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Perspective: Follow the Money: The Implications of Medical Schools Funds Flow Models

Miller, Jeffrey C.; Andersson, George E.; Cohen, Marcia; Cohen, Stephen M.; Gibson, Scott; Hindery, Michael A.; Hooven, Martha; Krakower, Jack PhD; Browdy, David H.

Academic Medicine:
doi: 10.1097/ACM.0b013e3182713b77
Financial Issues
Abstract

Medical schools conduct research, provide clinical care, and educate future physicians and scientists. Each school has its own unique mix of revenue sources and expense sharing among the medical school, faculty practice plan(s), parent university, and affiliated hospital(s). Despite these differences, revenues from clinical care subsidize the money-losing research and education missions at every medical school.

In this perspective, the authors discuss the flow of funds among a medical school, its faculty practice plan(s), parent university, and affiliated hospital(s). They summarize where medical school revenues come from, how revenues and expenses flow within a medical school and between a medical school and its partners, and why understanding this process is crucial to leading and managing such an enterprise. They conclude with recommendations for medical schools to consider in developing funds flow models that meet their individual needs and circumstances: (1) understand economic drivers, (2) reward desired behaviors, (3) enable every unit to generate a positive margin, (4) communicate budget priorities, financial performance, and the use of institutional resources, and (5) establish principles for sharing resources and allocating expenses among entities within the institution.

Medical schools should develop funds flow models that are transparent, aligned with their strategic priorities, and reward the behaviors necessary to produce effective collaboration within and across mission areas.

Author Information

Mr. Miller is former vice dean and chief operating officer, Northwestern University Feinberg School of Medicine, and managing member, Miller Group LLC, Chicago, Illinois.

Mr. Andersson is assistant vice chancellor and assistant dean for finance, Washington University in St. Louis School of Medicine, St. Louis, Missouri.

Ms. Cohen is senior associate dean for finance and administration, Stanford University School of Medicine, Stanford, California.

Mr. Cohen is executive vice provost and executive vice dean, Weill Cornell Medical College of Cornell University, New York, New York.

Mr. Gibson is executive vice dean for administration, Duke University School of Medicine, Durham, North Carolina.

Mr. Hindery is vice dean for administration, finance and clinical programs, University of California, San Francisco, School of Medicine, San Francisco, California.

Ms. Hooven is vice dean, administration, Columbia University College of Physicians and Surgeons, New York, New York.

Dr. Krakower is associate vice president, Division of Medical School Affairs, Association of American Medical Colleges, Washington, DC.

Mr. Browdy is chief operating officer, Northwestern University Feinberg School of Medicine, Chicago, Illinois.

Correspondence should be addressed to Mr. Miller, Miller Group LLC, 847 West Lill Ave., Chicago, IL 60614; telephone: (312) 927-8212; e-mail: jeffreymiller13@gmail.com.

© 2012 Association of American Medical Colleges