Louisa A. Peartree Assistant Dean, Administration University of Maryland School of Medicine

1. Keep Your Eyes on the Forest: Progress with Mission-Based Management Louisa A. Peartree Assistant Dean, Administration University of Maryland School of Medicine

2. University of Maryland School of MedicineFY2001 Revenues Total Revenue Budget $ 417 M

3. University of Maryland Medical School Faculty & Staff & Trainees • 991 Full-time Faculty • 1,328 University Employees • 800 Practice Practice Plan Employees • 540 Medical Students • 287 Graduate Students • 154 Fellows (ACGME & Other) • 545 Housestaff

4. Practice Plan Professional Fee Charges and Collections Fiscal Years 1992 - 2002

5. What is Mission-Based Management? • Acceptance that you can’t invest in everything • Develop processes for broad participation in decision-making • Increase accountability • Understand the revenues and costs associated with each mission. (New type of accounting) • Monitor how resources are invested and the “return” on this investment • Tie resource allocation to strategic priorities

6. Committee Structure Dr. Wilson Clinical Affairs Advisory Committee (CAAC) Research Affairs Advisory Committee (RAAC) Advisory Fiscal Affairs Advisory Committee (FAAC) Chair of Psychiatry ( Prior 4 yrs Chair of Surgery) Associate Dean, Clinical Affairs Chair of Anatomy & Neurobiology All committees involved in new activities

7. Prioritized a new question: NOT What does a faculty member do with his/her time to accomplish his/her mission? BUT What does the Department do with its resources, including its faculty, to accomplish the SOM’s mission?

8. FAAC Must Know Defining MBM at the department level underscores the importance of knowing the vision and goals that the Department Chair and Dean have agreed upon.

9. Mission Statements Research/ Scholarship /Academic Service Clinical Mission Education Mission Dept. Overhead Each mission includes revenues and expenses associated with these areas. Private Practice Operations Resident Clinic/Teaching Operations Community Clinic Operations UMMC Daytime UMMC In-house night Service Operations Billing, Practice Mgmt. All effort and expenses related to research and scholarship Effort which related to Dept. administration that supports all missions Education of undergraduate medical students Graduate Students Administration

10. Strong message from Dean and FAAC to Departments with Operating Deficits (no reserves) • One time cash infusion • Set expectations for FY01 at end of FY99 • Your departments financial situation likely to get worse in the future • Status quo not acceptable • Can’t grow your way out of the problem

11. Sample Department – FY00 Research/ Academic Serv. Mission Clinical/GME/Service Mission UME/GRAD Education Mission Department Overhead All Direct Expenses Overhead Allocation Total Costs $7,608,000 $950,000 $2,800,00 650,000 $ 325,000 $ 100,000 $ 225,000 50% 15% 35% (650,000) $ 7,933,000 $ 1,050,000 $ 3,025,000 66% 9% 25% Costs = $ 12,000,000

12. Sample Department – FY00 Research/ Academic Serv. Mission Clinical/GME/Service Mission UME/GRAD Education Mission Total Costs $ 7,933,000 $ 1,050,000 $ 3,025,000 66% 9% 25% Revenues (except SOM) $ 6,900,000 $ 0 $ 2,300,000 ($ 1,033,000) ($1,050,000) ($ 725,000) = ($ 2.8 m ) Dean’s General Funds = $ 1.3 m Loss = $ 1.5 m

13. Results in FY02 for this Department • $1.0 loss in clinical mission in FY00 was a surplus of $300,000 in FY02 • -Additional support from UMMC (MBM data) • -Clinical/contract collections up by $1.0 million • -Restructure resident clinic • -Increase investment in community NP model • -Increase overhead costs • Dean provided 1 year bridge funding for research team

14. Changes Across Departments Since FY99/00 • Downsized one residency and three programs • Additional affiliation funding appeared in each department • Twenty less full-time faculty in departments with operating deficits • Less unfunded research and less funded research (in two departments) • Loss reduced by 58% - from $2.6 m to $1.1 m – over 2 years.

15. Changes Across Departments Since FY99/00 • Identified key faculty in each Department • Need to retain key faculty members • Recruiting is expensive • Institutional effort to educate the Maryland legislature • Institutional investment in philanthropy

16. What is Mission-Based Management? • Acceptance that you can’t invest in everything • Develop processes for broad participation in decision-making • Increase accountability • Understand the revenues and costs associated with each mission. (New type of accounting) • Monitor how resources are invested and the “return” on this investment • Tie resource allocation to strategic priorities

17. Measuring Direct Medical Student Education • No individual faculty surveys • Counted hours of participation in the curriculum in the first two years • “Department load” method developed to assess department teaching in the 3rd and 4th year. Interviewed chairs and education coordinators to obtain information for each department. • Clerkship and course directors given administration time

18. Distribution of Faculty Hours in the Medical School Curriculum Data can be used as a relative measure

19. Lessons and Results • Some current subsidies must be reduced • Costs are in the people • It is not just the effort – it’s the outcome • Dean has funds available to invest in strategic initiatives, but can’t invest in everything • Chairs know that historical State allocation is not permanent • Attach value to participation in the curriculum

20. Definition of Mission-Based Management • Gets all components of its missions funded • Accomplishes all of its missions at or above a certain standard • Accomplishes one or more of its missions at an exceptional level • Has the management skills, funds and internal stability to accomplish the above points on a reliable basis