State Fund Boost Will Cut UCI Medical Center Deficit

A 10% increase in Medi-Cal payments to UCI Medical Center in Orange, approved by the governor earlier this week, will help cut the hospital’s budget deficit to about $8.6 million, an administrator for the hospital said Wednesday.

Before Gov. George Deukmejian approved the legislation, hospital administrators had announced a financial shortfall of $11.1 million for the 1988-89 fiscal year which ends next July 1. But the increased Medi-Cal payments, expected to be about $2.5 million, will help erase that deficit.

William Drozda, the hospital’s senior associate director and chief financial officer, said most of the $11.1-million deficit was going to be covered by $9 million pledged earlier by the Legislature. However, those funds will not be disbursed to UCI Medical Center until fiscal 1989-90, he said.

“We will get that money next year to cover this year’s deficit. That means we will have an approximate zero bottom line. Still, that is not necessarily good,” Drozda said.

The troubling problem, he said, is that the medical center will continue to fall short on indigent care costs. Currently, UCI Medical Center provides 40% of the county’s indigent care needs. Drozda said the hospital was $28 million short this year on its indigent care costs.

The state pays Orange County 70% of the cost of medical care for indigents. But since almost 70% of UCI Medical Center’s patients, including the large number of indigents, are in what Drozda called the “public pay” category, the hospital traditionally suffers financially.

“It’s remarkable that we’re only losing $11 million a year, considering that the shortfall in indigent care is our biggest problem,” he said.

Yet this year’s deficit for the UCI Medical Center followed two consecutive years of slight profits. In 1984, the facility had a deficit of $3 million and followed that with a $9.6-million shortfall in 1985.

Leon Schwartz, UCI vice chancellor and temporary director of the medical center, predicted last year that the hospital would again show a huge deficit in 1988.

The medical center later this year will also benefit from a $4-million state grant that will be matched by federal funds and distributed among dozens of hospitals in the state that are showing deficits. This emergency fund is expected to grow to about $50 million by 1991.

“We have not been told yet how much we will get from that, but it will be small,” Drozda said.

Mary A. Piccione, 53, a top administrator for the massive New York state university system, is scheduled to become UCI Medical Center’s director on Oct. 24. Piccione has had experience with such deficit problems, having worked at New York hospitals that provide indigent care.

“The deficit problems will be one of the first things that she will have to get to right away,” Drozda said.