Evaluation

While the AHC includes of some of the best researchers, educators, and clinicians in their fields, the current system of developing inter-disciplinary programs inhibits them from using their talents to their fullest potential. The current system creates incentives for unit managers to protect the interests of their own units, sometimes at the expense of the interests of the AHC as a whole. Dealing with administrative barriers, in the form of repeatedly negotiating for resources from associated units, takes much of the program director's time. In addition, no methodology exists to bring either financial or operational data together effectively. The significant obstacles encountered by developers of inter-disciplinary programs cause faculty and staff to look primarily within their colleges or business units when attempting to contribute to the goals of the AHC and the University. This reduces the frequency of collaboration between leading edge researchers and educators just because they work on different sides of collegiate/business unit boundaries.

IDP Criteria

The intent of the new IDP methodology is to enhance the free exchange of ideas and resources among AHC units by removing administrative barriers and inappropriate incentives. The IDP methodology for developing and managing cross-collegiate activities will unite collegiate units in the advancement of AHC strategic goals. By doing so, AHC faculty and staff will be able to draw upon the right resources at the right time to achieve the strategic goals of the AHC.

The goals of the IDP methodology are to:

Within the new framework, IDPs are defined as follows::

An IDP is a distinct, accountable unit, created to mount a concentrated effort which draws upon the resources of more than one collegiate unit to achieve a focused goal within the AHC.

IDPs have the following characteristics:

resources as well as a defined budget (see Appendix A for responsibilities of the program director),

While the IDP management and resource allocation methodology is designed for managing specific inter-unit programs, it is equally applicable to managing activities that fall entirely within one unit. It is anticipated that the IDP framework will be widely accepted by the AHC units as a tool to make strategic decisions within the business units.

Expected Benefits

The IDP initiative will create many benefits including:

Program Initiation

A program may be initiated at any level in the AHC (Appendix B displays the overall flow of the IDP process). Most often this will be by one or more faculty members but initiation may also occur at the department, dean's or provostial level. Initiation at these higher levels will differ somewhat procedurally but the same requirements will apply for approval.

In order to move forward a program must meet all of the provisions of the basic characteristics of an IDP. To receive consideration by the Provost's Council a program must also include substantial faculty participation from at least two collegiate units in the AHC and must expect to utilize resources or generate revenue across multiple colleges or business units.

As an exception, a proposal that includes only one business unit may be reviewed by the Provost Council if it meets certain conditions.

The basis for the exception is:

Directors of prospective programs must develop a pre-proposal that initially will be submitted for review by the Provost Council. Appendix C displays the format for and the information to be included in the pre-proposal. The Provost Council will review the pre-proposal and determine whether or not it warrants the development of a full proposal. Should a pre-proposal not be granted approval for further development, the Provost Council will provide to the initiator, in writing, the reasoning behind the decision. Through time the Provost Council will gain experience with evaluating pre-proposals and will develop criteria as to what makes a pre-proposal suitable for further development. At that time, the Provost Council will clarify its criteria for successful proposals. The Provost Council must work to develop a set of criteria to weigh tradeoffs between program applications. These criteria must clearly communicate to initiators the priorities of the council and the likelihood of final approval. The criteria may include "judgment" as one component, but this too must be clearly identified. Once clear criteria for pre-proposal acceptance have been established, pre-proposals will be reviewed for approval by a sub-committee appointed by the Provost Council.

Top-down initiation of pre-proposals may occur as well. Deans or other members of the Provost Council may identify prospective programs that cross collegiate boundaries and have significant potential for the AHC. When a potential program is identified, a member of the council will sponsor the creation of a program pre-proposal. The sponsor will identify the most appropriate faculty member to create the pre-proposal and will assume the responsibility of oversight for the program. From this point forward, the program approval and development process will continue as previously defined.

Full Program Approval

With pre-proposal approval, an initiator will develop a full program proposal. This will include a business plan, timelines and all other requirements as presented in the proposal template (see Appendix D for proposal template). Each business plan will include a sunset provision. This means that at a date certain the program will be discontinued. The time period for this sunset will be determined by the needs of the program but will not exceed five years. Should a program director wish to continue the program, a new business plan must be created and submitted to the Provost Council for review. This plan will be similar to the initial plan but will be updated with actual data, new market projections, and new strategies to deal with the changing environment. The Provost Council will review the new business plan and determine the appropriateness of reinstating the program. Should the program not be reinstated, the program director must arrange to cancel the program. Alternatively, the Provost Council may decide to transfer the program out of the university.

Proposals that are not approved will receive written notification of the decision including the basis for the decision. Proposals denied due to limitations of AHC resources may be resubmitted for review at a later date. It may be that during the next review period these proposals will create the best opportunities for the AHC and will therefore be approved.

Program Budgets and Funds Allocation

Budgets for IDPs will be established at the time of program approval. The method for providing funding for IDPs has not yet been established. The method of funding will be referred to the Provost Council for final determination. The options discussed by the IDP Committee are presented in Appendix E.

It is important to note that, no matter what method of program funding is chosen, there will be no additional AHC source of funds available for the development of IDPs. Rather, the funding mechanism chosen will provide a method to reallocate existing AHC funds and apply them to the development of IDPs.

Program Operation

Program Operational Structure

The program operational structure defines how a program will operate on a day to day basis. This structure must be decided at the outset to ensure effective operation of the program and to create the proper set of rules to deal with conflicts or issues that arise. Four broad aspects that define roles and responsibilities must be determined. These aspects are governance, management, administration and control.

Governance

By governance it is meant who is responsible for what decisions. Governance issues include but are not limited to hiring and firing decisions, tenure decisions, financial decisions, union and other labor decisions, legal reporting and any other accountability responsibilities required by internal or external agencies. Each program will propose the governance structure under which it intends to operate at the time of proposal submission. The Provost Council will agree to the proposed structure or suggest modifications at the time of program approval.

Three models have been suggested and most programs will fit somewhere within one of these. The models are

Under "current definition" all governance decisions and responsibility would remain in the same hands (chairs, deans, etc.) as they are currently. Core operational decisions would still be made by the director but these would need to be tempered by any interface with governance concerns.

Under a mixed governance structure the program director would be responsible for some but not all governance issues. Who determines what responsibilities are within the purview of the director and which are not would be subject to both negotiation and legal requirements (some issues may perforce remain with departments or deans and may not devolve to programs). Full governance would make a program "look" like a department from a governance perspective. All governance responsibilities would fall to the program director.

These suggested program structures may be looked at as points on a continuum of possible governance structures. Different program governance structures may be appropriate as programs evolve. The intended evolution of program governance should be identified at the time of proposal submission.

Management

The parameters of management responsibilities of the program director will be defined by the governance structure. Management means the administrative and policy decisions needed to implement the program It must be clear that once the structure is defined management decisions must rest primarily within the program itself. Management authority would only apply within context of the program itself.

Administration

Administration, in this context, refers to arranging for and conducting day to day operations. The administrative responsibilities of a program will vary with the level of governance approved for the program. As an example, under the full governance option, the administrative operations of a program such a payroll, purchasing, etc. would be under the control of the program director. The director would have the option of either direct provision of outside purchase of any of these as best fit the program needs and as justified within there proposal. Where services can be performed on a fee basis by existing resources, a cost benefit relationship must exist for creating new resources. Purchase of external services would be subject to the requirements of the university , the strategic needs of the AHC and any other legal limitations. At the other extreme, the current definition of governance structure, large portions of administrative responsibilities will be provided by existing AHC units.

Control

By control it is meant that the program abides by the policies adopted by the Board of Regents and University administration and all other requirements of law. The program would be subject to the same control provisions as any other unit of the University. For example, the program would be subject to the same internal and external audit provisions as other entities in the University.

Funds Flow and Reporting

The flow of funds determination defines who is financially responsible for all revenues and expenditures related to the program regardless of the source. There are two aspects to flow of funds, one procedural and the other substantive.

Procedurally the flow of funds is simply a technical issue and should take place where it is most efficient. This is simply a question of who banks the cash and who writes the checks. The result should be transparent to the program and the other operational structures (departments). Current procedures should change only when more effective methods are identified.

The substantive flow of funds is the reporting mechanism by which the credit for revenues will be given. The final determination of substantive funds flows will be made by the Provost Council. Appendix F presents the options discussed by the IDP Committee.

Department Practice Plans

The IDP procedures are impacted by the methods used to incorporate both revenues and expenses into the decision processes within the Academic Health Center.

Current practice within the Medical School is for each department to have a practice plan that manages the private practices of the physicians within that department. Each of these practice plans pays salaries, bills patients and operates in a manner independent from the University but within the oversight responsibilities of the Dean of the Medical School. Each department pays a Dean's tax based upon a net revenues computation and also reimburses the University for expenses incurred by staff in support of operation of the DPG. Computation paid by the practice plan to the faculty is approved by the Dean. Surplus funds available within the DPG are also to be remitted to the Medical School. These practices are under review by the physician group in the FORT task force and recommendations are pending.

The School of Veterinary Medicine is in the process of establishing a practice plan compensation policy that will encourage faculty to improve the financial viability of the hospital. This compensation plan is based upon a gain sharing formula with the control over total compensation within the authority of the Dean. This plan cover both physician and support functions.

The College of Pharmacy has a professional activities policy that is to handle those amounts of time and revenue which exceed the limits established in the consulting policy of the University. Under this plan, revenues are divided evenly between the physician, the department and the college. To this date this plan has not generated additional revenue for the college.

The School of Dentistry has a practice plan that operates entirely within the University Consulting Policy. This plan returns to the school through the Dean's tax approximately $100 thousand annually.

The School of Nursing has a practice plan that operates within the University and contributes 5% of net income to the school fund. This plan has not had a significant impact on the College. Under the current methods of mixing expenses within the Medical School which are in support of patient revenues with those in support of education and research it is difficult to determine true costs. Since the Medical School practice plan revenues are separated from the AHC it is equally as difficult to determine the revenues derived from any program. Changes to the current system are necessary if the impact on physician practices is to be one of the elements in determining the acceptability of a proposed program. The other colleges that have the revenues and expenditure fully incorporated into their current activities will not be faced with same difficulties. These units will identify revenues and expenditures related to programs much the same way they identify dollars within the academic budgets.

The options for incorporating external activities practice plans are basically two.

Purchased Participation

A program could contract for the services it required from the practice plan. This would include the program billing for all the services it renders. This billing function would be done within the existing University infrastructure (Hospital accounts receivable system) with the program (University) accepting the risks for deductions and timing of collections. This would allow the program to also contract for those services not available from an existing practice plan from other third parties and potentially in other locations. The responsibility for controlling costs and determining quality of service would be with the program director.

Cooperative Participation

A program would receive an up front commitment from the practice plan for support. In exchange for this support the practice plan would continue to bill for services it rendered. The practice plan would need to segregate expenditure and revenues to allow for the evaluation of programs as a total. The reporting required would need to be in conformity with the program strategic plan. While the responsibility for the program continues with the program manager the practice is committed to support the program to the degree and for the cost incorporated within the strategic plan. Any changes would required the approval of a revised plan. Excess funds generated would be available for distribution consistent with other programs and under the review of the Provost Council.

At the time of presentation of the Strategic Plan the method of incorporation of the Practice Plan activities must be specified and agreed to by the Practice Plan.

Information Management and Systems

Program directors will have available to them a system that will enable them to effectively manage program performance. The system will provide them with financial as well as operational information.

The financial aspects of the system will provide program directors and administrators with single income statements that will report revenues and expenses related to the program regardless of the source. Operational information will include information such as:

The new system will be implemented in four phases. Please see Appendix G for details of the implementation strategy.

Program Performance Oversight

Program performance oversight is accomplished through the regular reporting to and feedback from a member of the Provost council who has accepted oversight responsibility for a particular program. Such reporting will be done on a quarterly basis. Annual reviews of strategic plans will include evaluation of the program performance against all of the goals in the business plan including financial, clinical, research, teaching or other. This evaluation will indicate whether the program is meeting these goals or whether some adjustment needs to occur in the program management or the business plan. The program director will complete the review under the guidance of the Provost Council member assigned oversight. Should the program fail to achieve its stated goals, the Provost Council may choose to cancel the program and free up resources for more promising programs.

The new IDP effort attempts to create an infrastructure that will provide a repeatable process for program initiation and approval and a structure that will remove current barriers. The new infrastructure, as defined above, cannot currently answer all questions or provide a solution for all problems. The IDP infrastructure must remain flexible enough so that it can deal with the constraints of the its environment as more experience is gained.

Some of these issues are:

To implement the new IDP system, the AHC will use a pilot approach. This will enable the process to be refined and perfected before a rollout to the entire AHC. Two programs will be chosen to be included in the pilot. This pilot will include one each of existing and developing programs. This will make it easier to judge the effectiveness of the new system for managing programs in various stages of their lifecycle.

Each of the programs will follow the planning process and be subject to the new incentives and governance guidelines for the new system. On an ongoing basis, throughout the pilot phase, feedback will be gathered through interviews with all levels of individuals associated with the chosen programs. This feedback will be analyzed and modifications to the system will be made as necessary.

The performance of the IDP methodology will be reviewed six months after the pilot begins. At that time, all those associated with the pilot programs will be interviewed to gather information regarding the new system's performance. A judgment will then be made whether to apply the IDP approach to additional opportunities, modify the approach further or to abandon the IDP altogether.

Migration Plan for Existing Programs

Planning

As the Provost Council becomes more comfortable with the operating of IDP they will request from existing programs plans consistent with the IDP framework.

Integration with current systems

Through time, many AHC units may adopt the planning management structure outlined for IDP administration. While the sunset provisions may not be applicable for existing units, the process of strategic planning, benchmarks, accountability, and effective information access should improve the management of all administrative units. This may eventually result in most departments being modified to a program structure.

Final Plan for Implementation of IDP

Communicating

Spreading of the cross-departmental culture

IDP will be successful only if it is accompanied by an atmosphere of cooperating among units. To accomplish this, the new principle of cooperation must be communicated to all faculty and staff within the AHC.

Program initiation/approval process

The program initiation/approval process must be communicated in a clear manner to all AHC collegiate and departmental leaders. The communication device must convey a clear picture of the steps necessary to initiate and implement a program. This communication must also include a contact person for further information.

Clearly conveying new incentives

While it is certainly necessary to describe the mechanics of the IDP process, special focus must be given to the incentives for inter-departmental collaborations. These incentives are critical for the acceptance and utilization of the IDP process.

Training

Program planning training

Training materials, in the form of brochures, manuals and possibly short classes must be made available to faculty and staff. These materials will include the mechanics of the IDP as described within this document as well as address specific operational concerns of program directors and administrators.

Program management training and administrative training

The IDP process, with its greater emphasis on market viability and financial accountability, requires program directors and administrators to perform tasks not previously demanded. It is anticipated that faculty and staff must be provided to AHC employees so that they can effectively carry out these new responsibilities.

Feedback provision

Periodic interviewing of program managers and employees

It is critical that communication with program directors, administrators and employees be conducted on an ongoing basis during the test phase of the IDP. We recognize that many unforeseen issues will be uncovered during this time and care must be taken to modify the IDP process to resolve these issues.

Survey/Suggestion forms

A method for unsolicited feedback regarding the operation of the IDP should be provided to AHC employees. This feedback, in addition to interviews, will be used to modify and streamline the IDP.

Follow-up communication to input

Interviews and unsolicited suggestions should be followed up with communications back to the people supplying the information. To ensure the continuation of suggestion for improvement, employees must be confident that their input is evaluated and acted upon.

Re-evaluate and Modify

After the final IDP framework has been accepted and implemented AHC wide, feedback mechanisms must continue. In light of employee feedback, the IDP framework should be periodically reviewed and modifications should be made to continually improve IDP planning and operations.

APPENDIX A - Duties of the Program Director

Develop Pre-Proposal

Gain Pre-Proposal approval from Provost Council

Develop Proposal

Gain Proposal approval from Provost Council

Manage Program consistent with proposal

Review program progress with member of Prost Council assigned oversight

Before full strategic planning is undertaken by a group intending to submit a plan for a Provostial Program, a pre-proposal should be and submitted to the Leadership Council for screening consideration. If approved for full strategic planning, the group could proceed to the full plan and would have access to planning help through the AHC administration. The pre-proposal should be terse (no more than 7 pages), clear, and written for non-specialists. It should include:

EXECUTIVE SUMMARY:

A summary of the program elements, the program mission and goals, and a description of the relationship between the program and the AHC's overall mission. Identify the overall objective, the proposed duration, the customers/constituencies served, and the magnitude and sources of resources required. Give a clear statement of the value that the proposed program will add to the Academic Health Center.

PROGRAM POTENTIAL:

Explain the projected benefits/products that will come out of this program. What are its likely academic impacts, its role in the overall AHC mission, its potential for excellence, and its projected fiscal viability?

PROGRAM REASONING:

Demonstrate that the proposed program contains the required elements of a program. How does the proposed activity meet the criteria of a program? Why is the proposed idea best served by being organized as an IDP? Contrast the future as a program with other possible operating options. Describe the current status of the program.

PROGRAM RESOURCE PROJECTIONS:

In summary form, identify the likely sources and uses of resources for the program: fiscal, personnel, space. Identify assumptions made in the projections in such a way that they can be used to examine the financial risks of the program. Identify where existing resources are currently being used.

PROGRAM BENCHMARKS, DECISION POINTS, AND SUNSET

Identify key milestones in the program's development, benchmarks for success, and go/no-go decision points. Set a date, not to exceed five years, at which the program will be discontinued or transferred out of the University. Outline plans and the time that a program would be terminated, including the reallocation of program resources if dissolution is required.

PROGRAM INTANGIBLE RISKS:

Consider the possible downside risks: to other AHC activities, reputation, personnel career development, legal, ethical or otherwise. This section should evaluate the possible downside risk of "intangibles". This should include the risk of program failure, loss of other opportunities, risk of customer dissatisfaction, etc.

PROGRAM RECOMMENDATION:

Summarize the persons or organizations that are in support of the proposal at this preliminary stage. Recommenders in general should be stakeholders in the program, i.e., responsible for the program's operation and performance.

Mission statement

Relation to mission of the greater unit (College, AHC, University)

Goals and benchmarks for progress

SWOT analysis

Strategies for program development

Resources: Sources and Uses

Resources for the program should be budgeted, showing historical data (if they exist) for the past two years and projecting the current year and a total of five into the future.

The budget should include fiscal, human, and space resources. A budget worksheet is attached. In addition to the overall summary, supporting documentation should be given to more fully describe major resource categories.

Dollars:

Revenue

Revenue categories are mostly self explanatory. Some revenue categories may be relevant to a given program, others not. Where budgeted revenues currently flow to other units, both the accounting and impact of reallocation must be described in the "Relations to existing units" section of the program plan. Note that revenue derived from clinic income from patients must be held separate from dollars invested by the hospital in the program. Programs with core roles in the overall mission or with strong future potential may well deserve investment by the hospital, but such "subsidization" should be explicit. Investments may also come from other units of the Academic Health Center or from outside the University. When revenues flow from sources that are "volume dependent" (vary with activity, such as patient care), the underlying assumptions about volumes should be explicitly projected.

Expenses

Direct expense categories include personnel, research and development direct costs, educational direct costs, and direct administrative costs. Indirect costs of the program include costs of overhead for the hospital, space, and equipment.

Fixed costs of operation may not need to be accounted for unless the program is so wide ranging that it moves out of the realm of "normal operations". Otherwise, one could assume that the fixed costs of central administration, etc. would be incurred regardless of which program was chosen as a priority, thus absolving a particular program of accounting for those resources.

People:

Personnel resources must be allocated as well, including not only direct program participants, but also all personnel who direct effort toward program activities. Allocations should be broken down by broad mission (research, teaching, service, etc.) so that the efficiency of use by mission can be assessed. In some cases, exact personnel descriptions may not be needed, if the costs of personnel can be accounted for as an expense item for services "external" to the program.

Space:

Space needs of all types should be projected. In an actual plan, the specific locations should be designated whenever known.

Relations to existing units

Administrative and Governance structure and authority

Administrative approval and facilitation sought

Budget Worksheet

Option 1

A pool of funds will be set aside for program development prior to the approval of any new programs. This pool of funds will be held by the Provost and be made available only to IDPs. The source of this pool of funds will be a "tax" that is applied to AHC operating units. The manner that this tax will be exacted is undetermined.

Pros

Cons

Option 2

The sources of IDP funding will be established upon the approval of specific programs. On a program by program basis, each unit will segregate funds for program purposes for those programs approved by the provost council..

Pros

Cons

Option 3

Program funding will be provided, in part, by excess revenues generated by the operations of the program.

Pros

Cons

Option 4

50% of any new university of state dollars allocated to IDP

Option 5

Apply a set percentage of ICR/royalty income to IDPs

Option 6

Corporate seed money fund raising (medical alley or insurers/health systems)

Option 7

State tax on health care costs

Option 8

State tax on health related misbehaviors: tobacco, alcohol, etc.

Option 9

Other

The IDP Committee has considered the following three options regarding the disposition of revenues generated in excess of program expenses.

Phase 0

The system prototype is a model system that will be used to validate the system design. It will be non-functional but will assist in identifying user interfaces and system outputs. The prototype will be the beginning point for planning the Phase 1 system.

Phase 1

The Phase 1 system will have limited functionality. It will provide the essential tools necessary to manage a program. Data will be input to the system through a variety of methods. At this phase, data input will likely be through current system extracts and manual data entry. Phase 2

At this phase, users will have been employing the Phase 1 system for some time. New needs will have been identified as well as functions that are not necessary. The Phase 2 system will include modifications based upon the new requirements. System data will be loaded in a more efficient manner. The new system will take on-line data feeds from existing systems and the need for manual data entry will be minimized

Phase 3

Phase 3 moves toward a sophisticated level of system support. The Phase 3 system would include data feeds from proposed future university systems in addition to new requirements of the AHC. This approach will ensure that the fully implemented system will meet the needs of the AHC for program management. At the end of each phase, the system will be evaluated and modifications will be planned for the next release. Also, at the end of each step, a go/no-go decision will be made as to whether or not to proceed to the next phase of the project. Appendix G displays the estimated time and expense for implementation