March 27, 2006
You can request a copy of "Managing Resources
in a Better Way: A New Financial Management Approach
for the University of Michigan Medical School," the
article authored by Bill Elger that was published in the
April Edition of Academic Medicine by sending a note to firstname.lastname@example.org
Medical schools must get down to business and 'measure up' to survive, national expert says
New real-time, web-based tools lay foundation for solid decision-making
ANN ARBOR, MI – Medical School leaders nationally must manage their institutions more like a business – using key performance measures common to other industries – to excel in an uncertain academic environment where costs are skyrocketing, space is at a premium and clinicians and researchers are vying for increasingly limited federal dollars, says William Elger, newly selected national chair of the Association of American Medical Colleges’ Group on Business Affairs and chief financial officer of one of the largest academic research institutions in the United States.
“Medical schools must have rapid-fire, up-to-date information on measurable, critical success factors, including market share, expenditures and revenue sources. We face eroding federal and state support for medical research and education, so it is essential that we understand existing resources and identify the ones we need to grow as an organization,” Elger says. “Without the metrics to assess key performance measures, we won’t be top medical schools down the road.”
Elger, executive director for Administration and CFO of the University of Michigan Medical School, describes his institution’s answer to the highly competitive research and clinical care arenas in an article he authored, “Managing
Resources in a Better Way: A New Financial Management Approach
for the University of Michigan Medical School,” in the April edition of Academic Medicine.
Elger’s article introduces a novel, web-based strategic reporting system to manage financial resources more effectively than traditional financial management systems. The reporting mechanisms are called M-STAT, M-DASH and M-ALERT. These simple, interactive tools allow a user to manipulate critical variables with a few clicks, making it easy to assess how, say, an unexpected increase in overhead costs at the school level would affect the need for additional federal grants so research expenses are covered. It also allows users to compare the cost of research by individual faculty and across departments. The key to the system is real-time data from sources across the institution and selected external sources so that the Medical School can be “leaner and more adaptive to change,” says Elger.
The U-M Medical School is one of the largest research-intensive medical schools in the country and its 1,350-member Faculty Group Practice is one of the nation’s largest. The school’s $900 million total operating budget covers research, clinical and education enterprises. Being more agile is a critical – yet previously elusive -- goal.
The tools can:
- Highlight general financial trends, e.g., direct and indirect cost expenditures or federal versus non-federal expenditures
- With a click of the mouse, drill down to a more specific financial element such as trends in grant funding or clinical activity, e.g., new patient visits as a percentage of all patient visits
- Track the utilization of research space, e.g., total cost per square foot
- Calculate the break-even cost of research space
- Model various “what-if” scenarios, e.g., types and amounts of National Institutes of Health grant funding past, present and future, relative to other schools.
“The tools we have developed at Michigan are allowing us to analyze and plan for where we want to go, rather than spending our time reporting on where we’ve been,” Elger says.
The next phase of the project will incorporate an alert system, in which an e-mail will be sent to users when variables being tracked fall outside expected parameters.
The trio of financial management tools has generated considerable interest nationally. Other medical schools around the country are looking at this
reporting system to determine whether using key performance indicators could help their institutions more effectively track resources.
For a closer look at the Medical School’s strategic reporting system, log on to www.umms.med.umich.edu/test.public.demo.dashboard (both the username and password are “demo”).
For more information, contact William Elger at The University of Michigan Medical School at (734) 763-5202, or email@example.com.
Written by Mary Beth Reilly
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