From the Dean: More on the budget picture

I’m now in the last few weeks of my interim presidency at UND. Andy Armacost takes over officially on June 1, 2020, but as you probably know, we have been working together on the presidential transition since January. In view of the pandemic, having both of us working together during these trying times has been especially helpful as our different backgrounds, training and experiences enabled us to bring complementary assets to the monumental challenge.

But it will be nice to get back to being “just” the vice president for health affairs at UND and dean of your School of Medicine & Health Sciences! I very much appreciate the tremendous support that I’ve received from the SMHS family; doing both jobs would not have been possible without your help and support.

One of the issues that is a frequent topic of discussion on and around campus is UND’s financial status and budget situation in view of the COVID-19 pandemic. Accordingly, I’d like to summarize where the School stands as far as finances go. I’ll provide an overview in three time periods: the current academic/fiscal year that ends June 30, 2020; the next academic year (the second year of the current biennial budget) that runs from July 1, 2020 through June 30, 2021; and the next biennial budget period that runs from July 1, 2021 through June 30, 2023.

For the current academic year, the major factor that we are dealing with is a shortfall in revenue collections from our clinical practices (especially the Centers for Family Medicine in Bismarck and Minot) due to a significant reduction in face-to-face patient clinic visits. This revenue shortfall is typical of virtually every other health care delivery institution in the country. Some of this revenue shortfall is being addressed by COVID-19-related reimbursement through the federal government, and we have been able to reduce expenses as well. In addition, some of the revenue shortfall is being addressed by and even mitigated by increased telehealth encounters, both in terms of patient numbers and billing amounts.

For the coming academic year starting in July, the projected budget numbers appear manageable, largely because our projected student enrollment at the School is expected to remain largely stable as projected, unlike the rest of the UND campus where there is concern about a possible drop in fall semester enrollment. But one complicating factor is that the School receives some of its revenue based on a formula that distributes a portion of a pool of UND dollars to the SMHS. But if the pool is smaller because UND enrollment is less, the School gets the same relative-sized slice of a smaller pie, resulting in less revenue. We believe that we can deal with these issues for the upcoming year albeit with some belt-tightening and other adjustments. Importantly, Governor Burgum did not use the word “allotment” (meaning a reduction in state-allocated funding) during his recent speech about budget plans going forward for the coming academic year, so we are cautiously optimistic about the July 2020 through June 2021 period.

Finally, Gov. Burgum gave us some insight into his proposed approach for the 2021-23 budget. While the North Dakota Legislative Assembly ultimately will decide about the budgeting for the next biennium after it first convenes on Jan. 5, 2021, the Executive Branch’s proposal pretty clearly showed deference to higher education. The Governor proposed a 5 percent cut for smaller agencies, a 10 percent cut for medium-sized ones, and a 15 percent cut for large agencies. But higher education—clearly a large agency—was targeted for “only” a 10 percent reduction per student credit hour, suggesting that if higher education increases its student enrollment, then the overall funding reduction would be mitigated. We still have a long way to go until the final budget is determined, but the signals from the Governor certainly have shown a positive indication toward higher education.

Also, this Sunday was to be the day of the medical student Commencement Ceremony for our graduating Class of 2020 (our health sciences students graduate a week from tomorrow during UND General Commencement). But because of the COVID-19 pandemic, UND has cancelled all in-person ceremonies. Nevertheless, all of UND’s graduating students will be recognized next Saturday May 16, 2020, at 10 a.m. in UND’s first-ever virtual Commencement ceremonies. I am saddened that I won’t be able to congratulate in person all of the students who will receive their well-earned degrees this month, including our own Judy Solberg, chief of staff in the Office of the Dean, who will be receiving her Ph.D. Judy completed the work on her doctoral degree while helping to keep the School afloat while I had to divide my time between the President’s Office and the School, along with her family and personal responsibilities. Truly amazing! I hope that you will join me at the virtual Commencement ceremonies next Saturday and help us celebrate with our soon-to-be graduates.

So to all our graduates—congratulations, best wishes and do us proud! We are so very proud of you and your accomplishments! All the best in the future.

And congratulations to all the mothers in our UND and SMHS family on Mother’s Day this Sunday!

Joshua Wynne, MD, MBA, MPH
Interim President and Vice President for Health Affairs, UND
Dean, UND School of Medicine & Health Sciences