Basic Primer for Finances in Academic Adult and Pediatric Pulmonary Divisions

Abstract

The finances of academic medical centers (AMCs) are complex and rapidly evolving. This financial environment can have important effects on faculty expectations, compensation, and the work environment. This article describes the commonly used concepts and models related to financial decision-making in Pulmonology and Critical Care divisions across AMCs in the United States. Faculty clinical productivity is often measured by work relative value units, which are set nationally for a discrete piece of physician work and attempt to equilibrate aspects of care across specialties. The expected clinical productivity and salary for a given faculty member are often determined relative to one or more national benchmarks developed from data submitted by departments and schools across the country. The most commonly used benchmarks include those from the Association of American Medical Colleges and the Medical Group Management Association. Changes to the paradigm of fee for service reimbursement are beginning to change physician compensation and incentive structures. In addition, research and education are key academic missions for faculty. It is important to understand the limitations of extramural research funding and implications for the support of research infrastructure. Measurements of productivity within education have been less codified, but some centers are attempting to create educational relative value units similar to those used in clinical productivity. In summary, faculty should understand basic concepts of finances. This knowledge includes a common set of terms and concepts that can help all faculty understand basic financial considerations in their work and lead to success for their divisions.

Keywords: clinical practice; finance; pulmonary division.