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How Healthy is Hopkins?
As the recession continues, leadership discusses the state of the hospital and medical school.

blank Ron Peterson (left) and Ed Miller. “I’m very optimistic,” says Miller of his efforts at expense control. “The faculty and staff really get it.”
Ron Peterson (left) and Ed Miller. “I’m very optimistic,” says Miller of his efforts at expense control. “The faculty and staff really get it.”

Concerned about the effects the economic downturn is having on employees, both Edward Miller, Dean/CEO of Johns Hopkins Medicine, and Ronald Peterson, president of The Johns Hopkins Hospital and Health System, held meetings in late January, March and early April to keep staff informed about the status of The Johns Hopkins Hospital and School of Medicine. Presentations at our other entities by their respective leaders are planned for the future. The following report is based on meetings and interviews with Miller and Peterson.

How is business?

Miller: Compared to two months ago, the School of Medicine is making improvements. We had a $16 million deficit and now it’s $10 million. I’d like to break even by June. There’s no question that we’ve done it largely through expense controls that are in place.

Peterson: At The Johns Hopkins Hospital, the good news is, our patients need us in good times and in bad times. We’re very busy. Our volumes are consistent with the last few years. More and more, however, we are hearing about patients presenting for service with lesser ability to pay. Many have lost insurance, are now paying for COBRA or are having a difficult time paying out-of-pocket expenses, which will increase our bad debt. We also expect to see a loss in volumes as patients begin putting off going to see doctors.

So there’s a hiring freeze?

Miller: There’s a soft hiring freeze. We’re trying not to hire any new people for awhile unless we have a definite line of support
for them.

Peterson: We’re continuing our soft hiring freeze and are looking at every single request to hire or replace, limiting hiring where it is not critically necessary. Clinical positions will be given priority, particularly those that will require temporary staffing.

Will people lose their jobs?

Miller: Preserving jobs is a priority at the School of Medicine, as well as continuing to focus on our expense control. Another priority is to make sure that we get our fair share of the stimulus package.

Peterson: Priority No. 1 is keeping people employed. We want to preserve jobs and do everything possible to avoid a systematic reduction in force.

What about salaries?

Miller: Salaries for faculty and staff will remain flat because, honestly, if we were to hand out increases, we’d have to lay people off. I think people are happier to have a job and have benefits than to have a reduction in force.

Peterson: We will only be able to offer limited raises to certain employees, but not the merit increases we normally disperse. None of our most senior people will be receiving increases in the coming year. We are working on a tiered structure that gives employees with the lowest salaries the highest percentage increase, and allows for very modest increases for others. The details will be announced later in the year during
normal salary planning.

Will we lose our pension plan?

Peterson: No. Although the asset value has come down, we are committed to keeping the pension plan adequately funded. It’s a priority for us.

Will our benefits change?

Miller: The benefit that I’ve heard the most concern about is tuition grants for children. And I would strongly defend that we keep that in place. I don’t think that’s a place that we need to go. We do have a fairly rich retirement. I think there will be discussion about that, although there’s definitely no mandate about that yet. We offer a very good benefits package here compared to
almost any other university.

Peterson: They might. To keep the current workforce, maintain salaries and hold onto the pension plan, we will continuously look at other benefits and may consider making changes.

What can we do for you?

Miller: If employees see areas that are wasteful, or if they see ways to do things better, they’ve got to get that word up the chain. They’ve got to say, I have an idea. We shouldn’t have four different kinds of copy machines here. We don’t need all these pagers. Things accumulate. It’s just like putting stuff in your junk drawer. We add stuff and add stuff until we discover we haven’t used that in two years and we don’t need it anymore. Maybe that’s how people should look at it. I look at it as an opportunity.

Peterson:  During such extraordinary times, we all need to do our very best to be as productive as possible and judicious in our use of resources. When I walk around the institution in the evening, many unoccupied offices still have lights on as if they were occupied. One simple thing we can all do is to conserve energy by turning off lights when we leave office or lab areas for the day.

–Reported by Mary Ellen Miller

 

 

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