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Pathology Faculty Meeting - Financials. March 26 , 2014. UMHS Consolidated FY14 February MTD Financials. UMHS Consolidated FY14 February YTD Financials. Pathology Fiscal Year Comparison. AP Year to Date Actuals and Forecast. CP Year to Date Actuals and Forecast.
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Pathology Faculty Meeting - Financials March 26, 2014
Challenge • In order to meet the growth and investment aspirations of the Health System, margin improvement initiatives of $250M will be necessary through 2017 • We must look ahead and act on future risks and anticipated changes today to ensure sustained operational and strategic success • Changes are reflective of the significant health reform and reimbursement changes that the entire health care industry is facing • Way patients want to receive health care • Way insurers and government pay for health care • Way government is regulating health care
Challenge • Must continually find ways to adjust to be more efficient; lower rate of cost growth without compromising provision of high quality, safe and excellent services • Improve productivity while demonstrating value to those who purchase our services
Prior and Ongoing Efforts • Operations Improvement Plan • Care Management • Throughput Initiatives • Strategic Activations • Supply Chain Initiatives • Capital Spending Pause • Labor Savings Initiatives • Productivity Improvements
LABOR SAVINGS Benefits changes
UM Faculty vs. Provost Peers: Overall Results Summary 11/12 12/13 8/9 8/9 5/6 9/10 9/10 15/16 15/16 7/8 5/6 16/17 12/13 19/20 15/16 11/12 Average for Peers = 100 17-23 17-23 All Benefits: Retirement Income, Health Care, Paid Time Off, Death, Long-Term Disability, Dependent Tuition All H&W and Retirement: Retirement Income, Health Care, Death, Long-Term Disability, Short-Term DisabilityPaid Time Off: Holidays, Vacation, Short-Term Disability Percents under the graph labels indicate the percent of the employer-paid All Benefits BI score a particular benefit represents for the University of Michigan faculty
Columbia University Cornell University Duke University Emory University Harvard University Indiana University The Johns Hopkins University Massachusetts Institute of Technology Northwestern University Ohio State University Stanford University University of California University of Chicago University of Maryland University of North Carolina at Chapel Hill University of Pennsylvania The University of Southern California University of Texas System University of Virginia University of Washington University of Wisconsin Washington University in St. Louis Yale University UMMS Peer Group
Retirement Savings Plan ChangesEffective date: 1/1/2015 • University-wide change – certain components of salary, in addition to base pay, such as administrative and added duties differentials, one-time lump sum payments, faculty honors, overtime, PTO sell back, and payments for PTO/vacation accrual upon termination will no longer be eligible for retirement savings plan contributions. • Applies to current and future faculty and non-bargained for staff of the University. • Saves the University $4.4M annually ($2M of this UMHS) • Retains the University’s competitive position relative to 23 Provost peer academic institutions at an overall Benefit Index of 100. • No change to Retiree Health Benefits at this time. Scheduled for review again in 2016
Additional Health System Changes: HHC and Shared Services Staff Effective date: 1/1/2015 • Retain 2 for 1 Match • University contribution capped at 9%, • Employee contributes 4.5% to receive the 9% • Changes apply to: • Current and future non-bargained for staff of UMHHC and Shared Services • This change will not apply to Medical School staff • Will remain aligned with staff of the other academic units of the University and their labor market
UMHS Committee on Paid Time Off Programs • Changes to program elements are responsive to employee preference, manager feedback, and aim to generate productivity improvements • Apply to non-bargained staff in UMHHC and Shared Services • Staff of the Medical School will remain aligned with staff of the other academic units of the University. • Therefore, there will be no changes to the current Vacation/Sick/Season Day time off plan or extended sick time plan for Medical School Staff
Changes to PTO Plan • Applies to current and future non-bargained for staff of UMHHC and Shared Services: • Sellback – effective immediately • Discontinue sellback for Exempt staff • Limit sellback to 40 hours for Non-exempt staff • Payout at termination – effective July 1, 2014 • No payout if leaving the organization within first 2 years of employment • Eligibility – effective July 1, 2015 • Increase FTE eligibility requirement from 20% (8 hours/wk) to 50% (20 hours/wk) appointment
Changes to PTO AccrualEffective Date: July 1, 2015 • Applies to UMHHC/Shared Services future hires only(non-bargained for) • Modified accrual– Reduce PTO annual accrual as detailed below:
Extended Sick Time PlanEffective date: July 1, 2015 • Applies to current and future (non-bargained for) HHC/Shared Services staff: • Eligibility – • Increase FTE eligibility requirement from 20% to 50% appointment • Decrease waiting period to access benefit from 2 years of service to 1 year of service • Renewal – Change renewal cycle from every 5 years to every 2 years • Waiting period – Decrease waiting period from 2 weeks to 1 week • Pay structure – Implement tiered pay structure moving from 1st 26 weeks time off paid at 100% to: • 10 weeks time off paid at 100% • 16 weeks time off paid at 66.67% • 2nd 26 weeks remains at 50%
Overall HHC/Shared Services SavingsFinal “All Benefits” Index
Results • We strive to offer an outstanding “total rewards” package that includes a robust benefit program, competitive pay, numerous work life programs and many career development opportunities • After these changes, benefits package continues to be competitive and above average • Overall savings to Health System: $8.3M annually ($7.3M HHC; $1M Medical School) • Union contract provisions govern these benefits. Current contracts open for negotiations in 2017
RESOURCES • Further information: • http://www.med.umich.edu/umhshr/employee/benefit_changes.html • Questions • UMHS-Compensation@med.umich.edu
Peer Groups UM Medical School Peer Group The UMMS Benefit Index peer list is a Provost Peer list that consists of the University's top23 peer institutions based on actual, documented faculty recruitment and retention cases. UMHHC Peer Group The national Healthcare Peer list consists of 11 national academicmedical centers that the University competes with for faculty as well as staff. The local Healthcare peer list consists of six local Healthcare organizations. While there is a focus on the results relative to the six local peers, full analysis has been completed and summarized relative to the national peers and the combined local and national peers.
Columbia University Cornell University Duke University Emory University Harvard University Indiana University The Johns Hopkins University Massachusetts Institute of Technology Northwestern University Ohio State University Stanford University University of California University of Chicago University of Maryland University of North Carolina at Chapel Hill University of Pennsylvania The University of Southern California University of Texas System University of Virginia University of Washington University of Wisconsin Washington University in St. Louis Yale University UMMS Peer Group
Local Healthcare Organizations Beaumont Health System Detroit Medical Center Henry Ford Health System Oakwood Healthcare, Inc. St. Joseph Mercy Health System University of Toledo Medical Center National Academic Healthcare Organizations Baylor Health Care System BJC Health System Cleveland Clinic Duke University Indiana University Health, Inc. Mayo Clinic University of California San Francisco Medical Center University Hospitals Health System UNC Health Care System University of Pittsburgh Medical Center WakeMed Health & Hospitals UMHHC Peer Group
