Ike-damaged hospital, medical school laying off 3,800 employees

AUSTIN, Texas -- The University of Texas Medical Branch in Galveston, a teaching hospital severely damaged by Hurricane Ike, will lay off about 3,800 workers -- nearly a third of its work force -- because it is running out of money.

The University of Texas Board of Regents said in a news release that the Galveston hospital would have no money to operate in about three months at its current spending rate.

Ike caused nearly $710 million in losses to the hospital when it struck the Texas coast in September and officials have said insurance covered only about $100 million of that.

Some of UTMB's 85 buildings were inundated by up to 8 feet of water. The hospital's kitchen, blood bank and radiology department were virtually destroyed.

The University of Texas system doesn't have the money to cover the hospital's needs and Federal Emergency Management Agency funds cannot be used for operating expenses, or wages and benefits of staff, officials say.

Ike came ashore near Galveston on Sept. 13, flattening buildings and killing at least 37 people in Texas and more than 70 nationally. The monster storm was 600 miles wide when it hit land and is the most expensive in Texas history, causing an estimated $11.4 billion in damages -- so far.

UT officials had not yet identified which employees would be laid off but plan to pay them through January, according to The Galveston County Daily News. UTMB has 12,000 employees.

Dr. Kenneth Shine, interim chancellor of the UT system, was optimistic that most of those laid off from the hospital would find work at other health care institutions.

"The health-care industry tends to be maintained even through an economic downturn," he said in the Houston Chronicle.

A few faculty members would be laid off, but would remain on the payroll through the end of the academic year, Shine said.

The regents said the impact of the job losses could be lessened by hiring those affected in open positions at other University of Texas facilities or assisting them in job searches elsewhere.