How much did that trauma center cost? Could the funds have been used more wisely by plowing into the med school and other facilities instead of caving in to the community demands? And as a result of the latter, are they floundering for a Plan B or letting the whole thing sink with an eventual shut down? UChicago has done that before BTW - with their Ed. School. There’s a whole lot more money plowed into the medical side but maybe that’s a difference in degree, not in kind, from what happened to Ed.
Trauma center was small potatoes - I think it cost $35M, and there are operating costs every year, but it’s not a big expense.
Trauma center:
$40 million in startup costs
$20 million per year to operate - and it’s going to be more than likely to be unprofitable every year because it is Level 1. (If it were a less rigorous level 2, there is a chance to break even). UChicago closed its old trauma center because it was a money sink.
Having said that, they may have a strategy to stay afloat by linking cancer research to the trauma center.
And I suppose, it could be a good place for students to intern?
https://www.dainfo.com/chicago/20160218/hyde-park/u-of-c-trauma-center-could-open-by-early-2018
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4535320/
Question: why doesn’t the med school have its own endowment fund?
@FStratford - what’s $20M/yr in operating costs in relation to the operating costs of the entire med plant? I think, frankly $20M/yr is a steal for all the good optics that come with having a Level 1 trauma center on the south side - and a really good leader for the ER.
Ultimately a turn around will come down to cash - and lots of it. I don’t know if that’s going to happen.
A Level I Trauma unit would be a magnet for residencies in emergency medicine. It’s kind of the “go to” training ground for that field. And yes, it would provide an interesting clinical setting for med students on rotations.
^ probably too embarrassing to list the endowment separately. feinberg’s is 1.8 bil. rush is 500 mil. im not sure if pritzker would even hit rush’s number if you exclude non pritzker BSD money.
They are hiring a new dean for bsd/med school though
@cue7 just to operate the trauma center (employee cost mainly, since it requires hiring 1,000 FTEs)
Just a point of fact: 10 years ago, UChicago Medicine became profitable by slashing the sized of the Emergency Department. As a result, its bond rating and outlook went from negative to stable. It was that bad. This Level 1 needs to become a real winner (marketing wise and financial wise) for it to be worth the risk of a downgrade. (see chicagobusiness article)
Right now, the risk is low. Even if the $20 million operating expense is all loss, UChicago Medicine, may be able to handle it since its latest unaudited financial statement shows that it has a $98 million profit, but that would limit its ability to invest in itself for research and other initiatives whose returns are years, decades away. (see p&l pdf link below)
Think about the opportunity cost too - with $20million annually, one could presumably give $0.25 million scholarship to each each student each year for all four years of their schooling. (although I doubt the school would, so maybe that is too much of a stretch.)
From their P&L the comparable cost for salaries wages and benefits for the existing plant is $442 million, so its a 5% increase in cost but it could be a 20% decrease in profit.
@megabusbus LOL
They should hire their own “business development” employees. I would bet that their alumni base is comparable in wealth to the law school or business school… although their total alumni is only 1/3 in size…
Perhaps they should engage a Booth team to figure it out …
I know that we worked on a related issue during a class at Booth (then the GSB). Pretty sure I recall it was for University of Chicago hospital LOL.