B

1
Faculty Town Hall Meeting April 2002
2
Retreat Roadmap Day One
Research
Education
Compensation

• Overall Strategy Goals

Recipe for Success
Action Agenda
Clinical
Accountability
Service/ Admin.

• The retreat took place over 1 ½ days
• 200 pages of materials presented
• 90 participants on Day 1
• 30 participants on Day 2

Complete Retreat materials will soon be available
on the Prime 2005 website at http//njms.umdnj.e
du/prime2005/
3
PRIME 2005 Retreat Goals
The Leadership Retreat Accomplished 4 Major Goals

• Understand what is required to be successful as
  an enterprise and to achieve sustainable results
  in each mission
• Understand the interdependent funds flow of NJMS,
  UPA, University Hospital and UMDNJ
• Financial
• Productivity
• Commit to a new management model
• Identify, prioritize and begin implementation of
  mission related initiatives

4
PRIME 2005 Project Structure
This begins a long term process that typically
takes from 2-3 years to fully implement

• Test calibrate productivity measures
• Run shadow reports in pilot departments
• Develop required information systems

• Continue to test and revise measures as necessary
• Implement new budgeting system
• Expand shadow reports to additional departments

• Review allocations of all school wide resources
• Refine budget process, and measures

• Develop productivity measures
• Design financial and productivity reports
• Design reporting systems
• Implement new accountability structure

Prime 2005 is now in Test Phase
5
PRIME 2005 Approach to Data and Accuracy
100
Perfect accuracy
Strive to get here!
Accuracy
Time
There is no such thing as perfect data. Data is
useful to provide us with a direction for change.
6
PRIME 2005 Estimated Investment Needs

• Cancer Center of Excellence 22M
• Infrastructure Improvements 9M
• Infectious Diseases Center of Excellence 1M
• Trauma Center of Excellence 6-8M
• Cardiology Research and Center of
  Excellence 10-13M
• Neurosciences Center of Excellence 3M
• Cardiovascular Research Institute 8M
• Emerging Re-Emerging Pathogens 9M
• New Faculty Commitments 12M
• Top 30 Research Program 200-300M
• Prior Research Commitments 4M
• Debt Service Capital 25M
• Equipment Commitments 1M

Grand Total 300 400M over next 5 years
New Faculty Neuroscience, Preventive
Medicine, Assoc. Dean Research, Assoc. Dean
Education, Medicine, etc Prior Research
Commitments Biochemistry, Microbiology,
Pharmacology, Neurosciences
7
Finance Revenues Expenses- FY01
In FY01, NJMS had a net loss of 10.6M,
resulting in a decrease in reserves
Revenue State Approp.,Student Fees and
Tuition Indirect Recovery Housestaff
Support Extramural Research Funding Other
Restricted Revenues UPA Collections UPA Other
Credits Revenue Transfers Univ Hospital
Support Total Revenue Expense Faculty
Salaries Staff Salaries, Other Payroll
Related Housestaff Expense Supplies, Service
Maintenance Overhead Expenses UPA Expenses, Rent,
Malpractice UPA Dean/Dept Expenses Total
Expense Net Loss (Drawn from Reserves)
41.7 3.4 19.5 49.0 22.2
50.7 8.3 33.0 227.8 M 89.3 48.2 20.4 23
.0 15.2 14.1 28.2 238.4 M 10.6 M

• Similar statements were developed for each
  Department
• Transfers from the Deans office to each Dept
  were identified

8
Finance Transfers
Transfers are based on many things. In the
future, more specific criteria will be developed
to justify transfer amounts to each department
Transferable Revenues to Deans Office State
Appropriations Student Fees and Tuition Other
Restricted Revenue UH Physician Support Revenue
Transfer UH Other Support Revenue
Transfer Total Transferred to Departments State
Appropriations Student Fees and
Tuition Restricted Overhead Recovery CARP
Transfer UH Physician Support UH Other
Support State Budget Revenue Surplus
Transfer Total Transferred Used in Deans Office
29.6 11.8 6.1 28.5 4.5 80.5 M

• Specific amounts transferred to each Dept based
  on many factors
• Historical artifact
• Specific agreement
• Payment for specific services

23.4 9.3 3.3 0.5 28.4 1.8 4.5 71.2
M 9.3 M
DRAFTWork in Process
Source Physician Guarantee Payments are not
included, because departments transfer funds to
Deans Office first
9
Finance Transfers to Departments per Faculty
Total Transfers (M)
Surgery Orthopaedics Ophthalmology Family
Medicine Physical Medicine OB/GYN Pathology Neuros
urgery Anatomy Preventive Med Medicine Pediatrics
Radiology Neurosciences Anesthesiology Psychiatry
Microbiology Biochemistry Pharma Physio
8.6 2.7 2.1 1.2 1.2 3.6 4.2 1.2 2.7 1.6
10.5 5.4 3.6 2.3 2.8 3.7 1.9 1.2 2.5
DRAFTWork in Process
Note CARP (0.5M) and UPA Deans Guarantees
(1.2M) excluded for display
10
Finance Deans Account Reserve Trends
Cash reserves in the Deans UPA Reserve account
have been steadily declining since 1998.
Total Reserves (Deans UPA)FY98 - FY02 ( MM)
Total Expenditures (Deans UPA)FY98 - FY02 ( MM)

• Deans reserves used for many purposes,
  including
• Strategic investments in new programs
• Operational support of existing
  programs/departments
• Faculty recruitment packages

DRAFTWork in Process
2002 is a partial year
11
Finance Reserves by Department FY 01
(In Thousands of Dollars)
196 1,410 1,627 114 5,531 593 1,490 743 4
79 856 1,681 1,092 (526) 1,237 224 257 (32
2) 2,535 1,172 (10)
Anatomy Anesthesiology Biochemistry Family
Medicine Medicine Microbiology Neurosciences Neuro
surgery OB/GYN Ophthalmology Orthopaedics Patholog
y Pediatrics Pharma Physio Physical
Medicine Preventive Medicine Psychiatry Radiology
Surgery Office of the Dean
Total Reserves 20.5M
DRAFTWork in Process
12
Reported Effort for Basic Science Faculty
( Faculty)
Anatomy (22) Biochemistry (16) Microbiology
(24) Pharm. and Phys. (34) Preventive Medicine
(13) Basic Science Total (96)
DRAFTWork in Process
Source Based on 07/2001 NJMS faculty survey
responses.
13
Reported Effort for Clinical Faculty
( Faculty)
Anesthesiology (30) Family Medicine (8) Medicine
(96) Neurosciences (24) Neurosurgery (7) OB/GYN
(25) Ophthalmology (14) Orthopaedics
(17) Pathology (30) Pediatrics (49) Physical
Medicine (8) Psychiatry (45) Radiology
(36) Surgery (50) Clinical Total (452)
DRAFTWork in Process
Source Based on 07/2001 NJMS faculty survey
responses.
14
Finance Summary of Results
Preliminary
Faculty Effort
Total Expense Distribution
Admin/Service 8
Admin/Service 15
FY01
Research 27
Clinical 36
Clinical 34
Research 30
Education 26
Education 24
DRAFTWork in Process
These balances are directly affected by Faculty
Effort and assumptions discussed earlier.
15
Measures Compensation Guidelines

• Overall productivity should be reflected in
  compensation and reward highly productive
  behavior
• Examples of Issues Related to Productivity and
  Compensation
• Institution Infrastructure
• Current Contractual Agreements with Faculty
• Identification of Funding Sources and Funds Flow

The actual metrics are described on the Prime
2005 website at http//njms.umdnj.edu/prime2005/
16
Measures Team Results Summary

• Clinical Measures
• Work RVUs (Relative Value Units) serve as primary
  metric
• NJMS and Hospital will use quality or Q factors
  to encourage implementation of clinical strategic
  initiatives by faculty
• Clinical RVU targets come from national
  benchmarks for specialty
• Non-RVU services will use different metrics
• Research Measures
• Both funded and scholarship activities measured
• Funded metrics based on extramural dollars
  brought into the institution
• Scholarship metrics based on points for different
  scholarly activities
• Education Measures
• Measures based on points for different
  educational activities
• Q factors will encourage and reward outstanding
  education efforts
• Service / Administration
• Faculty are expected to do a certain level of
  service / administration
• Faculty with over 5-10 effort in
  Service/Administration need clear expectations to
  measure performance against

REMEMBER All measures will be reviewed and
modified over the coming year
17
Methodology Example
Full-Time Targets Clinical MGMA Benchmark
13,000 RVUs Education 2,300 points Research
(Funded) 750,000 points Research
(Scholarship) 3,000 points Admin/ Srvc
TBD
Actual Performance Clinical 8,500 RVUs
Education 460 points Research (Funded) 50,000
points Research (Scholarship) 400 points Admin/
Srvc TBD
Effort Allocation Clinical 60 Education
25 Research 15 Admin/Srvc 0
Calculations
Education Adjusted Points actual
points/effort 460 points /25 1,840
points 80 of Target (2,300 Points)
Research (Funded) Adjusted Points actual
points/effort 50K/15 333K points 44
of Target (750K Points)
Clinical Adjusted RVUS actual RVUs/effort
8,500 RVUs /60 14,166 RVUs 109 of Target
(13,000 RVUs)
Research (Scholarship) Adjusted Points
actual points/effort 400/15 2,667
points 89 of Target (3,000 Points)
Clinical Productivity
Education Summary
Research Summary
Funded
Scholarship
109 of target
89 of target
80 of target
44 of target
NOTE Targets indicated above are not final and
are indicated only for the purpose of discussion
18
Research NJMS Funding Comparison
As shown here, other programs such as Oregon
Health Science have successfully grown their
research programs. NJMSs research has also
grown substantially since 1988.
NIH Rank
Source NIH total of direct and indirect costs.
19
Research Productivity Comparisons
To reach Oregon levels, NJMS will need to add
additional research space
NIH Grant / Square Foot
NIH Grant /Square Foot
Clinical Space
B.S. Space
FY 2000 (000s)
NJMS Oregon Health Science University of Kentucky

• 52,490
• 140,537
• 70,647

• 52,152
• 35,463
• 43,453

• 222
• 230
• 261

• 450
• 1,070
• 397

. . . . increase number of Faculty, and increase
overall productivity.
NIH Grant / B.S. Faculty
NIH Grant /Clinical Faculty
Clinical Faculty
B.S. Faculty
FY 2000 (000s)
NJMS Oregon Health Science University of Kentucky
79 144 119
518 765 475

• 145K
• 225K
• 300K

• 46K
• 50K
• 70K

Source AAMC IPS FY99 and NIH grants
information FY00 2000-2001
Liaison Committee on Medical Education
Questionnaire. CSC Analysis
20
Research NIH Ranking By Specialty
NIH Department Rank
Funding (,000)
National Total
NIH Percentile Rank
NJMS
OB/Gyn Ophthalmology Surgery Psychiatry Pediatrics
Medicine Pathology PMR Radiology Anesthesiology
Family Practice Neurology Orthopedics Neurosurgery
Other Basic Science Misc Research Biochemistry
Microbiology Pharmacology Anatomy Public Health
20 32 47 47 53 66 69 14 56 40 0 0 0 0 8 18 56 54
59 77 51
77 69 89 85 91 110 98 18 65 45 - - - - 48 44 104
99 101 87 53
2,188 1,198 1,523 2,757 1,845 7,458 1,003 166 247
192 0 0 0 0 5,172 808 3,029 3,228 2,597 592 107
NIH 50th Percentile
DRAFTWork in Process
1 Grouped according to NIH specialty
classification. Funding total includes both
direct and indirect research grants. 2 Based on
NIH classifications, not NJMS Faculty
appointments.
21
Research Goals
To achieve a rank of 30 in six years, NJMS will
need to grow NIH funding by 30 per year.
6 Year NIH Funding Requirements To Reach 30 on
NIH Ranking
Additional NIH grant revenue required to reach
30 in 6 yrs 30 growth / year 127M new NIH /
Year
Current Top 3010/Yr
NIH Funding per Year
Current Growth Rate 13/Yr
Source NIH Website total of direct and
indirect costs CSC Healthcare analysis.
22
Achieving the Goal May be Possible
What Would It Take During 6-Years to Reach 30
on NIH?
80M 15M 140M 235M

• Recruitment packages for 500 faculty
• Recurring salary support (8M/yr in yr-6)
• New research space 280,000 ft2
• Total 6-year research investment to reach 30

(over 30 years)
8M / yr 13M / yr 15M / yr 15M / yr 15M / yr
Yearly Investment in Faculty Support SOURCE
Improved NJMS Reserves Recruiting Costs (80M /
6yr) Capital Investments (140M
mortgage) SOURCE Development (300M
Endowment) Indirect Recovery (10 effective)
Faculty
Dean
Source CSC Analysis
23
Requirements for Growing Research at NJMS
Reaching 30 on NIH will require highly
productive faculty plus new faculty and space

• Increase the productivity of existing faculty,
  both in the context of their currently declared
  percentage research effort and by increasing that
  percentage of effort dedicated to research.
• Put greater emphasis on developing higher yield
  clinical and translational research programs for
  NIH funding.
• Develop more large grant funding through program
  projects in the basic sciences.
• Increase faculty salaries on grants, freeing up
  existing appropriations for new faculty.
• Recruit substantial numbers of new faculty with
  research as a primary mission.

24
Research Infrastructure Issues
there are also numerous infrastructure issues
to be addressed in the near future.

• Complexity of IRB produces backlogs
• Bureaucracy of Purchasing Department
• Develop simple rapid direct order system for
  small purchases lt2,500
• Purchases are often delayed in the Purchasing
  Dept
• Support from IST to prioritize requests for
  research system development
• Reporting and tracking research accounting in
  BANNER
• Need for extensive laboratory renovations
  maintenance
• Lack of affordable housing for students,
  post-docs and faculty

25
Education Undergraduate Conclusions

• Increase matriculants to accepted ratio (45).
• The quality of undergraduate medical education as
  measured by USMLE Step Pass rates remains
  relatively high.
• Total state support to NJMS is relatively low as
  compared to other schools, but NJMS has limited
  ability to compensate for low state support
  through a tuition increase.
• NJMS has identified a need to improve the overall
  curriculum based on student and faculty feedback
• NJMS needs to ensure full compliance with LCME
  ACGME
• Establish student housing and housing office
• Achieve minimum of 85 board pass rates

26
RVU Productivity as of MGMA Median
Faculty above Median ()
MGMA Median
DRAFTWork in Process
Off-UPA charges were not available, if they had
been, overall productivity would have increased.
PERCENT OF MGMA MEDIAN
Source UPA FY01 Data, and MGMA 2001 based on
2000 data MGMA Medical Group Management
Association. Note Anesthesiology based on
charges, normalized to market rates
27
Clinical Productivity Opportunity
Achieving the higher level of productivity may
require infrastructure improvements at DOC, Univ
Hospital and UPA. This also assumes that the
patients are available in the community.
14.4M

• Total opportunityof 20M with existing clinical
  faculty
• UH would benefit from this increase as well

6.1M
38.3M
UPA Collections (MM)
Note If gross collection rates increase by 1,
collections increase by 2M.
DRAFTWork in Process
NOTE Opportunity models assume current
collection and billing ratios remain. Source
UPA FY01 Data, and MGMA 2001 based on 2000 data
MGMA Medical Group Management Assoc.
28
Clinical Conclusions

• Improvements in collection rates (often driven by
  better front-end data) and a more efficiently run
  DOC will enable increased collections and
  improved faculty productivity
• Analysis of clinical productivity indicates room
  for improvement, in the range of 6 to 20
  million to NJMS and additional downstream revenue
  to Univ Hospital
• Continue focus on improving overall clinical
  infrastructure at NJMS, Univ Hospital and UPA

29
AAMC Specialty Compensation Benchmark

• 2001 AAMC benchmarks were used to compare NJMS
  Faculty salaries against other Medical Schools
• NJMS Faculty Salaries compared to
• Albert Einstein COM
• Columbia
• Cornell
• Jefferson Med Coll.
• Johns Hopkins
• Mount Sinai
• NY Medical College

• NYU
• SUNY-Brooklyn
• SUNY-Stony Brook
• Temple
• Univ Maryland
• Univ Massachusetts
• Univ Pennsylvania

Source AAMC
30
Productivity/Comp Scenarios
31
Clinical Productivity/Salary Analysis
6
25
Benchmark for Specialty
Clinical Productivity as Percent of MGMA RVU
30
39
Salary as Percent of AAMC Benchmark for Specialty
DRAFTWork in Process
NOTE Clinical Productivity calculated using MGMA
50-tile., Salary Benchmark calculated using AAMC
50-tile. Source UPA, MGMA, AAMC
32
Links Between Comp Measures

• The Dean is responsible for directing State,
  UMDNJ and Hospital funds to Departments based on
  the Measures (at Dept Level)
• The Chairs are responsible for managing the
  linkages at the individual faculty level (within
  constraints of AAUP and UPA agreements)

Funding Source
Measures

• Total Clinical (RVUs, etc)
• Clinical RVUs for Hospital Patients
• Research Funding Points
• Research Scholarship Points
• Education Points
• Clinical Administration (identified by Univ Hosp)
• Service/Administration Points

UPA Distributions
Research Incentive
Univ Hospital Funds
State UMDNJ Funds
33
Deans Executive Group (DEG)
Dean
Improve Accountability at NJMS

Deans Executive Group
Mission-Based Teams
34
DEG Team Structure and Mandate

• Dept Chairs are assigned to at least one Team
• Additional members from the Faculty will be added
  where necessary
• Initial members appointed by the Dean for
  2-years future membership will be determined
  during the next year
• The Teams are not intended to replace or supplant
  existing NJMS committees mandated by the Bylaws
• The initial charge from the Deans Executive
  Group (DEG) will identify each teams mandate and
  begin to articulate the boundary between the
  various teams and with existing NJMS committee
  and councils (e.g. Curriculum Committee)
• Decision Support staff will be funded by the
  Deans office to support the DEG and NJMS
• Staff support from NJMS, UPA and Univ Hospital
  will be identified to provide analytic and
  process support

35
Prime 2005 Initial Initiatives

• Each team will be tasked with completing key NJMS
  initiatives by Deans Executive Group (DEG). The
  focus for each group will be on management vs.
  content.
• DEG responsible for holding each team accountable
  for developing a workplan and reporting progress
  made against that plan
• Where possible existing structures will be
  utilized

Clinical
Research
Education

• Ambulatory Redesign
• Standards Performance Measures
• Revenue Cycle improvements
• Capacity / Perioperative Services

• Identify key disciplines forresearch emphasis
• Infrastructure Issues

• Curriculum Develop.
• Faculty Develop.

Finance
Advancement
Facilities
IST

• Budget Process
• Reserve Policies
• NJ State Reductions
• Comp/Incentive Refinements

• DOC Space
• MSB Space

• Increase external outcomes

• NJMS IT Strategy
• Implementation of Prime 2005

36
Recipe for Success Plan To Fill the Gap

• The GAP can be filled from three areas
• Increased faculty productivity
• Enterprise-wide improvements to support improved
  faculty effectiveness
• Initiatives that focus on bringing in more cash
• Deans office efforts through development,
  strategic recruitments, etc

300-400M
Remaining Gap 30-130M
150M
35M
35M
3M
15M
20M
12M
More Research Salary on Grants
Improve Research Productivity
Improve Clinical Productivity
Reduce Admin Expense
Increase Indirects used for Growth
Expand Development Efforts
Bonds for new Research Buildings
Remaining GAP
Range of Investment Needs
DRAFTWork in Process
Source CSC Analysis
37
Key Guidelines for Prime 2005

• Chairs are a fundamental point of leverage for
  NJMS
• Formulas inform, not replace, Chairs judgment
• Chairs (and division chiefs) must be clear about
  their expectations with faculty
• Make all institutional cross-subsidies explicit
  (transparency)
• Identify and align all sources of income with
  faculty performance by mission clinical,
  academic, research, administration, etc
• Recognize and reward individual and departmental
  performance excellence
• Although formulas recognize differences between
  clinical and research or between specialties, all
  faculty evaluated against a similar level of
  performance

38
Next Steps

• Immediate Action Items
• Continue to communicate progress to Faculty
• Kickoff DEG on April 23rd, other teams will
  follow shortly
• Test and refine faculty productivity measures
• Setup support staff for implementing Prime 2005
• Consolidate existing Faculty Effort Surveys