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Every day, at public universities across Florida, folks are poring over budgets trying to weather the storm of an estimated $3 billion state shortfall. All told, budget cuts are in the hundreds-of-millions of dollars at public universities from Florida’s panhandle to the everglades.

The University of South Florida has reduced its state funded budget for Fiscal Year 2008 by approximately $19 million – a 5.4 percent reduction in base funding.

Last summer’s approved state budget now feels light-years away.

With no end in sight to Florida’s dropping revenues, public universities are bracing for even deeper cuts to their Fiscal Year 2009 budget. That new fiscal year begins July 1, 2008. “There’s no easy answer. If there was, we’d have it,” says Stephen K. Klasko, MD, MBA, Senior Vice President of USF Health and Dean of the USF College of Medicine.

Sitting down to an interview days before meeting with USF’s Board of Trustees, Klasko knows he’s in USF Health’s hottest hot seat – in the unenviable position of calling the shots in a crisis that some experts characterize as “the worst economy in Florida history”.

“On a personal level, I think the thing that drives me is my passion for USF Health. I am humbled by the true heroes that are out there among our faculty, our staff and our students, recognizing that many of our students could’ve gone to a different school. Certainly, many of our faculty could be in private practice making more money or at a different medical school with more resources. Our staff could be in the private sector. Most of them are here because they believe in USF. They believe in our mission and that’s a humbling thing,” says Klasko. “That’s where, personally, it gets difficult for me because I don’t want to let anybody down. I personally think that the only way I could let them down is for me not to be passionate, not putting in my time, and taking the easy way out.”

Navigating through a mine field of choices, Klasko says even options that appear easier at first, can have devastating effects long-term. So, how does he choose? Slowly and deliberately.

How does one choose?
Klasko’s decisions, he says, are anchored in the vision of USF Health. “If you believe the vision and the goal can vary, then it’s just a matter of ‘What’s going to be the least amount of pain?’ or ‘What’s the easiest?’. That’s one model. We’ve basically said the USF Health vision and the goal are not up for discussion. We’re going to move forward when it comes to being one of the first academic ambulatory health centers in the country based on service, quality and technology. We’re going to move forward and create a translational research enterprise. We’re going to move forward in some of our educational innovations like simulation and that kind of thing. So the variable, for us, is how we finance those things.”

Klasko’s strategy for the future is to create a ‘real’ USF Health enterprise – integrating services across the colleges of medicine, nursing and public health; pursuing a more progressive ‘academic medical center’ model; and a major overhaul of finance and operations in support of the medical school’s clinical operations. “Cutting budgets while preserving the mission,” says Klasko.

More USF Health-ness…
“We need to take advantage of both the strength and the hard work that faculty and staff have done over the last few years in building a real enterprise of USF Health, take some of the budget opportunities & challenges and really look to create a new vision,” says Klasko. “2008 – 2009 will be the year we begin implementing a strategy that realizes the efficiencies and community benefits of a unified USF Health.”

“I get a feeling, certainly among the other deans, (College of Public Health’s Dean Donna Petersen and College of Nursing’s Dean Patricia Burns) that this is a good tool for us to use to implement USF Health. So the vision that we see is a single budget. I think that will be worthwhile (A) if we save money in efficiencies, (B), and just as important, if it gets us to our strategic outcomes quicker,” says Klasko. “I think that some of the people who weren’t as strategically oriented may be enticed by the efficiencies, but we don’t want it to be just about the efficiencies.”

Integrating Services…
“We’re going to look across all administrative areas…and look at how we can make them very much USF Health oriented,” says Klasko. We have groups talking with Facilities, Human Resources, Faculty Affairs, Government Relations, Finance & Budget, Legal and Research Administration. In areas like Development and Information Technology, now known as ‘Information Systems’, integration has already begun and will continue to permeate daily operations and policies.

“What I hope that people would see beyond that we’ve saved money is that faculty affairs, for example, runs better. That finance runs better. That the reporting runs better. That any critics left would say ‘Boy, that’s what re-engineering should do! They save money and operate better. There are many areas where the perception from faculty and staff is that we’re not doing things as easily and as customer friendly as we can,” says Klasko.

It’s also about creating more USF Health-ness. “This enterprise of USF Health will begin to allow for increased synergies between faculty, students and others as we strive to increase interdisciplinary research and education between USF Health and other aspects of the university. It will also allow nursing, public health, medicine and pharmacy to work together seamlessly in such areas as prevention, wellness and care for the underserved,” says Klasko.

Q: How can shared administrative departments increase collaboration across colleges? What does one thing have to do with the other?
“I think it does!” responds Klasko in rapid fire. “We’re already doing that in things like Development, where we’ve realized that development professionals work on behalf of USF Health. If someone wants to give money to public health, they can advocate for that. We’ve done that in Communications very well. If we hadn’t combined communications, would we ever have been able to have a single vision around USF Health? More likely, we would’ve had medicine doing one thing, nursing doing another, and public health another.”

His thoughts on possible job losses to come…
Asked about possible job losses to come, his tone visibly changes. “The number one thing that we care about, from where I sit, is the folks who work for USF Health. They are our lifeblood, what drives us. We’ve already taken about 3- 4 million dollars worth of cuts decreasing as few human resources as possible and we’ll continue to look at that as the last resort. Each person that, for whatever reason has to leave – because they feel they have to leave USF Health to make more money or a program is being closed like what occurred in anesthesiology or when our faculty at Moffitt moved out we used less billers – each of those people represent a real asset to USF Health (A) that we’re losing, (B) that we feel for and (C) that needs to be handled with and dealt with respect,” says Klasko. “Every time we look at removing a person as a budget cutting exercise, we think twice, three times, four times. We look if there’s another alternative.”

Creating a True Academic Medical Center…
Another key piece of Klasko’s strategy involves increasing USF Health revenues by negotiating changes to the university’s hospital partnerships. “The dilemma we find ourselves in – a research intensive medical school in community based skin – as well as an under-functioning, under-resourced and follow-the-hospital-money practice group. That did not occur in a year and will take more than a year to fix,” says Klasko.

“2008 – 2009 will be the year we begin to assert USF Health’s role as a hub, along with our hospital partners and others, in changing the dynamics for Tampa as a health care destination site. Components of this will include establishing a healthy and hopefully more vibrant relationship with Tampa General Hospital and All Children’s Hospital, as well as one that is sustainable as the reputation of USF Health continues to grow,” says Klasko. Tampa General Hospital is the medical school’s main teaching hospital.

“The fact is that as the reputation of USF Health grows, we need a reality based relationship with our hospital partners. You’ll see this year that we are going to look at a budget that doesn’t limit our clinical practice activities to just the areas where we’re allowed to participate by our hospital partners,” notes Klasko. “Just as we have begun to do with orthopedics, we will expand, as needed, with new partners in areas such as radiology, anesthesiology, pathology, orthopedics and cardiology.”

Hospital relationships…
“Our hospital relationships were primarily set up when we started in the 1970’s as a nice community based medical group without many aspirations on our own. Our hospitals were neither strategically aligned with each other, nor strategically aligned with us, in many cases. People have heard me talk about this a lot, but we are the only large academic practice group in the country that cannot practice radiology, pathology and anesthesiology!” says Klasko, and then, compares USF Health to “Bedouins”, nomadic desert tribes of Arabia, to make his point. “It has to feel like we’re Bedouins in the desert when it comes to orthopedics because we go from hospital to hospital! Those are not trivial things. They’re not trivial financially. They’re not trivial morale-wise and they’re not trivial strategically.”

“The amount of dollars that we lose because we don’t have the ability to do any of these hospital based practices, both on the dean’s tax and academic support, as well as the practice group, is staggering. It’s in the millions of dollars,” says Klasko.

Q: How much?
“The real simple math,” says Klasko, “if you take a place like the University of Florida or the University of Alabama at Birmingham, a surgeon doing a case there is generating income for that case. Then he or she is sending the case to a university radiologist, to a university anesthesiologist and to a university pathologist…but we have to send it to different private anesthesiologists, radiologists, pathologists – somewhere to the tune of $20 million.”

Klasko, as well as other leaders, point to academic medical centers across the nation which own a hospital and refer within their medical group. The results, they say, bear fruit in all their education, research and clinical missions and produce greater clinical revenues. “It’s a huge deal when people look at us from the outside and our ability to do something great,” says Klasko. “They’ll say to me ‘You’ll never be great until those kinds of issues are resolved’.”

Story by Lissette Campos, USF Health Communications

Other links:
USF Provost
Office of USF President Judy Genshaft
Florida Economy at a Glance