The school’s dean said he plans dramatic change. Privately, some faculty say the administration is not focusing on the biggest problem: the 6-year-old Center for Pediatric Dentistry, which is losing the most money.
Almost a year after the University of Washington mapped out a financial recovery plan for the deficit-ridden School of Dentistry, the school’s red ink has grown by another $6 million, and now totals $35 million.
To try to erase the shortfall, the school is freezing reserves and most staff hiring, as well as travel and expenditures for conferences, food and beverages. It has audited its books, and hired a comptroller to oversee expenses.
Dentistry school Dean Joel Berg said he plans to reorganize the school. “It must dramatically change,” he said.
Privately, some faculty say the administration is not focusing on the school’s biggest problem: the 6-year-old Center for Pediatric Dentistry on Sand Point Way, which is losing the most money.
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But Berg and UW Provost Jerry Baldasty, who is overseeing the deficit problem, say the issue goes beyond that one clinic. Berg says the school’s financial situation is growing worse because it has 15 different entities managing the $35-million-a-year budget. Those entities are composed of eight different departments, including pediatric dentistry, endodontics, oral medicine and oral surgery.
“There are many aspects that are highly fragmented,” he said.
Berg has been at odds with some members of the faculty since last year, when the faculty rejected the financial stability plan and raised concerns about how well the school is being managed.
Faculty members have argued that the Sand Point pediatric dentistry center, which opened in September 2010, was based on overly optimistic estimates of the number of patients who would use the facility. It has a goal of serving low-income patients, but also serves insured and full-paying patients.
Eighty percent of patients at the pediatric center, and 50 percent of patients at its adult clinic, are on Medicaid, which doesn’t fully cover the cost of patient care.
Baldasty said the entire School of Dentistry is providing “a huge amount of uncompensated and undercompensated care.” In the 2015 fiscal year alone, he said, the school provided $1.7 million in uncompensated care, and $5 million in undercompensated care — the difference between the amount Medicaid paid and what it cost for the dental school to provide the care.
“It’s a safety net for a large number of people who have no place else to go,” Baldasty said. “That’s one of the major problems.”
In a Board of Regents meeting Thursday, UW President Ana Mari Cauce echoed that sentiment. “At some point, we need to have a very difficult conversation across the university about what we can do, because in so many ways we’ve become the safety net for the state,” she said. The issue came before the regents board for a brief review.
When the deficit first came to light, Berg said he was focused on bringing more full-paying patients into the dentistry clinics. Last week, he said he has had some success there, although he did not give details.
In addition, he said he is working on a plan to increase the reimbursement rate. Medicaid, a federal program, is administered by the state, so “there are some opportunities” to try to affect the rate, he said.
In addition to the $35 million deficit, the school owes about $20 million for the cost of renovating the Sand Point center. Berg said the school pays about $800,000 every year to the UW’s internal lending program for that renovation.
Berg says the deficit dates back to 2007. Budget figures obtained by The Seattle Times appear to show the situation worsened after 2011, shortly after the Center for Pediatric Dentistry opened.
By 2015, the records show, about half the school’s departments were losing money, including endodontics, oral medicine, oral surgery and pediatric dentistry. But pediatric dentistry had by far the largest deficit, totaling about $15 million that year. The school’s other departments were running modest surpluses.
In an email to Berg in February 2014, former UW senior vice president for planning and management Paul Jenny wrote: “In the first six months of FY 2014, that deficit in the clinical budgets increased by over $2 million to $17,518,347. When you met with my staff about deficits you detailed a number of things you are doing to bring this situation under control and stated that you would at least ‘stop the bleeding’ this fiscal year. This does not appear to be happening.”
Several internal audits have found a variety of problems with internal controls. Last year, an audit found inadequate monitoring of clinic finances, a lack of reconciliation for some expenses and noncompliance with the UW’s procurement card practices.
And in a letter to the school’s faculty last month, Baldasty wrote: “In many cases, a lack of fiscal controls is contributing to growing clinical deficits.”
Berg was in the running for dean of the University of California, Los Angeles, dentistry school last year. He said he was recruited for the position.
“I don’t want to leave Seattle,” he said. “I’m thrilled it never worked out.” He’s now being considered for an extension of his contract here at the UW.