UGHS .062 HOUSTON, TX -- (Marketwired - August 05, 2014) - University General Health System, Inc. (OTCQB: UGHS) ("University General"), a diversified, multi-specialty, integrated, physician-centric general acute care regional health care delivery system, today announced the implementation of cost containment measures that are expected to result in permanent cost reductions and savings in excess of $13 million annually. The cost saving measures included salary and work force reductions, along with cutbacks in, and/or the elimination of, certain marketing and other initiatives that previously did not produce the desired outcomes.
UGH - Houston implemented an additional $2.7 million in permanent annualized cost reductions, in addition to previously reported expense reductions, some of which were seasonal in nature. Hospital Outpatient Departments accounted for $0.7 million in projected annual cost savings, UGHS Management Services expects to benefit from $3.1 million in annual expense reductions, Support Services lowered its costs by $2.2 million annually, and UGH - Dallas reduced expenses on an annual basis by $4.7 million. Some of these cost savings resulted from the elimination of nearly 100 jobs within the Company's operating network.
"Given the dynamic nature of the health care industry and our disappointing financial performance in 2013, we determined that drastic measures were required to remain competitive and restore profitability," stated Hassan Chahadeh, MD, Chairman and Chief Executive Officer of University General Health System, Inc. "While the implementation of these permanent cost-saving measures were often difficult, they were necessary and we are hopeful they will result in a positive impact upon our financial results during the balance of 2014 and in future years. We will also continue to focus on strategic relationships, the divestiture of non-core assets and the elimination of non-performing assets."
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