Jeff Balser, M.D., Ph.D., President and CEO of Vanderbilt University Medical Center, and Dean, Vanderbilt University School of Medicine. 1
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On April 30 the VU and VUMC transition was completed and we are now a separate legal and financial entity. Today we are 5 days old. Thank you to all those who worked so hard to make this possible. In late 2014, we made the announcement that Vanderbilt University and Vanderbilt University Medical Center would become separate legal and financial entities, while remaining seamlessly connected for our shared academic missions. You ve had questions, and our goal has been to keep you informed as we worked to make this a largely non-event for as many of our people as possible. We have succeeded in finalizing the reorganization and we now own VUMC. As a new organization, we have greater independence and greater control over what happens. As leaders, we now own this organization. We have more freedom and we have more responsibility. Now, with our own Board of Directors, we have more assistance regarding oversight for our short and long-term goals. I want to offer an overview of the journey that brought us to where we are today. Recently, we issued bonds issued by VUMC, allowing the Medical Center to purchase buildings and other assets from Vanderbilt University. Why did big investment companies invest in us, and how did we present 3
VUMC? Here s what we did and here are the stories they heard about us. 3
They already respected the world-renowned Vanderbilt brand. We have a spectacular reputation across the nation. I shared with them our facts. We have an annual operating budget of $3.3 billion, with 4 hospitals serving over 320,000 patients per year. We are the largest private employer in Tennessee. We have over 2.1 million ambulatory visits, and perform over 65,000 surgical operations per year. Their key questions were around understanding what we would be as an independent healthcare entity. What would we really look like as a separate entity? Why were we not just another non-profit health system? And how do our research and training programs impact the Medical Center s activities in healthcare?...you might have some of these same questions. 4
Another strategic advantage is that we now have our own 11-member Board of Directors who are focused solely on the Medical Center s needs. 5
When I met with investors I shared how our innovation and training are embedded into VUMC s operations and culture. They also liked that we are geographically adjacent to the University s campus, which helps ensure strong ties with University colleagues to collaborate on research and shared programs in training and education. 6
Our investors were impressed because we build our own people. It makes us much more powerful clinically. We have over 1,000 physicians in training, and in the top 1% of competition for VUMC residencies in the U.S. If you look at all physicians in Tennessee, 43% of pediatricians and 33% of general surgeons were trained at VUMC. Twice a year we have an incoming group of 160-plus nurse residents. 7
In these face-to-face meetings with institutional investors we shared examples about you the great work you do. For example, we talked about our Vanderbilt-Ingram Cancer Center and our National Cancer Institute designation. There is a reason why patients from all over this region, and beyond, seek the Vanderbilt-Ingram Cancer Center for care when they need it most. We provide the education and training of cancer specialists, the basic and translational science that brings the latest options to our patients, and clinical quality and service all must be at the very highest level in the nation. All three missions are fundamental to achieve and maintain the status as an NCI-designated Comprehensive Cancer Center. 8
The fact is, VUMC is an Academic Medical Center with a capital A. There is nothing like us in Tennessee, and only a few places have comparable depth and scope in the entire Southeastern region of the United States. So our case to the investors was this: when investing in healthcare, choose the place where training, discovery and service to patients are harmonized - where the sum is far greater than the individual parts. So you can imagine that after all this, that investors from around the nation were so excited about VUMC. Much like each of us has a personal credit rating, VUMC had to establish an institutional credit rating. We received an initial credit rating of A3 a good score for a brand new credit making its debut on the financial stage. We then went to the institutional investor community to sell bonds, hoping they would find us appealing. The results were amazing! We had ten times the demand for our bonds than we were willing to sell. 10
So now what? Our performance will be watched closely by those wondering how we will perform and we are going to be strategic about growth. As we perform well, many people and other entities will want to do business with us. We need to work smarter and create new ways of doing things and we all need to find innovative ways to solve our problems. It is up to us to build the path forward. 11
One of the metrics by which we will be measured on going forward is our savings, how much money we have set aside in case of an emergency and to help self-fund growth. This slide shows our days of cash on hand. We have made great progress since 2008 and will continue to. Our goal is to have 100 days of cash on hand by 2020.
So this is how we are doing on our 4 strategies: Restructure our Organization done! Grow our system We are doing this now. Make Care Seamless We are doing this now with EpicLeap, and Empower our People. As leaders, we are all responsible to build the culture of the organization we desire to meet the results we set together. 14
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As I thought about empowerment, I ve been reading more about ownership. There is a great article by Eric Chester, and I ve pulled some key points from his article. 16
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Our theme today is Building an Empowerment Culture. What I hope empowers you is the excitement and vision that we can do this. We own and are responsible for VUMC. We are making the rules on how we offer the best quality care for our patients in combination with education, research and clinical care. This is empowering to me, and I hope to all of us. Thank you. 18