University of Texas System regents have ordered layoffs of about 3,800 state employees at the UT Medical Branch at Galveston, attributing the action to financial losses stemming from Hurricane Ike.
The UTMB campus employs about 12,000 people, and regents said they recognized the devastating effect that the loss of nearly a third of the workforce would have on the region's economy.
The Galveston medical branch is losing $40 million a month after the shutdown of its hurricane-damaged main hospital, and the regents said they had no choice if they wanted to save the institution. The vote was unanimous.
Kenneth Shine, the system's interim chancellor and executive vice chancellor for health affairs, told the [italics] Austin American-Statesman [end italics] that two of UTMB's major functions - medical research and education - would not be downsized.
Shine said last month that a "significant" portion of the medical branch's workforce would have to be laid off to maintain a financially viable institution. The 12,000 employees have been kept on the payroll since the hurricane.
John Sealy Hospital, UTMB's main patient-care facility, had been struggling even before the hurricane to fill its 500 to 600 beds because of a decline in patients and rising costs. Shine said it would most likely be reconfigured as a 200-bed hospital, with 32 of those set aside for care of state prisoners.
He speculated that the hospital might be able to expand to 300 beds, but that would depend on how many people move back to Galveston and whether a health district is established to help underwrite expenses.
The layoffs will primarily affect nurses, technicians and other hospital workers. Shine said they are intended to bring the workforce to a size suitable for a 200-bed operation and should be viewed as permanent. The dismissed workers will be paid through mid-January.
The medical branch would exhaust its financial reserves by February or March if no action were taken to reduce the work force, officials said.
The UTMB complex sustained about $710 million in damage related to Hurricane Ike. UT System officials hope to receive $400 million from the Federal Emergency Management Agency, but said rebuilding the hospital would take years.
The UT Medical Branch is the largest employer in Galveston County, according to City of Galveston officials.