By Cindy Abole
In these fiscally challenging times when costs continue to escalate and funding resources continue to fall, colleges and institutions of higher learning such as MUSC have struggled to find ways to better manage resources.
After much planning and development, MUSC's new financial management system and strategies are taking shape as a proactive step to address the university's financial health and provide a foundation that will help set its future. The goal is to implement the new financial management system in 2013.
Mark Sothmann, Ph.D., vice president for academic affairs and provost, said the financial system developed in past decades is not suited to track funds flow within the university or support needed updates and changes with the new fiscal realities. The proposed new incentive-based reimbursement system focuses on aligning revenues and costs, providing the necessary data to support this decision-making model.
The effort to balance mission-specific academic quality and costs is specifically focused on a transparent change to show how dollars flow throughout the institution, thus creating a more effective decision-making system, said Sothmann.
Sothmann, Lisa Montgomery, vice president for Finance and Administration, and a funds flow committee are responsible for transforming the financial management system to the new incentive-based reimbursement system. The plan also promotes conversations and dialogue regarding strategic investments. Montgomery credits the committee and the finance staff for devoting the time and expertise necessary to make this transition possible given all the other competing priorities.
Within the year Montgomery, Sothmann, MUSC President Ray Greenberg, M.D., Ph.D., institutional vice presidents and deans have met several times during leadership retreats and conducted extended discussions and evaluations of the proposed funds flow structure. Simultaneously, administrative and faculty leadership wanted to address the institution's necessary cultural change by embracing the 2010 Strategic Plan themes —entrepreneurialism, innovation, interpofessionalism and global health.
"MUSC as a whole must embrace these changes to continue moving forward in the present and future fiscal climate," said Sothmann. "Such change can't be done well without an effective decision-making system in place where authority is clearly coupled with responsibility."
The new system allows colleges to manage their own costs with revenues allocated to new academic responsibility centers, which will be composed of the six colleges. Colleges will receive all their revenues and pay all direct and indirect costs. Additionally, they will contribute to a strategic investment fund so the central administration has a "steering wheel" to advance universitywide initiatives that help define MUSC as an institution.
The committee received feedback from financial consultants, Huron Consulting. Leaders determined the plan's funding mechanism, revenue streams and algorithm structure for revenues that go directly to colleges and administrative units. The Budget Office has worked with the Huron group to develop the actual model and will have it in place prior to the university's fiscal year 2013 planning cycle.
As of June, Sothmann announced the institution's newest challenge in this process—integrating both the financial management system and the university's 2010 Strategic Plan into planning and creating strategies among MUSC's six colleges, administrative units and departments. "This plan allows each college and administrative unit to be unique and innovative in its planning by fostering dialogue, preparing strategies and setting agendas," he said.
For example in the Strategic Plan's theme of innovation, MUSC is actively collaborating through its multiple centers and colleges to be among the nation's leading universities in addressing the high incidence of stroke among South Carolinians. Additionally, the MUSC Library, College of Nursing and College of Health Professions are using advanced online education technology to provide students, faculty and clinical researchers with information and connect them with resources.
In global health, beginning this fall, the College of Graduate Studies will begin delivering its master of science in clinical research program in India, the first MUSC degree to be delivered in another country. The degree program will further expand its online capability, build a support structure, and system capable to sustain future student-faculty exchanges in other countries.
For the entrepreneurial theme, Sothmann explained that academic health centers, such as MUSC, are viewed as economic engines within their home states. They secure the grant dollars from federal agencies, attract the hiring of key people and produce spin-offs of new technologies, research and businesses. The entrepreneurial focus is not limited to research, it also includes educational and clinical initiatives. "Our focus in these areas is to create a climate for our faculty to think in entrepreneurial ways," he said.
MUSC's work in interprofessionalism is shown through its Creating Collaborative Care program. And the newest buildings, the Bioengineering and Drug Discovery buildings, are models that manifest an interprofessional and team research focus.
"To be a leading academic health center, we need to be strategic in how we move forward with key initiatives at multiple levels of the university with decision-making anchored to strong financial management. If we don't do this, we'll fall back. Our focus is not should we do it, but when and how we do it," said Sothmann.
The majority of colleges are moving forward to implement the funding model and strategic plan within their units.
According to Sothmann, "It is the job of central administration and the President's Office to strategically guide this process along by engaging the colleges and university administrative units in a shared dialogue and effort."