Kevin replies to “UT Matters” readers—
Re: Issue #8: “Rising Above Adversity: the Challenges of Emergency Situation ”
Question: Why don't we have plastic, glass, or aluminum recycling receptacles in our buildings??
Answer: Recycling is an important activity at UTHSC-H. Every material with a recycled value that pays for the cost of the recycling activity is part of the program. At this time, recycling is focused on “high-grade office paper and corrugated cardboard (See: HOOP 1.16 on “Recycling”). Recycle values are periodically checked by Facilities, Planning and Engineering to ensure that the recycling program keeps up with changing market conditions. Plastic, glass, and aluminum have collection, handling, and housekeeping costs that exceed the revenue the University would receive from the sale of the materials, so they are not currently included in the program. Students, in some buildings at UTHSC-H, are putting together volunteer recycling programs with student labor being the key ingredient. A good example is GSBS student Josh Gowin, who is leading the organization of a student recycling program at the Medical School Building
Question: I appreciate the increase of the subsidy for the mobility program. It is very welcomed during this time of increased gas prices. What is the possibility that the university may allow a more flexible work schedule such as 4 10-hour days to help with commuting? I know the university has left it up to the discretion of the dept management for flex requests, but I want to know if the university as a whole will support this? For myself, no one currently in my dept works this schedule and my van is possibly moving to run a 4 day a week schedule. Thank you for your response.
Answer: University policy currently offers the option of a compressed work week made up of four 10-hour days with one day off during the work week, provided that the job is appropriate for flextime and the department continues to meet the University's needs in conducting its business. Such arrangements also must comply with all state and federal regulations. I urge you to discuss your individual situation with your department management. An overview of flextime guidelines and necessary forms are on the Web at: http://www.uthouston.edu/worklife/worklife/flextime.html. For additional help, you can contact Employee Relations Advisors Donna Price or Debbie Norris in HR.
Re: Issue #7: “ Looking at the Realities of Indirect Cost Recovery (Part 3)”
Question: Re: section on the Cancer Prevention and Research Institute of Texas: "These grants will award a large amount of direct funding but will carry little or no indirect cost recovery – which could inadvertently lead to a redistribution of resources to support one segment of our research programs at the expense of others.” Can you explain what you mean by the preceding sentence ? How would it redistribute resources ? If we don't get indirect costs from these funds does it make sense to apply for them?
Answer: Such a redistribution of resources could occur over time when or if the University makes significant changes in the directions of our research programs in an effort to become more competitive for these grants. The willingness of the State to provide funding for the “direct” costs of research is very important, as well, because it will provide the opportunity for conducting research we know is of value to Texas and Texans. The State of Texas, understandably, doesn’t often provide “indirects” as it “pays for” buildings and most administrative costs already.
Question: Kevin, I noticed in the latest Accountability Report for the UT System from Geri Malandra that UTHSC-H had the highest administrative costs (9.6%) compared to the average for the other health campuses (5.6%). Why are we an outlier and what can we do to bring our administrative costs in line with the other health campuses?
Answer: Health related campuses with associated hospitals (e.g., UT M.D. Anderson, UTMB, UTHSC-Tyler and now UT Southwestern) are able to allocate a substantial portion of their administrative costs to their hospital operations, which lowers these components’ administrative cost measure percentages. Due to the complexity of UT-Houston’s six schools, the Institute of Molecular Medicine and the Harris County Psychiatric Center, a significant amount of cross-functional activities were set-up in our financial system as being institutional support by default. In reality, these expenses should have more appropriately been reflected in other categories such as academic support, instruction, or public service. Efforts are underway to correct these problems prior to the close of this fiscal year, which should result in about a 2.5 percent reduction in our administrative cost percentage.
Question: We were left out of the State-wide employee pay raises for the 2005 and 2007 Legislatures. Is the institution going to allow us a cost of living pay raise in the face of rising gas and food prices?
Answer: So far, employee pay raises are not the lead topic of discussion at the capitol. UT System, which sets the legislative agenda for each Session on system-wide issues like tuition and pay raises, is focused more on achieving increases in formula funding (by $13.7 million per biennium) and related issues that affect our ability here at UT-Houston to provide raises. Such an increase by the Legislature in formula funding should increase departmental funding and thus enhance the ability to give employee pay raises.
Re: Issue #6: “Looking at the Realities of Indirect Cost Recovery (Part Two)”
Question: What are the state requirements for issuing RFP's, doing sole sourcing, etc in terms of dollar limitations and requirements?
Answer: The Procurement Department has posted many helpful answers online in the FAQs at: http://buy.uth.tmc.edu/faq.htm and in the downloadable handbook on “Formal Bid Procedures.” Additional help on doing a Request for Proposal (RFP) is available by calling 713-500-4700 or e-mailing procurementservices@uth.tmc.edu.
Question: In February of 2004 UTHSC contracted with Per-Se (now McKesson) in a contractual arrangement that was to increase clinical practice revenue $20M over the next five years. Over the past year I have noticed that the University has been taking on a larger role when it comes to billing and collections. This entails the hiring [of] billing professionals, coding professionals, billing specialists and administrative staff to help support those functions. Question: While bringing these services back in-house may increase the efficiency of the clinical billing process these are costs paid by the University – Why aren't those costs reimbursed by McKesson? – If McKesson's performance is substandard, why isn't the contract terminated, inefficiencies identified and corrected, and UTHSC taking sole responsibility for clinical billing? Your time is appreciated.
Answer: Good question. I believe that the outsourcing four years ago of many, but by no means all, of our billing & collection processes to Per-Sé Technologies (acquired by McKesson in Jan. 2007 in a transaction valued at $1.8 billion) remains a good move. That is, adjusted for changes in payor mix, I believe that McKesson does a better and more efficient job of collecting (on a “per RVU basis”) than we did, in our previous, “UTHSC-H-owned” operations. This has been analyzed and studied many different ways but that conclusion remains constant.
One area, in particular, for which I believe McKesson deserves a lot of credit is their use of technology and reporting. We simply know more about our “book of business” – our billing & collecting operations – than we ever have before. This means, occasionally, that we sometimes know more details about account follow-up and similar issues than we’ve known before. I think this sometimes contributes to the “pockets” of dissatisfaction with McKesson’s (and, frankly, with our own) work in this area.
I’ve often said, publicly, that one of the first things a consumer or analyst of physician billing & collecting-type work must develop is a reasonable and appropriate tolerance for imperfections and errors. With nearly half a billion dollars of physician invoices “handled” each year – with an average balance of some $350 – we’re talking about more than 1.3 million bills. As many of these invoices relate to low- or no-pay patients (about half our patients are Medicaid or self-pay), the “margin” on this work is very modest. As my mother might have said, “Our Lord and Savior couldn’t do this work perfectly.” So, errors and omissions will happen, do happen (here and at most other similar, large billing operations). Developing reasonable tolerances and expectations around this work is thus “the whole ballgame.”
So, billing and collecting remains a very complicated business. Over these four years, the contract has evolved. We’ve adjusted performance measurements. We’ve changed some of its terms. And, yes, we’ve “taken back” some portions of the billing & collection work (including coding for almost all, non-hospital-based departments). We have adjusted the fee appropriately for these shifts in work responsibility.
This entire topic is one that Dr. Colasurdo, Andrew Casas and I discuss frequently. And I expect that we’ll have further “tweaks” and refinements to the overall process, in the months to years to come. We all want this to work better; but again, it’s complicated work, and we “own” a lot of responsibility for how it all turns out.
Again, thanks for the question.
Re: Issue #5: “Looking at the Realities of Indirect Cost Recovery (Part One)”
Question: For those of us without 21 inch monitors, could you use 10 or 12 point type?
Answer: Outstanding suggestion! We’ll go to the Web equivalent of 12-point type in Issue #6 and hope it improves the on-screen appearance of UT Matters for everyone.
Question: Why do we still have to pay indirect costs on really small grants (e.g. those < $5,000)? If a grant is even $500, we have to pay $150.
Answer: Indirect costs are based on a formula that calculates the amount of money an institution needs to support research activity. Generally, it isn’t in UT Health Science Center’s financial interest to charge less than our negotiated rates, or to waive F&A costs for grant awards below a fixed amount. This calculation is applied equally to all grants regardless of the amount awarded. Nonetheless, this is an interesting point from the perspective of administrative simplification and streamlining. So, we’ll look into this further.
