Academic health centers are grappling with daunting financial challenges. Declining reimbursement rates for clinical services, skyrocketing malpractice premiums, and the manifold implications of a struggling economy have all contributed to financial distress. Increasingly, department chairs are expected to function as CEOs of small (or not so small) businesses. The pressure to generate revenue from both new and old sources poses a threat to pursuit of educational, research, and community service missions. To preserve all aspects of academic mission, departments have needed to adopt rigorous approaches to strategic planning, definition of faculty roles, accountability, and measurement of achievement.
Developing new approaches to planning and management has been vital to success in this demanding environment. Most departments of family medicine now utilize explicit, evidence-based planning and management tools. These techniques come under the general umbrella of measurement-based or fact-based management. Several departments, including those at the University of Saint Louis, the University of Cincinnati, and Thomas Jefferson University, utilize the Balanced Scorecard, the best known of these new approaches. Developed at the Harvard Business School in the early 1990s, the Balanced Scorecard is a strategic planning technique designed to clarify mission and critical success factors.1-3 The Balanced Scorecard forces departments to assess the needs of their customers carefully, determine the types of internal processes they do well, determine what processes and activities are needed to continue to learn and change, and set clear financial strategies and goals. When used correctly, a Balanced Scorecard not only drives change, but also drives a robust examination of department performance. Although the Balanced Scorecard is one effective measurement-based management tool, every department has had to institute rigorous approaches to assessing group and individual performance.
One of the most challenging but important aspects of instituting these new levels of accountability is translating departmental objectives into effort by individuals. Achieving success in each aspect of academic performance has required that larger departments of family medicine differentiate assignment of faculty roles. Increasingly, clinician-educator faculty are expected to have received additional training in clinical and teaching skills. All research faculty complete some type of research fellowship, which often includes an advanced degree. Department physician-administrators undergo a variety of training experiences to prepare for their key leadership roles.
Department chairs are also working with individual faculty members to define distribution of effort. A growing number of departments are matching effort to source of funding. Medical student teaching is supported by the medical school budget, the hospital supports graduate medical education, and clinical efforts are matched to the clinical budget. Research and other contractual activities are matched to a specific source of dollars. Linking effort to funding makes it possible to assign a specific financial balance sheet, not only to programs but also to individual faculty members. This level of accountability has been a source of stress as well as a source of enlightenment. Individuals respond well to clarity of mission and establishment of clear goals, particularly if the link between individual effort and department success is clear. For many departments, faculty now talk about contracted time: “Here is what I’m being paid to do for this percentage of my total salary”.
Although bringing a business perspective to academic medicine can be intimidating and feel like a departure from core mission, it can be gratifying as well. As an example, during the past 4 years the Department of Family Medicine at Thomas Jefferson University in Philadelphia has been hard hit by low reimbursement and overwhelming malpractice rate increases. The department has faced budget cuts and new expenses totaling just under $4 million. Strict measurement-based management, including a high level of group and individual accountability, enabled the department to maintain faculty size and high teaching scores from students and residents, to fill all residency positions through the match with US medical school graduates, and to increase dramatically funded research and community activity.
Achieving difficult objectives and maintaining optimism in challenging times are some of the foremost challenges facing chairs of departments of family medicine. The ability to define and measure progress is increasingly a part of the fabric of department management and is a necessary part of the process for departmental success.
Richard C. Wender, MD
Alumni Professor and Chair
Department of Family Medicine
Thomas Jefferson University
Jeff Susman, MD
Professor and Chair
Department of Family Medicine
University of Cincinati
- © 2003 Annals of Family Medicine, Inc.