MUSC UNIVERSITY LDI

1. MUSC UNIVERSITY LDI June 3, 2011

2. Vision “MUSC should be a Leading and Transformative Academic Health Center.” President Ray Greenberg, M.D., Ph.D. Academic Leadership Retreat- February 2011

3. Transformative Change “Transformation (1) alters the culture of the institution by changing select underlying assumptions and institutional behaviors, processes, and products; (2) is deep and pervasive, affecting the whole institution; (3) is intentional; and (4) occurs over time”

4. Overview • Transformative Change • MUSC Financial Management System • MUSC Strategic Plan • Tough Questions

6. Financial Management -Why Transformative Change? • South Carolina has cut appropriations to higher-education by 50+% in recent years • South Carolina is one of six states that has faced a budget shortfall equal or exceeding the state’s higher education expenditures2 • If South Carolina eliminated all state government except education and Medicaid, the state would still face a budget deficit 2 • South Carolina Governor Nikki Haley has sworn off tax increases • State Medicaid payments and balance sheet obligations are expected to continue driving out the “discretionary” budget priorities (like higher education) 6 (1) Reuters, “South Carolina Scrambles to Deal with Budget Shortfall, January 5, 2011 (2) Quote from State Senator A. Shand Massey; Chronicle of Higher Education, Colleges to Confront Deep Cutbacks, January 3, 2011

7. Financial Management System • Not a budgeting system • Is a blending of vision, operations, strategic goals, financial management • Requires university-wide ownership through collective leadership

8. Current Funds Flow 8 * Includes transfers and pass through associated with MUHA and UMA

9. Proposed Financial Management System 9

10. Why this Model? • Better Decision-making System • Incentive based system to grow revenue and control costs • Decision making at the point of action • Better understanding of the true costs of operations relative to revenue • More Deliberate University-Wide Communication • Link Academic and Fiscal Forecasting for Longer Term Planning • Administrative services have been tied largely to one funding stream- changing the stream • Rule based

11. Implementation Progress • Completed: • Evaluation of current model incentives, challenges and funds flows- Funds Flow- 2010 • Identification of ARCs and development of revenue and cost allocation methodologies- December-January 2010 • MUSC Leadership approval of a revenue and cost allocation methodology (February 2, 2011) • MUSC Board of Trustees review of revenue and cost allocation (February 10, 2011) • University presentations • Development of FY2010, 2011 P&L statements- March & April 2011 • MUSC Academic Leadership approval of a finalized revenue and cost allocation methodology (May 23 2011) Current State Assessment Model Development ~17 Months Until Full Implementation Communications & Consensus Building Beta Testing & Reporting Implementation 11

12. Implementation Progress • Underway: • Develop P&L for current FY 2010, FY2011 and FY2012 for 2013 implementation • Calculation of funding requirements for MUSC Investment Fund • Development of Hold Harmless/Hold Benefit for initial implementation • Development of deferred maintenance funding plan • Development of Oversight and Operations committees • Development of 3-year fiscal forecasting plans for ARCs • Creation of selected management reports for education and training of ARC leadership teams Current State Assessment Model Development ~17 Months Until Full Implementation Communications & Consensus Building Beta Testing & Reporting Implementation 12

13. MUSC Strategic Plan as Transformative • Globalization • To improve the health of people in South Carolina and globally through the development of collaborative global partnerships in education, clinical care, and research • Entrepreneurship • Create and sustain a culture, with both pathways and infrastructure, that will support University-wide entrepreneurialism. Cultivate opportunities to explore new portals and partnerships, public and private, while promoting an ethical framework for pursuits

14. MUSC Strategic Plan as Transformative • Technology/Innovation • Provide an environment that promotes the application, development, and transfer of technology, fosters and rewards innovation, cultivates human capital, and responds to emerging priorities to advance health care, education, and research • Interprofessional/Interdisciplinary • MUSC will be a leader in interprofessional/interdisciplinary practices by building on existing activities and fostering an environment that rewards innovative and integrated education, research, and patient care

15. Example- Master of Science in Clinical Research Global • College of Graduate Studies • Enrollment Management • Risk Management • Administration & Finance • Legal • Library • Information Technology • Education & Student Life • Commission on Higher Education • Foundation for Research Development • Student Advising • Office of International Support • Office of the Provost

16. Next Steps • 2009-10: • Defining the Vision • Formation of Broad Based Strategic Planning Committees • Articulating the Strategic Plan- Goals & Strategies • 2010-11: • Approval by Board of Trustees- August • Implementation Committees • Specialized subcommittees • 2011-12: • Integration- MUSC Excellence, Colleges, University Policies, Administrative Infrastructure, Financial Management • Business plans • Center (s) development

18. Tough Questions?