An Illustrative Business Plan to Inform Decision Making

Transcription

1 Georgia Graduate Medical Education Consortium An Illustrative Business Plan to Inform Decision Making Final Report February 11, 2009 ECG MANAGEMENT CONSULTANTS, INC. 100 Cambridge Street, Suite 2001, Boston, MA telephone fax web site SEATTLE BOSTON WASHINGTON D.C. SAN DIEGO ST. LOUIS

2 PREFACE ECG Management Consultants, Inc., has assembled the accompanying financial projections using information provided by the management of Athens Regional Medical Center, Northeast Georgia Health System, and St. Mary s Healthcare System, as well as a series of assumptions that are described in detail throughout the document. There will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. This report and the accompanying projections are restricted to internal use; we express no assurances of any kind regarding the projections. Detailed information regarding the financial projections is in the report and attached worksheets. Further, any discussion of legal issues contained herein is preliminary and subject to review by legal counsel. This material reflects our understanding of general legal principles, but may not be a complete description of currently applicable state and federal laws and regulations. We suggest that you consult with legal counsel to confirm compliance with the law and suggest any necessary changes to the proposed arrangements.

3 TABLE OF CONTENTS Page I. Executive Summary...2 II. Introduction and Background...8 III. Consortium Model...13 A. Mission, Vision, and Purpose B. Corporate Structure, Ownership, and Governance C. Affiliation Agreements D. Residency Programs IV. Consortium Leadership, Management, and Operations...18 A. Management Structure and Corporate Operations B. Academic Operations V. Internal Medicine Residency Program...23 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges VI. Emergency Medicine Residency Program...29 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges VII. Family Medicine Residency Program...35 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges VIII. General Surgery Residency Program...41 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges \02\134730(doc-E) i

4 IX. OB/GYN Residency Program...47 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges X. Psychiatry Residency Program...53 A. Overview B. Residents C. Faculty D. Rotation Assumptions E. Critical Challenges XI. Implementation Sequence...59 A. Approval Decision by Participants B. GGMEC Formation C. Initial Corporate Operations D. Initial Academic Operations E. Institutional Accreditation Process F. Program-Specific Start-Up and Accreditation Process G. Residency Program Start-Up Operations H. Recruitment Planning I. Resident Recruitment J. Commencement of Residency Program Operations XII. Revenue Projections...65 A. Relevant Medicare Background B. DGME and IME Reimbursement C. Resident FTE Cap D. Reimbursement for New Teaching Hospitals E. Detailed Assumptions Applied to the Financial Projections F. Residency Programs G. DGME Payment Calculation H. IME Payment Calculation XIII. Expense Projections...82 A. Consortium Expenses B. Program-Specific Expenses C. Start-Up Expenses \02\134730(doc-E) ii

5 XIV. Conclusions Tactical Considerations and Implementation Strategies...89 A. GGMEC Funding B. Medical Staff Involvement C. Accreditation D. Recruitment and Retention E. Statutory and Regulatory Changes \02\134730(doc-E) iii

6 I. Executive Summary 1488\02\134730(doc-E) 1

7 I. Executive Summary In a variety of recent studies, it has been well documented that the state of Georgia is confronted by an expected shortage of physicians. One response to this challenge is the establishment of a new medical education program the University of Georgia/Medical College of Georgia Medical Partnership Campus in Athens to produce new physicians. A second, complementary response is the need to develop graduate medical education (GME) programs, which are necessary to train physicians in various medical and surgical specialties upon graduation from medical school. In fact, GME programs are essential to medical students while enrolled in medical school. The Liaison Committee on Medical Education (LCME), the body that accredits medical schools, requires that medical student clerkships should be conducted in healthcare settings where resident physicians in accredited programs of GME, under faculty guidance, participate in teaching the students. 1 To foster and promote the development of GME programs, the Georgia Graduate Medical Education Consortium (GGMEC) is envisioned as a tax-exempt, separately incorporated organization with the mission of developing high-quality GME programs in response to the projected shortfall of physicians within the state of Georgia and particularly the northeast region of Georgia. More specifically, it is under consideration that GGMEC, in affiliation with academic partners, would focus on establishing GME programs at three hospitals: Athens Regional Medical Center (ARMC). Northeast Georgia Health System (NGHS). St. Mary s Healthcare System (SMHCS). To facilitate decision making and provide the leadership of ARMC, NGHS, and SMHCS, as well as other key stakeholders, with a detailed illustration of the potential organization, operation, and finances of the proposed GGMEC within the context of a range of possible residency programs, a detailed business plan was requested and prepared by ECG Management Consultants, Inc. The business plan illustrates the requirements for the formation of GGMEC as an Accreditation Council for Graduate Medical Education (ACGME) -accredited institutional sponsor of six potential residency programs: Primary Care Programs Other Programs Family Medicine Emergency Medicine Internal Medicine General Surgery Obstetrics and Gynecology (OB/GYN) Psychiatry 1 Functions and Structure of a Medical School, Standards for Accreditation of Medical Education Programs Leading to the M.D. Degree. LCME, June 2008, ER-8, page \02\134730(doc-E) 2

8 It is important to recognize that no decisions have been made by the three hospitals to participate in the envisioned consortium or to host any of the particular residency programs. The business plan illustration is designed to inform and educate each hospital s executive management team, medical staff, and governing boards regarding the potential requirements and implications of GME participation. Accordingly, alternative decisions could be made regarding GME participation, the mix of residency programs, the scale of the GME enterprise, and other factors. Implementation assumptions associated with establishment of the modeled GGMEC and associated residency programs include: An initial 9-month period during which requisite hospital board approvals must be obtained, medical staff endorsements received, and necessary funding secured. A subsequent 2-year, 9-month period during which the consortium is formed and commences operation, key recruitments occur, ACGME-accreditation requirements are satisfied, and medical students are recruited for the GME programs. Six years of program operations during which the GME programs ramp up to full operation with a complete complement of residents. At full operation, the workforce of the consortium and associated GME programs is characterized by: 102 full-time residents. 77 faculty physicians devoting a portion of their time to the educational programs.» 6 residency program directors.» 71 faculty physicians. 16 full- and part-time management and administrative support personnel. The Medicare program is the single largest source of funding for GME. As new teaching hospitals, ARMC, NGHS, and SMHCS are eligible for GME reimbursement from the Medicare program under a strict set of conditions. In fact, the current federal reimbursement mechanism for new teaching hospitals through Medicare for direct graduate medical education (DGME) and indirect medical education (IME) payments creates a financial incentive for rapid GME program growth. DGME payments are intended to cover the direct costs incurred by hospitals that operate GME programs. Direct costs include resident salary and fringe benefits, faculty compensation for teaching and supervision of residents, program administration, and related overhead. IME payments are intended to cover the indirect costs incurred by teaching hospitals and to reflect the percentage by which teaching hospitals costs of care increase due to the presence of GME programs. 1488\02\134730(doc-E) 3

9 Specifically, there is a 3-year window for program development, at which point Medicare caps the number of residents it will reimburse. Accordingly, any GME program growth in the future beyond the initial 3-year period (e.g., increase in residents in existing programs or the addition of new programs) is ineligible for reimbursement under the current regulations. It is therefore of the utmost importance to maximize resident enrollment during the first 3 years of operation while balancing the need to provide high-quality clinical and didactic education. For these reasons, the business plan projects the simultaneous accreditation and implementation of the six considered GME programs. Projected reimbursement and annual operating expenses for GGMEC and six residency programs are summarized below. It should be noted that the financial projections are presented in constant dollars, and therefore do not forecast changes in Medicare reimbursement or inflation. Start-Up Program Ramp-Up Program Operations Revenue DGME Reimbursement IME Reimbursement Total Revenue Expenses Academic Year 2009 Academic Year 2010 Academic Year 2011 Academic Year 2012 Academic Year 2013 Academic Year 2014 Academic Year 2015 Academic Year 2016 Academic Year 2017 $0 $0 $0 $393,250 $710,977 $1,109,436 $1,824,395 $2,465,521 $2,853, ,631 1,672,201 2,604,031 4,255,840 5,704,360 6,557,133 $0 $0 $0 $1,318,880 $2,383,178 $3,713,467 $6,080,235 $8,169,881 $9,410,163 Personnel $648,750 $1,992,500 $2,860,583 $4,179,500 $6,198,050 $8,523,947 $10,246,715 $11,295,545 $11,535,545 Non- Personnel 64, , , , , , , , ,750 Total Expenses $713,566 $2,119,405 $3,117,983 $4,575,900 $6,745,450 $9,249,247 $11,106,865 $12,243,045 $12,512,795 Net Income (Loss) $(713,566) $(2,119,405) $(3,117,983) $(3,257,020) $(4,362,272) $(5,535,780) $(5,026,630) $(4,073,164) $(3,102,632) Residents Non- Medicare $0 $0 $0 $395,433 $1,034,211 $1,916,332 $2,555,109 $2,980,960 $3,102,632 Support 2 Adjusted Net Income (Loss) $(713,566) $(2,119,405) $(3,117,983) $(2,861,587) $(3,328,061) $(3,619,448) $(2,471,521) $(1,092,204) $0 As depicted above, potential Medicare reimbursement is insufficient to cover the projected annual cost of the modeled academic enterprise, indicating that at full operation in academic year () 2017, funding from non-medicare sources of approximately $3.1 million annually (approximately $30,418 per resident per year for the 102 modeled residents) will be required to sustain the consortium. 2 Non-Medicare support is estimated at $30,418 per resident per year based on break-even funding requirements for \02\134730(doc-E) 4

10 Importantly, the reimbursement model described in this report considers only potential reimbursement available through the federal Medicare program. Pending federal legislation is expected to eliminate any federal matching funds for GME through the Medicaid program. Consequently, in lieu of any philanthropy that might be accessed, the envisioned GGMEC will require non-medicare financial support from the state of Georgia. Alternatives for providing such support might include: Direct support from the state to the consortium. Provision of funding through the University of Georgia to underwrite the cost of faculty through paid stipends, thereby reducing the potential operating costs of GGMEC. Direct support to the hospitals participating in the training programs that can be used to fund the consortium. In addition to the non-medicare operating support required for the GME programs to break even, projected start-up costs for the consortium and associated residency programs include the following: Total Start-Up Expenses for Operating subsidy during the first 3 years of start-up ( ). Operating subsidy during program ramp-up ( ). Faculty and management recruitment expenses during the first 5 years ( ). Professional fees associated with legal, consulting, and accounting services during the first 3 years ( ). Furniture, equipment, supplies, and minor renovations during the first 3 years ( ). Total start-up expenses during ramp-up ( ). $5,950, ,372, , , ,000 $20,695,775 Despite the imperatives for rapid growth, GGMEC will potentially face a number of challenges and must develop sound contingencies to mitigate the related risks. Such challenges and risks include: The need for sufficient funding from the state of Georgia and/or other sources to support start-up activities and shortfalls arising from inadequate Medicare reimbursement. The active support of ARMC, NGHS, and SMHCS medical staff for involvement in medical education. 3 4 The operating subsidy required during start-up is to cover the net loss assumed by the consortium during The operating subsidy during program ramp-up is to cover the adjusted net loss (i.e., after Medicare reimbursement and non-medicare operating support) during \02\134730(doc-E) 5

11 The ability to attain ACGME accreditation of all GME programs in advance of establishing the first residency program. Ensuring successful recruiting efforts and the ability to retain residents during the initial program ramp-up and beyond. The potential for both favorable and unfavorable statutory and regulatory changes. Various others. Despite these risks, the state of Georgia, each of the hospitals, and their academic partners have a unique opportunity to benefit from the establishment of GME programs. Tactical strategies that should be considered to mitigate the above risks and to appropriately optimize GME reimbursement potential include the following: Consider delaying implementation of any GME programs until accreditation is ensured for all desired programs. Alternatively, GGMEC should consider the potential benefits of a sequential implementation of residency programs whereby, for example, two GME programs are established and grown at one of the hospitals over the first 3 years, and then the next two programs are implemented at another hospital over Years 4 through 6, and so on. Devise and execute detailed recruitment and retention plans for all residency programs in advance of initiating the first GME program to achieve a successful ramp-up during the initial years and to maximize the resident FTE cap at each hospital. Maintain a high degree of alertness regarding governmental action and any resulting statutory or regulatory changes. Allow for flexibility during implementation to exploit any previously unforeseen opportunities that may arise and/or to mitigate the impact of any unfavorable changes. Clarify medical staff roles, responsibilities, and expectations as they relate to the GME programs. Ensure that key medical staff leadership is engaged in business plan review, GGMEC approval decisions, and execution of implementation plans, and make certain that any key recruits are in place in advance of the programs start dates. A deliberate and well-conceived approach to GME program implementation is the most important requirement associated with the potential development of the envisioned GGMEC and associated residency programs. 1488\02\134730(doc-E) 6

12 II. Introduction and Background 1488\02\134730(doc-E) 7

13 II. Introduction and Background In response to an expected and increasing shortage of physicians in the coming years, the University of Georgia/Medical College of Georgia Medical Partnership Campus in Athens was established to increase the number of medical school students. In addition, it is noteworthy that Brenau University is considering development of a medical school, and that the recently established Philadelphia College of Osteopathic Medicine Georgia Campus began accepting students in While the development of new medical programs presents numerous challenges, area hospitals and their medical staffs are confronted by decisions of whether to make their facilities available and to participate in the training of medical students. Specifically, during the third and fourth year of medical student education, medical students require patient care-based experiences involving clerkships at hospitals and other clinical facilities. In fact, the LCME, the body that accredits medical schools, requires that medical student clerkships should be conducted in healthcare settings where resident physicians in accredited programs of GME, under faculty guidance, participate in teaching the students. 5 Accordingly, the development of GME programs, which are necessary not only in support of medical student clerkships but to train physicians in various medical and surgical specialties upon graduation from medical school, is an essential component of the challenge associated with medical school expansion and new medical program development. The willingness of hospitals and their medical staffs to host GME programs is therefore critical to medical schools. In recognition of the above, in November and December 2007, a steering committee comprising the senior leadership of ARMC, NGHS, and SMHCS was assisted by ECG in conducting a preliminary feasibility assessment of each hospital s interest and capability to participate in GME. In addition, the hospital chief executive officers (CEOs), through the steering committee, considered the possibilities for a collaborative arrangement among the three institutions and potential academic partner(s) for establishing new GME programs in the region. This project was sponsored by the state of Georgia. The steering committee reached the following conclusions during the 2007 process: Physician workforce studies completed independently by each hospital are consistent and project shortages emerging in many specialties in the next 10 years. The establishment of GME programs in northeast Georgia would serve to mitigate concerns regarding physician supply. The three hospitals, individually and collectively, can provide a clinical environment conducive to the operation of high-quality GME programs. 5 Functions and Structure of a Medical School, Standards for Accreditation of Medical Education Programs Leading to the M.D. Degree. LCME, June 2008, ER-8, page \02\134730(doc-E) 8

14 There is a seemingly supportive medical staff environment and physicians who have expressed interest in serving as faculty to GME programs. A medical education consortium model for organizing, governing, managing, and financing GME in the region may represent the best opportunity to meet institutional, regional, and statewide objectives and imperatives (e.g., GGMEC). Significant financial hurdles will need to be resolved to promote establishment of GME programs in northeast Georgia and foster their ongoing financial viability. Participation in GME is a mission-changing decision for each hospital, requiring deliberative and comprehensive planning, substantial constituency support, and requisite corporate approvals. Based on these conclusions, it was determined that the development of a detailed business plan for establishing both a medical education consortium organization and a specific set of potential residency programs would serve as an effective illustration of the academic enterprise contemplated by the steering committee at the end of Further, such a business plan would provide ARMC, NGHS, and SMHCS with the data and information necessary for informed decision making regarding future participation in GME. Accordingly, and once again given the sponsorship of the state of Georgia, a project was conducted during the concluding 6 months of 2008 to develop a business plan illustrating the creation of GGMEC, consisting of six residency programs: Primary Care Programs Other Programs Family Medicine Emergency Medicine Internal Medicine General Surgery OB/GYN Psychiatry This report represents the culmination of that effort. In developing the business plan, particular attention was paid to the ACGME, which promulgates specific requirements for all allopathic residency programs. Key areas of ACGME requirements affecting development of the business plan included the following: Sponsoring Institution ACGME-accredited residency programs must operate under the authority and control of a sponsoring institution. Hospitals, medical schools, or consortium organizations may be sponsoring institutions. The sponsoring institution:» Assumes the ultimate financial and academic responsibility for a program of GME.» Must be appropriately organized for the conduct of GME in a scholarly environment.» Must be committed to excellence in both medical education and patient care. 1488\02\134730(doc-E) 9

15 Clinical Experience Requirements of Each Program The ACGME and associated Residency Review Committees (RRCs) define specific requirements by specialty to ensure that residents gain proficiency in their respective area of specialization through a variety of factors. Those factors involve:» Duration of training and minimum resident complements.» Clinical volume requirements.» Exposure to various clinical specialties and subspecialties.» Facilities.» Limitations of resident work hours.» Various others. Faculty and Funding-Related Requirements for Each Program The ACGME and associated RRC requirements associated with specific programs vary depending on the specialty. However, such requirements may relate to:» Program administration.» Numbers of faculty.» Limitations on faculty clinical commitments.» Funding support for faculty compensation.» Various others. In addition to the ACGME accreditation requirements, the business plan also focused significant attention on Medicare reimbursement for GME. As new teaching hospitals, ARMC, NGHS, and SMHCS are eligible for GME reimbursement from the Medicare program under a strict set of conditions. In fact, the current federal reimbursement mechanism for new teaching hospitals through Medicare for DGME and IME payments creates a financial incentive for rapid GME program growth. DGME Payments DGME payments are intended to cover the direct costs incurred by hospitals that operate GME programs. Direct costs include resident salary and fringe benefits, faculty compensation for teaching and supervision of residents, program administration, and related overhead. IME Payments IME payments are intended to cover the indirect costs incurred by teaching hospitals and to reflect the percentage by which teaching hospitals costs of care increase due to the presence of GME programs. Specifically, there is a 3-year window for program development for each hospital, at which point Medicare caps the number of residents it will reimburse. Accordingly, any GME program growth in the future at each hospital beyond the initial 3-year period (e.g., increase in residents in existing 1488\02\134730(doc-E) 10

16 programs or the addition of new programs) will be ineligible for reimbursement under the current regulations. It is therefore of the utmost importance to develop strategies that maximize resident enrollment during the first 3 years of operation while balancing the need to provide high-quality clinical and didactic education. In reviewing the financial projections contained in this report, there are several important considerations to be kept in mind: General Consideration The accompanying financial projections are intended to be an illustration of the potential costs of GGMEC, its associated residency programs, and the potential Medicare reimbursement that may be available to each of the three hospitals. There will usually be differences between the projected and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Accordingly, this document and the accompanying projections are restricted to internal use; ECG expresses no assurances of any kind regarding the projections. Medicare Consideration The financial projections are based on specific assumptions associated with the ability of each of the three hospitals to qualify for GME reimbursement as new teaching hospitals in accordance with information obtained from the Code of Federal Regulations (CFR). Congress may change such regulations at any time, and the Centers for Medicare & Medicaid Services (CMS) or other federal agencies may alter their interpretation of the regulations in the future. Further, the relevant fiscal intermediary may interpret or apply the federal regulations in an unforeseen manner. Other Considerations ACGME accreditation standards and requirements, as well as various other factors upon which the assumptions were prepared and financial projections developed, may change over time. Further, any discussion of legal issues contained herein is preliminary and subject to review by legal counsel. This material reflects ECG s understanding of general legal principles, but may not be a complete description of currently applicable state and federal laws and regulations. We suggest that you consult with legal counsel to confirm compliance with the law and suggest any necessary changes to the proposed arrangements. 1488\02\134730(doc-E) 11

17 III. Consortium Model 1488\02\134730(doc-E) 12

18 III. Consortium Model This section of the report describes the organizational characteristics of the prospective GGMEC. A. Mission, Vision, and Purpose The mission, vision, and purpose of the consortium are intended to provide organizational direction and consistent guidance for its leadership and participants. 1. Mission To educate physicians through the operation of high-quality GME programs that address the physician workforce requirements of the state of Georgia, serve the communities of consortium participants, and support the needs of the consortium s academic affiliates. 2. Vision The consortium s vision is to: Promote a scholarly environment for the conduct of all GME programs, and coordinate the oversight of educational quality, program requirements, and accreditation. Train excellent physicians to practice in Georgia, and particularly in northeast Georgia. Contribute to patient care quality. Enhance administrative efficiency by sharing the administrative costs of GME to reduce redundancies and realize economies of scale. Coordinate financial arrangements and foster sustainable, long-term financial performance. 3. Purpose The consortium is organized exclusively for educational and scientific purposes in support of medical and health-related professional education. Accordingly, the consortium will sponsor, organize, coordinate, and supervise GME programs and activities maintained by its members. B. Corporate Structure, Ownership, and Governance To successfully implement and achieve the mission, vision, and purpose of the consortium, proper structures, policies, and procedures are required. 1. Corporate Structure GGMEC is envisioned to be a tax-exempt 501(c)(3) corporation. 1488\02\134730(doc-E) 13

19 2. Ownership The anticipated corporate members are: ARMC. NGHS. SMHCS. 3. Governance It is proposed that the consortium have a 10-member Board of Directors comprising: Each corporate member s CEO or his/her designee. A representative from each corporate member s governing board. One representative from the consortium s primary medical program affiliate, likely the medical program dean or dean s designee. One representative of the senior leadership of the University of Georgia. One at-large representative appointed by a majority of the other board members. The president/executive director of the consortium. Board authorities will include responsibility to: Set strategy and policy for the educational enterprise. Approve consortium budgets. Oversee educational and corporate operations. Approve clinical education and affiliation agreements. C. Affiliation Agreements Affiliation agreements are required to organize, manage, and/or finance the consortium by specifying its relationship to its partner organizations. The following affiliation agreements are anticipated: 1. Member General Consortium Agreement This agreement contractually binds member institutions (i.e., ARMC, NGHS, and SMHCS) to participate in and support the GME programs and activities promulgated by the consortium. Nevertheless, each member institution reserves the right not to participate in a consortium program that is in conflict with its own activities. Importantly, it is anticipated that each of the three hospitals 1488\02\134730(doc-E) 14

20 will commit funding to the consortium in amounts equivalent to the Medicare DGME and IME reimbursement they may become eligible to receive. 2. Medical School Affiliation Agreement The medical school agreement addresses the role of the medical school relative to the consortium and the GME programs. This agreement may also include specifications for undergraduate medical education activities (e.g., clinical clerkships). The consortium may or may not have multiple medical school affiliates. Such affiliates may include: The University of Georgia/Medical College of Georgia Medical Partnership Campus in Athens. Brenau University Medical School (development is under consideration). Philadelphia College of Osteopathic Medicine Georgia Campus. Others. 3. Affiliated Institution Agreements The institution agreements address the relationships that the consortium and its programs have with nonmember institutions to which residents may rotate (or vice versa). Nonmember institutions may be affiliated hospitals or nonhospital sites such as children s hospitals, physician-operated ambulatory facilities, and so forth. These agreements also ensure compliance with Medicare rules and regulations, as well as accreditation requirements. D. Residency Programs It is assumed that the consortium will seek accreditation as the ACGME institutional sponsor of the GME programs and each residency program will have a designated home institution (the base hospital), determined by the location of the program s managing academic department and/or the preponderance of its trainees rotation time. The following table summarizes the projected number of residents in each program: Residency Program Duration in Years Minimum Size Projected Total Residents Family Medicine Internal Medicine OB/GYN General Surgery Emergency Medicine Psychiatry Total \02\134730(doc-E) 15

21 The designated home institution for each residency program is an essential implementation decision for the consortium, because the ability of each of the three hospitals to become eligible for Medicare GME reimbursement is predicated upon the establishment of newly accredited residency programs at each of the hospitals. While the consortium and its member hospitals must be mindful of the Medicare reimbursement implications, GME programs can be configured to deploy residents among ARMC, SMHCS, and NGHS despite the designated home institution. The flexibility to deploy residents freely will improve the consortium s ability to provide the necessary educational experiences to residents and minimize the need to seek out nonmember institutions that can provide residents with external rotation opportunities. 1488\02\134730(doc-E) 16

22 IV. Consortium Leadership, Management, and Operations 1488\02\134730(doc-E) 17

23 IV. Consortium Leadership, Management, and Operations This section describes key attributes and assumptions regarding the leadership, management, and operations of the prospective GGMEC. A. Management Structure and Corporate Operations The management and staff responsible for managing the consortium and its GME programs are structured as follows: Board of Directors President/ Executive Director Vice President/ Designated Institutional Officer Residents Committee GME Committee Program Directors Faculty Corporate Operations Staff Finance and Accounting Human Resources Legal Information Technology GME Office Staff Residents Resident Affairs Accreditation Affiliations As depicted, the consortium will require management and staff to perform essential business functions on behalf of the consortium. Key functions and associated staffing assumptions are as follows: President/Executive Director The president/executive director is responsible for the day-to-day operation of the corporation. The president/executive director takes direction from the Board of Directors, maintains relations with consortium member organizations and affiliates, and directs members of the management team who have responsibility for specific functional areas of the consortium. 1488\02\134730(doc-E) 18

24 Finance and Accounting The finance and accounting department is overseen by the finance director. The finance director is responsible for ensuring that the financial long-term goals and obligations of the organization are met, developing financial policies, and overseeing implementation. In addition, the finance director monitors and executes a variety of financial activities, including budgeting, analysis, purchasing, payables, receivables, cash management, and the preparation of tax returns and annual reports. Human Resources The human resources (HR) director is responsible for developing, implementing, and coordinating policies relating to all aspects of personnel administration. Information Technology The information technology (IT) director implements and monitors all activities that relate to the organization s information system, including help desk functions, system maintenance, data processing, networking, and system security operations, and performs tasks related to programming and integration, with a focus on readiness for future organizational growth. Importantly, it is anticipated that the IT director will support goals and objectives of the consortium related to the educational programs and their telecommunications needs. Legal The general counsel develops, plans, organizes, and implements programs to comply with applicable federal and state statutes and regulations. The general counsel drafts, reviews, and maintains all consortium agreements and contracts, and also provides consultation regarding specific business risks related to issues of regulatory compliance. It is anticipated that the general counsel will be a half-time position. Administrative Assistants It is anticipated that the consortium will have two full-time administrative assistants. They will coordinate and support the activities of the corporate functions of the consortium and provide secretarial/clerical support for all management positions. B. Academic Operations The academic operations of the consortium and its GME programs are organized and described in the following four areas: Physicians Residents Committees GME Office Staff 1488\02\134730(doc-E) 19

25 Staffing assumptions associated with each of these areas are detailed below. 1. Physicians The consortium s arrangements with physicians may take numerous forms. For example, the consortium may employ physicians directly, establish arrangements with physicians as 1099 independent contractors to the consortium, or enter into financial agreements with affiliates who employ physicians (e.g., hospitals or universities). For example, faculty might be directly employed by the University of Georgia, with funding support coming from GGMEC to the university. Such an approach might enable the state of Georgia, through the university, to participate in the financing of essential residency programs. Regardless, the compensation estimates described herein should be viewed as estimated financial obligations of the consortium and should not necessarily be viewed as an employment relationship between the consortium and physicians. Vice President/Designated Institutional Official A designated institutional official (DIO) is required by the ACGME to serve as the primary representative of a sponsoring organization. The primary duties of the DIO include authority and responsibility for the GME programs as a whole, and responsibility for ensuring compliance with ACGME institutional requirements. Additional duties include: Serving as first point of contact for all GME organizations (ACGME, National Resident Matching Program [NRMP], American Osteopathic Association [AOA], etc.). Providing oversight, management, and leadership for GME. Providing GME education to GME and non-gme staff. Overseeing GME budgets. Reviewing and cosigning all program-related correspondence to the ACGME. Although not required, the DIO is typically a physician, and for planning purposes, is assumed to be a full-time position. Program Directors ACGME requirements specify the need for program directors with accountability for the quality of all aspects of their respective residency program. Informed by ACGME requirements, each program is assumed to have a half-time program director, with such effort considered protected time for program administrative responsibilities. The balance of each program director s time is assumed to be spent in reimbursable clinical activities. Faculty Minimum FTE requirements for sufficient faculty supervision of residents and teaching activities in each GME program are discussed in each program-specific section of this business plan. 1488\02\134730(doc-E) 20

26 However, barring instances where ACGME requirements specify a different faculty commitment, it is assumed that: Program directors commit 50 percent of their time to administration of the residency programs. Core faculty commit approximately 25 percent of their time to the educational aspects of the program. Supplemental faculty devote 10 percent of their time to the program. 2. Residents The minimum and targeted resident counts for each GME program are discussed in each programspecific section of this business plan. 3. Committees The ACGME requirements state that several types of committees are required to provide avenues for communication and action within the consortium. GME Committee GME programs will be overseen by a centralized GME Committee (GMEC), which will address issues of program location and resident rotations according to each organization s available resources, preferences, and other factors. ACGME requirements stipulate that GMEC membership must include the DIO, residents nominated by their peers, representative program directors, administrators, faculty members, and others as determined. The GMEC and DIO are jointly responsible for ensuring compliance with ACGME institutional and program-specific requirements. Residents Committee The ACGME requires an organization or other forum for residents to communicate and exchange information on their educational and work environment, their programs, and other resident issues. The ACGME also requires that residents participate on committees and councils whose actions affect their education and/or patient care. 4. GME Office Staff The GME office serves as the center for GME administration and operations; thus, communications, requests, approvals, and disputes are addressed via the GME office and not at the level of the individual hospitals. A full-time director of medical education with a full-time administrative assistant will staff the office, report to the DIO, and coordinate and support all matters related to resident affairs. In addition to the GME office staff, each residency program will have a half-time (0.5 FTE) program coordinator who provides administrative support activities to his/her respective program, such as resident tracking, accreditation filing, and scheduling. While assigned to each residency program, the program coordinators have a reporting relationship to the director of medical education. Program coordinators are required by the ACGME and are assumed to be half-time positions. 1488\02\134730(doc-E) 21

27 V. Internal Medicine Residency Program 1488\02\134730(doc-E) 22

28 V. Internal Medicine Residency Program This section illustrates a potential internal medicine residency program that might be sponsored by the consortium. A. Overview The ACGME stipulates that all internal medicine programs have a minimum duration of 3 years, and residents must be provided with a productive learning environment that fosters department identity among residents. As such, clinical volumes must be sufficient to ensure that each resident develops a satisfactory level of maturity, judgment, and technical skill. Specific attributes of internal medicine programs that were used to inform this plan include the following: Minimum number of residents: Average number of residents: Faculty-to-resident ratio: Breakdown of resident activities in hours per week follows: 9 Resident Program Total Hours per Week Clinical Hours per Week Ambulatory Hours per Week Didactic Hours per Week Internal Medicine B. Residents The following table outlines the expected number of residents, per postgraduate year (PGY), for the internal medicine program over the initial 5 years of the GME enterprise. For planning purposes, it is assumed that the minimum number of 12 residents is multiplied by 2 for a projected program complement of 24 residents ACGME Program Requirements Internal Medicine. Access through ACGME Web site: Graduate Medical Education Directory (data for 2007). Graduate Medical Education Directory (data for 2007). Graduate Medical Education Directory (data for 2007). 1488\02\134730(doc-E) 23

29 Academic Year PGY PGY PGY Total C. Faculty Faculty positions within the internal medicine program include the program director, an associate program director, clinical faculty, and supplemental faculty. Total count for the associate program director and clinical and supplemental faculty is based on program size and adjusted based on the expected percentage of time spent on teaching and/or administrative activities. The expected teaching time was informed by the ACGME requirements presented below. The program director must:» Dedicate at least 50 percent of professional effort to the educational program, and the sponsoring institution must provide salary support for this time.» Have at least 5 years of participation as an active faculty member in an ACGMEaccredited internal medicine residency program.» Have at least 3 years of GME administrative experience prior to appointment.» Be currently certified by the American Board of Internal Medicine. Sponsoring institutions must provide associate program directors based on program size, and a program with residents must have at least one associate program director. Associate program directors must receive salary support for 20 hours per week. All faculty must be certified by the American Board of Internal Medicine. Faculty must regularly participate in organized clinical discussions, rounds, journal clubs, and conferences. Some members of the faculty should also demonstrate scholarship by one or more of the following:» Peer-reviewed funding.» Publication of original research in peer-reviewed journals.» Publication or presentation of research, case reports, or clinical series at local, regional, or national professional and scientific meetings.» Participation in national committees or education organizations. 1488\02\134730(doc-E) 24

30 Faculty must have protected time and adequate support services to accomplish these tasks. The table below summarizes the estimated faculty FTE requirements for the program and is based on a 0.9 faculty-to-resident ratio. Academic Year Internal Medicine Program Director Associate Program Director Clinical Faculty Supplemental Faculty Total Unweighted FTE Count It is assumed that the above required faculty will devote a portion of their time to the educational program, with the remainder of their professional activity funded by clinical income or other sources. Accordingly, the following table estimates the effective faculty FTEs requiring funding by the program given estimated teaching efforts: Effective Faculty FTEs per Year FTE Funded By the Program Internal Medicine Program Director Associate Program Director Clinical Faculty Supplemental Faculty Total Weighted FTE Count ACGME program requirements dictate that the program must include key clinical faculty (KCF) in addition to the program director, associate program directors, and chief residents. To maintain consistency, KCFs are termed as clinical faculty throughout the plan. KCF requirements are based on program size, and a program with 79 or fewer residents requires 4 KCF. KCF requirements include:» Dedication of at least 15 hours per week to the internal medicine program.» Assistance in the preparation of written curriculum. 1488\02\134730(doc-E) 25

31 » Evaluation of the competencies of residents.» Monitoring of resident stress. D. Rotation Assumptions To ensure compliance with ACGME program-specific requirements, each program establishes a resident rotation schedule, which determines how each resident spends his/her time. For example, a first-year internal medicine resident should expect to spend a minimum of 4 months in inpatient internal medicine teaching service assignments. Based on ACGME requirements (EXHIBIT I), a sample internal medicine rotation schedule is depicted below. Internal Medicine Program Sample Resident Rotation Schedule Duration in Months PGY-1 Inpatient Medicine (4 months) Medical ICU (1 month) Critical Care Unit (1 month) Night Float (1 month) Psychiatry (1 month) Medical Subspecialties (2 months) Electives (2 months) PGY-2 Inpatient Medicine (4 months) Medical ICU (1 month) Critical Care Unit (1 month) Night Float (1 month) Medicine Consults (1 month) Electives (4 months) PGY-3 Inpatient Medicine (2 months) Medical ICU (1 month) Critical Care Unit (1 month) Emergency Medicine (1 month) Night Float (1 month) Geriatrics (1 month) Electives (5 months) E. Critical Challenges Challenges to implementation of this plan were generated from results of programmatic assessments completed by medical staff representatives at each hospital as well as meetings held with members of the medical staff during the planning process. Challenges to implementation are as follows: 1. Ability to Meet ACGME Requirements Clinical volumes at the hospitals are sufficient to meet ACGME standards. However, it may be challenging to identify sufficient percentages of that volume that are assignable to residents for teaching. In addition, a majority of the ambulatory care volume associated with internal medicine 1488\02\134730(doc-E) 26

32 program requirements is performed in private practice physician offices. Patient response to receiving care from residents instead of their traditional physician is unknown. Accordingly, identification of sufficient ambulatory care resources is essential to program success. 2. Accommodation of Other Resident Program Rotations Similar to the challenges presented above, residents from other specialties, such as emergency medicine and OB/GYN, must rotate through the internal medicine department. Accommodating internal medicine residents and other specialty residents increases the need for access to patients. 3. External Rotations A programmatic assessment was conducted to identify areas that the hospitals may be unable to offer residents as part of a rotation schedule. The following clinical experiences are required to be accredited by the ACGME and may need to be provided by nonmember institutions: Endocrinology. Infectious diseases. Rheumatology. Geriatric medicine. Medicare GME reimbursement regulations stipulate that any time spent by residents at a hospital site that is not the primary teaching hospital may not be counted toward the DGME and IME reimbursement payments. Based on the projected need for selected external rotations, residents in an internal medicine program at GGMEC will likely spend 4 months of their educational experience at an external site. The effect of the reduction of resident FTEs for the internal medicine program is as follows: Total resident FTE count: 24. Total months of external rotations per resident: 4. Adjusted FTE per resident: Net resident FTE count: \02\134730(doc-E) 27

33 EXHIBIT I Page 1 of 2 Internal Medicine Residency Program Clinical Requirements 1 General requirements for residents:» Must spend 1/3 of training time in ambulatory care.» Must spend 1/3 of training time at inpatient sites.» Minimum four weeks experience in emergency department.» Attend a minimum of 108 continuity clinics.» Must have a minimum of three months and maximum of six months in critical care unit. Clinical experience requirements for residents include the following areas:» Cardiology.» Emergency medicine.» Critical care medicine.» Endocrinology.» Gastroenterology.» Hematology.» Infectious diseases.» Oncology.» Nephrology.» Pulmonary disease.» Rheumatology.» Geriatric medicine. Residents should have technical proficiency in the following areas:» Advanced cardiac life support.» Abdominal paracentesis.» Arterial puncture.» Arthrocentesis.» Central venous line placement.» Lumbar puncture.» Nasogastric intubation.» Pap smear and endocervical culture.» Thoracentesis.» Arterial line placement.» Cryosurgical removal of skin legions.» Elective cardioversion.» Endotracheal intubation.» Skin biopses.» Soft tissue and joint injections.» Temporary pacemaker placement. 1 The program requirements for each resident program were extracted from documents found on the ACGME s Web site. For each program, the requirements in PDF format can be found under the review committees tab under the heading Program Requirements. 1488\02\134995(doc-E)