2008 | USF Health Transforming the Future

1. 2008 | USF Health Transforming the Future Stephen Klasko, MD, MBA VP, USF Health Dean, USF College of Medicine January 17, 2008 Board of Trustees / Health Sciences and Research Workgroup

2. The USF Health story • We need new ways of understanding health – leading to new ways of designing health care • As a result, in 2005 we created USF HEALTH across medicine, nursing, public health, physical therapy … and more

3. These touchstones have guided decision-making aimed at national prominence:We will not invest in less. Strive for National Strive for National Strive for National Prominence Prominence Prominence Creative Educational Creative Educational Creative Educational Models Models Models Research Really Research Really Research Really Matters Matters Matters Entrepreneurial Academic Creative/Successful Practice Models Practice Models Practice Models True Collaboration: True Collaboration: True Collaboration: USF Health + COM + HSC + University University University 2005 | Looking Ahead Blueprint for Strategic Action:

4. 2007Creative Educational Models • All colleges: USF is first choice for students who want to be LEADERS • All colleges: Students launch first student run clinic – “The BRIDGE” • Students adopt Carl Sagan - an East Tampa charter school • USF COM one of nation’s most innovative curricula including scholarly concentrations

5. 2007 Creative Educational Models • CON - Launched new programs • Nurse Anesthesia (CRNA) • Doctorate of Nursing Practice • Baccalaureate Specialties • Accelerated (2nd Bachelor’s) • First Time in College (FTIC) • Joint JD/MPH and JD/MD are fully operational with Stetson Law School. • COPH - Recent recognition by the Peace Corps for Masters International Program.

6. 2007 - Transformation of Research(i.e. Research Really Matters) Vision: • Articulated a Strategic and a Business Plan to accomplish top 50 status in NIH funding in five years • Established three Interdisciplinary Signature Programs Colleges: • COPH concluded successful recruitment of Global Infectious Disease Research teamincluding: World Class Scholars Tom Unnasch, John Adams, and Wil Milhous who join Dennis Kyle in forming this outstanding team. • COM established a School of Biomedical Sciences to streamline services and converge resources • Jeff Krischer awarded $169M to coordinate a 10-year study in juvenile diabetes • CON jumped from 53 to 42 in nation, with goal of top 20 in research funding. • Directors appointed for Nursing Research Center & Pyschoneuroimmunology Nursing Center; Maureen Groer received a $1.45M NIH grant to explore how changes in the immune function following childbirth may affect the physical and mental health of mothers.

7. USF Health Awards Year to Date Comparisons

8. 2007 | USF Faculty Practice Group • For the year ending FY 06-07, the faculty practice group had an over-recovery from operations of approximately $900,000.   • FY 07-08 will finalize our ability to be the first academic practice group that will be totally electronic • Two year: $15 million investment • USF will serve as the Southeast representative for the NEPSI (National Electronic Prescribing Safety Initiative) • Total integration of our forty different practice sites • The below the line number (non-cash) is over a $7 million gain, including: • investment income from our reserves and the bond proceeds • the development match for our electronic health care purchase.

12. 2008 | USF Faculty Group Challenges • Development of a True Multispecialty Group: • There is no practice group in the nation that can prosper without anesthesiology, radiology, pathology, facility fees and hospital revenues • Financial Challenges: • Medicare funding reductions • Increased competition • Reduced state resources • Moffitt practice group (both a challenge and an opportunity) • Operational Challenges: • Moving from a practice “plan” to a vibrant multispecialty group

13. 2008 | Changing the Paradigm of Our Internal Practices • Changes in practice group administration • More entrepreneurial • Doctor/Staff Friendly • Reduction of overheads • Coordinated patient care through referral within our practice group • Take advantage of our new facilities in hospital based areas such as pathology and radiology

14. Looking Into the FutureToday’s Perspective - Our Financial Challenges Planning Options (Increases) Improve current clinical patient service revenue $10M Reduce central practice group expenses 3.5M Reduce clin. dept. duplication practice group svcs 1.5M Moffitt transition funding 2.2M Reduce travel, events, functions, food 1.3M Consolidate practice plan & COM adm (IT) .5M Harborside lease savings 1.0M Reduce USF Health VP initiatives 1.0M Morsani Center Imaging & Amb. Surg Strategies 2.0M $23M Challenges (Reductions) Reduced State Support <$6M> Debt Service new buildings <3M> Medicare Reductions <4M> Practice Plan margin for reinvestment <3M> Moffitt Overhead <3M> <$19M>

15. 2007 | Hospitals We launched the ambitious goal to transform the standard of health care in the region • US News – Gyn at TGH is 25th in nation • Top 50 ENT, Liver Transplant, Urology • Orthopedic residency for first time in 15 years • Recruitments 2007 • Dr. Lewis Rubin from Cleveland Clinic - Muma chair for Neonatology • Dr. Clifton Gooch from Columbia University - Chair of Neurology • Renegotiating relationships with Moffitt, ACH, TGH, VAs • Exploring new relationship with BayCare

16. Our Reality • No model exists in the U.S. where a medical school affiliated with three or four strategically independent (both of the medical school and each other) has been able to achieve what we intend to without dramatically changing. • University hospital • Fundamental change in the philosophy and by laws of affiliate hospital

17. Case Study: Orthopedics • No orthopedic residency in Tampa for fifteen years • Private group at TGH held the fate of orthopedic trainees hostage for that length of time • In 2007, USF Orthopedics begun with residency approved, UCH as the primary hospital, and a “deal” with our primary teaching hospital that we would not practice there • Our adopted hospital, UCH, has decided to limit the amount of USF physicians with privileges • In 2008, despite incredible success in recruiting physicians, building a great residency (500 applicants for four positions) we are looking for a hospital partner

18. Orthopedics in Tampa Bay • Two of the most performed (and the only orthopedic procedures measured by Healthgrades) are total hip replacement and total knee replacement • TGH (FOI), St Joseph’s and Brandon are all poor in outcomes for hip replacement (Healthgrades 2008) • TGH (FOI), Brandon and Florida Hospital Zephyr Hills are all poor in outcomes for knee replacement (Healthgrades 2008) • Would a Unversity hospital that raised the bar for care in the community by bringing in new faculty members with a commitment to excellence help raise the bar for all hospitals? • Ask Pittsburgh, Birmingham, Columbus, Farmington, Sacramento

19. Healthcare: Academic Entrepreneurial Practice Models Centers for Advanced Healthcare: Model for transforming ambulatory care, CRISPS • USF Health South Tampa Center for Advanced Healthcare opened August 27, 2007 • Morsani Center on campus of USF Health opens Summer 2008

20. Priority to Transforming Healthcare in Tampa Bay Region: University Hospital Note: 1970 USF Medical Center Master Plan Phase III In-patient Hospital Facilities

21. Bottom Line USF COM was born as a community model, non research intensive medical school Its adolescence has been marked by a desire to break out of that mold There is an increasing gap between research “haves” and “have nots” in medical schools

22. Legislative Statute • Allows Florida’s medical colleges given the appropriate funding to build an academic medical center on their campus • There are no world renowned medical schools without that opportunity in this country • The statute does not address CON reform in any other manner, so arguments about single specialty doctor owned hospitals do not apply • Having said that, many states have passed prudent CON reform which makes it easier for hospitals to expand appropriately without “opening the floodgates.” • CON exemption would be a policy statement by the state to support the capacity and future of USF Health to have control over its clinical, research and educational health services — it is not an economic commitment by the state. • That hospital would not compete with our partnership at TGH, because the TGH arrangement does not include clinical services such as anesthesiology, pathology, radiology and orthopedic surgery; and the exemption would not compete with the BayCare community hospital partnership in Pasco, which is primary and secondary care.

23. Measuring Quality | Where is Tampa? • No hospitals in Solucient Top 100 (2006) • No hospitals in US News Honor Roll (2007) • No hospitals among Healthgrades Florida’s best hospitals (2008) • No hospitals among Healthgrades Florida’s excellence for patient safety (2008) • No hospitals among Healthgrades Florida’s clinical excellence (2008) • No hospitals with better than expected Coronary Bypass outcomes (2008) • Despite USF being shut out of the orthopedic market for fifteen years-TGH, St Joes and Brandon are all “poor” in hip replacement

24. The University/Hospital Equation: Top Tier Rank What Do Rankings Influence? • Recruitment of Faculty, Staff & Students • Research Funding • Publications • Consumer Awareness • Physician Referrals • Patient Referrals • Quality of Care • Recruitment of Faculty, Staff & Students • Research Funding • Publications • Consumer Awareness • Physician Referrals • Patient Referrals • Quality of Care What Influences Rankings?

25. The Financial Perspective • Average support received by all medical schools $51 m • Hospital partner financial support for top 20 COMs $99 m • Hospital partner financial support for top 40 COMs $72 m • Hospital partner financial support for “non elite” COMs $41 m • UPMC support for Univ of Pittsburgh COM $169 m • % of medical school revenue received from hospital partners--elite medical schools 17

26. What is the FHA Protecting in Tampa? • USF Health invited to join Institute of Health Care Improvement Consortium of 20 Quality Medical Centers (2007) • USF COM among the only medical schools in the country to have two clinical departments in Top 10 in NIH funding (2007) • Pediatrics #3 • Neurosurgery #9 • USF Practice Group among first medical schools to be totally paperless (2008) • Southeast representative for NEPSI • “Doctors Without Pens” • When USF is able to recruit world class chairs and faculty, Tampa becomes a “health destination site” • Gynecology #25 • Urogynecology • ENT Top 50 at TGH and Moffitt

27. Hospital Affiliations Among Top Research Universities • 36 of the Top 50 Research Universities have medical colleges • 34 of the 36 describe the hospital relationship as “ownership” or “affiliation with strategic alliance” which makes for more control than exists at USF • Of the bottom 30 medical schools in NIH funding, 27 of the 30 are described as community medical colleges, a model in which USF is currently labeled • It would appear that “ownership” per se is less an indicator of success than a “meaningful affiliation” with a University hospital that a) significantly invests in the medical school and b) sets the bar for care in the community

28. People Are Leaving Tampa to Obtain World Class Healthcare As part of our discussion with aspirational peers, UPMC revealed these facts concerning healthcare in Tampa • Many patients leave Tampa for specialized healthcare, especially in cardiology, sports medicine, spine, and specialized radiologic procedures • Very few patients come to Tampa from non-contiguous zip codes for care, except in cancer • This is the model expected of a small community not of a fast growing metropolitan area

29. Why This Is Important to Tampa • There are no hospitals in the Tampa Bay region other than Moffitt with a national reputation • In many cases, unlike most other communities, the best hospitals have little teaching or University component and in most cases no resident physicians or medical students, eg. Morton Plant Meese, Sarasota Memorial • Many patients assume they must leave the area for the best health care • This has significant implications for the community and the University given the bioscience thrust by other communities in Florida and the new medical schools beginning in Orlando, Miami, and Boca Raton

30. Pressures To Change • New Florida medical schools • Flush with cash • The Orlando push • Increasing ACGME emphasis on scholarly and academic activity • NIH funding • Cannibalization of RO1 funded researchers by Top 60 medical schools

31. ACADEMIC MEDICAL CENTERSResource Growth and Sources Tuition and Fees State and Local Appropriations Other Federal Research Other Federal Revenue From Hospitals $ in Millions Fiscal Year Source: LCME

32. Communities That Have Recognized the Power of an Academic Medical Center • University of Pittsburgh--Presbyterian Hospital • University of California, Davis---Sacramento General Hospital • Penn State University---Lehigh Valley Hospital • University of Alabama, Birmingham • University of California, San Diego • Ohio State University • Case Study--University of Connecticut • Hartford Hospital, main teaching hospital • Built 200 bed University hospital in Farmington • Both Hartford Hospital and U Conn Hospital excel • U Conn Hospital among Top 15 teaching hospitals (Solucient) • Quality of care in Connecticut generally considered among best in Northeast

33. Our Hospital Partners - TGH • USF is excluded from many of the profitable and academically important specialties • Radiology • Pathology • Orthopedics • Transplant surgery • Anesthesiology • The chair conundrum • ACGME Implications • Plastic surgery • Hand fellowship • Orthopedics • Radiology • Anesthesiology • Institutional deficiencies

34. Our Hospital Partners - MCC • Moffitt actually expends the appropriate dollars from the hospital to research and education, but rather than University activities, the money goes directly to Moffitt • Moffitt “University” as it relates to IP and research indirects • Competitive groups within the same University • DIO • Surgery • OB-GYN • Neurosurgery

35. Our Hospital Partners - ACH • USF only responsible for 8% of the clinical revenue • Would like to “own” pediatrics—the DIO model • Openly competitive with TGH • USF COM in the middle

36. Bottom line • USF COM exists for the benefit of the hospitals • Research survival • Chairs and leadership • Will we be a “world class” health care community? • Service and technology • Where have all the patients gone?

37. OSU Medical Center University OSU Medical Center Research Education Patient Care COM & Office of Health Sciences Departments School of Biomedical Science School of Allied Medical Professions School of Public Health Centers, Programs, & Institutes OSU Physicians Central College Faculty Practice Plan Departmental LLCs: Medical Surgical Primary Care Hospital Based OSU Health System University Hospital OSU James Cancer UH East OSU Harding Behavioral OSU Ross Heart Primary Care Network Specialty Care Network

38. USN&WR’s“America’s Best Hospitals” OSUMC Rankings: Overall, #Programs 1 13 24 28 40 41 9 44 7 6 6 (99’ data) (00’ data) (01’ data) (02’ data) (03’ data)

39. It’s Not Just the Hospitals--The Byrd Conundrum • There is no state funded research institute in the country that is on a medical school campus without a reporting relationship to the health science center • Establish the Johnnie B. Byrd, Sr., Alzheimer’s Center and Research Institute as an entity within the University of South Florida, under the authority and oversight of the USF Board of Trustees. • The Byrd Institute’s statewide mission and identity would be maintained and specifically enumerated in statute. • BOT oversight and statutory identity enhances governance and accountability to the Byrd Institute’s founding goals of world class research, treatment, and care-giver support for Alzheimer’s disease.

40. The Conclusion • USF needs the opportunity to build a small teaching hospital or to partner with an academic hospital entity to create a world-class academic medical center to advance: • The research, clinical and education missions at USF Health and USF • The reputation and needs of the Tampa Bay community as it continues to grow in population and stature

41. The Conclusion • This is a totally separate issue from blanket CON reform but rather a decision that will affect the state’s medical schools and multi-billion dollar investment • Since there are no top medical schools without a University hospital partnership where the University chairs serve as the hospital leaders, our communities will not see the “academic medical center” advantage

42. The Conclusion • As a trade organization, the FHA will protect its member hospitals rather than push for increased competition or change • In every community whereby an academic medical center has arisen to “set the bar for care in the community” safety, service and quality have risen across the surviving hospital systems • USF Health is at a crossroads of becoming one of those systems but cannot without a paradigm shift among the hospital systems in Tampa