Vanderbilt University Medical Center employees will not accrue any vacation in the coming quarter, and faculty and staff will not get a pay raise this summer as part of a series of cost-cutting moves that will help the institution save $50 million by July of next year.
The cutbacks were outlined Tuesday afternoon by Jeff Balser, Vanderbilt vice chancellor for health affairs, who last month said the large federal spending cuts being made would require VUMC to immediately find ways to safeguard its financial future. In a follow-up letter Tuesday, Balser said federal lawmakers' passage of a continuing resolution and Gov. Bill Haslam's decision to pass on a federal option to expand Medicaid means VUMC's "challenges are becoming clearer."
Balser wrote he has received many suggestions that will help the medical complex become more efficient over the long term. But those ideas, he added, have not been enough.
"The seriousness of the state and national financial circumstances [...] also require us to take some major immediate actions to assure the Medical Center’s financial health and future," he wrote.
As he outlined almost a month ago, Balser said layoffs are being treated as a last-gasp option. Before then, and in addition to advocating for general spending restraint when it comes to food and travel, his team has put in place the following measures to generate $20 million in savings by the end of June:
• Departments without direct patient care responsibility are under a hiring freeze through June 30.
• Employees will not earn new vacation between April 1 and June 30, the end of VU's fiscal year. This measure will produce savings of nearly $12 million.
With an eye to saving another $30 million next year, Balser also said that faculty and staff will not get a raise on July 1 and VUMC executives will not get paid the portion of their compensation that is based on institutional performance metrics.
"We will constantly evaluate savings performance from a host of cost reduction activities, while continuing to brace for additional revenue reductions we will likely see over the coming months," Balser wrote. "If possible, we will implement a pay increase later in the coming fiscal year."
Read Balser's letter in full here.