Today I want to update you on a couple of major initiatives under way at the Medical Center. One is very important for our present and the year ahead. The other has large implications for our distant future. In some sense, though, they are opposite sides of the same coin, and they currently occupy about 90 percent of my day.
Our plan to reduce operating expense by $24 million is gearing up. Administrators are working hard to identify savings that can be realized by the end of the fiscal year on June 30.
Members of my staff and I have been meeting with leaders every evening this week to review preliminary plans and answer questions. I've been impressed with the “can do” spirit that has been demonstrated in these meetings and elsewhere. What is also clear is that there is not a one-size-fits-all approach to the problem. Every department and every school seems to have its own unique personality and its own creative solutions to the problem.
Organizations like ours go through these cost-cutting exercises every so often. The last time we did so in this across-the-board fashion was in 2011. In that case, however, the reductions were planned and implemented at the beginning of the fiscal year so there was a longer runway to realize the savings.
As I mentioned in my Campus Memo last week, the plan we are developing will take us to the end of the year, but that will not completely solve our financial problem. These efforts will extend into FY2018. But we will have the luxury of a little more time to implement additional plans for efficiency and revenue enhancement.
This is difficult, unpleasant work. One of the measures of any organization is how well it can rise to a challenge. So far, I think we're measuring up.
Meanwhile, the major legislation we proposed this year continues to make progress down at the Capitol. You may recall from my earlier VC Notes or from media reports that we have proposed the Health Care Collaboration Act. This law will give UMMC greater flexibility to take part in joint business activities with other hospitals and providers, with a particular focus on distressed hospitals in small communities. In a changing health care landscape, academic medical centers need this flexibility or risk losing much of their relevance as the market takes shape around them.
A version of our bill passed the House of Representatives earlier in the session and this week it has survived two crucial committee votes in the Senate. Our hope is that it will pass the full Senate next week and ultimately be signed into law by the Governor.
Of note, a number of provisions that were included in the original House bill were either removed or diluted in the Senate. Even though we emerged from committee with about half of the flexibility we want and need to be successful, we will return in future sessions for refinements.
This legislation is vital to our future. While it won't eliminate the potential for occasional financial stress such as we're experiencing now, it will allow us to deploy our assets more efficiently and form relationships that make us more resilient in the face of such challenges. We'll be doing everything we can in the next days and weeks to ensure its passage.
We'll have more communication about both of these initiatives in the days ahead. I'll thank you in advance for your patience and support, as we press on toward A Healthier Mississippi.