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Like its peers, DHMC is facing fiscal challenges

"Most of the country's academic medical centers are feeling the effects of . . . this 'perfect storm' of financial pressures," Daniel Jantzen, DHMC's vice president for finance, told the New Hampshire legislature a few months ago. "These are very challenging times for all providers, but particularly for DHMC."

Costs: Cuts in Medicare and Medicaid reimbursements, rising drug prices, escalating salary costs, and labor shortages in key areas such as nursing, pharmacy, and radiology, are all contributing to very challenging times for teaching hospitals.

For the first time in its history, DHMC has had five consecutive months of losses because of lower-than-expected revenues and higher-than-expected expenses in some areas. In the most recent quarter, however, the Medical Center has made some gains and hopes to end the fiscal year in the black.

DHMC has been hurt by its inability to open beds and treatment areas to meet patient demand. In many cases, this is due to being unable to hire nurses to staff those beds. DHMC has also been affected by some key physician vacancies.

To address the situation, DHMC is opening additional clinical capacity where it is able to, in specialties where demand is high. In addition, there is a Center-wide effort to reduce expenses— by limiting hiring in all areas except those that have a direct bearing on patient care or patient safety and by trimming nonwage expenses. And for the first time in DHMC history, employees worked as a group to persuade state legislators—via hundreds of letters, phone calls, and e-mails—to restore Medicaid funding after a 31% cut in state reimbursements was proposed.

DHMC will continue to be fi- nancially challenged in 2004, because regional and national pressures are not expected to improve soon. When the new space currently under construction opens, the Medical Center will be able to increase patient volumes (see pages 3 and 18 for the latest on the expansion project). The capital costs of the new facilities are being funded from sources other than the operating budget, though their opening will also bring additional upkeep costs in the short run.

Solid: "These are sobering times for all of us in academic medicine," says executive vice president Paul Gardent. "Nevertheless, I am optimistic because DHMC, as an academic medical center, plays a unique and important role in improving health care in the region. We are fortunate to have some very solid cornerstones on which to build our economic recovery. These include our commitment to our mission and to our patients, which is foremost in the minds of everyone who works in this Medical Center. Most important, we have extraordinarily talented and committed staff who work together as a team."

Laura Stephenson Carter

If you would like to offer any feedback about this article, we would welcome getting your comments at DartMed@Dartmouth.edu.

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