1. Benchmarking Academic Enterprise Robert Belsole M.D. Vice Dean for Clinical Affairs

2. AIMS – Clinical Criteria Every Faculty member needs a defined assignment, a portion of which is Clinical Performance Clinical faculty should justify their base and incentive pay on RVU’s (75%MGMA, academic, by specialty), net collections and a portion of hard money.

3. Academic Health Centers Most Academic Centers are changing their business culture Subsidy vs. Competition Mission based, asset managed, business intelligence models Faculty evaluated and paid on productivity in clinical, education and research arenas

4. Clinical Performance RVU’s Billings Collections # patients, clinics, days in clinic Night call Procedures Simple and Fair

5. RBRVU - RVU RVUS – units that quantify work, practice expense and malpractice costs for a physician service to establish payment Harvard School of Public Health 1988 – charged to quantify physician work product Most clinical services have a billing code and assigned RVU, 52.5% work, 43.6% expense and 3.9% malpractice $37.89 – conversion factor – Medicare Rate

6. RVU Geographical Adjustment (GPCI) Facility vs. Non Facility $37.89 – medicare payment Wk RvuPractice RvuMalpr Rvu$$$$$$$$ Office -New -31.341.130.09$97.02 Office -New -52.671.780.15$174.33 Office - Est -30.670.690.03$52.68 Lap Hernia6.263.20.93$393.76 Knee Arthro7.756.981.34$609.01 Pacemaker6.664.470.52$441.51

7. RVU Based Reward - Advantages Clean and based upon work performed Not based upon amount billed and collected Same effort treating patients in all financial classes Comparison to national benchmarks Applicable to incentive and bonus plans

8. RVU Based System - Disadvantage Teaching and research missions Clinical grants and contracts Hard salary support – state, hospital etc Ancillary Services Administrative duties Expense ratios

9. AIMS Salary Requirements - Clinical RVU – equal or exceed 75 th percentile MGMA (academic) for specialty (or equivalent) Aggregate Sum 1. net collections 2. E&G allocations 3. Professional Service Contracts 4. Clinical Research Revenue 5. Consultations, CPE and Other

10. RVU Threshold for patient care activities Aggregate $um>>>>base salary + benefits +malpractice insurance (after group and department expenses)

11. AIMS Salary Requirements - Clinical RVU Bashing MGMA Bashing USFPG Bashing – billing and collecting State Appropriation Bashing – historical accident in distribution DSR ….Practice Plan Bashing Dean’s Tax Bashing Department Expense Bashing Division Expense Bashing – too high and paid with after tax dollars!

12. Taxation Revenue$100,000$100,00 /////////////// //// ////////////// //// Dean 7.0%$7,000$5,250 UMSA 18.0%$18,000$13,500 Department 10.0%$7,500$5,625 Division $25000$25,000 /////////////// /// Expense$57,500$49,375 Faculty Support$42,500$50,625

13. Key Points – Clinical AIMS FTE ASSIGMENT – unclear, 417 clinical faculty, ? FTE’s GROUP MISSION PHYSICIAN EXPECTATIONS COM EXPECTATIONS CONTROL YOUR OWN SHOP AFTER TAX DOLLARS STATE OF EXPENSES

14. UMSA Expense Summary ( YTD March 31, 2006) $78.25 million (68.7%) – Pt Service Revenue (PSR, fee for service) $35.64 million (31.3%) – non PSR $113.88 million (100%) – Total Revenue $111.01 million – Overheads and Expenses* 51.4% Non Faculty ($58.5 million) 48.6% Faculty ($55.3 million) Does not include state money such as E&G rate used in MSSC and UMSA activities

15. Clinical Practice RVU Analyses 2,155, 686 – Global RVU’s 1,161,082(54%) – Work RVU’s 994,604 (46%)– Practice Expense RVU’s

16. Total Revenue Analyses $113.88 million - Total Revenue $78.25 million – PSR $15.27 million – Contract Revenue $7.93 million – DIO/HLM Contract Rev $4.08 million – DSR Grant Revenue $4.47 million – “Other” Income $3.35 million – Misc. donations etc $535,589 – Capitation/Consultation

17. Total Revenue Analyses $113.88 million - Total Revenue $78.25 million – PSR $15.27 million – Contract Revenue $7.93 million – DIO/HLM Contract Rev $4.08 million – DSR Grant Revenue $4.47 million – “Other” Income $3.35 million – Misc. donations etc $535,589 – Capitation/Consultation

18. Total Revenue Analyses $78.25 million – PSR $4.08 million – DSR Grant Revenue $535,589 – Capitation/Consultation $82.87 million Adjusted Patient Service Revenue 994,604 (46%)– Practice Expense RVU’s $38.23 million – allocated expenses (-$20.31 million) 1,161,082(54%) – Work RVU’s $44.63 million – faculty expenses (-$10.72 million)

19. Revenue_RVU Analyses $82.87 million Adjusted PSR 2,155,686 global rvu’s $38.44 per rvu $37.89 per rvu – national conversion factor Next $1 million Adjusted PSR, rvu = $38.91

20. Total Revenue Analyses $113.88 million - Total Revenue $78.25 million – PSR $15.27 million – Contract Revenue $7.93 million – DIO/HLM Contract Rev $4.08 million – DSR Grant Revenue $4.47 million – “Other” Income $3.35 million – Misc. donations etc $535,589 – Capitation/Consultation $31.02 million

21. DISCUSSION Faculty performance can’t be based upon RVU work and expense ratios. Not enough patients and expenses are too high State ($14 million) and Non Patient Service Contract ($31 million) revenues needed in the equation College wide minimums are difficult to apply to Clinical Performance since “base” is not defined equally by all departments

22. AIMS – Clinical Criteria Every Faculty member needs a defined assignment, a portion of which is Clinical Performance Clinical faculty should justify their base and incentive salary on RVU’s (75%MGMA, academic, by specialty), collections and a portion of hard money. Clinical FTE income derived from clinical revenue should be based upon a 55% (UMSA) and 45% (Faculty) split. All clinical, educational and research corporate expenses need to be defined and subjected to the same standards as applied to the faculty A complete analysis would also evaluate the contribution of the state to the clinical, educational and research missions.

23. TRUE AIMS SYSTEM We have – rvu’s, billing, collections, patients, clinics, procedures We don’t have - true clinical, education and research expense in corporate and state systems We need – expense/rvu expense/$collected expense/patient encounter NEXT STEP