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