Confronting today's medical education environment

MCGHI Assumes Operation of MCG's
Hospital and Clinics

Two strategic initiatives were implemented by the Board of Regents during Fiscal Year 2000 to stabilize the fiscal health and enhance the competitiveness of the Medical College of Georgia in the changing health-care environment.

With an early retirement program, approved by the board in August 1999, MCG reduced its workforce by over 700 employees to improve efficiency and manage severe reductions in revenue. Reimbursements from Medicare and Medicaid declined under the Balanced Budget Act of 1997, and increasing managed care pressures to reduce hospital stays further cut back revenues for the hospitals and clinics.

Prior to approving the early retirement program, the Board of Regents had taken other measures to alleviate the budget shortfall at MCG. In the Spring of 1999, an increase in the hospital bed rate was approved to generate $7 million in new revenue. MCG's outpatient pharmacy also was reorganized, at a savings of $2 million, and another $2 million was saved by eliminating vacant positions and improving medical management.

In a separate restructuring effort, the Board of Regents approved a Master Affiliation Agreement between MCG and MCG Health, Inc. to enhance the the medical college's ability to joint venture and compete more effectively in the ever-changing health care sector. The comprehensive agreement confirmed MCGHI's commitment to support the hospitals and clinics' three-part mission of medical education, research and patient care, including indigent care.

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©2001 University System of Georgia Board of Regents