People Interview: Critical Care

A $200 million gift has boosted the endowment at UCLA School of Medicine Provost and Dean Gerald S. Levey now focuses on reimbursements and training.

Staff Reporter

As medical school deans go, Dr. Gerald S. Levey would seem to be living the good life.

Last week, it was announced that Hollywood mogul David Geffen had donated $200 million to UCLA's School of Medicine, the single largest donation ever to an American medical school, boosting its endowment to nearly $800 million. At the same time, the outline of the university's new $800 million hospital is taking shape off Westwood Boulevard. It will replace the aging facility that was damaged in the Northridge earthquake. The hospital, which was designed by world-renowned architect I.M. Pei, opens in the fall of 2004.

Still, the university is far from immune to the problems in health care. As a key member of the county's health care system it trains residents at two county hospitals and is a top-level trauma center the university has particular interest in averting a meltdown of the county health system, which faces a $700 million shortfall.

Question: So how did you convince David Geffen to donate the single largest gift ever to an American medical school?

Answer: I didn't have to convince Mr. Geffen at all. As a former regent of the University of California and as a philanthropist, he understands the needs of educational institutions. After we met for the first time about a month ago he shared his vision with me, and I shared the vision of the school of medicine and where I saw our future.

Q: Isn't one month an extraordinarily quick time to nail down a gift this large?

A: It is amazing. We had the same goals.

Q: What are those goals and how will the funds help you get there?

A: I hate to single out any one program, but it means that students who have qualified to go to our medical school and don't have the means, can attend it. It will provide critical support for our medical scientists training program. It will help us expand our genetics program. It is not only the largest gift but it is unrestricted. To have this kind of an endowment is a treasure.

Q: So you would think that the medical school's financial goals have been exceeded.

A: We always have a need for more capital funds. This gift is for our endowment. I would like to have our two new research buildings named and I want to finish up the hospital project. That's about another $200 million.

Q: In terms of capital funding how much have you raised since you took the job in 1994?

A: The university has been in a capital campaign since July 1, 1995. By June 30, 2002 the medical sciences division will have raised over $1 billion.

Q: USC's Keck School of Medicine has its own ambitious goals to raise hundreds of millions of dollars and improve its rank among medical schools. Is there enough money to go round?

A: Absolutely. This is a very large population area, a very well-to-do area. USC and UCLA are geographically positioned quite differently. In New York City there are five medical schools. There is plenty of room for us both.

Q: We're talking big dollars here. It would paint the picture of a well-heeled university program without monetary concerns.

A: No, it's been challenging. The traditional fee-for-service patient has disappeared. Our patient population here is basically Medicare, Medi-Cal and contracts we have with health maintenance organizations. Reimbursement from them has fallen dramatically.

Q: Can you put a number on that?

A: It's in the hundreds of millions over a five-year-period of time, compared to what we would have gotten eight years ago.

Q: What has that done to the hospital's budget?

A: We have gone through peaks and valleys. The first year I was here the hospital made in the area of $10 million. Our peak year was $50 million profit. This year we are anticipating a profit of $10 million.

Q: How have you managed to stay in the black given a decline in reimbursement rates?

A: We have had to re-engineer how we work. We have become more efficient. We have looked at every aspect of our budget for waste and duplication. We have looked at the efficiency of our staffing ratios. We have managed to keep ourselves in the black but it's been difficult. The doctor's network that we initiated has been a real blessing for us.

Q: Can you talk more about that network?

A: It started in 1994 and now we have 19 clinics. There is a mandate from the state about teaching more in ambulatory outpatient care and training more generalist physicians. These physicians play a critical role in that. They do a lot of that teaching.

Q: But how does this help you financially?

A: Most people who have primary care physicians don't want to travel 40 minutes. They want to travel 5 or 10 or 15 minutes. The fact that we have these clinics in position on the west side of Los Angeles has made us much more accessible, much more visible. It has brought new patients to UCLA.

Q: Can you put a number on that?

A: Our occupancy at the Westwood hospital had dropped significantly over the preceding decade. We are essentially a 500-bed hospital. It had gone from about the mid-400s of patients per day to about 350. Since 1995 we are running an average daily census of over 460 patients.

Q: How important is a high daily census to your financial health?

A: It's critical. The more patients you take care of the more relevant you become when you negotiate managed care contracts.

Q: What are the consequences of the county health system facing a nearly $700 million shortfall as the federal bailout runs out?

A: If there has to be multiple closures of county health facilities somebody is going to have to care for these patients and right now all the major hospitals are full to capacity.

Q: But how do you square that with the plan being devised by Dr. Thomas Garthwaite, the county's health services director, that calls for closing beds and radically increasing outpatient care?

A: The challenge is going to be for the county supervisors to get very politically involved and obtain the resources from the federal government to continue the system. That is not to say they should not reform it, but it cannot be allowed to implode. The county health care system should be considered a national treasure but is instead always under an economic gun.

Q: And what about this idea Garthwaite has talked about, reorienting medical care to better meet the needs of patients, not the county's medical school partners such as UCLA, which trains residents at Harbor and Olive View?

A: Dr. Garthwaite and I have met, and we have, in a very preliminary way, exchanged views. He is a very skillful administrator but we have not had any substantive discussions. But whatever changes evolve, people from UCLA will be engaged. It's a minority of our students that train there.

INTERVIEW: Gerald S. Levey, M.D.

Title: Provost and Dean
Organization: UCLA Medical Sciences and School of Medicine
Born: Jersey City, N.J., 1937
Education: Bachelor of Arts, Cornell University; Doctor of Medicine, Seton Hall College of Medicine
Career Turning Point: Serving as chairman of the Department of Medicine at the University of Pittsburgh School of Medicine
Most Admired Person: Dr. Robert Petersdorf, former president of the Association of American Medical Colleges
Personal: Married, two adult children

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