MINUTES OF A REGULAR MEETING OF THE BOARD OF VISITORS
OF VIRGINIA COMMONWEALTH UNIVERSITY
September 18, 1975
A regular meeting of the Board of Visitors of Virginia Commonwealth
University was held on Thursday, September 18, 1975, at 9:00 a.m. in
the President's Dining Room.
Present were Drs. Blanton and Gwathmey; Messrs. Dabney, Grey,
McGehee, Morgan, Norris, Obenshain, Scott, Seaborn and Shumate;
Mesdames Satterfield, Stone and Thalhimer. Absent was Mr. Taylor.
Also present were Drs. Brooke, Fleshood, Hall, Neal, Salley, Temple,
Willett, Wilson and Woods; Messrs. Holmes, VanPelt, Ware and Mrs.
Hawkins.
Dr. Blanton called the meeting to order.
On motion made and seconded, the Minutes of a Joint Meeting of the
Property Committee and the Finance Committee, held July 17, 1975; the
Minutes of a Regular Meeting of the Board of Visitors, held July 17, 1975;
the Minutes of the Executive Committee and the Finance Committee, held
August 18, 1975; and the Minutes of a Special Meeting of the Hospital
Liaison Committee, held September 3, 1975, were unanimously approved.
The Report of the President followed.
Following the President's Report, Dr. Temple recommended that an
invitation be extended to members of the General Assembly to tour both
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campuses of Virginia Commonwealth University. He indicated that the
invitation would be extended first to the members from the Richmond area.
Mr. Ware announced that Dr. and Mrs. Walther Riese had pledged
$1,000 for a distinguished service award, provided an additional $4,000
can be raised from other sources. Virginia Commonwealth University will
not be committed to raising the additional $4,000. The award is to be
known as the Riese-Melton Award, named after Dr. Riese and Mr. Hugh
Melton, a long-time employee of the Department of Anatomy at MCV/VCU.
On motion made and seconded, the concept of awarding distinguished em-
ployees was unanimously approved.
Dr. Woods discussed the proposal to establish the Division of Pri-
mary Care and General Internal Medicine within the Department of Medi-
cine. He stated that, as a division, it would be helpful in obtaining more
outside support. On motion made, seconded and unanimously approved,
the Division of Primary Care and General Internal Medicine was established.
Dr. Temple gave the Board a status report on the Richmond Eye Hospital.
He stated that the Governor's Office had not given approval for the purchase
of the Richmond Eye Hospital and in the event that approval is given, 9-C
bonds would be used for the purchase.
Dr. Brooke presented the University Admissions Policy. Following a
discussion, it was agreed that the Office of the Attorney General be asked
to review the Statement and that the administration review admissions state-
ments of other universities.
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Dr. Neal presented a status report on the HMO, It was pointed out
that, originally, the HMO project was to be evaluated for one year and
then a decision was to be made as to whether to continue the project fo
r an additional year. It was requested that a historical review summary o
f the project be made and that a copy be mailed to Representative Satter-
field and distributed to the members of the Board.
Dr. Neal distributed copies of the "MCVH Management Enhancement
Recommendation," which is made a part of these minutes. He stated that
the different type face on the checklist reflects time elements.
Dr. Neal distributed a "Special Report to the Board of Visitors" on
the considerations and concerns relative to the proposed $120 million
hospital bond issue. This report is made a part of these minutes. Dr.
Neal stated that there has been no indication as to whether the Governo
r will include the hospital project in his bond referendum.
Dr. Neal distributed copies of the "Hospital Bed Utilization Guide-
lines to Implement MCV Hospitals' Policy on Admitting, Discharging and
Transferring of Patients." Following a discussion, on motion made and
seconded, the Policy was unanimously approved. A copy of this document
is made a part of these minutes.
Dr. Temple announced that the Virginia Hospital Laundry, Inc. , had
won its case in the Supreme Court of Virginia.
Dr. Willett presented the suggested plan of procedure in considering
"Board Orientation, Continuing Education, University Governance and
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Organization." On motion made and seconded, a committee was appointed
to study the feasibility of the suggested plan and to report to the Board in
90 days.
At this time, Dr. Thomas C. Barker, Dean of the School of Allied Health
Professions, joined the meeting. He presented a brief report on the National
Health Planning and Resources Development Act of 1974, Public Law 93-641.
On motion made and seconded, the Report of Gifts, Grants and Con-
tracts was unanimously approved. Dr. Salley mentioned that out of 603
institutions awarded grants and contracts, Virginia Commonwealth University
is in the top 100.
On motion made and seconded, the Financial Statements were accepted
by the Board.
Following a discussion, on motion made and seconded, the Faculty
Appointments and Changes in Status were unanimously approved.
The meeting adjourned at 1:10 p.m.
Richard D.Obenshain
Approved:
REPORT OF THE PRESIDENT
September 18, 1975
Dr. Temple gave the Board a briefing with reference to a number of meetings
that had been held with the Acting Secretary of Education and the staff of the
State Council of Higher Education. He continued by reviewing the guidelines
used by SCHEV in making budget reductions and passed to the Board several
newspaper clippings describing the action of the State Council in reviewing
institutional budgets for the 1976-78 biennium.
Dr. Temple spoke about faculty salary averages saying that he believed that
the Council had not correctly used data gathered by VCU in support of our
faculty salary averages and that our staff would be preparing materials to
support our case. We will be seeking an appointment with the Council
staff for a further discussion of this matter in the near future.
Dr. Temple advised the Board that more students had been placed in hotels
and motels this year than in any prior year. Some of these students are now
being moved back to campus as rooms become available in University
dormitories.
Dr. Temple stated that five or six candidates had been interviewed for the
position of Special Assistant to the Attorney General (Legal Counsel for the
University) and, hopefully, a selection could be made and reported to the
Board by the October meeting.
MCVH MANAGEMENT ENHANCEMENT RECOMMENDATION
PHASE I ACTIVITIES DATE INITIATED DATE COMPLETLu
1. Prepare draft statement of MCVH Mission April 4, 1975
April 9, 1975
April 11, 1975
2. Approved MCVH Mission Statement April 17, 1975
3. Negotiate relationships and responsibilities between
MCVH and Professional Schools July 11, 1975
4. Develop institutional program of lectures for MCVH July 1, 1975
5. Specify quantitative goals for MCVH's next budget
year May 8, 1975
PHASE II ACTIVITIES
1. Review Booz, Allen and Hamilton report April 17, 1975
May 15, 1975
2. Adopt recommendations June 19, 1975
3. Screen candidates for position of Executive Director May 7, 1975
4. Review current MCVH staff against recommended
positions in transitional organizational structure June 2, 1975 July 16, 1975
5. Designate interim Executive Director - MCVH May 11, 1975
6. Implement HSD organizational realignment and
designate Associate Provost July 11, 1975
7. Implement reorganization of purchasing and cost
accounting responsibilities at MCVH July 14, 1975
8. Implement MCVH transitional organization structure July 7, 1975 July 16, 1975
9. Appoint new Executive Director - MCVH
10. Screen candidates for new HSD and MCVH positions May 8, 1975
PHASE II (cont.) ACTIVITIES DATE INITIATED DATE COMPLETED
11. Appoint Assistant Provosts and MCVH positions July 11, 1975
12. Implement reorganization of personnel
responsibilities at MCVH
13. Clarify the organizational responsibilities of
HSD Deans July 11, 1975
14. Redefine MCVH department level management positions
15. Adopt recommended final MCVH organization structure June 15, 1975
16. Begin developing management improvement program July 1, 1975
17. Begin developing management succession plans
PHASE IIIa ACTIVITIES
1. Approve and implement five-step program as outlined
in Chapter VII June 15, 1975
2. Disseminate Phases IV-XII of the Implementation Plan July 29, 1975
3. Complete conceptual design and implementation plan
for MCVH position planning and control system
4. Make specific organization improvements in: September, 1975
Business Office
Unit Management
Operating Rooms
Housekeeping
. Patient Transportation
Central Service
Medical Records
. Nursing Service
Clinical Pathology
. Radiology
Pharmacy
. ADW Clinics
Admitting Office
PHASE IIIa (cont.) ACTIVITIES DATE INITIATED DATE COMPLETED
5. glop effective departmental participation in
MCVH operations planning July, 1975
6. Review and approve detailed recommendations de-
signed to improve bed control systems and policies July, 1975
7. Adopt an operating improvement plan to correct basic
operating deficiencies June 2, 1975
. Institute management training program
.
processing
.
.
.
information systems
.
.
.
.
8. Implement short-term improvements in the ADP
systems August, 1975
PHASE IIIb ACTIVITIES DATE INITIATED TARGET COMPLETION DATE
1. Improve patient charging system and reduce revenue
loss
Develop patient charging procedures manual June 2, 1975
Conduct training sessions for patient floor personnel June 2, 1975
.
patients receiving gratuitous services from staff June 2, 1975
Revise selected patient charge forms July, 1975
.
medical records and ordering of services for
patients June 2, 1975
.
ADP technology July, 1975
PHASE IIIb (cont.) ACTIVITIES DATE INITIATED TARGET CUMPLLTlui\I
2. Lement personnel area recommendations
.
and procedures July-August, 1975 December 31, 1975
.
information system -- under design by
consulting firm SeptembeA 30, 1975
Prepare conceptual design of a position
control system -- under design by consult-
ing firm May 1, 1975 SeptembeA 30, 1975
3. Develop improved payroll systems -- under design
by consulting firm
Study the integration of the payroll system
information with the management information
system May 1, 1975 September 30, 1975
Compare existing system's capabilities with
MCVH's requirements May 1, 1975 September 30, 1975
Specify the integration design of payroll with
the accounting system that will serve MCVH June 1, 1975 October 31, 1975
4. Develop procurement and stores capability -- to be
developed by consultant
Establish MCVH Purchasing office capability July-August, 1975 January 31, 1976
Plan for integrating Purchasing with AccountingMay 1, 1975 October 31, 1975
Plan for expanding the computer information
systems support for purchasing May 1, 1975 October 31, 1975
Streamlining the stores operation
(specified in the Phase IIIa report) May 1, 1975 Octobelt 30, 1975
5. Complete accounting system conceptual design --
to be developed by consultant
Study the role of the system relative to the
financial management system May 1, 1975 September 30, 1975
PHASE Ilib (cont.) ACTIVITIES DATE INITIATED TARGET COMPLETION DATE
entify the financial information needs of
management May 1, 1975 September. 30, 197D
. to the management information system May 1, 1975 September 30, 1975
. capabilities requirements May 1, 1975 September. 30, 1975
. June 1, 1975 October 31, 1975
TARGET TARGET
BUSINESS OFFICE ACTIVITIES START DATE COMPLETION DATE
1. Approve Business Office Report June 19, 1975 July, 1975
2. Recruit key managers
Director, Patient Affairs August, 1975 November., 1975
Manager, Patient Resources Division August, 1975 Octoben, 1975
. Manager, Patient Billing Division August, 1975 January, 1976
. Manager, Patient Reimbursement Division August, 1975 October, 1975
3. Establish Patient Resource Division November, 1975
4. Establish Patient Reimbursement Services
Division Novembvt, 1975
5. Establish Patient Billing Services Division January, 1976
6. Transfer Inpatient Accounts to PAO January, 1976 March, 1976
7. Complete study of outpatient services September, 1975
8. Screen existing business office employees September, 1975 March, 1976
9. Implement recommendations for facilities
improvement October, 1975 March, 1976
SPECIAL REPORT TO THE BOARD OF VISITORS
Considerations and concerns relative to the proposed $120 million revenue bond issue
to construct a new 550-bed hospital and renovate existing structures:
1. How can our consultants, Booz, Allen & Hamilton, so readily
sign off on a $120 million bond issue to be issued by the MCV
Hospitals when they "hedged" on the $80 million issue?
MCVH'S ABILITY TO MEET DEBT SERVICE REQUIREMENTS HAS ALWAYS BEEN
THE MAJOR CRITERION FOR DETERMINING FINANCIAL FEASIBILITY
MCVH's ability to meet debt service requirements of a bond issue is a function
of several interrelated factors including:
Demand for its health services
Its cost and revenue structures
Regulations of government and third-party payers
Its management capability.
Each of these factors has been extensively evaluated in 1974 interim and final
reports concerning the financial feasibility of facilities development for MCVH. Some
of the factors and their components are more stable than others, but overall require
general review, analysis and assessment in an updated study. The September 3, 1975,
consultants' letter represents a preliminary analysis and opinion--both need to be con-
firmed once the audited results of fiscal 1975 become available.
Specifically in regard to the question raised concerning the absence of reserva-
tion in the September 3, 1975, letter outlining a preliminary assessment of the financial
viability of a $120 million bond issue (s), the following should be noted when compared to
the October 2, 1974, report:
The September 3rd letter was based on projections and related assump-
tions found in the 1974 report on the financial feasibility of the project.
Key components of the 1974 report explicitly reflected in the September
letter as constants are:
Utilization projections based on the demand analysis
Proportion of fixed and variable costs
Interrelationships between gross patient revenue, allowances,
adjustments and bad debts, and expenses.
