changes have occurred relative to staff positions and hiring?

A hiring pause was put in place in Fall 2008. Early in January, 15 positions at the senior management level, including four vice presidents, were eliminated. (Two more vice presidents left to take other positions.) Responsibilities were redistributed across the leadership team as a result of these changes.

After weeks of additional planning and intense discussion, in February about 450 employees were notified that their positions were being eliminated as part of a reduction in force. Those employees make up about 5 percent of UCMC's workforce. Over the next 18 months, UCMC will continue to eliminate positions by selective attrition.

We deeply regret that economic circumstances have forced us to lose so many talented employees, especially at such a challenging time in the job market. We are treating these departed colleagues with compassion, and doing everything possible to assist them.

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New Initiatives

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12. Will Chicago BioMedicine continue to invest in new initiatives, technologies and facilities?

Yes. Even as UCMC looks for ways to reduce costs and become more efficient, it must continue to invest in cutting-edge technologies, modern facilities, and strategic initiatives in order to ensure that Chicago BioMedicine can achieve its core missions. Such investments are necessary if UCMC is to continue to provide medical care of the highest quality and safety, conduct agenda-setting research, educate the nation's finest doctors and scholars, and lead the way in biomedicine. Nevertheless, the capital budget group will critically evaluate all projects to ensure that only the highest priority projects are funded.

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13. Will you go ahead with the New Hospital Pavilion?

Yes. UCMC plans to proceed with construction of the New Hospital Pavilion (NHP), which is scheduled to be completed in 2012. The NHP is crucial for UCMC to retain its leadership positions in patient care and clinical research--which are central to the Medical Center's mission as well as its long-term financial strength.

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14. How will the NHP project benefit your patients and your biomedical enterprise?

Examples of the benefits of the New Hospital Pavilion include:

  • Better imaging for heart patients and neurosurgery patients. The NHP will allow UCMC for the first time to place large MRI machines and other imaging devices directly in operating rooms, where surgeons can use them immediately before and after procedures. This will increase surgical accuracy and simplify patient scheduling.
  • Many more isolation rooms for patients who are immunocompromised or have infections. Preventing infection is imperative for cancer patients in chemotherapy, transplant patients and a variety of people with compromised immune systems.
  • More space for families of patients, and more comfortable patient rooms without the need for double occupancy. Patient rooms in the NHP will have more built-in space for families, and should eliminate the need for double rooms throughout the Medical Center.
  • High flexibility. The NHP's modular design will allow easier changes in the future as new imaging technology and therapeutic techniques, such as robotics, become available. New technology will continue to transform the practice of medicine, and UCMC must be prepared to adopt those improvements when they happen.

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Academics

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15. Will any faculty positions be eliminated?

No faculty will be laid off. There is a pause in hiring new faculty, and some faculty positions will remain unfilled when individuals depart or retire, and those who are not reappointed when their contracts expire. Over the next two academic years, about 120 current academic appointments will gradually lapse.

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16. Will the reductions affect academic programs in the basic sciences?

The only direct effect on basic science programs will be some administrative restructuring, as departments combine administrative functions and reduce duplication. There will be some new controls on faculty expenses. No changes in academic programs are planned, and the budget reductions will not affect the number of incoming graduate students.

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17. Will the reductions affect medical students?

Although the Pritzker School of Medicine is admitting fewer students than it did a few years ago, those changes are unrelated to the current budget reductions. As part of the Pritzker Initiative, announced last spring, Pritzker is reducing the incoming medical school class size from 104 new students per year to 88. The Pritzker Initiative is a curriculum reform designed to educate new physicians with significant research and scholarship experience. It shifts teaching from the lecture hall to personal interactions and one-on-one mentoring with senior faculty. It also involves increased financial support for students--which should decrease their educational debt and allow them to choose specialties based on interest rather than accumulated debt and consequent financial need. The budget reductions will not reduce financial support for students.

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18. Will the reductions affect residents?

Because of the new affiliation with the NorthShore University HealthSystem, the total number of incoming first-year residents will increase significantly. As of July 1, the NorthShore affiliation will bring an estimated 100 new residents and fellows into UCMC programs.

UCMC-based residency programs will be affected in different ways. The choices are still being discussed, but some programs will grow, some will remain the same and some will get smaller. Once fully approved by the accrediting agencies, those that will grow because of collaboration with NorthShore include anesthesiology, pediatrics, orthopedic surgery, emergency medicine, and radiology. UCMC's internal medicine residency program, which has grown significantly over the past several years, will take seven fewer residents in the 2009 match, corresponding to the decrease in general medicine inpatient beds.

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Clinical Care

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19. Will any clinical care units be affected?

Some units that have been seeing fewer patients, or that do not fit well into UCMC's growing emphasis on serious illness, will close this Spring, as soon as mid-April. These include a general medicine unit and two off-campus doctors' offices on Greenwood and 47th Street. Primary care services at the two clinics will return to the Medical Center's primary care clinics in the Duchossois Center for Advanced Medicine, on campus. Inpatient services provided by the general medicine unit will be absorbed by inpatient units at Mercy Hospital and Medical Center (2525 S. Michigan Avenue) and Holy Cross Hospital (2701 W. 68th Street).

In addition, UCMC will reduce bed capacity in the intensive care units, and one surgical unit will no longer be open on the weekends (Saturday afternoon through Tuesday, a time of low utilization). Some duplicative laboratory services were consolidated and the adult emergency room will be reorganized. UCMC also will work to integrate the administration of its 31 ambulatory clinics. Implementation of these plans will be refined in discussions with UCMC's clinical faculty and nursing staff.

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20. How will the adult ER be reorganized?

UCMC is planning to improve key processes in the emergency departments. One of the goals is to connect patients who do not have emergent conditions with appropriate healthcare resources in the community. The planning process is still underway, and final decisions have not yet been made. It is important to note that UCMC's emergency room is committed to treat all patients who need emergency care, regardless of their financial circumstances or their insurance status.

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21. How will changes in the emergency room affect wait times in the ER?

Patients will receive an initial medical screening by a physician, rather than the standard triage by a nurse, soon after arriving at the Medical Center. Those who do not need emergency care will be provided with options for care at alternate sites, which may involve much shorter waits.

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22. Why are waiting times so long?

For its size, UCMC has always attracted a disproportionately large number of ER visits, which makes it difficult to find hospital beds for ER patients who need to be admitted. The average academic medical center gets about 100 visits per staffed bed per year. UCMC has 154 visits per staffed bed per year, one of the highest ratios of any U.S. academic medical center. The backlog can slow down the entire system as patients wait in an ER bed for a hospital bed.

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23. Why not just increase the number of ER beds?

UCMC has over the years found that increasing the number of emergency room beds has not produced a lasting effect. In 2002 the Medical Center had 21 adult ER beds. With those 21 beds, UCMC went on ambulance diversion about 12 percent of the time and 12 percent of patients left without being seen. (The national average is about 2 percent, and almost 5 percent in urban areas. This increases as volume and waiting times go up. A 2006 survey found that average ER waiting time was 4.4 hours for an ER with 40,000 visits a year, but waiting time increased by 30 minutes for every 10,000 additional patients.) In 2004 UCMC spent $6.5 million to increase the size of the adult ER from 21 to 31 beds and nearly doubled the ED budget. The number of patients who left without being seen dipped briefly then went back up. In 2008, 13 percent of adult ER patients left without being seen and UCMC went on diversion almost 25 percent of the time.

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24. What can be done to decrease waiting times?

The experience at UCMC suggests that this problem will continue, regardless of how many ER or general medicine beds the Medical Center provides, unless it can help patients establish medical homes within the community. About one-third of the patients who make up the 80,000 to 85,000 UCMC emergency room visits each year come to the ER instead of seeing a primary care physician in the community. This not only interferes with genuine emergency care, it takes activity away from the community-based physicians and clinics set up to care for patients from nearby neighborhoods. Our goal, through the Urban Health Initiative, is to strengthen the community health network and do a better job of connecting patients with the right care setting.

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25. Will that effort include collaborations with other hospitals?

Despite closing one 24-bed unit, UCMC will expand access to general medicine beds through its growing programmatic relationships similar to the collaboration between UCMC and Mercy Hospital and Medical Center. This partnership features a general medicine unit and an inpatient psychiatry unit, both staffed by UCMC physicians. In April 2009, UCMC will concentrate inpatient care for geriatric and kidney disease in newly opened units at Holy Cross Hospital, also staffed by UCMC physicians. Patients who come into the UCMC system via the ER, and for whom care at Mercy or Holy Cross is the preferred option, will be transported by ambulance. As the chart below illustrates, many academic medical centers have far more extensive relationships with nearby community hospitals. This allows them to focus on their clinical strengths and still provide care for patients with common and less severe disease in hospitals with a less expensive cost structure.

Bar graph: 2005 Honor Roll Hospitals: Beds at Main Facility and Affiliated Facilities

View a larger version of this chart (176 KB)

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26. How will these changes affect the Medical Center's commitment to the Urban Health Initiative?

The economic downturn and UCMC's response to it make the Urban Health Initiative more important than ever. The UHI is a long-term commitment by UCMC to improve the health status of the surrounding community through collaboration. It is designed to improve access to quality healthcare by finding a "medical home" for patients, a place where they can establish a lasting primary care relationship. It includes the South Side Health Collaborative, which helps emergency room patients with non-urgent conditions establish an ongoing relationship with a community health center or physician. It also includes grants to community healthcare providers to help them serve more patients and partnerships with community hospitals to provide care for patients with less severe illness. This enhances the capacity of UCMC to perform leading-edge clinical research and innovative treatment that it is uniquely positioned to offer.

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27. How can you tell if these efforts are working?

UCMC has studied the effects of the UHI since it was first created and will soon launch a major study of health and healthcare on the South Side of Chicago. This will provide baseline data to study the effects of each aspect of the program on community health.

The Medical Center routinely monitors every aspect of operations to make certain every program meets or exceeds guidelines and measures up to institutional goals. Representatives of all components of Chicago BioMedicine are benchmarked and publicly reported. The Medical Center measures patient satisfaction, faculty and staff satisfaction, the Core Measures from the Centers for Medicare and Medicaid Services, and accreditation from multiple external organizations like the Joint Commission and Blue Cross/Blue Shield. This broad array of metrics provides a framework for institutional planning and has guided the budget-reduction recommendations. The data will also provide early indications whether any implemented change is having a beneficial or adverse quality or safety impact.

Table: Quality Metrics

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The Media

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28. What is your explanation for the Dontae Adams case written about in the Chicago Tribune?

This story, about a boy bitten by a dog, contained multiple inaccuracies and distortions. The story involved an upset mother who took the child from the UCMC ER where he was treated conservatively, to Stroger Hospital, where he was treated surgically. Medical Center emergency room doctors stabilized the patient, cleaned and dressed the wound, provided pain medication and tetanus shot, and gave him a dose of IV antibiotics--all standard of care. The story implied that a surgeon at Stroger Hospital had criticized the care UCMC provided. In fact, that surgeon has stated, in writing, that UCMC's care met a "high standard." The ER team would have provided identical care to any patient with similar injuries, and the decision to defer surgery was not connected in any way to the patient's insurance status.

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29. What is your response to critical statements made by the American College of Emergency Physicians?

It is unfortunate that the ACEP chose to issue a statement critical of the UCMC, based largely upon misconceptions in a news story and without first contacting the Medical Center to gather basic facts. ACEP's understanding and description of the Medical Center's plans for the Emergency Department and inpatient services is incorrect. The errors were so egregious, and careless, that the editor of Modern Healthcare returned the criticism:

"For as long as anyone on our veteran editorial staff can remember, hospitals and ER doctors alike have criticized patients for using ERs as outpatient clinics to address non-emergent medical conditions," he wrote. "They blame ER overcrowding on patients who should be seen at their doctor's office. And hospitals, physicians and other emergency caregivers have been encouraged to come up with solutions to unclog ERs by diverting patients to the most appropriate and more cost-effective settings for care----"

"Leave the emergency rooms open for patients with true medical emergencies. For anyone with a real emergency, that's great. But now, ACEP says that's bad. It says hospitals are going too far and patients with emergency medical conditions are being shunted away to other facilities. So what's ACEP really concerned about? It's money---"

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