aasa new administrators workshop financial management & financial models october 4, 2015
TRANSCRIPT
AASA New Administrators Workshop
Financial Management
& Financial Models
October 4, 2015
Page 2
Introduction
Issues to Consider in Financial Management
Stewardship of Department Resources
Models of Financial Reporting
Managing Finances in Research Administration
Page 3
Stewardship of Financial Resources
Willie Sutton Principle:
Robs banks because that’s Where the money is
Page 4
Stewardship of Financial Resources
Ronnie Brown Principle:
Know where your money is
UAB Gift, State & Discretionary Accounts
UAB Research Accounts
Page 5
Types/Location of Funds
Practice Plan Funds
Track P & L, Balance Sheet
State Funds Allocation
Allocation Models
Discretionary & Service Center Accounts
Endowment & Gift Accounts
Research Accounts
Page 6
Managing the Resources
Regular review of all accounts
- All 300+ UAB Accounts
Know the sources and timing of salary support
- Budget accordingly
Inquire about expenses and revenues
- Multiple requisitions
- Computer purchases
Page 7
Managing the Resources
Know campus/practice plan policies
- Work with internal audit and compliance
Work on internal controls
- Check & cash handling
- No outside checking accounts
Avoid procurement and credit cards
Budget & Track faculty commitments
Page 8
Managing the Resources
Monthly Visa Statement
Beer $45
Pizza $55
Bowling $60
Beer $75
Skydiving $100
Girlfriend’s Rent $500
$ 835
Ronald A. Brown317 Shades Crest LaneHoover, AL 35224
Page 9
Types of Financial Models
Salary Inclusive Model
Mission Based Model
Funds Flow Model
Page 10
Salary Inclusive Model
FY 2015 – Actual FY 2015 – Budget % Variance
Pro Fee Collec. 25,000,000 23,000,000 9% less Dean’s Tax (1,250,000) (1,150,000) 9% Other Assessments (750,000) (690,000) 9%Contractual Rev. 5,000,000 5,000,000 -0- Hospital Support 10,000,000 11,000,000 -9%Grant Rev. 1,500,000 1,000,000 50%State Funds 2,000,000 2,000,000 -0-VA Salary Support 2,500,000 2,500,000 -0- Other Revenues 500,000 250,000 100% Total Revenues 44,500,000 42,910,000 4%
Revenues
Page 11
Salary Inclusive Model
FY 2015 – Actual FY 2015 – Budget % Variance
Faculty Salary/Benefits 27,500,000 27,000,000 -2%Faculty CME 500,000 500,000 -0- Non-Faculty Sal/Ben 7,500,000 7,500,000 -0- Operating Expenses 5,000,000 4,500,000 -11%Malpractice 3,000,000 3,000,000 -0-
Total Expenses 43,500,000 42,500,000 -2%
Profit/Loss 1,000,000 410,000 +144%
For Divisional Statements Add:
Chairman’s AssessmentMSO/Billing OfficeAdmin. Assessment
Expenses
Page 12
Divisional P & L
CV Plastics Urology General Chair/Admin
P & L before 100,000 50,000 (35,000) 50,000 (75,000) Assessments
Chairman’s Assessment (25,000) (10,000) (10,000) (20,000) 65,000 (5% of Revenues)
MSO/Billing Office (2% of Revenues) (10,000) (4,000) (4,000) (8,000) 26,000 Admin. Assessment (10,000) (2,000) (2,000) (8,000) 22,000 Net P & L 55,000 34,000 (51,000) 14,000 38,000
Page 13
Mission Based Model
Clinic Research Education Admin.
Pro Fee Collec. 25,000,000 Less: Dean’s Tax (1,250,000) Other Assessments (750,000) Contractual Rev. 4,000,000 1,000,000 Hospital Support 6,000,000 2,000,000 2,000,000 Grant Rev. 1,500,000 State Funds 2,000,000 VA Salary Support 2,500,000 Other Revenues 250,000 250,000
Total Revenues 35,500,000 1,750,000 5,250,000 2,000,000
Revenues
Page 14
Mission Based Model
Clinic Research Education Admin.
Faculty Salary/Benefits 15,000,000 5,000,000 5,000,000 2,500,000 Faculty CME 250,000 250,000 Non-Faculty Sal/Ben 4,500,000 1,500,000 500,000 1,000,000 Operating Expenses 4,000,000 500,000 250,000 625,000 Malpractice 3,000,000
Total Expenses 26,750,000 7,000,000 6,000,000 3,750,000
Net P & L 8,750,000 (5,250,000) (750,000) (1,750,000)
Expenses
Page 15
UAB Funds Flow Model – Began FY 2014for All 17 Clinical Departments
FY 2013 Hospital Mission Support Amount + Additional $23 Million in FY 14
Professional Fee Revenues
Departments• wRVU Revenues • Expense Reimbursements
Centralized Clinical Expenses • Clinical Staff• Malpractice • Direct Clinic Expenses• Billing Office • Practice Plan Overhead
Central Funds Flow Account
Page 16
UAB Funds Flow Model
Previous hospital support eliminated
All clinical costs centralized
wRVU Revenues – 3 year Rolling Avg. of MGMA Comp/RVU
70% of Median by Specialty, Surgery has 21 Rates
Non-Funds Flow Revenues & Expenses remain for non-UAB hospitals, e.g., Children’s Hospital of Birmingham
Physician Benefit & Dept. Administrative Cost Reimbursement
Funds Flow Withhold (10% of RVU Revenues) - 20 At-Risk Metrics
Development of wRVU Based Compensation Plans with Academic & Educational Component
Page 17
UAB Funds Flow DiagramPrior Department Clinical P & L
Expenses
Revenues Physician Salaries
Phy Benefits
Physician CME
Clinic Staff
Res./Admin Staff
Malpractice
Clinic RentHSF IndirectBilling Office
ProfessionalRevenues
Contract Rev
Mission Support
Clinic Rev
Physician Salaries
Physician Benefits & CME
Res./Admin.Staff
Indirect on Non-FF Rev.
wRVURevenues
Non-FF Revenues
Physician Benefits
Admin. Reimburs.
Contract Rev
Central Funds Flow Account
Clinic StaffClinic RentMalpracticeHSF IndirectBilling Office
Prof Rev(exc wRVU)
Clinical Rev,Facility &Tech. Fees
Knowledge that will change your world
Revenues
Revenues
Expenses
Department P & L
Expenses
Page 18
Funds Flow Model – Department of Surgery
FY 2015 – Actual RevenueswRVU Revenues 15,000,000 Non-Funds Flow Collec. 6,000,000 FF Reimbursement 4,000,000Contractual Rev. 5,000,000 FF Withhold (1,500,000)
Total Revenues 28,500,000 ExpensesFaculty Sal/Frg 27,500,000Faculty CME 500,000Staff Sal/Frg 750,000Operating Expenses 250,000 Malpractice 100,000Overhead 250,000
Total Expenses 29,350,000
Clinical Operating Margin (850,000) 3 – 5% of Revenues
Page 19
Funds Flow Model – Department of Surgery
With Payment of At-Risk FY 2015 – Actual
Clinical Operating Margin 650,000 Other Income & ExpensesInvestment Income 100,000 UAB Transfers (650,000) AEF Transfers (150,000) Gain/Loss on Investments 100,000
Total Other Income & Expenses (600,000)
Increase/Decrease in Net Assets 50,000
Page 20
Divisional P & L – Funds Flow
CV Plastics Urology General
Clinical Margin 500,000 250,000 100,000 250,000
Other RevenuesInvestment Income 50,000 5,000 -0- 5,000 State Appropriation 100,000 50,000 50,000 50,000
Other ExpensesFaculty Education Comp. 200,000 150,000 150,000 250,000 Chairman’s Assessment 25,000 10,000 10,000 20,000 Research Expenses 50,000 10,000 10,000 20,000 Other UAB Contributions 100,000 -0- 25,000 -0- Total Other Rev. & Exp. 275,000 135,000 (45,000) 15,000 Net P & L 275,000 135,000 (45,000) 15,000
Page 21
Research Administration
Circular A21 - F & A Rate determinants
Campus F & A Rate (Indirect Expense)
Fixed vs. Variable Grants
Assist faculty with budgets & applications
Project grant expenses & monitor grant spending
Know salary expense timing
Actively manage clinical trials
Page 22
Research Administration – Clinical Trials
Budget Development
Start up costs
Patient Care costs
Staff/PI Effort
Completion of Agreement
IUCAC – Animal Care Committee
IRB –Human Subject Protocols
Page 23
Clinical Trials Budgeting
A. Startup Costs
Personnel Startup Costs (Time & Effort)
Role Salary #of Hours Cost/hr Fringe Rate Total
Principal Investigator 100,000 3 $49.00 30% $520.00
Study Coordinator 50,000 10 $24.50 30% $318.50
$0.00 $0.00
$0.00 $0.00
Subtotal $838.50
Indirect $251.55
Total $1,090.05
Administrative Startup/One-Time Fees
Description Quantity Charge Total
Clinical Trials Office Fee 1 $1,000.00 $1,000.00
Pharmacy Setup Fee 1 $500.00 $500.00
IRB Fee 1 $1,000.00 $1,000.00
Subtotal $2,500.00
Indirect @ 30% $750.00
Total $3,250.00
Study Startup Costs Total:
$4,340.05
Page 24
Clinical Trials Budgeting
B. Clinical Care Costs per SubjectSalary, Time and Effort
Role Salary #of Hours Cost/hr Fringe Rte Total
Principal Investigator $100,000 2 $49.00 30% $127.40
Study Coordinator $50,000 4 $24.50 30% $127.40
$0.00 $0.00
Subtotal $254.80
Indirect @ 30% $76.44
Total $331.24
Subject Tests/Procedures/Subject Reimbursement
Description CPT Qty for Facility Pro Cost Total Cost per
Code Screening Charge Fee Each Qty Subject
Pharmacy dispensing N/A N/A $500.00 1 $500.00
Subject reimbursement N/A N/A $50.00 1 $50.00
Labs, X-Ray, CT, ETC. 1 $500.00 2 $1,000.00
$0.00 $0.00
Screening Failure Subtotal $500.00 Subtotal $1,550.00
Indirect $150.00 Indirect $465.00
Total Screening Failure Cost $650.00 Total $2,015.00
Clinical Care Cost per Subject: $2,346.24
Page 25
Clinical Trials Budgeting
C. Other Study CostsDescription Quantity Charge Total
Pharmacy maintenance fee 1 $75.00 $75.00
Pharmacy close-out fee 1 $75.00 $75.00
$0.00
$0.00
Subtotal $150.00
Indirect $45.00
Total Other Study Costs: $195.00
Budget Summary
Costs Sponsor
Reimburs. Variance
Personnel Startup Costs $1,090.05 $1,090.05
Administrative Startup Costs $3,250.00 $3,250.00
Clinical Care Costs Per Subject $2,346.24 $2,346.24
Full Enrollment Total (n= 100) $ 234,624
$234,624
Other Study Costs $195.00 $195.00 $0.00
Total Study Cost at Full Enrollment
$241,505.29 $241,505.29 $0.00
Page 26
Research Administration – Clinical Trials
Revenue Types
Start Up
Per patient enrollment
Miscellaneous services
Expense Management
Expense Timing
Subject Reimbursement
Page 27
Final Thoughts
“You can observe a lot by watching” Yogi Berra