Weather patterns and finances have some things in common, according to Lori Mackey: Both can be predicted, but despite forecasts, planning for the unexpected is a must.
Mackey, senior associate dean for operations and finance and chief operating officer at University of Cincinnati Physicians, shared her thoughts with a crowd of 160 in Kresge Auditorium Monday, March 18, during a presentation titled "Business as Usual Will Not Be Enough.” Mackey’s talk was the third in a series of presentations by the college’s senior associate deans.
In a reference to the 1978 children’s book-turned movie "Cloudy with a Chance of Meatballs,” Mackey described a financial situation at UC’s College of Medicine as not unlike the "adaptation-is-critical-to-survival” message offered by that tale of calm and welcomed rain showers of meals followed by destructive storms of oversized food.
"The one thing I want to make sure everyone realizes is that these are just challenges,” said Mackey. "I’ve said it before and I’ll say it again, ‘UC has been here for a long time; UC is going to be here for a long time.’
"We are huge, and even in a constrained time, we are thriving.”
Mackey highlighted a shift in faculty effort indicating more of a focus on clinical activity—the result of a conscious decision on the part of the college to grow the clinical mission.
"We are changing to meet the needs of the economy,” Mackey said. "We are growing our clinical programs because there is a margin in clinical business.”
Despite the push to grown the clinical program, research still makes up more than a quarter of faculty effort across the college.
Uncertainty at the federal level with regard to research funding remains a top concern, and is made even more unpredictable, Mackey said, by the potential effects of a sequester.
"This has forced investigators to be more cautious about research expenditures, and, as a result, support to the college through indirect costs associated with research grants has dropped,” said Mackey. "This affects maintenance of key infrastructure and raises questions space utilization—questions that will have to be addressed in future budget planning.”
Despite research challenges and losses to endowment income, the college’s anticipated budgeted shortfall for 2013 ($11.6 million) is projected to be closer to $5 million. This is due to a one-time increase in general funds support to account for semester conversion changes, small increases in projected gifts to the college and practice plan contributions, as well as less-than-projected spending from the Medical Center Fund. (The Medical Center Fund is a nonprofit corporation that invests and manages funds of University of Cincinnati Physicians and University of Cincinnati Physicians Corporation in order to support the teaching, research and patient care activities of the College of Medicine.)
This smaller-than-predicted shortfall might be easier to manage out of, but it will still require a strategic approach to revenue generation and expense reduction, hinging on increasing student enrollment, diversification of the college’s research portfolio, improved fundraising, centralization of key functions and a more focused approach to guiding the university community to use the UC Health system of physicians and hospitals.
The College of Medicine, Mackey said, traditionally hasn’t been aggressive when it comes to increasing student enrollment, and, therefore, has historically taken cuts through the performance-based budgeting process.
Each college is allocated a set amount of general funds from the university and these funding allotments are based on flat enrollment. When state support to the university decreases, general fund allocations receive corresponding cuts and colleges have to make up for these cuts by growing enrollment or cutting expenses.
Growing student numbers, she said, will be a key strategy for revenue generation over the next four years.
The college plans to increase overall enrollment by more than 28 percent (from a current 1,280 students to 1,645) by 2017. Increases will be driven by five existing programs and through a newly created undergraduate premedical program based within the college:
• Medical student enrollment increases (from 664 to 685) will be managed by better management of attrition.
• The master’s of public health (MPH) program based in the environmental health department has capacity for more students and plans call for more than quadrupling MPH enrollment (from 44 to 200 students) over the next four years.
• The doctorate in medical physics program is preparing to double in size from the 14 enrolled in the 2013 entering class to 28 students by 2017. This program, which received state approval in January, is the only one of its kind in Ohio and was the third in the United States when it was approved by UC’s Board of Trustees in 2012.
• Graduate certificate programs plan to add 7 students to their current 13.
• Master’s programs are planning to increase from 174 to 205.
• The newly formed premedical undergraduate program anticipates 100 students by 2017. This program is being built to nurture medical school aspirations for a greater number of undergraduates.
Part of a System
The relationship between the College of Medicine and UC Health is symbiotic, requiring each organization to focus on the financial success of the other.
Mackey highlighted through a financials breakdown the percent of revenue and support provided to the college by UC Health. Programmatic support, practice plan contributions, the Dean’s Fund (discretionary dollars) and education and research payments make up about 19 percent of the 2013 budget—up from 11 percent in 2009.
The "funds flow” between UC Health, University of Cincinnati Physicians and the College of Medicine is critical for the clinical, education and research missions of the college, Mackey said, and success across those missions supports the mission and bottom line of the health system.
The college plans to work more closely with the university to steer employees to use the UC Health system. Already, UC and UC Health have partnered to reduce office-visit co-pays by 50 percent for Humana-covered university employees using UC Health physicians.
Mackey detailed results of an internal audit of the college’s accounting, human resources (HR) and information technology (IT) activities, which has led to the centralization of these functions across the college. HR and accounting have now been centralized throughout the college and IT has been centralized for 14 of 22 departments. The remaining eight departments will be scheduled for completion over the coming year.
Beyond improving internal systems, the college and its health partners plan to differentiate along quality and cost. The creation of a biomedical informatics department and a focus on clinical effectiveness research will be key to this plan.
In addition, the college plans to focus its faculty recruitment efforts on those with disease-based expertise and to continue to develop institute structures.
Robust marketing efforts are planned to highlight joint UC/UC Health institutes and programs that differentiate UC Health from other local and regional health systems. UC Health and University of Cincinnati Physicians also continue to jointly negotiate payor contacts in order to secure the best rates for patients.
Overall, Mackey said, the college is "facing our challenges with clarity and focusing on securing a better future.”
Mackey’s slides and the complete video from her talk can be viewed in the Dean’s Corner on med.uc.edu.
The fourth and final presentation in the senior associate deans series will be held Monday, April 15, at 12:15 p.m. in Kresge Auditorium, and will feature Myles Pensak, MD, senior associate dean for clinical programs, CEO of University of Cincinnati Physicians and chair of the otolaryngology–head and neck surgery department.
The senior associate deans presentation series followed a Nov. 8, 2012, presentation by Thomas Boat, MD, dean of the College of Medicine and UC vice president for health affairs, in which he discussed progress made College of Medicine since he presented his vision for the college in October 2011.
View the Boat’s November 2012 presentation and slides and video from the research and education talks at http://med.uc.edu/AboutUs/DeansOffice.aspx.