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Business Officer Magazine

Prescription for Change

Leaders at public and private research universities share their treatment plans for managing the massive organizational changes inherent in medical school expansion, acquisition, and integration.

By Sandra R. Sabo

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Efforts on the part of a university to start, acquire, or incorporate into its operations something as significant as a medical school certainly qualify as disruptions of a dramatic degree. For insights into the challenges—and rewards—of such massive change, Business Officer talked to representatives of three institutions that have undertaken transformative initiatives related to their medical schools and discovered prescriptions for success.

Case I: The Expansion
Florida State University starts a medical school.

Case II: The Acquisition
Drexel University acquires a medical school from a bankrupt health system.

Case III: The Integration
Johns Hopkins University (JHU) and Johns Hopkins Health System (JHHS) merge their financial, administrative, and human resources systems. 

SANDRA R. SABO, Mendota Heights, Minnesota, covers higher education business issues for Business Officer.

Survival Skills

The difference between mastering change and muddling through it may rest in following these recommendations offered by several business officers. 

Call on the experts. “If your management team doesn’t have expertise in a particular venture, use experienced consultants,” advises John Carnaghi of Florida State University (FSU), Tallahassee.

“We didn’t have a clue what was required to establish a medical school, so we put a retired dean of medicine on the payroll for a couple of years. He helped us anticipate the issues we’d face, identified pitfalls along the way, and guided us through the accreditation process,” says Carnaghi, who also asked for advice from fellow business officers at other Florida medical schools. 

Similarly, Johns Hopkins University (JHU) and Johns Hopkins Health System (JHHS), Baltimore, hired financial consultants to determine the feasibility of jointly adopting a new enterprise resource planning system. Based on the firm’s findings and input from a trustee advisory committee, the two institutions developed a project budget that included the costs of all hardware, software, and personnel and assumed a 10-year return on investment.

Deal with the details. Because everything that happens on a campus circles back to money, business officers can’t escape the myriad issues associated with a large-scale operational change.

“Many times, business officers don’t want to get their hands dirty,” says Thomas Elzey of Drexel University, Philadelphia. “But, to do something big, you have to get deeply involved so you know exactly what is going on throughout the organization—you can’t do this from the 10,000-foot level.”

Communicate often and well. Ron Werthman, of Johns Hopkins Health System, observes, “If you’re going to embark on a huge change with cultural impact, you can never communicate enough. Ever.”

The HopkinsOne project undertaken by JHU and JHHS had its own formal communication plan, developed by representatives from both institutions. Through vehicles such as print articles, e-mail discussion lists, and frequently asked questions posted on a Web site dedicated to the project, the team prepared employees for changes ranging from which longtime systems would no longer exist to how different their pay stubs would look.

“It’s easy to get caught up in the project itself and forget that other people, both internally and externally, need to know what’s going on,” adds Carnaghi. Faced with vocal and local opposition, FSU often held town meetings and sent an army of speakers into the community to talk about why it was using its resources to establish a medical school—and how citizens would benefit. To address internal concerns, FSU senior staff provided updates on the medical school every time the deans or campus business officers had a meeting.

Remember that time heals. John Carnaghi’s own physician publicly denounced FSU’s plan to establish a medical school; that same doctor now works with FSU medical students. After eight years, Carnaghi observes, “The medical school has become just another FSU program as well as part of the community.” 

When Drexel University acquired a bankrupt college of medicine, not all of its employees cheered. “The rest of the university didn’t want any resources that they were currently getting to be reallocated to help support a struggling medical school,” says Jeffrey Eberly of Drexel’s college of medicine. “That attitude changed once the other departments realized that they did not lose any resources. Plus, the medical school has been showing a profit for the past five years.”

Keep the project in perspective. “Big projects and massive change cause people to behave in unusual ways,” says Carnaghi. “It’s the business officer who must keep a balanced perspective for everything to turn out well in the end.”