Rutgers - UMDNJ Integration: The Path Forward from Good to Great and The Role of Responsibility Center Management (RCM)

Transcription

1 Rutgers - UMDNJ Integration: The Path Forward from Good to Great and The Role of Responsibility Center Management (RCM) Terri Goss Kinzy, Ph.D., Associate Vice President for Research Kathleen Bramwell, MBA, Senior Vice Chancellor, Finance & Administration Association of Academic Health Centers 2015 Senior Administrative/Fiscal Officers meeting July 10, 2015

2 Acknowledgements J. Michael Gower, MBA Senior Vice President of Finance Treasurer Christopher J. Molloy, Ph.D. Senior Vice President for Research and Economic Development 2

3 Rutgers (pre-july ): One university on three campuses Rutgers Newark Rutgers New Brunswick Rutgers Camden No medical or dental schools 3

4 Previous University Structures in NJ (with Medical Schools) Rutgers University Rutgers Camden Rutgers Newark Rutgers New Brunswick UMDNJ University Hospital Robert Wood Johnson Medical School Cancer Institute of NJ School of Public Health University Behavioral Health Care School of Health Related Professions Graduate School of Biomedical Science School of Nursing Rowan University Rowan University Cooper Medical School New Jersey Medical School New Jersey Dental School School of Osteopathic Medicine Key Rutgers University UMDNJ Rowan 4

5 July 1, 2013 The new Rutgers 5

6 July 1, 2013 Structures Rutgers University Independent Rowan University Rutgers Camden Rutgers Newark Rutgers New Brunswick Robert Wood Johnson Medical School Cancer Institute of NJ School of Public Health University Behavioral Health Care School of Health Related Professions Graduate School of Biomedical Science School of Nursing New Jersey Medical School New Jersey Dental School University Hospital Rowan University Cooper Medical School School of Osteopathic Medicine Key Rutgers University Independent Rowan Transferring to Rutgers Transferring to Rowan 6

7 The new addition to the Rutgers family.. Biomedical & Health Sciences Rutgers Newark Rutgers New Brunswick Rutgers Camden 7

8 Each unit will share a common core but retain unique strengths Newark Theoretical and applied research Public/ private partnerships First-rate education in urban setting Close working relationship between students and faculty Diverse metropolitan campus, proximity to NYC New Brunswick Large, land-grant campus Broad distinction in research and scholarship Physical & life sciences hub Comprehensive offering International recognition in arts and humanities Camden Personalized campus environment High-impact civic engagement Distinct areas of research excellence Engine of opportunity for families and communities Educational and economic impact in South Jersey and Delaware Valley Rutgers Newark Biomedical & Health Sciences Rutgers New Brunswick Rutgers Camden Common core Globally Acclaimed Brand Interdisciplinary & Cross-Campus Offerings Integrated Graduate & Professional Education Academic Rigor Strength in Arts and Sciences Health care education, research and clinical services 8

9 Rutgers Biomedical and Health Sciences Rutgers Biomedical and Health Sciences is the umbrella organization for the following schools and units and has outstanding health sciences education, clinical services, a statewide presence, strategic basic and applied research foci. Schools and Units Cancer Institute of New Jersey Ernest Mario School of Pharmacy New Jersey Medical School Graduate School of Biomedical Sciences Robert Wood Johnson Medical School Institute for Health, Health Care Policy and Aging Research School of Nursing College of Nursing School of Public Health School of Dental Medicine School of Health Related Professions University Behavioral Health Care Former University of Medicine and Dentistry of New Jersey units Original Rutgers units 9

10 Introduction: Brian L. Strom, M.D., M.P.H. Inaugural Chancellor of RBHS Internationally recognized scholar, award-winning educator, and a visionary academic leader Founder of the field of pharmacoepidemiology Formerly Executive Vice Dean for Institutional Affairs at the University of Pennsylvania s Perelman School of Medicine Elected to the Institute of Medicine of the National Academy of Sciences in 2001 M.D. from the Johns Hopkins University School of Medicine and M.P.H. in epidemiology from the University of California, Berkeley 10

11 Integration: Benefits Enhance educational opportunities Strengthen recruitment of top faculty and students Attract increased research funds (top 30) Foster even more highly productive and innovative multidisciplinary projects Expand opportunities for research collaborations and for translating scientific knowledge into clinical medicine Strengthen private-public partnerships between higher education and the health care industry Connect the Rutgers brand to health care delivery Develop greater efficiency and economy of scale for University services 11

12 The New Rutgers statewide reach Major Clinical Components Cooperative Extension Offices Main Clinical Affiliates Additional Locations 12

13 Unified Health Sciences at Rutgers: A Vision as a Statewide Hub Education, clinical and research collaborations 13

14 Common University Budget Models EVERY TUB ON ITS OWN BOTTOM INCREMENTAL FORMULA-BASED RESPONSIBILITY CENTER MANAGEMENT Budget model in which each school acts as an independent entity responsible for its own management and funding Budget model in which budget allocations are based upon the funding levels of the previous year and possibly increased by a set percentage Budget model in which budget allocations are based on predetermined formulas Budget model in which each unit is financially responsible for activities and held accountable for direct and indirect expenditures with strategic investments by academic leadership to advance the university or local/ regional as a whole 14

15 Responsibility Center Management A budget model promoting financial responsibility at a unit level Works most effectively in an environment of transparency and accountability RCM is a tool academic leaders have responsibility for using the system to advance the missions of the University 15

16 Current Budget Model All Funds Budgeting (AFB) was instituted at Rutgers in 2005 AFB is a modified version of RCM where flat overhead on tuition and F&A is used to support the local/ regional administration and systemwide administration costs not directly budgeted to the schools Legacy UMD units are on an RCM type model but different from AFB 16

17 How Does RCM Work? Revenues are credited to the Responsibility Center that generates them Schools must then pay for their direct expenses as well as a share of the expenses to fund the Support Units REVENUE Clinical income Tuition and Fees F&A Return Other Income RESPONSIBILITY CENTERS Schools Research Centers Auxiliaries DIRECT & INDIRECT COSTS Direct Expenses System-wide Support Units Local/ Regional Support Units 17

18 Do Other Schools Use RCM? RCM was created at University of Pennsylvania in the early 1970 s as a response to a financial crisis In the 1980 s schools such as U of Southern California and the U of Toronto also developed RCM budget models Now many public and private universities have converted to RCM Indiana U, Michigan, Iowa State, U of Minnesota, Syracuse, U of Florida, etc. 18

19 Why Switch to RCM? Academically Centered - Academics over Economics Provides schools with better data, more control, and greater flexibility over resource decisions Increased accountability and transparency Greater focus on long-range strategic planning RCM enables understanding of ROI and priority decisions given limited resources 19

20 RCM Project Committee Structure RCM Steering Committee Chancellors SVP for Finance SVP for Administration RCM Advisory Committee Faculty Deans Vice Presidents University Senate representatives RCM Technical Committee Key unit administrators from across the university 20

21 Allocation of Costs System-wide Local/ Regional Costs that are incurred by system-wide support units providing services to all Costs that are incurred by support units providing services at the local/ regional or chancellor level 21

22 Allocation of Costs System-wide Cost Pools General Administration Academic Support Student Support Debt Service Utilities Operations and Maintenance Information Technology Strategic Libraries Research Support 22

23 Metrics for Allocation of Costs Once the cost pools have been developed, they need to be allocated to the schools using a metric that best measures the activity The metrics used should be based on best practices, verifiable, easy to understand, and uniform Our model includes the following metrics: Unit Expenditures; Net Assignable Square Footage; Enrollment & Tuition data; F&A Return data; and Faculty & Staff FTE 23

24 RCM Concerns and Realities Those academic units that do not have enough revenues to cover their direct and indirect costs will be eliminated One of the benefits of RCM is that it highlights the full costs to operate schools and allows for informed discussions as to the level of subvention given above and beyond earned revenues Concern Reality 24

25 Time Frame DESIGN (FY13) -Read available RCM literature and researched RCM models at other universities -Determined indirect cost pools and developed methodologies to allocate these costs to the revenue generating responsibility centers PREPARATION (FY14) -Advisory committees formed to discuss preliminary RCM budget model -Develop preliminary budget model -RCM budget model is continually refined and fine tuned based on committee feedback TRAINING & TRIAL RUN (FY15) -Training will be provided through information sessions, small focus groups, hands on computer labs, and documentation -A trial run of RCM will be implemented on paper and run parallel to AFB -Assumptions will be tested and tweaks made FULL IMPLEMENTATION (FY16) -RCM will be fully integrated into the general ledger 25

26 INTEGRATION IMPACT: Research and RCM models In the new Rutgers, the Research Functions that were a hybrid of centralized and school-based functions at legacy UMDNJ will operate through a centralized and expanded Office of Research and Economic Development Integration of Functions Centralized UMDNJ Contract Negotiations (Legal Management) School-based UMDNJ Research Administration Offices (grant submissions, contract signatures) Rutgers Office of Research Administration Comparative Medicine/ Vivarium, Controlled substances Office of Research Advancement IRB, COI, Research Misconduct Administration IACUC, Export Control Administration Office of Research Regulatory Affairs Technology Transfer Office Office of Innovation & Partnerships 26

27 Excellence in Research Administration Project: Review of Research Administration includes all locations, units and campuses for the following offices: Office of Research Administration (OCC, ORO, ORSP) Office of Research Regulatory Affairs (IRB, IACUC, COI, Compliance) Division of Grant and Contract Accounting 27

28 Methodology for performance enhancement and change management We will use a combination of the approaches below to generate ideas related to the five pillars of administrative efficiency and effectiveness. Rutgers People and Organization Structures Our experience and Best Practices Process Analysis The Business Processes The Technologies employed in conducting services Webbased Survey Tool The impact of the services on internal and external Customers Idea Generation The way that Rutgers measures its Performance and applies metrics 28

29 Gathering information, ideas and feedback to develop the recommendations and initiating implementation: Information Request and RADIUS survey Interviews (Investigator Focus Groups, Central Office Staff) Technology sessions Business process review sessions Survey customized survey questions for Investigators, department and central staff Faculty, Central and Department Administrators Collect Data Gather ideas via survey, interviews and working sessions Gather data via information request and RADIUS Analyze data and assimilate into report Recommendations and final report Communications Implementation Evaluation 29

30 Linking performance and scale to RCM and the strategic plan 30

31 Questions? 31