and Kristin Gustafson
An evolving marketplace, a funding shortage and technological advances have forced the Academic Health Center to take a long, hard look at its future.
Bringing together its top health-center administrators and regents with medical backgrounds, the University is now trying to get the AHC back on solid ground in terms of education, research and service.
A newly formed ad hoc Board of Regents committee met for the first time Wednesday to align the center’s vision with the University’s mission.
The Academic Health Center consists of the University’s seven medical schools, an educational powerhouse supplying 70 percent of Minnesota’s health care professionals.
Frank Cerra, the center’s senior vice president, addressed the regent committee Wednesday and said the organization is struggling to maintain its competitive edge in the health sciences marketplace.
That conclusion followed Cerra’s consultations with the health center’s department heads during the past few months. To garner outside perspectives on the health care issues the University faces, Cerra also met with community leaders in government, business, labor, health care and education.
“We in the health sciences are clearly facing a defining moment,” Cerra said. “The answer is not going to come from outside; it must come from inside the institution.”
To find the answer, the regents were called in to offer University input and outside medical experience.
“If (the AHC) is not meeting its full potential, we are not doing our job,” said Regent Maureen Reed, chairwoman of the ad hoc committee.
Three challenges have forced the AHC to re-evaluate itself.
ù An evolving marketplace is the primary cause of the AHC’s financial woes. The health care market, which is focused on medical technologies, fails to recognize that education and research are major factors in creating expert clinical care, Cerra said.
“Strategies to capture the market sometimes overshadow the educational component,” Regent Warren Larson said.
ù The U.S. Congress and Minnesota’s Legislature have also failed to adequately support medical education. Of last year’s $4 billion budget surplus, the Medical School received only an $8 million increase in funding.
“The bottom line is we don’t have the money to function the way we want to,” Regent Anthony Baraga said.
So the AHC has compensated by dipping into its reserves by $50 million during the past four years. Cerra said if the AHC doesn’t right itself soon, the reserve cushion will disappear.
ù The biological revolution means the University must create more jobs and programs to keep up with technology. Despite adding programs, the University has had a 19 percent decline in faculty since 1995, mostly top-notch members of the Medical School.
Struggling with the past
Although academic health service centers nationwide are facing the same difficulties, the University struggles with an additional burden.
Some of health center’s darkest days came in 1995 when misappropriation of funds because of the sale of the anti-organ drug ALG caused the National Institutes of Health to label the University as an exceptional organization. This exceptional status is a NIH probation given to organizations after evidence of poor business-management practices surface.
The school created a new management system to better monitor its transactions and avoid further fraud.
The University is concerned with its delicate relationship with the NIH because the organization gives the school $128 million annually, more than a third of its total research funding.
The Medical School’s black eye turned a lighter shade of gray in October when an NIH committee re-evaluated the University. An upgrade in status is expected in late December or early January.
To meet the challenges and prevent old ones from re-emerging, Cerra said the doors of communication and collaborative decision-making have been opened.
The new Board of Regents committee is the first step.
Cerra told committee members he wants two things from them. First, to spread the word that severe problems exist. And second, to help the AHC chart a new course.
The committee agreed.
Offers of expertise
Surgeon, medical director, scientist and radiologist are just a few of the titles of the four regents selected for the health-center committee.
Reed will lead the group as they help determine the center’s fate.
The organization’s success is crucial to the University’s mission of research, education and service. Its income and expenses are critical to the University’s financial health.
While Cerra answers specific questions about strategy and direction during the next few months, the four members will share their medical expertise with the health center.
Reed said the selection is not accidental.
“We all fought to be on this committee,” Reed said. “The reason for putting these regents on is that it was felt that their experience and training (in the medical field) would be very useful to a strategic planning process that the AHC is engaging in.”
These regents will help address the changes challenging health care, including finances, expectations, technology and lifestyle choices, Reed said.
Every health institution wants to address these same issues, Reed said. “And society is interested in the answers,” she added.
AHC faculty also want action.
Faculty representatives said employees are fed up with day-to-day worker shortages, excessive hours and too many patients.
Regent committee members decided to observe a AHC faculty meeting to better understand their many concerns.
The board members will incorporate what they learn into their first priority: Making sure the AHC’s direction matches the University’s mission.
The mix of research, education and service is “really at the heart of it,” Reed said.
“That’s why the Academic Health Center exists,” she said. “So the question that the University’s Academic Health Center must ask itself is, how do we best do that?”

Craig Gustafson covers the Medical School and welcomes comments at [email protected]. Kristin Gustafson covers University administration welcomes comments at [email protected].