2010 Fiscal Year in Review
To the extent that the fiscal year ended June 30, 2009 may go down as one of the weakest financial performances of the Medical Center in years, one year later, its financial performance for the fiscal year ended June 30, 2010 can be described as one of the best. The consolidated Medical Center financial statements for the twelve months ended June 30, 2010 reflect revenues in excess of expenses from operations of $86.7 million.
Compared to the previous fiscal year, the increase in revenue over expenses from operations for 2010 represents a significant improvement over the 2009 operating results of $29.7 million. The overall improvement in consolidated financial performance can be attributed primarily to:
- Improved investment performance and its impact on investment income, mark to market adjustments on interest rate swaps, and pension liabilities;
- The successful resolution of medical resident/FICA issue with the Internal Revenue Service;
- The implementation and realization of the full impact of a cost reduction program resulting in savings approximating $40 million;
- A temporary freeze on our wage and salary adjustments for employees earning more than $40,000 annually;
- Increased inpatient and ambulatory clinical volume; and
- A deceleration of Strategic Plan-related faculty recruitment in the School of Medicine and Dentistry.
While every business unit within the Medical Center reported a positive change in net assets (comparing 2010 over 2009), we realize that sustaining this level of peak performance will be difficult. Our clinical enterprise continues to be the primary economic engine for the Medical Center, and like many of our academic medical center peers, we face significant hurdles in the near- and longer-term â€“ such as responding to national health care reform measures, New York State and National Institutes of Health budget tightening, local employer pressures on health care costs, bed capacity issues and sluggish economic recovery.
Even so, we are encouraged by the knowledge that our leadership team, faculty, staff and volunteers have successfully steered through financial challenges in the past. In the same way, we will navigate future trials together in the years ahead.