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MUSC Medical Links Charleston Links Archives Catalyst Advertisers Seminars and Events Research Studies Public Relations Research Grants MUSC home page Community Happenings Campus News Applause


Funds committee addresses financial strategy

MUSC is undergoing a critical review of its financial strategy during a period of unprecedented decline in its level of state funding and an increasingly competitive education and health care environment.    
That is why a new MUSC Funds Flow Steering Committee is analyzing how MUSC’s budget model compares to that of similar institutions nationwide in order to develop a long-term strategy that addresses needs as MUSC faces state budget cuts and other revenue challenges. The committee will present its recommendations to the deans’ and president’s councils by December.
The process began in January when John Raymond, M.D., former vice president for academic affairs and provost, and Lisa Montgomery, vice president for finance and administration, appointed the MUSC Funds Flow Steering Committee. The committee was charged to review the overall financial philosophy and study resource and expenditure allocation models that would best meet the challenges that MUSC faces.
“We are in the information gathering and evaluative phase of the process,” said Mark S. Sothmann, Ph.D., dean of the College of Health Professions and committee chair. “We are conducting due diligence in what strategic changes might be recommended given the budget issues confronting MUSC.”    
John R. Curry (center), managing director  of Huron Consulting Group, meets with MUSC Funds Flow Steering Committee. Joining Huron in 1995, Curry has led many projects, involving such specialities as incentive-based budgeting, rationalization of complex information technology organizations and library systems, cost reductions through benchmark analysis and shared services.

The committee has 19 members drawn from the MUSC faculty senate, office of the president, University Medical Associates, MUSC colleges and MUSC hospital.
The area of focus for the committee is broad-based and includes such issues as:
  • Matching revenue and expenditures for effective decision making
  • MUSC state appropriation distribution
  • Tuition matrix
  • Overhead cost assignment
  • Funding key university services operations
  • Fidelity of funding
  • Funding of ongoing universitywide strategic initiatives
  • Previous MUSC funds flow reports
An earlier Educational Funds Flow Task Force concluded in May 2009 that it was time for MUSC to re-examine its budget model. The report pointed out that MUSC’s budget has evolved through decades, and there is a need for a comprehensive analysis to better position the university for more effective budgetary decision-making in the 21st century.
Sothmann said the increasing complexity of MUSC and the volatility of its environment accent the need to anchor the university’s budgetary model to principles and practices that will better position MUSC to thrive in the future. “There are dozens of universities across the country who are in this same type of budgetary review because of the difficult funding environment.”
Input is coming from committee members who were chosen to ensure a wide diversity of representation of all the key constituent groups at MUSC, he said. A national expert in university budgeting modeling also recently visited MUSC to speak with unit leaders to get a 360-degree view of budget needs institutionwide.  There will be subsequent articles in The Catalyst and an open forum scheduled as the process moves forward so employees will remain informed.
Sothmann said it’s a complex process. For example, the distribution of income from a variety of sources is being examined to determine if better incentives to grow revenue can be built into the system.
“If you flip the lever on one side, what’s the downstream impact somewhere else? That’s the complexity of this. We all recognize we want to make some adjustments to provide incentives, but the campus is highly complex in how key revenue streams support critical operations and programs.  So if you flip that switch and don’t have some plans on what to do or the implications of it, you’re just going to create more issues. It’s a very detailed and complex issue that needs to be addressed from a global perspective and then drilled down in very specific ways.”
Another area that’s being addressed is how state budget cuts have impacted critical service units. Historically, certain service units have depended largely on state appropriation dollars for their source of revenue. When 55 percent of the state appropriation dollars is cut without examining the structure of funding for those service units, it has an unintended—and sometimes disproportionate—impact on these essential programs, he said.
“We have situations where the historic revenue streams don’t necessarily provide for the continued operations of critical services that are valued,” said Sothmann. “We have to grow revenue on one hand, and we have to figure out the most efficient ways to support those service units that bring critical value to the institution.”
Sothmann said he’s committed to the committee’s work because it will give MUSC the best information about what its true costs are and the revenue streams relative to those costs.
“This is a transformation quite honestly in the sense of trying to position MUSC for the next decade or two in what will continue to be a highly volatile and highly competitive environment for what we do, and it will position us to make better informed decisions relative to how we address that environment.”

Friday, Aug. 13, 2010

The Catalyst Online is published weekly by the MUSC Office of Public Relations for the faculty, employees and students of the Medical University of South Carolina. The Catalyst Online editor, Kim Draughn, can be reached at 792-4107 or by email, Editorial copy can be submitted to The Catalyst Online and to The Catalyst in print by fax, 792-6723, or by email to To place an ad in The Catalyst hardcopy, call Island Publications at 849-1778, ext. 201.