Vanderbilt University Medical Center braces for $250M budget cut as Trump admin slashes spending
Why it matters: VUMC is one of the world's leading research institutions, the largest health care provider in the Nashville area and a massive economic engine for the region.
Driving the news: VUMC president and CEO Jeff Balser announced the cost reductions in a sobering video message to staffers on Wednesday. Axios acquired a copy of Balser's message.
In response to "actions being taken in D.C.," Balser said VUMC's "research enterprise" would experience a hit, as well as administrative areas such as human resources and IT.
Zoom out: The Trump administration has proposed cuts to National Institutes of Health research grants and to the Department of Health and Human Services.
Cuts to Medicare and Medicaid payments are on the table as well.
State of play:"Some [research] programs will experience reductions — particularly those that cannot be fully supported on grants or the generous gifts from our donors," Balser said. "And some people working in those programs will be unable to continue at VUMC."
Balser said VUMC will not cut back on its clinical enterprise, which delivers health care to people throughout the region. He stressed that the $250 million in reductions are "a conservative approach."
"Revenue reductions of more than twice this amount are possible in the coming year," he said. VUMC recorded operating revenue of $7.6 billion and expenses of $7.4 billion in fiscal year 2024.
By the numbers: The drastic cut in expenses comes as VUMC and Vanderbilt University unveiled an economic impact report detailing the institutions' value to Middle Tennessee.
VUMC and VU combined for $22.13 billion in economic impact on Nashville and the state, according to the independent analysis.
The institutions combine to provide 120,000 jobs.
VUMC hosted 3.3 million patient visits in fiscal year 2024, with 80,000 hospital discharges, 81,000 surgical cases and 213,000 emergency department visits, according to the report.
What he's saying: "In my 15th year as your leader, I well understand the importance of all our programs in patient care, training and research," Balser told employees in his message. "I know they are vital to the health and well-being of the people in this region, nationwide and worldwide. VUMC will withstand these economic shock waves while sustaining our missions and our culture."
"In this chaotic atmosphere, our success will depend upon many things, but two are fundamental: remaining focused on the people we serve and sustaining our trust and support for one another," he said.
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