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University of Iowa News Release


March 10, 2009

UI Health Care leaders announce voluntary cost reduction moves

UI Health Care leadership announced today three voluntary cost reduction initiatives estimated to save a total of $2.6 million.

First, more than 40 of the most senior management leaders of UI Health Care will take a voluntary pay reduction of 5 percent for the remainder of FY 2009 and through FY 2010, which ends on June 30, 2010. These positions include the vice president for medical affairs, the dean of the UI Carver College of Medicine and the chief executive officer of UI Hospitals and Clinics, as well as associate vice presidents, assistant vice presidents, associate deans and other senior leaders from UI Health Care.

Further, this same senior management group will forego any annual salary increase on July 1, 2009.

In addition, the senior leadership group will also not receive any incentive compensation in FY 2010 related to FY 2009 performance. In past years, senior leadership at UI Health Care has had 20 percent of their pay "at risk" based on achievement of overall organizational and individual goals. Past practice has been that such "at risk" incentives are paid after the end of the fiscal year in which the goals were achieved and the incentive compensation was earned.

"UI Health Care believes these decisions are responsive to the significant challenges the overall economy is experiencing. Our financial performance at UI Health Care is going to fall short of budget and, therefore, senior leadership must lead the way in volunteering to help reduce expenses," said Jean E. Robillard, M.D., vice president for medical affairs.

Robillard stated that such measures may be extended beyond the FY 2009-10 period based on the organization's financial performance and other factors.

"Our first priority is to assure that the financial situation has no negative impact on direct patient care, and that our educational and research missions also remain very strong," he added. "We take our role as Iowa's only comprehensive academic medical center very seriously and are focused on maintaining excellence."

In commenting upon UI Health Care's announcement, University of Iowa President Sally Mason stated, "UI Health Care has been working diligently since September to reduce expenses, and they have been planning on how to manage the economic downturn for this fiscal year and next. I commend the UI Health Care leadership team for its prompt action in addressing the financial situation. The UI is waiting for the conclusion of the legislative session to complete its budget planning for the next fiscal year."

As part of the university, UI Health Care is working closely with university administration in implementing these and other cost-savings initiatives.

STORY SOURCE: University of Iowa Health Care Media Relations, 200 Hawkins Drive, Room E110 GH, Iowa City, Iowa 52242-1009

MEDIA CONTACT: Tom Moore, 319-356-3945,