When Ora Pescovitz joined the University of Michigan Health System in 2009, she envisioned having a team that would make new discoveries and shape the future of health care.

Two years later, Pescovitz, the executive vice president for medical affairs, is outlining her goals to achieve this vision.

At the annual State of the Health System address last week, Pescovitz challenged her staff to double its share of complex care cases like heart bypass surgeries before the close of the decade. Pescovitz plans for her staff to achieve this by increasing patient referrals and looking for partners to share resources with.

“It isn’t enough to do a lot of things well,” Pescovitz said before an auditorium of UMHS staff. “We need to do some things better than anyone else.”

UMHS handles about 7 percent of complex care cases statewide and tends to about 45,000 inpatient stays each year. Increasing complex care cases to 15 percent will help UMHS gain “market leadership” and maintain financial stability in its hospitals and health centers, Pescovitz said in her speech. UMHS is at risk of losing $100 million from its clinical operating margin in the next seven years, she said.

Pescovitz also wants UMHS to cultivate an “interdisciplinary learning environment,” improve patient care experience and engage in “groundbreaking” discoveries. She highlighted UMHS’s success this past year, citing that the University received the most funding from the National Cancer Institute out of any other academic medical center in the country in the 2010 fiscal year.

U.S. News and World Report ranked the University Medical School tenth in research in the nation in 2010 and the University Nursing School sixth in the nation, Pescovitz added.

“We really have a lot to be proud of,” Pescovitz said in her speech.

However, the mood of her speech shifted slightly, as Pescovitz addressed ongoing
negotiations between UMHS and the Michigan Nurses Association. The negotiations started in April, and nurses at UMHS have not had a contract since July.

Pescovitz emphasized the importance of competitive wages and benefits for the nurses at UMHS.

“Our nurses are really on the front line of seeing our patients,” she said. “Our nurses are critical to creating the ideal patient care experience … and ensuring quality patient care.”

Ann Sincox, a member of the Michigan Nurses Association, said in August that UMHS’s focus on facility expansion is a main reason for the current controversy.

“The only concern UMHS has expressed recently is how much the new Mott Children’s Hospital is costing them,” Sincox said at the time. “Their decision to build at a time that the economy slumped should not be paid for on the backs of the nurses.”

Despite the ongoing negotiations, the hospitals and health centers unit of UMHS recorded strong year-end fiscal reports in June. The unit showed an expected operating margin of 2.1 percent on revenues of $2.1 billion for the 2011 fiscal year, according to a June 16 UMHS press release.

For its 2012 budget, which the University’s Board of Regents voted on in June, the unit projected a 3-percent positive operating margin, the press release states. Hospitals and health centers adjusted their projection to a 1.1-percent negative operating margin after accounting for the opening of the newly renovated C.S. Mott Children’s Hospital and Von Voigtlander Women’s Hospital and the initiation of the first phase of Mi-Chart — a new information technology system for UMHS. The updated hospitals are set to open next month.

Despite the strain that the two projects will place on the UMHHC budget, Doug Strong, chief executive officer of the unit, acknowledged the long-term benefits of the new hospitals.

“These two projects … will prepare us to serve even more patients, and in a more efficient environment, for decades to come,” Strong wrote in the release.

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