Messages from the Executive Vice President
June 28, 2004
To: The Health Center Community
From: Peter J. Deckers, M.D.
For several years, President Austin has routinely sent letters to the University community that address many issues of significance for the institution at large. I have greatly admired these letters and believe Heath Center faculty and staff would benefit from a similar initiative to provide updates regarding challenges and opportunities of particular interest to the Health Center community. I plan to send these letters twice a year. Here is the first. As always, I invite your constructive critique.
Let me begin by reiterating a point that I have made on many occasions since assuming my current position. Like academic medical centers nationwide, we are undergoing unprecedented changes that are reshaping the very core of our educational, research and clinical enterprises. Frankly, I find most of these changes to be long overdue and appropriate, though I understand that some, while necessary, are extremely complex and stressful to the organization. Stress and aggravation need not, necessarily, be troublesome. If managed appropriately, they can be a source of great strength.
Several important changes are described on the following pages. I remain confident that our collective intelligence, determination and skill will enable us to not only prevail, but continue to thrive.
The Board of Directors started a process in late 2003 to develop a new vision statement for the Health Center. Not to be confused with an organizationís mission, a vision statement, by one definition, consists of two components: core ideology and envisioned future. In our case, the Board set their sites on the year 2020 and charged us to create a vision for what the Health Center will strive to become over the next 15 years. The Board was particularly interested in a vision that would help guide them, and us, in making programmatic decisions, especially those involving the allocation of resources, which means usually money, space and commitment to faculty and staff recruitment.
Following a highly collaborative process that sought input from many within the Health Center, the Board voted to approve the new vision statement at its June meeting with the understanding that action plans and performance metrics will be developed and presented at future meetings. The vision statement has now been posted on the Health Centerís website: http://www.uchc.edu/about/mission.html and I encourage you to spend a few minutes to consider its content.
Financial Results and Outlook
On the operating budget side, the Board of Directors approved the Health Centerís proposed $595 million operating budget at their June 14th meeting. The approved operating budget provides for expenditure increases that are 6.4% over FY04. The good news is that the Health Center is on target toward meeting its FY04 budget projections and is expected to end FY04 with a very small net gain. This result is largely due to the increased profitability of the clinical operation as evidenced by the turn-around of a $6.5 million FY02 loss in UConn Medical Group to a breakeven status in FY04, and a positive gain in the overall clinical operations of approximately $2.4 million for FY04. In addition, and happily, total Health Center academic (research and education) awards are $1.7 million ahead of last year, through May.
ďRemarkable Care through Research and EducationĒ continues to be the common thread within the proposed Fiscal Year 2005 Budget. The budget reflects increasing investment in the established Research Strategic Plans and Signature Programs along with continued growth in the clinical enterprise. However, due to reductions in State Appropriations, the FY 2005 budget will present significant challenges. This budget relies upon the continued growth in research revenue and clinical volume, and no further cuts in State Appropriations. But that said, the day after we had this FY 05 budget approved by the Trustees, we learned that the fringe benefit rate for employees in the state retirement plan had been increased. This move had a $2 million negative impact on our FY 05 bottom line, over and above what will be considered below. The original budget included investments for the following items:
- Contractual Salary and Fringe Benefit increases due our union employees averaging 3.5% = an $8.5 million increase.
- Other managerial and administrative Salary and Fringe Benefit increases of $2.7 million.
- Continued commitment to the Research Strategic Plan of $2.6 million.
- New investment of $1.5 million in our Signature Programs.
- Increased expenses for external influences such as internal audit expansion, corporate compliance, research compliance, HIPAA, Standard Wage Act, and Core CT.
- Increased expense for the expected growth in research awards and clinical volume.
- Increase investment for Information Technology across all domains and for Campus planning needs.
- The impact of acquiring and outfitting the Munson Road property.
- The impact of opening the Farmington Surgery Center.
The challenge we face is to continue to manage the organization in an ever-changing environment. In addition to possible changes in Medicare and Medicaid reimbursements and in our state appropriation, we must contend with regulatory pressures that include compliance and HIPAA, potentially volatile clinical market conditions and continued fluctuations in the economy. We will continue to monitor our monthly financial results and make appropriate adjustments to ensure that the Health Center meets it budgeted goals.
The day after commencement in May, the Health Center formally recognized the tremendous support that Pat and Jim Calhoun have given to our Cardiology program over the years. More than 200 friends, family members and associates of the Calhouns joined us to celebrate and acknowledge this important milestone. Under the direction of Bruce Liang, M.D., the newly named Pat and Jim Calhoun Cardiology Center is now actively implementing a unique business plan that was approved by the Board earlier this year. The plan identifies the centerís growth strategies and features a comprehensive set of performance metrics through which the centerís progress will be measured.
Not to be outdone, Carolyn Runowicz, M.D., the new Director of the Cancer Signature Program, presented this programís business plan to the Board at its June meeting. It was accepted enthusiastically. She will now begin to implement the plan, which calls for our cancer program to gain National Cancer Institute designation within ten years Ė a prestigious and highly challenging goal, to say the least!! The national search for our Musculoskeletal Program leader is progressing under the watchful eye of Interim Director Larry Raisz, M.D. We expect to meet with top candidates beginning this summer and concomitantly develop similar inventories, metrics and business plans for this important area of research and clinical care.
Patient Safety System
Following years of preparation and planning, the first phases of the Health Centerís computer- based Patient Safety System went live on June 14, ushering in a new era of clinical care. With the introduction of each system component we will gain efficiencies and reduce errors Ė helping us to achieve new levels of patient safety and quality improvement. The first phase went live throughout John Dempsey Hospital; additional hospital-based automations will be implemented in the months ahead, and our outpatient practices will convert in 2005.
Also deserving mention is the enormous and critical job of user training. A small army of trainers and super users are moving mountains as over 1,600 employees complete training through large group, classroom and web based activities. I thank everyone in Information Technology and our clinical enterprise who is contributing to this Herculean task.
Collaborative Center for Clinical Care Improvement
Our ability to improve patient safety and clinical quality does not end with the phasing in of our patient safety system. I believe we must take a completely fresh approach to the way we organize ourselves to stay on top of these issues. To that end, we are forming the Collaborative Center for Clinical Care Improvement (4CI). The Center will develop and implement policies, practices and standards as well as develop research and educational strategies to improve patient safety and quality, with emphasis on four areas: medication management, pain control, nosocomial infections, and patient falls.
Reporting to Steve Strongwater, M.D., Director of Clinical Operations, the 4CI will formalize our approaches to improving patient safety and clinical quality, and aim to accelerate the pace of change through broad adoption of the very best in evidenced based, highest quality medicine. It will also serve as a learning laboratory, with the goal of making available to others the knowledge we gain through the centerís activities. It will initially operate as virtual center, but will aggressively seek external support via grants and gifts to eventually become self sustaining and managed by dedicated staff. I can think of no other initiative that promises to do more to enhance our clinical product and build patient confidence over the next decade than the establishment of this center.
Health Science Education
Twenty members of the faculty are working together with a leadership team from our IT department to develop a strategic plan to promote the expanded use of e-learning systems in our Schools of Medicine, Dental Medicine and Graduate Biomedical Sciences. The plan is expected to include upgrades to classroom technology, an enhanced student portal, upgrades to the e-learning platform and the creation of new online courses.
While experts from around the country agree that higher education needs to move quickly towards enhanced e-learning, they also acknowledge that there are some significant resource barriers to achieving this goal. We are therefore planning to work with a consortium of medical schools that includes NYU, Johns Hopkins and Tufts to collaborate on these initiatives.
The uniqueness and quality of our schoolsí curricula have been a source of pride for years. Keeping pace with the trends and technology in e-learning will help assure that our students will continue to receive a highly valued and relevant educational product in the years ahead.
Public Health Initiative
Earlier this year President Austin announced the formation of the University of Connecticut Center for Public Health and Health Policy, an effort to significantly augment the university's commitment to its public health mission. The center will integrate and consolidate resources across campuses, provide key additional resources, and establish, in collaboration with recognized academic departments, doctoral training programs that support initiatives designed to expand our research opportunities in selected areas of public health. The center will also expand university partnerships with the State Department of Public Health and local health agencies throughout Connecticut to enhance public health practice and support workforce development.
Forming the center allows us to better coordinate and capitalize on our existing strengths in public health-related education and research. It is led by co-directors Eileen Storey, M.D., M.P.H., Associate Professor of Medicine, and Ann Ferris, Ph.D., R.D., Professor of Nutritional Sciences, and is organized as an inter-campus, interdepartmental center reporting to me and Janet Greger, Ph.D., Dean of the Graduate School and Vice Provost for Research and Graduate Education. The co-directors convened a strategic planning team earlier this month and formed five task forces that are working to operationalize this initiative.
Research Services Enhancement Working Group (RSEWG)
In September, 2003, the Health Center selected PricewaterhouseCoopers to lead a working group composed of 36 faculty and senior administrators in an examination of our research enterprise and compare our performance to best practices in research and research administration at peer institutions. The goals of this engagement were:
1. To engage the research community as partners to address their concerns regarding all aspects of support services and operations as they relate to the research domain.
2. To use this forum as a means of developing new operational efficiencies and improvements throughout the research domain.
The RSEWG is charged with thoroughly studying the entire research enterprise and developing an economic model that identifies possible inefficiencies and eliminates redundant costs. Its objectives include challenging current entitlements, improving throughput and eliminating roadblocks, enabling us to position our research enterprise as a model for faculty/administration collaborative effort.
Over the course of 10 months, PwC conducted a series of information workshops in which the working group participated. This work also included two subcommittees: one on Health Center Research Advisory Committee (HCRAC)/Core Facilities and one on Research Administration charged with examining issues and challenges specific to these areas and making recommendations for performance improvement. Both the PwC and subcommittee final recommendations are due by the end of June 2004. As a result, further significant changes should be expected. This will result in improved operational and financial performance for the research enterprise and shared accountability for performance management. I thank all the participants for their time and efforts.
The Center for Biostatistics
As our research enterprise continues to grow we find ourselves faced with the need for increased professional services and teaching from biostatisticians in a number of areas, particularly clinical research support and clinical research education. Currently we do not have enough appropriately trained personnel with the expertise needed to meet the requirements of the Health Centerís most innovative and promising translational and clinical research programs.
Looking beyond our existing situation, we proposed a Type II center that would offer a reasonable and promising approach for re-organization of biostatistical activities within the Health Center. The proposed structure would combine the existing GCRC Biostatistics Core and HCRAC Biostatistics Facility with newly hired post-doctoral fellows and staff. Center faculty and post-doctoral fellows would have appointments in those departments that are most compatible with their own research interests and their commitments to institutional research initiatives, center programs, or other funded research projects. The center would be expected to recoup the costs of biostatistical services whenever possible and to use those funds to cover future operating expenses. Funding would be provided by the Office of the Executive Vice President, the GCRC, and HCRAC, and the center director would report to the Dean of the School of Medicine through the Associate Dean for Research and Planning. This proposal was approved unanimously on June 14th by the Deans Advisory Committee (DAC) of the School of Medicine and the center now exists.
As evidenced by the programs described above, our mission as an academic medical center leads us to have exceptionally diverse interests and responsibilities as a workforce. That said, I can always count on one topic to hold nearly universal appeal: COMPENSATION!
Like nearly every other area of our operations, we have sought to achieve increased productivity of our faculty and managerial employees. In the case of faculty, we have significantly increased productivity in many ways including clinical and research incentive and academic merit compensation. The development of such plans was mandated by the Board of Directors as part of the Health Centerís financial turnaround plan of 2000. In the case of managerial employees we have continued our practice of merit increases tied to performance evaluation and imposed a salary freeze (excluding promotions and equity) in two of the last five fiscal years. We believe a more accurate picture of the results of those efforts is evidenced in the trends for faculty and managerial FTE and salary growth depicted in the following charts. These charts are based on actual total earnings and projected earnings for FY04 (7/1/03 to 6/30/04) based on the first 24 (of 26 annual) pay cycles and include base 04 salary data and two research incentives (6/30/03 and 12/31/03 = $972,160) and three clinical incentive payments (FY03-Q2, Q3, Q4 and projected FY04Q1 = $1,160,466).
Click on image to enlarge.
Click on image to enlarge.
I recognize that no single snapshot can ever present a complete picture of an organization as complex and dynamic as an academic health center. FTE and salary growth are impacted almost daily as a consequence of inpatient census, outpatient volumes, research grant awardsí activity, and general fund appropriation or fringe benefit actions. But the trend is clear. Everyone in the Health Center -- faculty, managerial and union employees alike -- has been asked to achieve greater productivity. No area has been exempted, and the results are gratifying.
Faculty compensation has also been an area of particular interest for several members of our Board of Directors. They asked that we review our various faculty compensation and incentive plans and make recommendations relative to current regional and national trends in faculty compensation. They also directed us to examine the plansí effectiveness in terms of increased faculty productivity. This work was undertaken with the assistance of Computer Sciences Corporation Global Health Solutions (CSC), a firm which had conducted similar work for Albert Einstein College of Medicine, University of Pennsylvania, and Penn State Hershey.
In September 2003, CSC issued its recommendations, which included modifications to the research incentive, clinical incentive, and academic merit compensation plans. All were thoroughly discussed with multiple groups of faculty and constructive suggestions allowed further modification of these plans. CSC also suggested restructuring of the dental practice plan; and implementation of a prospective base or floor salary plan for tenured faculty who fail to meet defined and very minimal standards of productivity. All of these recommendations were reviewed with the Board or Board Subcommittees which endorsed the plan revisions and the development and prospective implementation of a base or floor salary plan for tenured faculty.
Over the next several months, a base salary compensation plan was developed in consultation with the President Austin, Health Center senior management and the chairpersons of the Board of Trustees and Board of Directors. In May, 2004, a Tenured Faculty Minimum Guaranteed Salary Policy, applicable only to faculty awarded tenure after May 12, 2004, was issued. The policy provides that the minimum guaranteed salary for faculty awarded tenure after May 12, 2004 shall be 50 % of the median Association of American Medical Colleges salary for rank and specialty. Salary in excess of this base is variable and dependent on academic, clinical and/or administrative productivity, as well as available revenue, as determined by the Chair of the relevant faculty memberís department and the Dean.
As I have said from day one, all compensation plans are dynamic. They must remain fully responsive to faculty and institutional needs and may change as reimbursement and other funding sources increase or decline. But there will be no more routine, across the board, cost of living adjustments. Everything is incentive- or merit-based. Given that, change is inevitable and refinement should be expected, not reacted to emotionally or hysterically.
Despite challenging winter weather and a wet spring, construction of the Medical Arts and Research Building (MARB) is proceeding on schedule and within budget. We expect the building will be substantially completed in January and occupied starting in February, 2005 consolidating many components of our Musculoskeletal Signature Program. We are planning to close on the Munson Road facility early this summer and then begin the task of connecting it to our telecommunications and data networks. The space plan for the facility calls for moving most, if not all, administrative functions out of the Administrative Services Building to Munson Road. The plan will be finalized during the summer and moves into the building are expected to begin this fall and continue into early 2005.
Once these two new facilities are on line, we will finally be in a position to begin the many moves that were identified as a result of our recent clinical space planning efforts. Developed after a collaborative process that included forecasting our long-term patient volumes and space needs, the plans call for moving many clinical services to create better alignments and, in many instances, more room for services that are projected to outgrow their current allocated space. As part of the overall space plan, the Administrative Services Building will be converted into ambulatory clinical space. These changes will be sequenced over several years and have been planned to avoid service lines from undergoing more than one move.
The new fiscal year also marks the beginning of 21st Century UConn. Approximately $16 million of these capital funds become available to us in 2005. As a result, several Health Center projects will get underway, including the development of a preliminary design for the new research building, renovations to the Patterson, Link and Blue Auditoria, plus multiple IT infrastructure improvements and deferred maintenance projects.
There is an old saying in show business that it takes years of hard work and dedication to become an overnight sensation. The same can be said for fundraising. Ellen Brenner and the rest of her Development team are clearly demonstrating the benefits of planning, cultivation, old-fashioned legwork and some luck. We have recently learned that many long standing initiatives to attract significant gifts to the Health Center will be closed! We have already received oral commitments regarding some and are in the final stages of completing others. While I am prevented by the donors from providing details at this point, I can say that we will take great pleasure in announcing these very major, in fact transforming, gifts as soon as it is appropriate to do so.
In FY 2001, 22.6 percent of our budget came from State support. The percentage has dropped every year since; in FY 2005 State support of our $595 million, 4,600 employee organization will total 16.1 percent. The economic reality of this diminishing support makes our philanthropic and clinical care efforts even more critical to our future. We cannot succeed in the short run without them Ė especially the latter. I am confident we will see significant gains in both areas.
InIn closing, I applaud your determination to read through these many pages. Thank you! Please join me as I look forward to the challenges ahead with great optimism and enthusiasm.