February 2, 2012

Opportunities, challenges ahead for VUMC: Balser

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Jeff Balser, M.D., Ph.D., discusses strategic initiatives for VUMC at Wednesday’s Faculty Meeting in Light Hall. (Anne Rayner)

Opportunities, challenges ahead for VUMC: Balser

Speaking to a packed auditorium on Wednesday afternoon during this year’s Winter Faculty Meeting, Jeff Balser, M.D., Ph.D., vice chancellor for Health Affairs and dean of the School of Medicine, addressed progressive growth in Vanderbilt University Medical Center’s national reputation while also outlining ongoing, strategic efforts targeted to ensure the Medical Center’s continued economic strength.

The nation’s budget deficit and its prospective implications on health care delivery and reimbursement framed the first portion of Balser’s presentation. He outlined how these changes are anticipated to impact VUMC while also detailing proactive steps in process to help sustain financial stability during potentially turbulent years ahead as components of national health care reform are implemented.

“The nation’s current economic crisis is going to last a while,” he said.

For 2012, the gross federal debt for the United States stands at $16.7 trillion. As a percentage of Gross Domestic Product (GDP) this figure represents a greater proportion of the nation’s income than any period since the close of World War II.

As President Obama and federal legislators work to address the nation’s long-term financial issues, inevitable changes to health care delivery and reimbursement will occur.

Beginning January 2013, as a result of the Budget Control Act of 2011, $1.2 trillion will be reduced from the federal budget — half coming from defense spending with the remainder from non-defense programs such as health care or funding for scientific research.

An exception, however, will limit cuts to Medicare payments to providers and insurance plans to 2 percent of such payments in any year, or about $10.8 billion in 2013, which could increase to $16.1 billion in 2020.

With these long-term concerns in mind, Balser said the Medical Center is prudent to act now, working to significantly reduce the Medical Center’s annual operating costs by as much as $50 million by the beginning of FY13. While VUMC is a $2.9 billion annual enterprise with its core missions of research, education and patient care, the clinical enterprise is the primary financial engine supporting these activities.

Potential losses to VUMC as a result of the Budget Control Act or a Supreme Court decision could include future reductions to Medicare and Medicaid, potential repeal to portions of the Affordable Care Act and other changes such as global payments for traditional tertiary-care fee-for-service delivery.

Other concerns are potential reductions to funding support for Graduate Medical Education and the Hospital Assessment Coverage process now used by Tennessee and 45 other states to draw additional dollars into Medicaid programs.

Balser said with the challenges ahead it will be necessary to keep the emphasis on people, recruiting and training the world’s brightest students, faculty and staff while providing patients the world’s finest health care.

“Our value system must be people first,” he said.

Strategies being implemented or already in place to address the impact from health care reform include a tiered review process for hiring new employees, strategic growth of Vanderbilt’s affiliate hospital relationships, maximizing opportunities to share resources such as space, infrastructure and administrative support across the Medical Center, and prioritization of “mission central” programs and initiatives.

As Balser’s address transitioned from financial positioning, he offered updates on relationships with Vanderbilt’s new affiliate hospitals — Maury Regional Medical Center, NorthCrest Medical Center and Williamson Medical Center — plans to build an outpatient campus within Williamson County, and a new media campaign surrounding the unique role Children’s Hospital plays in Middle Tennessee.

Evidence of VUMC’s growing reputation on the national and international stage included acknowledgements of benchmarking achievements such as being named to both Thompson Reuters 2011 Top Hospitals and the 2011 U.S. News & World Report “Honor Roll.” Vanderbilt is one of only four institutions to be named to both lists.

Successes for the School of Medicine include tripling the number of endowed chairs during the past decade from 49 to 156, with 61 new chairs being added during the past three years alone; and also the newly launched Curriculum 2.0, providing medical students with a more personalized system of lifelong learning.

Since 2001, the School of Medicine has experienced a 45 percent increase in student applications, while the Interdisciplinary Graduate Program (IGP) and Medical Scientist Training Program (MSTP) have seen a 15 percent year-over-year increase in applications for 2012.

Balser also offered praise for the School of Nursing, now ranked 15th by U.S. News & World Report, which places VUSN among the nation’s top 5 percent of nursing schools. Also recognized was the growing distinction of its faculty by national organizations and strong growth in new student applications and enrollment.

Balser acknowledged appointments for new department chairs, division and center directors, School of Medicine administration and other leadership advancements occurring during recent months.

He also cited numerous achievements in the research enterprise such as: drug development, technology transfer and significant center grants awarded to faculty working in broad areas of gastroenterology and diabetes to continue large-scale research initiatives.

Offering further evidence of VUMC’s growing international clout, publication citations for a one-year period have increased from 17th to 14th as benchmarked among the nation’s leading academic research institutions.

In closing, Balser highlighted 14 members of the faculty from across the University who recently became new fellows of the American Association for the Advancement of Science (AAAS) and also acknowledged faculty recognized by or chosen to serve significant roles with national professional organizations.

To view a video presentation of the 2012 Winter Faculty Meeting please go to: http://mediasite.vanderbilt.edu/mediasite/Viewer/?peid=46705a6ea250483d94e5c7c87c2fb6951d.