Goal of cuts to create more fully integrated Chicago BioMedicine

Chicago BioMedicine is responding to the economic downturn with a reorganization that will lower costs while strengthening the institution’s core missions.

The changes, outlined in a Friday, Jan. 9 letter from James Madara, CEO of the University Medical Center, are designed to increase integration of resources and personnel across Chicago BioMedicine. By acting rapidly and decisively now, the institution can reduce expenses in a targeted way and operate at an even higher level of quality and excellence.

“The vision of a more fully integrated Chicago BioMedicine has long been our goal,” Madara wrote. “The economic circumstances compel us to accelerate the process and act swiftly and broadly from a position of strength. We are well positioned to tackle this challenge head-on and forcefully.”

Quick action is needed because the facts underlying economic planning for Chicago BioMedicine have changed as a result of the national downturn. The institution has experienced a decrease in patient volume, steep drops in investment and endowment income, and flattening of revenue overall.

Such trends call for a disciplined response, Madara said. The goal is to cut $100 million from the annual budget of $1.5 billion by the start of fiscal year 2010, in order to align expenses with income and ensure sufficient resources to invest in strategic priorities.

The reorganization already has begun at the leadership level. A total of 15 senior management positions, including four vice presidents, were eliminated during the week of Jan. 5. Their responsibilities will be redistributed across the leadership team, producing greater integration across the core missions of patient care, research, education and community outreach activities.

“We deeply regret that the economic circumstances required the loss of these talented leaders from our team, individuals who dedicated themselves to the success of the Medical Center,” Madara wrote. “We value their contributions and legacy and will do everything we can to support them in their career transitions.”

The reorganization process was the subject of a retreat held Wednesday, Jan. 7 and Thursday, Jan. 8, involving 100 senior leaders from across Chicago BioMedicine. They reviewed the interim results from eight budget groups that have been working for several weeks to develop plans for cost reductions and reorganization. The retreat allowed for in-depth discussions about the need for a strategic response to the downturn, the developing plan, and ways of getting feedback from members of the faculty and administration. The budget groups will work intensively over the next few weeks to submit their recommendations by the end of the month.

Although the organization already has implemented many cost-reduction measures, including a pause in hiring, these steps will not be sufficient to reach the $100 million target.

“Unfortunately, we anticipate the need to eliminate some staff positions through layoffs as well as attrition,” Madara wrote. “All budget decisions, including staffing levels, will be based on our commitment to maintain the highest quality of patient care and safety, our outstanding educational environment, and academic excellence.”

Reducing the budget in a targeted and strategic way will permit the protection and enhancement of the core missions in Chicago BioMedicine, Madara said.

A number of meetings will be held in coming weeks in order to share information, solicit feedback and respond to questions. Employees are encouraged to consult their unit leaders, and managers will be seeking comments, suggestions and questions. For more information, staff can consult a dedicated site on the Medical Center Intranet, at http://home.uchospitals.edu.

Madara stressed that by making strategic reductions and increasing integration across the organization, Chicago BioMedicine will emerge from this difficult time stronger, more unified and with more clarity of mission.