University of South Florida College of Medicine



University of South Florida

College of Medicine

LCME Institutional Self-Study

Report of Committee Eight:

Educational Resources: Finance

Study Year 2005-2006

The contents of this report represent the judgments and opinions of the members of this Self-Study Committee. The committee has made every effort to ensure that the information represented is accurate. The LCME administrators have not audited the data in the text of the report and there may be some discrepancies within the database or executive summary as a result. While every attempt has been made to provide and evaluate information accurately and objectively, the committee acknowledges that any errors of fact in this report are unintentional.

(Printed October, 2006)

Table of Contents

I. Executive Summary/Key Issues. 3

II. Responses to Questions in Guide to Institutional Self-Study 4

III. Analysis of Recommendations and Deficiencies Relevant to Committee as Identified by Most Recent LCME Review in 1999 12

IV. Major Changes Since Last LCME Review in 1999 18

V. Areas of Strength 22

VI. Areas of Concern and Challenges 25

VII. Review of Compliance with Established Standards 26

VIII. Recommendations, Possible Solutions and Strategies 28

IX. Issues of Concern Relevant to Other Committees 29

X. Attachments 29

XI. Narrative of Process 29

XII. Database Accuracy 30

XIII. Committee Membership 30

I. Executive Summary/Key Issues.

Committee Eight Educational Resources: Finance identified areas of improvement and robust growth during the institutional self study for LCME accreditation. Steady, positive shifts in COM revenue sources for education, practice-plan initiatives, enrollment, faculty recruitment, all source budget process, compensation using pay-for-performance, facility expansion, expansion of research programs, and community outreach were distinguishing components of our successful internal review of educational finances. Two new facilities, with projected profitability within the next 2 years, will protect and align the educational mission and research opportunities for the first time since USF enrolled its first medical school class in 1971. The following themes represent the key areas of our review and also address queries generated from our last LCME review:

• Revenue Sources

The COM continues to show a shift in the balance of resources towards national public medical school benchmarks. Reliance on faculty practice continues to decrease while grants and contracts have increased.

• The Practice Plan: USFPG (USF Physicians Group)

A cornerstone of the educational mission, USFPG, has enhanced all aspects of its business organization, operations, and process and achieved national recognition. Administrative structure, operations upgrades, managed-care contracts, productivity, global relative value work units, visits, faculty retention and recruitment have collectively described USFPG as a best-practice model. Most importantly, USFPG strategic planning guarantees protection of the COM educational mission

• Sources and uses of Capital

Growth of several existing sources of capital funds has enabled the COM to direct a greater proportion appropriation to renovation and capital equipment. Bond financing and state equipment funds have secured 2 new sites for clinical outpatient teaching and state-of-the-art technology. These buildings include the Center for Advanced Health Care (CAHC) and the South Pavilion on the grounds of Tampa General Hospital.

• Major changes since 1999

Practice-Plan governance, recruitment, facilities, creation of the Asset Investment Management System Council (AIMS) to help achieve an all-source budget, and pay-for-performance salary plan represent initiatives that strengthen, protect, and enhance the educational mission and help implement our general competencies and core objectives.

The Educational Resource: The finance committee states that USF COM has protected and enhanced the educational mission and competencies. In a growth climate of all segments of the Tampa Bay population and in the absence of other large multi-specialty groups or university medical programs, the COM has distinguished itself through practice-plan growth and financial well-being with consistent growth in state resources, sources of capital, and basic science and clinical research initiatives.

Responses to Questions in Guide to Institutional Self-Study

1. Discuss the appropriateness of the balance between the various sources of financial support for the school (i.e., state and local appropriations, income from patient care, endowments, tuition income, research income, hospital revenues). Are revenue sources stable? How do you view the prospects over the next five years?

Committee Response: The College of Medicine continues to make significant strides toward an appropriate balance of sources and uses of capital. The committee emphatically concluded that we currently have an adequate balance of funds. More specifically, of the nine revenue sources, reliance on faculty practice earnings continues to decrease, and both grants and contracts as well as indirect cost earnings have substantially increased during the same time period (see pie charts below).

Mission-based budgeting will align sources and uses of capital, as well as resources with enrollment. The college’s tuition levels are at the 50th percentile for public universities, while the actual dollar-level of tuition collections is below the national mean for public medical schools. Florida tuition levels at state universities continue to be the lowest in the country, while medical school tuition has continued to be at the 50th percentile. Florida will continue to mandate tuition levels through the legislature, and with an anticipated increase of 5 % per year. Enrollment levels in the MD program have reached the maximum levels without additional enrollment funding. Florida has an enrollment-funding program that provides base recurring funding by FTE and level throughout the state university system. However, beyond the enrollment funding provided for additional FTE’s in the USF system, significant investment in facilities and plant is required.

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Several important observations need to be noted from these Figures. Clearly the reliance on Faculty Practice Plan resources has decreased from 47 – 40% (7% decrease since 1997). In addition the decline in state appropriation appears substantial; however, the direct subsidization to the Moffitt Research and Cancer Center (of approximately 11 million dollars) is no longer included in our state base. Moreover, federal Upper Payment Limit dollars have replaced state resources. Of other significance is that Grants and Contracts and Indirect Cost earnings increased from 14% to 26% during the same time period. This is an increase in federal awards received by the COM.

Revenue sources remain stable and sources continue to grow through the practice plan, and grants and contracts. Revenue, from all sources, continues to be projected in a positive direction. Moreover, revenue prospects for the next five years remain stable.

2. Comment on the degree to which pressures to generate revenue (from tuition, patient care or research funding) affect the desired balance of activities of faculty members. If so, what mechanisms are in place to protect the accomplishment of the educational mission?

Committee Response: Faculty productivity pressure exists in every U.S. medical school but the culture and priorities of the organization sustain this educational mission. USF COM has several robust revenue and non-revenue sources to monitor and protect faculty and the educational mission.

The clinical faculty salaries are enhanced with $18-million in educational & general state appropriations in order to provide release time for teaching and research. In FY 2004-2005, faculty members report 13.1% of their total effort in the teaching of the MD professional student. This is comparable to the amount of state funding allocated to the total base salary of the clinician. Total instruction effort, including MD, graduate and resident effort, amounts to approximately 36%. This effort is supported by clinical research grants, state funding, and practice earnings. Despite the increase in clinical earnings and enrollment growth to 120 per class, no decrease in faculty effort has been identified by self-reporting by all faculty.

In 2005, USF COM created the Asset Investment Management System Council (AIMS) whose responsibilities include the creation of an all-source budget and a pay-for-performance faculty compensation plan. Both these mechanisms further ensure not only long-term protection of the educational mission but also real-time evaluation and monitoring of performance and the flow of dollars. A seminal mandate passed in the academic year 2005-2006 includes a 15% effort commitment defining college-wide minimums for every full-time faculty member in the following three areas: medical student instruction (5 %), scholarship (5 %), service (3 %) and professional development (2 %). The AIMS initiative is being piloted in the 2006-2007 academic year and will go into effect on July 1, 2007 (see Attachment 1, AIMS Council).

Lastly, the Executive Leadership Team (ELT), consisting of the dean of the COM, the chief financial officer, chief operating office and all three vice deans convene monthly. It is during their strategic-planning and budget-cycle process which further protects the educational mission.

The most significant initiatives over the past five years designed to protect, monitor and evaluate the educational have been the all-source budget, pay-for-performance, and the ELT. Faculty have unanimously participated in the processes.

3. Describe how the school has positioned the clinical enterprise (faculty practice plan/organization and structure of healthcare system) for best results in the local health care environment. Is planning related to the clinical enterprise occurring?

Committee Response: The COM has a fundamentally sound organizational structure and practice plan designed to protect all aspects of the educational mission. Under authority of its Board of Directors of the practice plan, the Executive Management Committee (EMC) is responsible for all clinical programs, their finances, faculty compensation, compliance, and managed-care contracts. Because of its link to the vice president/dean, there continue to be educational goals during strategic planning within the EMC. Both the practice plan and the ELT utilize strategic planning as a means to ensure focus of the educational mission. As reflected in our mission statement, the College of Medicine has been authorized to provide educationally oriented clinical-practice settings and opportunities, through which college faculty physicians provide health care and treatment to patients, including patients at independent hospitals and various other institutions and clinical sites as an integral part of their academic activities and their employment as college faculty. The USF College of Medicine is further authorized to maintain a Faculty Practice Plan (FPP) for the orderly collection and administration of income generated by faculty practice activities and to provide other services in support of the college’s clinical-educational mission.

The college’s FPP was created in 1973 as a not-for-profit corporation, named University Medical Service Association, Inc. or “UMSA.” UMSA bills, collects, administers, and disburses funds derived from the clinical practice activity of the college’s faculty physicians. In addition, the college has formed a governance structure as an integral part of the college, named “USF Physicians Group” of the USF College of Medicine, with responsibility to provide oversight and advise the USF vice president for Health Sciences/dean of the College of Medicine relative to the clinical-service mission and related business support functions of the FPP. The USFPG Board of Directors is comprised of the vice president/dean (who serves as board chair), the 16 clinical department chairpersons, 16 elected faculty physician members, and others. The college’s FPP provides management and other support services including revenue-cycle operations, human resources, managed-care contracting, credentialing and re-credentialing, patient ambulatory-support services, quality management, information services, and finance and accounting.

The college presently has approximately 438 full-time faculty physicians and other practitioners organized into the following 16 academic-clinical departments: Anesthesiology, Dermatology, Family Medicine, Interdisciplinary Oncology, Internal Medicine, Neurology, Neurosurgery, Obstetrics and Gynecology, Ophthalmology, Otolaryngology, Pathology, Pediatrics, Physical Therapy, Psychiatry, Radiology, and Surgery. The chief administrative officer of the college is the vice president for Health Sciences/dean of the College of Medicine. The vice president/dean reports to the university president. The 16 academic-clinical departments are each headed by a chairperson who reports to the vice president/dean. Most departments are subdivided along medical sub-specialty lines into divisions headed by chiefs/directors who report to the chairperson. Within the departments and divisions, individual faculty physicians are employed by the university to perform duties in support of the education, research, and patient service missions of the college.

The business operations of the faculty practice plan are considered among the most technologically advanced and best in the country.

• When compared to national data by the Medical Group Management Association (MGMA), the Association of American Medical Colleges (AAMC), and University HealthSystem Consortium (UHC), USF Physicians Group ranks among the best in “number of days” in accounts receivable, in its short-term net collection ratio, and in its leverage in the community related to third-party contracting for physician services. Many of the business improvement processes implemented over the last several years have been presented at national meetings of these organizations.

Days in Accounts Receivable, a benchmark used to determine the efficiency of a business operation, represents the number of days from the time a charge is entered into the system until it has been paid and the account has been cleared. From FY 1999 through FY 2004, Days in Accounts Receivable have decreased from 78 to 48 days, or 38.46%.

Short term net collection ratio (STNCR) is an accrual-based measurement that is equal to net payments (for the first 8 months of the last 12 month period) divided by net charges. Practically, this ratio is used to measure the physician group’s efficiency of collecting and successfully resolving receivables in a short period of time. USFPG’s Short-Term Net Collection Ratio increased from 75% in FY 1999 to 84.10% in FY 2005, an increase of 12.13%

Collections remain above budget since 2001 and during this similar time actual collections have increased each year.

• From a systems perspective, the practice plan has been aggressive in implementing and operationalizing software packages to optimize its scheduling, registration, and billing accounts receivable activities; this includes the full implementation of IDX’s Transaction Editing System and the Ingenix Claims Manager product.

• Many practice plan software vendors, including IDX, Spheris and Allscripts Healthcare Solutions, have partnered with USF Physicians Group as a development site because of the forward-thinking nature of the organization.

• Electronic Health Record and Practice Management System - The physicians and physician leadership of USF Health and the College of Medicine have made a critical decision about the future—to adopt an electronic health record and implement mandatory use as soon as possible.  The USF Physicians Group will lead the conversion.  The electronic health record provides the basis for the building of knowledge which is the core of our commitment to USF Health, and to building the new Centers for Advanced Healthcare on campus and at Davis Islands.

• After an extensive review and analysis of electronic health record and practice management systems by USFPG physicians and staff in the academic year 2005-2006, management decided to continue to enhance the Allscripts and IDX applications.  It is management’s belief that this partnership is essential in achieving our goal of becoming a national model of excellence.

Allscripts Healthcare Solutions is a leading provider of clinical software, connectivity, and information solutions used by physicians to improve healthcare today. Allscripts will be the exclusive Electronic Health Record (EHR) of the USF Physicians Group.  This new agreement expands the relationship to help realize our goal of being a principal provider of "patient-centric" care in a paperless environment where quality, technology, and people come together in the ambulatory patient-care setting.   

In addition, we have renewed our relationship with IDX, the practice-management system of the USFPG, which is fully integrated with Allscripts.  Allscripts and IDX share a 10-year strategic relationship that directly links the clinical and financial information of the practice plan.  

Some of the features of the Allscripts EHR include the following:

• Secure on-line consultations  

• Automated disease management services  

• Personal health records for our patients  

• Flexible template-driven documentation automatically produced as a by-product of providing patient care  

• Fully integrated document imaging technology  

• Industry leading e-prescribing  

• Physician order entry and results transmission for lab and diagnostic testing  

• Point-of-care charge capture to eliminate lost charges and enhance revenue  

• Integrated Care Planning customizable patient care plans with patient education material  

The selection and implementation of these enhanced applications is critical to the development of the Centers for Advanced Healthcare and further development of USF Health as a recognizable brand. Additionally, USF Health and the centers will become a national reference location for Allscripts. Implementation of the enhanced applications is scheduled to occur over the next year with completion dates corresponding to the opening of our USF South Pavilion at the Tampa General Campus.

All the above measures provide benchmarks that point to a financially solvent clinical enterprise. Ongoing strategic planning in support of the educational mission occurs throughout the year both within the ELC and the EMC. A recently completed planning initiative involved the use of College of Nursing space for our teaching academy and classrooms.

4. Describe how present and future capital needs are being addressed. Is the financial condition of the school such that these needs can be met?

Committee Response: Present and future capital needs are assessed at all levels of the organization. Strategic planning initiatives have focused on both our educational mission as well as the research cores. USF Health sources of capital include state funding, development/capital campaigns, indirect rebate funds, operating over-recovery for the FPP, and carry-forward state appropriations.

In past fiscal years, these sources have been modest; however, as growth continues in the practice plan, the annual-giving fund, state PECO resources and research awards, the college has been able to contribute a greater proportion of funds towards capital equipment and renovations.

Through Bond Financing and State PECO Equipment funds, the following clinical equipment will be provided as the new facilities open in 2007 and 2008. Since these clinical sites will become our clinical-medical-teaching areas for out-patient services, utilization of state-of-the-art technology with our Electronic Health Record system will provide students access to the latest devices.

|South Pavilion |

|Diagnostic Imaging (Digital) |

|3.0 T MRI |

|64 Slice CT |

|2 Mammography units |

|Digital radiography unit |

|Radiography & Fluoroscopy Unit |

|Diagnostic Ultrasound |

|RIS/PACS with multiple reading workstations |

|Clinical Areas |

|100 Exam tables |

|200 Workstations |

|North Pavilion |

|Diagnostic Imaging |

|3.0 T MRI |

|64 Slice CT |

|4 Mammography units |

|Digital radiography unit |

|Radiography & Fluoroscopy Unit |

|Diagnostic Ultrasound |

|Bone Densitometry Unit |

|RIS/PACS with multiple reading workstations |

|Operating Rooms (Initially 4 increased to 8) |

|Equipment for 4 Digitally Integrated ORS |

|Surgical Lights with integrated cameras |

|Surgical booms |

|Audio Visual equipment |

|Cameras |

|Monitors |

|Anesthesia Equipment |

|Microscopes |

|2 C-Arms |

|Surgical Equipment |

|Ambulatory Surgery Management System |

|Endoscopy Suites (5) |

|Booms |

|Endoscopes |

|C - Arm |

|PACU/ Pre & Post Op |

|35 Stretchers |

|Monitoring Equipment |

|Clinical Areas |

|60 Exam tables |

|120 Workstations |

Additionally, state funds have been provided for various capital renewal and major maintenance of the physical plant. The College of Medicine has/will used state resources to provide new facilities for student lounges, locker areas, 24-hour student computer expansion areas, new work-out facilities for medical students, and general upgrades to classrooms and wireless technology throughout the entire campus. These upgrades and capital renewal funds are changing the face of the College of Medicine campus and will be completed during 2006.

Finally, funds provided from donors, indirect rebates, and state resources to the College of Medicine Office of Research will allow development of key research cores and equipment. While this is a three to five year commitment of resources, the first cores are being financed with state PECO funds.

Analysis of Recommendations and Deficiencies Relevant to Committee as Identified by

Most Recent LCME Review in 1999

Measures to enhance the management of the faculty practice plan, including the results.

• Operations Strategy

The USF College of Medicine Faculty Practice Plan, known corporately as UMSA/MSSC, is a Direct Support Organization (DSO) of USF, and will be charged with the oversight and centralized management of the Center for Advanced Health Care (CAHC), including the Ambulatory Surgery Center (ASC) UMSA/MSSC bills, collects, administers, and disburses funds derived from the clinical practice activity of the college’s faculty physicians. UMSA/MSSC is comparable in some respects to a Management Services Organization (MSO) and provides additional support services such as revenue cycle operations, human resources, managed-care contracting, business development, credentialing and re-credentialing, patient ambulatory-support services, quality management, information services, and finance and accounting. The administrative organizational chart is shown below. Oversight for all matters pertaining to the educational mission is provided by the Board of Directors who typically delegate authority and responsibility to the EMC. Thus, the practice plan is linked to the EMC for all matters pertaining to the educational mission.

• Ongoing Operations

The USF Physicians Group (USFPG) has experienced significant growth over the last five fiscal years. Growth of a business can be measured in a variety of ways; however, in order to fully understand the growth of USFPG over this time period, one must look at a number of specific factors that, in sum, are responsible for the group’s success. These measurements are commonly accepted business tools used by other centralized academic practice plans and physician practices across the country to measure the overall health of the business. They are multifaceted and examine the financial, operational, and contractual areas of the practice.

• Contractual Relationships with Third Party Payers (Managed Care/Health Plan

Over the last 12 years, USFPG has seen its managed care business grow from 17% of total collections to its current level of 46% of total collections . The remaining 54% is comprised of the following: Medicare 24%), Medicaid (8%), Self-Pay (9%), Commercial Insurance (indemnity) (10%), Hillsborough County Health Care Plan (1%), Worker’s Compensation (1%), and other (1%).

Managed Care Collections as a Percentage of Total Collections

Fiscal Year 2005 Payer Mixed Based on Collections

This growth can be attributed to three primary factors:

1. Population growth in the Tampa Bay area;

2. The increase in the overall penetration of managed care in the Tampa Bay area due to employer groups opting to convert their employer-based group health insurance to managed care; and

3. A contracting strategy at USFPG of expanding our managed care business by contracting with virtually all of the managed care organizations (MCOs) in the Tampa Bay area in order to assure access to patients.

USFPG and its primary hospital affiliates, Tampa General Hospital (TGH), the H. Lee Moffitt Cancer Center and Research Institute, and All Children’s Hospital, have become providers of choice among third-party payers and employer groups. Most health plans have recognized that USFPG, TGH, and Moffitt are critical components of a viable, marketable network of participating providers. This recognition has worked to the benefit of USFPG; over the last several years, the Department of Managed Care and Business Development and the USFPG Managed Care Committee have successfully renegotiated all of USFPG’s managed-care contracts with third-party payers. These rate increases have ranged from 10% to 33% with an estimated annual increase in patient-care revenue of $4,000,000. It is important to note that this projected increase is based solely on the negotiated increase in reimbursement, not increases in volume or productivity, these will be discussed in detail in the next section.

• Growth in Productivity

In addition to receiving higher reimbursement per unit of service, USFPG has also significantly increased its volume of patients. This is clearly illustrated by the graphics below showing, for the last four fiscal years, increases in total charges, increases in total collections or receipts, and increases in relative value units (RVUs). RVUs are used in health care to appropriately measure a unit of work across various medical specialties in order to measure physician and practice productivity on an “apples to apples” comparative basis.

Total Charges – Eight Year Summary

Total charges have increased by $146,592,517 over the last eight fiscal years, an increase of 97%.

Total Collections – Eight Year Summary

Total collections have increased over the last eight fiscal years by $42,585,070, a 67 % increase.

It should be noted that in the healthcare sector, the relationship between a provider’s billed charges for services rendered, and the actual payment, which is received as payment in full, varies according to the methodology upon which the provider bases his or her billed charges, the geographical area of the country, and the average rates-of-reimbursement in a given market. In 1999, USFPG opted to move to a practice-wide fee schedule. The methodology is based upon the prevailing Medicare Allowable rate (MCA). Specifically, all evaluation and management procedure codes (CPT) are billed at just over twice the prevailing MCA, and all other codes (procedural and non-E&M) are billed at just over three times the prevailing MCA.

Global RVUs –Seven Year Summary.

Global RVUs have increased over the last seven fiscal years from 1,984,581 RVUs in fiscal year 2000 to

2,919,474 in fiscal year 2006, representing a 47 % increase.

North Campus Patient Visits

This graph displays the increase in patient visits from FYE 1999 through FYE 2006, for visits only to the USFPG’s north campus, consisting of the USF Medical Clinic; the Eye, Ear, Nose, and Throat Institute; and the USF Psychiatry Center. North campus patient visits have increased by 42% since FY 1999.

Faculty Retention/Physician Growth Rate*

Academic medical centers typically experience a high degree of faculty turnover on an annual basis. Despite this trend, USFPG has grown significantly in the number of credentialed physicians over the last four fiscal years. The growth rate for fiscal year ending 2001 through 2005 has been 7%, 11%, -1%, 3%, and 5% respectively.

Operational Efficiencies

Investments in technology, human resources, and business improvement processes have yielded extremely favorable results in the operational efficiencies of the USFPG. These improvements are clearly evident in the following, industry-accepted-performance metrics for physician group practices.

Days in Accounts Receivable

Days in accounts receivable, a benchmark used to determine the efficiency of a business operation, represents the number of days from the time a charge is entered into the system until it has been paid and the account has been cleared. From FY 1999 through FY 2006, days in accounts receivable have decreased from 78 to 48 days, or 38.46%.

Short-Term Net Collection Ratio

The short-term-net collection ratio is an accrual-based measurement that is equal to net payments divided by net charges. Practically, this ratio is used to measure the physician group’s efficiency of collecting and successfully resolving receivables in a short period of time. USFPG’s short-term net collection ratio increased from 75% in FY 1999 to 83.2 % in FY 2005, an increase of 11%.

Major Changes Since Last LCME Review in 1999

• Governance Changes in the Practice Plan

The governance of the faculty-practice plan was enhanced with a new governance structure utilizing the creation of an Executive Management Committee (EMC). This committee is appointed by an advisory to the vice president/dean who serves as the chair of both the EMC and the Board of Directors. The executive director of the faculty-practice plan functions as the chief operating officer responsible for administrative operations and reports directly to the vice president/dean. In this new governance model, the vice president/dean is clearly designated as having ultimate authority over the faculty practice plan as an integral part of the College of Medicine.

In July, 1999, the Faculty-Practice Plan Board approved college-wide revenue cycle policies which have been implemented to coordinate and standardize business practices throughout the college. In this same year, the COM faculty practice plan had achieved significant, measurable improvement in the performance if its “revenue cycles.” Between 1999 and 2001, the faculty practice achieved significant, measurable improvements in the performance of its “revenue cycle” functions. The practice plan has made significant investments in technology upgrades including a point-of-service collection model, Ingenix Claims Manager software, and the IDX transaction Editing System. The practice plan has also implemented an activities based staffing model in which all “revenue cycle” activities and related time allocations are documented in order to determine appropriate staffing rations.

• Enrollment cap at 480

Plans or expectations to increase or decrease enrollment over the next five years are dependent upon state funding, statewide initiatives, USF resources and LCME approval. There are no plans to reduce medical student enrollment, and presently, at 480 funded medical students, USF is capped at its enrollment. USF College of Medicine may receive additional capital and enrollment funds from the legislature to expand enrollment to 200 per class. The College of Medicine has submitted a capital and operating fund request in order to expand. There will not be expansion of enrollment beyond the 480 without sufficient resources to provide a strong educational program as well as LCME approval.

• New revenue sources

Over the next five years, anticipated major changes in revenue sources are the continued growth in the USFPG practice plan and new sources of facility fees from the opening of the Ambulatory Service Center. The USF practice plan will be opening eight operating rooms and five procedure rooms in our new Center for Advanced Healthcare on the USF campus. New facility fees and new physicians will provide additional revenue sources for the physicians and faculty of the College of Medicine. Additionally, the College of Medicine has made an initiative to recruit basic science faculty with research awards. It is anticipated that research funding will increase as well as federal indirect rebate funds.

• New areas of departmental strengths: Faculty recruitment

Over the next five years, anticipated major changes in faculty strength are the hiring of seasoned basic science researchers and out-patient ASC faculty to support the Center for Advanced Healthcare. Currently, the college is developing an Orthopedic Surgery and Sports Medicine initiative, and new hires and a chairperson are being recruited. Finally, the College of Medicine is committed to recruiting basic science and clinical science educators and will provide substantial state funds to provide release time for educating students in an out-patient setting.

• New Facilities: Center for Advanced health care (CAHC) and South Campus Project

Another mechanism in place to protect the accomplishment of the educational mission is aligning education-delivery opportunities with clinical care and research-delivery sites. Two new facilities, the Center for Advanced Health Care (CAHC) and the Center for Advanced Medical Learning and Simulation are being built on the main campus. The design of the CAHC facility is to enhance instruction and role modeling of clinical skills for interdisciplinary education of students in medicine, nursing, public health, and physical therapy in the setting of integrated-health groups delivering clinical care and a venue for clinical research with a projected occupancy of 2007. The Center for Advanced Medical Learning and Simulation will be one of three world-wide centers for advanced medical and surgical training with a virtual hospital surgical skills lab and concept development lab with a projected occupancy of 2008.

The Centers for Advanced Health Care will include two new buildings along with the existing clinical facility located on the USF Tampa Campus. The new South Clinic facility will be a 126,000 square-foot medical office building and will be constructed adjacent to Tampa General Hospital. Current services at Tampa General Hospital will be relocated to the new building with the potential to add new service lines, diagnostic imaging, and other diagnostic procedures. USF Health plans to occupy and operate this building in early 2007. The other new facility, the North Clinic Facility, will be a six-story, 194,400 square-foot building located on the USF Tampa Campus. Included within this facility will be eight out-patient operating rooms, five endoscopy suites, diagnostic imaging, basic clinical-office space, pharmacy, food services, and a patient-education library. The planned occupancy for this building is July 2007. Currently, both facilities are on schedule.

Marketplace analysis shows that the primary service area is a very competitive market with a significant number of hospitals and ambulatory-surgery centers in the vicinity of the future site of the Centers for Advanced Health Care. However, research also indicates that no one center dominates the out-patient and diagnostic-imaging market. In addition, the primary and secondary-service areas, defined as Hillsborough County and the six surrounding counties, indicate a future compounded annual growth rate of 2.7% within the 45-64 age group over the next five years. Hillsborough County has the fastest growing 65+ age group in Florida. This forecast allows USF an economic advantage to become a dominant provider in the region.

The total project cost for the new facilities is estimated to be $90-million dollars and is dependent upon the sale of $47-million dollars in tax-exempt bonds that will yield $44.3-million dollars. USF Health has engaged consultants to identify and project revenue streams and provide a financial-feasibility analysis. Using national and regional averages in addition to internal historical information for volume, growth, productivity, reimbursement rates, payer mix, and expenditures, they have projected that the project would be profitable by year two. Year one would produce a net loss of $810 thousand dollars. The net present value of the project is estimated to be $8.9 million dollars.

Five-Year Projection of

Gross Revenues, Net Income, and Operating Margin

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USF Health states that these projections are very attainable and is very confident in its ability to reach these goals. USF Health members have pledged all revenues from their practice plan to service the debt obligation. Of the $87.9-million-dollar cost, $28.6-million has already been secured from the state in the form of a PECO appropriation, $8.6-million has been gifted from Tampa General Hospital, and $8.4 million is expected to be raised through development efforts.

• Asset Investment Management System (AIMS): The move to All Source Budgeting and Pay for Performance Faculty Compensation

Faculty members seek to balance their activities in research areas, clinical activities, and education in order to achieve the desired goal of student education and to ensure revenue generation that will support various objectives of the medical school. The nature of achieving this balance requires delineation of specific responsibilities for each faculty member and a review process to ensure accomplishment of these objectives including education.

The dean has initiated the Asset Investment Management System (AIMS) in April 2005. This process will produce an all-source budgeting system as well as a pay-for-performance compensation plan, both of which will align performance to fulfill the education mission with faculty-salary support. The AIMS council is composed of representatives of the administration, basic science, and clinical faculty.

(Appendix 1)

An implementation plan and timeline was defined to ensure faculty participation and input. Proposals were designed for performance standards and templates for faculty use. Both the clinical and basic science faculty are presently in the process of defining their assignment responsibilities through the AIMS process. The approved performance requirements and minimum percentages of effort will serve as the foundation for basic science and clinical faculty assignments including incentive and bonus pay beginning July 1, 2007.

AIMS has defined college-wide minimum performance requirements for all ranked Basic Science and Clinical faculty (Appendix 2). The expectation is to dedicate a minimum percentage of total assigned effort defined as 5% instruction (Appendix 3), 5% research/scholarly activity (Appendix 4), 3% service/governance, and 2% professional development. The faculty will further define the remaining 85% by proportioning this remaining effort among the categories to reach 100%. Clinical minimums have also been established and, in planning sessions, takes in to account the educational mission (Appendix 5). These delineations of faculty performance will be reviewed with the respective department chairperson for approval at the beginning of the term and reviewed each year regarding fulfillment. This provides a mechanism to communicate faculty assignments with performance expectations. In addition, further delineation is required to define standard, strong, and outstanding performance. This delineation creates a method upon fulfillment to award incentive-and bonus-rewards to the faculty. Since education is a designated component, AIMS will ensure all basic science and clinical faculty participate in the educational mission and have defined roles to ensure accomplishment of the mission. Furthermore, AIMS creates a pathway for rewarding outstanding performance of faculty in fulfilling the educational mission.

• College of Medicine Organizational Changes

The following organizational chart illustrates the hierarchal breakdown of the principal associate and vice deans for the COM. Note that the vice president/dean and CFO have financial oversight over all sources of revenue and expenses including the USFPG practice-plan budget.

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Areas of Strength

• Management and growth of the practice plan

Organizational changes have strengthened the business operations of the practice-plan. Moreover, there continues to be a steady stream of clinical faculty recruitment.

• Improvement in practice plan metrics and financial well being.

National performance benchmarks have been utilized and all indicators demonstrate sound revenue stream.

• Consistent and growing state resource base

The state base for the College of Medicine continues to grow at a modest rate. There has been only one reduction in state appropriations since the last site visit and those funds were enhanced with the Federal UPL program.  The Education & General appropriations have been increased each year with a CPI base salary increase for faculty and staff, enrollment growth per state formula, and special appropriations for programmatic increases.  In addition, the state has also authorized tuition increases for undergraduate, graduate and professional programs allowing institutions to build this increase into their base of support.

Some pass-through funding including direct earmarks for the Moffitt Cancer Center have been removed from the base allocation of the medical school, but this does not affect the College of Medicine programs or base funding in any way although there is an apparent decline in the numbers reported on the AFQ to the LCME. 

During the 2006-2007 fiscal year, the state fully funded the additional 58 medical students to the maximum of the enrollment formula and provided additional recurring funding of $2.4 million to rebuild the Orthopedic and Sports Medicine Program within the USF College of Medicine. 

• Clinical research continues to expand with sound organizational structure.

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• Community outreach initiatives help to expand growing USF clinical presence.

Clinical outreach centers have provided access to patients as well as educational caseloads. Excellent balance among patients’ diversity, clinical practice, and educational exposure exist. There is no evidence of disparate missions.

• Continued growth exists in the research base for clinical and basic science faculty

support.

USF Health is the University of South Florida's enterprise of faculty, staff, and students dedicated to improving the full continuum of health. USF Health has at its core the Colleges of Medicine, Nursing, and Public Health. Also included are the schools of Basic Biomedical Sciences and Physical Therapy. In partnership with its affiliated hospitals, USF Health's research funding last year was $134-million – more than half of which came from federal sources. USF is one of only 95 public and private universities in the U.S. that have been designated as Carnegie Comprehensive Doctoral Research University/Very High Research Activity.

The percentage of our research base that has full indirects to pay for campus overhead is increasing.  By virtue of the COM federal NIH funding growing, indirects have nearly doubled since 1999.  Thus although the indirect rebate continues to be at the 30% level, it is a larger sum of money.

Shown below is the projected 12-year enhancement program initiated by Dr. Rao, Vice Dean for Research.

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• Florida and Tampa Bay Region is a growth area in all segments of the population

The group draws patients from the seven-county area of Hillsborough, Sarasota, Manatee, Hernando, Polk, Pinellas, and Pasco; growth in this seven-county area is projected at more than 300,000 residents by the year 2007 (source: Claritas, Florida Agency for Healthcare Administration). The highest growth will occur in the age groups of 45 – 64 at 20.1% and 65+ at 14.5%. This population growth will generate an annual demand of more than 244,000 new patient visits across all specialties. More than one-third of this growth will take place in Hillsborough County alone; Hillsborough County residents account for more than 70% of USFPG’s overall new patients. This growth cannot and will not be sustained by USF providers unless additional facilities are developed. If USF does not seize the opportunity to recruit additional clinical faculty, and expand and modernize its facilities, this new business will go to other providers/physician groups. If USFPG, as the largest multi-specialty physician group on the west coast of Florida, does not expand to meet demand, then another large “Super Group” will move or expand into the Tampa Bay area.

Areas of Concern and Challenges

• Indirect rebates and support of research to USF Health

The new vice dean for research has very rapidly established the metrics and delineation of the importance of our research initiatives. Indirect rebates are a current topic of discussion and remain an area of improvement. Establishment of core facilities and an office of Clinical Research are viable steps towards improving the rebates.

The 30% rebate has remained a consistent allocation from campus to the dean/chair/investigator (the 10/10/10 concept) since 1999.  The fund continues to grow for productive PIs and research areas, because most departments have utilized the funds for bridge funding in the event of loss of grant rather than as a fund for building research practices. 

• Rising cost of medical practice administration and faculty salaries.

• Impact of future state support in climate of additional medical school financing

• Competition and recruitment for specialty practice physicians, including diversity in areas of

high-market demand and related expenses

• Potential threat of large group practice entering market

• Commitment from affiliated hospitals to support educational and research missions

• Continues Practice Plan strategic planning focusing on educational mission

Review of Compliance with Established Standards

SECTION V. EDUCATIONAL RESOURCES

Part A: Key Quantitative Indicators

Please provide the following information, using your school’s copy of the Longitudinal Statistical Summary Report as the data source.

a. Total revenues (in millions, one decimal place)

|1997-98 |1998-99 |1999-2000 |2000-01 |2001-02 |2002-03 |2003-2004 |2004-2005 |

|209.6 |219.7 |232.7 |251.1 |265.6 |291.1 |306.6 |316.2 |

b. Total expenditures (in millions, one decimal place)

|1997-98 |1998-99 |1999-2000 |2000-01 |2001-02 |2002-03 |2003-2004 |2004-2005 |

|206.0 |214.5 |228.1 |246.5 |262.3 |285.4 |304.3 |310.0 |

c. Total state appropriations, if applicable (in millions, one decimal place)

|1997-98 |1998-99 |1999-2000 |2000-01 |2001-02 |2002-03 |2003-2004 |2004-2005 |

|42.8 |45.3 |49.7 |50.1 |49.4 |46.9 |49.0 |32.7 |

d. Professional fee (practice plan) revenues (in millions, one decimal place)

|1997-98 |1998-99 |1999-2000 |2000-01 |2001-02 |2002-03 |2003-2004 |2004-2005 |

|91.8 |95.7 |94.9 |104.8 |106.4 |126.6 |120.7 |130.6 |

e. Direct federal grants and contracts (in millions, one decimal place)

|1997-98 |1998-99 |1999-2000 |2000-01 |2001-02 |2002-03 |2003-2004 |2004-2005 |

|27.7 |30.6 |34.2 |40.0 |49.5 |46.5 |61.8 |64.9 |

ER-1. The LCME must be notified of any substantial change in the number of students enrolled or in the resources of the institution, including the faculty, physical facilities or the budget.

Committee Response: The LCME has been notified of the increase in the medical school enrollment from 96 per class to 120 per class. There have been no significant decrements in the financial resources of the medical school, and all sources have had steady and consistent growth. New physical resources have been planned for the Centers for Advanced Healthcare in the north and south campus and have been discussed in Committee 8.

ER-2. The present and anticipated financial resources of a medical school must be adequate to sustain a sound program of medical education and to accomplish other institutional goals.

The costs of conducting an accredited program leading to the MD degree should be supported from diverse sources, such as income from tuition, endowments, earnings by the faculty, support from the parent university, annual gifts, grants from organizations and individuals, and appropriations by government. Evidence for compliance with this standard will include documentation of adequate financial reserves to maintain the educational program in the event of unexpected revenue losses, and demonstration of effective fiscal management of the medical school budget.

Committee Response: The present financial resources are diversified and growing and are sufficient to support a medical education program and provide support for the other missions as well.  The faculty practice plan represents 40% of the total support for the Medical School for FY 2004-2005, which has declined over the years as the research base and indirect cost earnings increase.  Gifts and endowment support continues to have modest increases, the support from affiliated hospitals has remained consistent, and the growth of research support and indirects, both from NIH and Clinical Trials, have increased to 26%.  Appropriated funds and tuition funds contribute 14% of the total budget. Revenue from all sources continues to be projected in a positive direction and projections for the next five years show a continued growth in the practice plan and research revenues, and stabile state and hospital support.

|Source of Revenue |

|USF College of Medicine FY 2005 – 2006 |

|Total Sources : $316.3 Million |

|Twilin and Gout Appropriation |$ 44.3 |14.0% |

|Grants and Contracts | 65.0 | 20.6 |

|Indirect – Facilities and Administrative | 15.0 |4.7 |

|Practice Plan |130.6 | 41.2 |

|Gifts and Endowments | 8.2 |2.6 |

|Hospital and Residency Support | 41.6 | 13.2 |

|Other (CME and Aux) | 11.6 |3.7 |

| | | |

|TOTALS |316.3 |100% |

The revenue sources of USF medical school continues to grow and reliance on the practice plan finances continues to diminish as grants and contracts and hospital support grow. These funds are more than adequate to maintain the educational component of the faculty work load.

Reserves are maintained by both the practice plan and USFPG. The practice plan has a department-wide policy to maintain at least a two-month operating reserve, and Florida mandates maintenance of a 4% reserve. Both policies are adhered to by the College of Medicine and reserves are adequate.

A third reserve will be required as the bond payments become due. This will be maintained by the USF Property and Finance Corporations as required by the terms of the Letter of Credit, underwriters, and bond raters.

ER-3. Pressure for institutional self-financing must not compromise the educational mission of the medical school nor cause it to enroll more students than its total resources can accommodate.

Reliance on student tuition should not be so great that the quality of the program is compromised by the need to enroll or retain inappropriate numbers of students or students whose qualifications are substandard.

Committee Response: Tuition collections is a minor source of the total sources of support for the medical school (3%). Tuition has increased to the medical student at a rate of approximately 3-5% per year for the past five years; however, the tuition rates remain commensurate with the other SUS Florida medical schools and are at the 50th percentile for all U.S. medical schools.

In planning for the financing of the Centers for Advanced Healthcare, new revenue streams from the Ambulatory Surgical Centers and offsetting lease payments were considered for repayment of bond debt. No state resources or tuition collections will be used for the repayment of the debt. In the business planning of the centers, new operating room facility fees will be collected and new areas of clinical operations have been pursued to generate sufficient funds for the project.

Strong state support, over $18-million is provided to the clinical science faculty to provide release time for medical student teaching and scholarly activities and has been solidified in the AIMS project. Minimum standards have been developed for all missions (see attached AIMS documents) and pay-for-performance standards have been developed for all three missions.

Recommendations, Possible Solutions and Strategies

• Indirect rebate returns to the College of Medicine remain low and need to be increased. Appointment of the new vice dean, Dr. Abdul Rao and his research requirements for faculty members as well as influx of funded faculty will enhance this argument.

• New state medical schools may increase the support for current medical schools.

This is a moving target dependent on state appropriations in the future. We see that USF will receive continued support and enhanced funding because of our important role in Central West Florida.

• Reliance on practice-plan earnings continue to decline and will need to stay in the practice to support the bond payments

• True teaching-hospital support to provide resources for the educational and research missions.

Significant advances have occurred in this area over the past year, in particular with Tampa General Hospital, our major teaching hospital affiliate. However, the practice plan, administration, and affiliates must continue to share the expense associated with the educational initiative.

• Using new affiliates and expanding new residencies to provide community needed healthcare.

• Marketing strategies as a result of potential increased private practices.

• Continued support for the development/fundraising campaign to enable USF Health to become

nationally prominent.

Issues of Concern Relevant to Other Committees

None.

Attachments

Attachment 1 – AIMS Council.

Attachment 2 – College-Wide Effort minimums (15%)

Attachment 3 – Working Template for Basic Science and clinical Departments

Attachment 4 – Vice Deans (education, research, clinical affairs) Contributions to

Minimums

Attachment 5 – Vice Dean for Clinical Affairs Performance Criteria

Narrative of Process

The committee was comprised of faculty from basic sciences and clinical departments, senior administrator from the COM, and practice plan executive director. The LCME Self-Study Coordinator as well as the vice dean were present at a number of meetings. Self-study packets were distributed to everyone containing the last LCME report, as well as the ACGME Medical School Finances report. Internal data consisted of practice-plan benchmarks, and business plans for both the Center for Advanced HealthCare and the South Campus Clinical building. Two key presentations were given by Joann Strobbe concerning AAMC benchmarks for public medical schools and a detailed practice plan evaluation by Joe Jackson.

The committee met bimonthly for several months focusing first on areas of strengths, concerns and challenges attempting to critically balance the pressures of clinical practice and education of the medical students. There was universal agreement that the COM was financially capable of sustaining faculty and resources to train a medical school class size of 120. However, the committee felt that any further increase in class size that was approved by the LCME would require substantial capital and resources. Hopefully the clinical revenue and facility fees from the Center for Advanced Healthcare and the South Campus Tower at Tampa General Hospital will provide adequate capital beginning 2008-2009 for potential increases in class size.

Described as both a strength and a weakness were our discussions about less reliance of the educational mission on the practice plan and the need for a funding stream for core facilities. Because of the diverse backgrounds of the committee members, we were able to openly discuss and financially reconcile key barriers and successes relating to faculty recruiting and the educational mission. Both basic scientists and clinicians voiced unanimous approval for national benchmarks. Thus data was collected from national benchmarks for revenue sources of public medical schools, faculty practice-plan work relative value units and other practice plan benchmarks. We ultimately assigned segments of the database to each committee member and had discussions about people’s findings. The text was edited by the chair and redistributed for final approval.

Database Accuracy

Database section included the required LCME database elements. The committee reviewed the sections appropriate to our deliberations. The accuracy of the databases was confirmed through committee discussions.

Committee Membership

Charles Paidas, MD, MBA, Self-Study Committee Chair

Professor, Surgery & Pediatrics

Chief, Pediatric Surgery

Faculty Council

Charles Brock, MD

Assistant Professor, Neurology

Faculty Council Treasurer

John Dietz, PhD

Professor, Molecular Pharmacology & Physiology

Charles M. Edwards, MD, MBA

Assistant Professor & Associate Program Director, Internal Medicine

Harvey Greenberg, MD, MBA

Associate Professor & Associate Chair, Interdisciplinary Oncology

Richard Heller, PhD

Professor, Molecular Medicine

Co-director, Center for Molecular Delivery

Richard Karl, MD

Richard G. Connar Professor & Chairman, Surgery

Director, Division of Surgical Oncology

Michael T. Parsons, MD, MBA

Professor, Obstetrics & Gynecology

Associate Vice President, Clinical Quality Improvement, USF Health

Joseph M. Jackson, MBA, Administrative Liaison

Executive Director, USF Physicians Group

Joann Strobbe, MEd, Administrative Liaison

Chief Financial Officer & Associate Vice President, Finance, Administration & Technology

USF Health

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