The Georgetown University Board of Directors unanimously approved a reorganization and cost-elimination plan Thursday for the Georgetown University Medical Center.

The new plan proposes to add $13.5 million each year to the edical Center’s net margin and restore the financially-troubled center to solvency by 2007.

The plan will reorganize the Medical Center into four distinct administrative units. It also calls for increasing medical school enrollment and tuition, consolidating research labs and reducing administrative expenses. The Medical Center also plans to boost its role as a biomedical research institution with a new Biomedical Graduate Research Institute.

“By fostering increased inter-disciplinary research, this new structure positions Georgetown University Medical Center to better take advantage of the changing priorities and emerging opportunities in the world of biomedical research,” Stuart Bondurant, interim executive vice president for university health sciences and dean of the Medical Center, said in a letter to the edical Center community.

“The plan eliminates our operating deficit by [fiscal year 2007], while better positioning the Medical Center to respond to emerging biomedical research opportunities and better situating us for long-term growth and success.”

While the plan addresses new revenue sources for the center, such as an unspecified tuition increase for medical students and increased enrollment in the medical program and other graduate programs, it will also implement various expense reductions. The center will close some research labs deemed “financially nonviable,” and tenured faculty will be given the option of early voluntary retirement.

Certain non-tenured faculty and staff face the prospect of job losses in the wake of the planned reorganization.

“The consolidation of the administrative units of the basic science departments and the closing of labs will require the elimination of some staff and non-tenured faculty positions,” Bondurant said. “The working groups worked hard to minimize the need for such steps, but they are a necessary part of our plan to eliminate our operating deficit and position us for future growth.”

Last summer the Medical Center eliminated 65 staff and non-tenured faculty positions based upon the recommendations of a committee comprised of staff and faculty.

Scientific research grants from external sponsors will cover an increasing share of faculty salaries and center expenses. The edical Center received a record-setting $130 million in sponsored research funds last year, and officials at the center said that reductions last year would not impact its fundraising in fiscal year 2005.

Working groups consisting of academic and administrative officials from the School of Nursing and Health Studies, the edical School, the Lombardi Cancer Center, and the BGRI devised the plan over the fall. The plan was approved by the Committee on edical Center Affairs of the Board of Directors.

These groups will form the basis of the reorganized Medical Center, which began experiencing financial difficulties in the late 1980s. Faced with increasing debt, reductions in federal funding of medical schools and the growth of suburban hospitals, the Board of Directors decided in the mid-1990s to seek a partner to operate the edical Center’s clinical facilities. MedStar Health, a Columbia, Md.-based non-profit health care group, assumed control of the hospital in 2000.

Prior attempts to rein in the center’s deficits have fallen short of expectations. The university projected to save $12.75 million through the layoffs, but only achieved $7.9 million in savings.

The sudden departure of former executive vice president Daniel Sedmak last August did little to give some Medical Center faculty confidence in the success of the interim leadership, according to interviews with faculty last year.

Despite this, Bondurant thanked the members of the university and Medical Center communities in his letter and stressed the openness and fairness with which the committees were formed.

“Many members of the Medical Center and university communities contributed . by attending the numerous faculty governance and open meetings that were held to discuss the planning efforts, by asking thoughtful and probing questions, and by offering constructive suggestions that ultimately made our plan better,” he said.

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