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Cost Containment

UAMS has instituted a number of cost reduction initiatives over the past three years. Our budget includes funds from several sources including: state appropriation, tuition, patient care revenue, research grants and philanthropy. Our economic impact from the 2010 Battelle Memorial Institute study showed to be $2.1 billion annually from UAMS operations alone. When UAMS is combined with our major affiliates, Arkansas Children’s Hospital and the Central Arkansas Veteran’s Administration Hospital, it made a total of $3.9 billion. This is accomplished with a state appropriation of $114 million.

At UAMS, we have taken several measures to ensure that we are cutting costs in several areas of our institution.

  • A consultative engagement was approved, and we undertook a cost reduction initiative involving all aspects of our clinical operation and, through that, we reduced operating expenses by $42 million annually over the course of 18 months.
  • In a partnership with the University Health System Consortium (UHC), we are working to continue our supply chain optimization program, and have targeted another $10 million reduction.
  • Our current total number of personnel is exactly equal to the number of personnel in June of 2009 despite increases in student enrollment, clinical volume, square feet under management and research grant funding.
  • A major initiative through which we have reduced utility expenses is construction of a new energy plant utilizing heat pump chiller technology and the upgrading of our central energy plant with the same technology. With the introduction of this new technology we have reduced total utility expenditures from $16,445,591 in FY 2009 to $12,238,204 in FY 2012.
  • With the new West Energy Plant, which started operation in June 2008, the actual savings have met expectations. Cost savings have been running between $1.2 million and $1.7 million per year.
  • We also have begun a process of retro-commissioning our poorest performing buildings to ensure that we are optimally managing HVAC across campus.  Through the retro-commissioning process we have reduced utility expense in the Family Medical Center by $4,000 per month. We will be expanding that process through our least efficient buildings in the months ahead.
  • The new Distributed Energy System is under construction, but early savings have been achieved. The project has been projected to save $3.6 million per year.
  • UAMS was able to add 1 million square feet of facilities without any increase in the overall utility budget.