UC Davis Health System is on target to achieve its financial objectives, reports Martha Marsh, chief operating officer and director of hospital and clinics. "The cost-reduction measures we've undertaken over the last several months have proved crucial to our financial well-being," Marsh said. "It looks like we'll be where we need to be at year's end, but this has not come without tremendous effort and commitment on the part of our faculty and staff." In October, health system officials announced plans to eliminate about 100 positions by Jan. 1 to respond to financial pressures that have been threatening teaching hospitals across the nation. The administrators were expecting more budget cuts for both the current fiscal year and fiscal year 2000-2001. At the time, the financial reductions were expected to involve significant workforce reductions. Health system leaders will continue to implement cost-reduction plans through the end of June. Current projections require that 53 staff positions -- yet to be identified -- be eliminated by June 30, and administrators say they are working to achieve this goal through attrition and moving existing employees to other jobs within the university. "Our top priority has always been -- and will continue to be -- the elimination of vacant positions," Marsh said. "And when that isn't possible, we work to place existing employees in vacant jobs. Thanks to the efforts of managers throughout the health system, we've been able to minimize the actual number of layoffs." The turn-around was due to the employees, said Marsh. "I truly believe we have an extraordinary staff and faculty here, and everyone has contributed to this success." The hospital director pointed out that the hospital is full. "The demand for our services is exceeding our capacity, both on the inpatient side and in many outpatient services," Marsh said. But, she said, in today's marketplace, having a full hospital doesn't by itself mean financial success. "So while our services are in great demand, we still must find cost savings in some areas, yet we also must increase our investments in other areas," Marsh said. "I know this may seem like a contradiction, but it's a fact of the environment in which we operate. "In today's marketplace, you have to be more efficient every day than you were the day before. This is not unique to UC Davis. Everybody -- community hospitals in this region and other academic medical centers nationally -- are facing the same financial challenges we face," said Marsh. To date for the fiscal year, 105 vacant positions have been cut, and 142 occupied positions have been eliminated. At least 71 employees whose positions are being eliminated already have been moved to other jobs within the university, and Human Resources staff members are working to place the remaining employees. "These numbers are constantly changing, and we wanted staff to have the most current information," said Gloria Alvarado, director of human resources for the health system. She urged staff members in the health system who have concerns about information heard from other sources to talk with their supervisor. On May 1, the health system's Staff Assembly will sponsor two meetings, at which hospital leadership will present additional information about the health system's financial status. The dates will be carried in a future Dateline.