1. University of Alabama Birmingham Funds Flow Model Issues for Discussion AASA Annual Meeting October 6, 2015

2. Page 2 Introduction  What was the intent of Funds Flow?  What were the first year outcomes? (FY 2014)  What changes are needed for the future?  What is needed to insure focus on the academic and clinical performance?

3. Page 3 UAB Funds Flow – Rationale for Change  Hospital “Mission Support” Process  Not a consistent process  Did not align Practice with Hospital.  Little or no accountability on support

4. Page 4 UAB Funds Flow – Rationale for Change  Clinic & practice plan cost allocation process  Multiple formulas  Surgery assessed 33% of overall cost  Divisional discussions focused on assessments

5. Page 5  Oversight Committee delivers a Shared Governance Structure.  Aligned clinical efforts between the HSF & the Hospital.  Enhanced the Financial Performance of UAB Medicine. Positive Results of Funds Flow

6. Page 6  Removed Infrastructure and Clinical Expense Increases from Department responsibility.  Enhanced the Financial Performance of the Clinical Departments.  Permitted the Implementation of an Academic Enrichment Fund for the School of Medicine. Positive Results of Funds Flow

7. Page 7 Clinical Operating Margin- Departments in Funds Flow Department still need to focus on research investments, divisional profit & loss, and managing P & L

8. Page 8 UAB Funds Flow Issues  Too much focus on wRVUs at the expense of the other missions. How to fund research & education?  Compensation plans driven by wRVUs  How to incentivize academic activities  GME Support – Unchanged, needs resolution  How to distribute the At-Risk withheld funds  At Chair’s discretion

9. Page 9 UAB Funds Flow Issues  Focus on Return vs. New Visits in medical specialties  Sub-Specialties without sub-specialty rates  GYN Oncology & Neurovascular  Specialties may perform the same procedures – but, receive different conversion factors.  Neurosurgery Spine – Orthopaedic Spine – Unresolved

10. Page 10 Suggested Changes for Funds Flow  Design of Faculty Compensation Plans to incentivize/reward academic missions  Develop “Academic” RVUs to reflect effort & accomplishments  Prepare Funds Flow for value & quality based reimbursement  Reduce number of at-risk metrics and align with AMC 21 pillars.  AMC 21 – UAB Medicine strategic plan  Revised metrics: Pillar Goals - 10% Academic Goals - 10% Clinical Goals - 80%

11. Page 11 Modeling a more Balanced System that also focuses on Value-Based Purchasing 2017 Weighting of Departmental Funds Flow Revenues RVUs/Service 1.Budgeted RVUs 2.Budgeted Clinics 3.New Patients Meet Goals: +$ Incentive Goals Not Met: -$ Revenues 60% + 20% Quality 1.Value Based Purchasing 2.Population Health Meet Metrics: +$ Incentive Metrics Not Met: -$ Revenues + Academic TBD 20%