Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Georgetown University’s Newspaper of Record since 1920

The Hoya

Medical Center Will Make Cuts

Georgetown University Medical Center must implement a series of layoffs for non-tenured researchers and medical center staff in order to end ongoing financial losses, University President John J. DeGioia said Tuesday night at the spring convocation for faculty and staff.

Layoffs are among a series of measures implemented at the medical center since financial losses began in the 1990s. Profits from Georgetown University Hospital had funded science research at the medical center until 1996. But higher costs for clinical care in the 1990s led to $200 million in losses, forcing the university to sell the hospital in 1998.

Without the hospital’s profits, the university has been forced to increase fundraising support for research projects. The university’s board of directors outlined this goal in a “restaging” effort in 2000 that aimed to end the medical center deficit by 2007.

The inability to meet these fundraising goals, however, has forced a shift to a strategy that calls for more drastic measures. The medical center currently faces a $35.3 million deficit.

“The university as a whole cannot subsidize medical center research losses indefinitely,” DeGioia said. “We will sustain our research focus, and we will go through the always-difficult work of reducing expenses. To be concrete, we will have to reduce the numbers of non-tenured researches and staff involved in our mission at the medical center.”

DeGioia, who brokered the sale of the hospital to MedStar Health as Senior Vice President in 1998, defended the different steps the university took to eliminate the financial losses.

“The sale eliminated our exposure in the most volatile dimension of the medical center but it did not bring closure to all of our financial challenges,” he said.

Since 2000, the top medical center post has been held by three different administrators. Daniel Sedmak took over as executive vice president of health sciences in July 2003 and DeGioia praised the measures that Sedmak has implemented to decrease expenses and raise revenue.

DeGioia also outlined financial challenges facing the entire university, which he said are exacerbated by the medical center’s losses but would remain even if the medical center could break even.

“While we raised more money in this past year than in any other in the university’s history,” he said, “our endowment is an anomaly in the world of `top 25′ universities.”

DeGioia said that because Georgetown had broken into the elite circle of universities only 35 years ago, it remained competitive as an academic institution but not as a financial institution.

“Other institutions are more rich than Georgetown,” he said. “But they are not more interesting. They are not better. They do not have some of our unique assets. They do not have our people. They do not have our promise.”

The university faces additional financial constraints because it has reached its borrowing ceiling, accruing $650 million in debt, and because it faces an enrollment cap imposed by the District of Columbia.

DeGioia addressed these concerns in light of the recent completion of the $1 billion capital campaign, noting that the campaign total reflects future commitments that will be made over the course of five years. Of the $1 billion raised, $664 million has been collected and of that amount, $300 million has already been spent.

While financial concerns are not the university’s mission, he said, they affect its mission nonetheless.

“We have to address the financial undercurrents that characterize this moment for us so that the university continues to support the academic values and expectations that define us as a major research university,” he said.

DeGioia also outlined new initiatives, including a possible foreign service campus in Doha, Qatar, to educate students in the Near East, and a possible residential campus in Mexico where Georgetown students could study abroad with Mexican students. He also detailed an effort underway by Provost James J. O’Donnell to study the undergraduate program.

These and other initiatives, he said, remain integral to the success of the university. “We can’t afford to be complacent, focused only on our immediate financial challenges, challenges that, frankly, have characterized this university for 30 years.”

In closing, DeGioia told the faculty that it would be the strength of the Georgetown community that would pull the university through these challenges.

“That is Georgetown’s greatest asset. There’s no one who will take this responsibility, if not us,” he said. “It’s just us. It has always been just us.”

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