Benchmarking Academic Enterprise

Robert Belsole M.D.

Vice Dean for Clinical Affairs

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.

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

Clinical Performance

• RVU’s

• Billings

• Collections

• # patients, clinics, days in clinic

• Night call

• Procedures

Simple and Fair

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

RVU

• Geographical Adjustment (GPCI)

• Facility vs. Non Facility

• $37.89 – medicare

payment

Wk Rvu Practice Rvu Malpr Rvu $$$$$$$$

Office -New -3 1.34 1.13 0.09 $97.02

Office -New -5 2.67 1.78 0.15 $174.33

Office - Est -3 0.67 0.69 0.03 $52.68

Lap Hernia 6.26 3.2 0.93 $393.76

Knee Arthro 7.75 6.98 1.34 $609.01

Pacemaker 6.66 4.47 0.52 $441.51

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

RVU Based System - Disadvantage

• Teaching and research missions

• Clinical grants and contracts

• Hard salary support – state, hospital etc

• Ancillary Services

• Administrative duties

• Expense ratios

AIMS Salary Requirements - Clinical

• RVU – equal or exceed 75th 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

• RVU Threshold for patient care activities

• Aggregate $um>>>>base salary + benefits +malpractice insurance (after group and department expenses)

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!

Taxation

Revenue $100,000 $100,00

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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 $25,000

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Expense $57,500 $49,375

Faculty Support $42,500 $50,625

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

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

Clinical Practice RVU Analyses

• 2,155, 686 – Global RVU’s

• 1,161,082(54%) – Work RVU’s

• 994,604 (46%)– Practice Expense RVU’s

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

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

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)

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

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

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

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.

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

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