RESOURCE INTERFACE BETWEEN
AHC AND FAIRVIEW HEALTH SERVICES
JANUARY 27, 1999
This document summarizes the resource interface between Fairview and
the University as reflected in the merger and affiliation agreements, and
subsequent discussions.
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The support of medical education and research within the FUMC campus is
to be shared between the AHC and Fairview based on the "bucket" concept
where all revenue supporting research and education collected by Fairview
is balanced against the costs of these activities as identified and tracked
by mutual agreement of the two parties. The deficit of cost over
revenue is to be split and should there be a surplus it is to be distributed
to the AHC. In the future the "bucket" mechanism may be expanded
to the system level.
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In addition, Fairview will provide an educational and research grant to
the AHC on a yearly basis at the level of 25% of net greater than 3.5%
of operating margin at the system level or at least one million dollars,
which would be offset against leasing costs.
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Fairview and the AHC have agreed upon a Joint Funding Process, with funding
from both parties for initiatives that have win/win elements for clinical
activities as well as academic advancement. The first round of this
initiative is underway and has been characterized as a bottom-up process
(investigator driven).
Additional investments in clinical programs centered in the Medical
School fall into the final category of resource flow. The objective
of these funds would be to increase patient volume for the system.
Based on discussions with the Council of Clinical Sciences on October 5,
1998, we propose to address areas of clarification as they relate to the
interface with Fairview and the Academic Health Center. It is our
understanding that Mr. Page desired:
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a single point of contact for resource allocation in the AHC
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prioritization of important programs for support
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not to be placed in a position of diverting system resources for community
competitive programs within the Fairview system
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that the prioritized requests go through the FUMC and Fairview System budgeting
process
The AHC and Fairview have agreed that the single point of contact
for the Medical School departments would be the dean of the Medical School.
These might include:
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Investment in world class academic programs that are unique to the AHC
in order to keep those programs on the cutting edge. These investments
could include support for faculty retention and recruitment, ancillary
personnel, facilities, etc. (within legal constraints).
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Investment in community competitive programs where loss of personnel, need
for equipment, etc. threatens the loss of patient volume from the Fairview
system. An example might be pediatric neurology which, without support,
will lose it's clinical capabilities and the patient base represented in
this area will be lost to the Fairview system.
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Investment in recruiting for University physicians to serve in outstate
communities where there is both a Fairview system presence and need.
These pathways would go through the FUMC budgeting process.
In preparation for the FUMC budget process, the Dean will develop a prioritized
list of potential clinical program investments to be considered by FUMC
management and board. The Dean will develop the list through a process
that would include:
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Alignment of goals with anticipated mutual success to both parties
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Planning that includes Medical School leadership as well as FUMC and Fairview
management
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Prioritization of the requests as a result of the process, approved by
the Dean of the Medical School
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The Dean's Office as the single point of contact for these initiatives.
The assumptions behind this model will require strategic allocation
of available resources by the senior management of Fairview and the AHC.
