The Brody School of Medicine in 2014

Updated Oct. 13, 2014

When the East Carolina University School of Medicine was created four decades ago, our threefold mission was clearly established and deep-seated within our values and our daily work:

  • Increase the supply of primary care physicians to serve our state;

  • Improve the health status of citizens in eastern North Carolina;

  • Enhance the access of minority and disadvantaged students to a medical education.

Today, in the midst of tectonic shifts in health care and medical education, our vision remains clear and our mission remains constant. Brody will remain dedicated to training our doctors and treating our citizens.

Change for Brody is inevitable, but it provides an opportunity to imagine and build our future.

A Changed Environment

In the last five years, the Brody School of Medicine has absorbed a cumulative, permanent state budget cut of $9.2 million, or nearly 19 percent, of our state funding. These cuts mean we have had to teach our students and take care of our patients with fewer resources.

As a leading employer in the region, matching losses in support staff and operating funding has made it more difficult and costly to hire and retain qualified employees, to keep essential basic functions operating smoothly, and to keep needed medical equipment up-to-date.

Much of the shortfall resulting from these legislative cuts has been “back-filled” with money from the ECU Physicians practice. Even our ability to backfill through our faculty practice has been compromised seriously by legislative actions in the last two years. Those actions have effectively cut millions of dollars from our practice revenue, yet produced no tax savings for the state. These cuts have the potential to cause serious harm to health care and economic opportunity for the people of eastern North Carolina.

The importance of ECU Physicians to the ability of Brody to accomplish its mission is great. ECU Physicians carries a shortfall of as much as $22 million for Fiscal Year 2014. (UPDATE: ECU Physicians finished Fiscal Year 2013-14 with operational losses totaling $14.4 million. See ‘Frequently Asked Questions’ at the bottom of this page for more updates.)  Multiple factors are causing this deficit. Some are permanent external changes including how providers are reimbursed for care and the implementation of new regulations, procedures and requirements at the state and federal levels. Others are due to our passion for caring for underserved patients. Still others are as a result of historic budgeting practices, clinic workflow habits and our current academic model – appropriate when implemented but no longer optimal.

We continue to work with North Carolina legislative leaders to restore our ability to collect delinquent bills owed to us from patients who have the ability to pay through the use of the Set-Off Debt Collection Act (SODCA). The state law allows state agencies owed delinquent funds by individuals to collect a portion of that debt from some of the debtor’s state tax refund or lottery winnings. SODCA remains state law for most agencies. However, last year ECU Physicians and UNC Hospitals were denied the ability to use the law to collect delinquent debt, costing Brody over $6 million this year.

We are also working very hard to inform leaders in Raleigh about the value and critical nature of retaining the Medicaid Upper Payment Limit, or UPL, for ECUP’s financial stability. A significant portion of our patients are insured through Medicaid, whose reimbursement rate is often less than the cost of providing care. Recognizing that the time needed to teach medical students and residents creates higher costs when treating patients, the UPL provides a mechanism – using only federal funds and no state funds – to increase the standard Medicaid reimbursement. If the N.C. Legislature eliminates UPL, ECU Physicians will lose approximately $15 million in revenue annually. Any reduction or restriction on our use of UPL will also cost us millions in annual revenue. Both SODCA and UPL are issues ultimately beyond our control, but our efforts to convince leaders of their value and importance go forward forcefully.

Brody is neither alone nor even the first medical school to undergo transformational change. Close to home, Emory University School of Medicine, Wake Forest Baptist Medical Center and University of South Carolina School of Medicine – a peer community-based medical school – have all begun significant restructuring in order to position themselves for the changes affecting all of us.

Mergers, acquisitions and new management arrangements are everywhere. Duke LifePoint Health has entered into a joint venture with Wilson Medical Center; Nash Health has entered into an affiliation agreement with UNC Health Care; and Sentara Health has taken over the Albemarle Medical Center in Elizabeth City – and all of that is just in our own backyard in the last six months.

A new structure is needed to sustain the clinical practice and the medical school. By establishing a sound financial base at this time, we can build opportunities for investment in the future.

What Is Guiding the Process?

Brody and university leaders are working hard to inform policymakers and payers to convince them to alter actions that have been harmful to the financial sustainability of our medical school. However, we must concentrate most of our attention and efforts on those things we are able to impact directly: how we operate the Brody School of Medicine and the ECU Physicians practice.

Dr. Paul Cunningham, dean of the Brody School of Medicine, and members of his senior leadership team have been working with department chairs and external consultants to conduct a comprehensive review and analysis of Brody and the ECU Physicians practice.

Early in 2013, ECU hired Hunter Partners consultants to help us conduct an extensive study of the ECU Physicians clinical enterprise and make recommendations for improvement. A report on their findings is available here (PDF format).

Actions being taken are based on objective data, analysis, evidence and peer-based benchmarks whenever possible. Some decisions require subjective judgments. In all cases, Brody leaders depend on the best advice from faculty, staff, students, department chairs, consultants and leaders in our community and state.

What Will Change?

The Hunter Partners report confirms what we have known for some time but can now document precisely:

  • We have some outstanding faculty productive in clinical practice, education and research. These super-performers are often under-appreciated and also under-compensated for what they do, compared to national benchmarks.

  • The report also provides the mechanism to identify a small minority of faculty who are not performing at adequate levels. These members of our team will be provided with clear measures that must be achieved. They will be counseled and supported on ways to make the required improvements in their performance and productivity and they will be held accountable.

  • We have also reassessed, down to a granular level, the financial performance of every unit in ECU Physicians. Funding sources and amounts are often misaligned with everyday work realities. We are in the process of realigning our allocations to reflect consistency in budgeting and will be making those adjustments in the coming months.

The University Committee on Fiscal Sustainability has made some recommendations on the configuration of basic science departments. A report published by that committee this spring is available online and will guide Brody’s actions in this area.

We have the ability to more directly impact how we operate ECU Physicians to improve efficiency, effectiveness, health outcomes, patient satisfaction and revenue. Using objective financial data, we are able to determine for every program or division whether it is operating at break-even, at a profit or loss.

Concurrently, we have re-evaluated what resources and structural elements are core for the education of medical students at the Brody School of Medicine. In addition to objective accreditation requirements that must be met, for Brody, the definition of core encompasses:

  • Resources required to support ANY medical school, including admissions and student affairs, basic science education, medical education, six required areas of clinical training, faculty affairs and professional development;

  • Programs that support diversity and inclusion;

  • Population health-based clinical and community service outreach to eastern North Carolina;

  • A balance of primary care and specialty services to meet the most prevalent health care needs of the region and provide the necessary clinical learning “laboratory” for medical students and residents;

  • And administrative systems and services to support those listed above.

Each clinical program within ECU Physicians has been measured on a grid that gauges both their contribution to core requirements and profitability.

Something that is deemed not core for education of medical students may still be essential and valuable to our partners at Vidant, or may be an activity that is important and needed in and for the community. In such cases, we will proactively engage in appropriate discussions and negotiations about that activity continuing in a different way.

At the conclusion of this transformation, Brody will have a different profile and will provide different services than it does today. The transformation on which we have embarked guarantees that we are doing our part to ensure Brody will be here tomorrow and will be in a position to make investments for the future.


If you have questions, comments or concerns about the contents of this Web page, email them to

Frequently Asked Questions About Brody & ECU Physicians
(Last Updated 7/31/14)

Based on the operations of ECU Physicians, the practice lost $14.4 million in 2013-14. One-time funding from other university sources limited the actual losses to $9.2.


We will continue to review overall budget outcomes - including changes that affect our partners at Vidant - before we can determine the specific outlook for Brody. Based on our preliminary analysis, the legislature is responding positively to our concerns on specific critical legislation affecting the Brody School of Medicine.

The proposed budget reinstates, in part, the ability of our clinical practice to collect debt through the Set-Off Debt Collection Act (SODCA) as well as provides additional access to federal Medicaid funding by making adjustments to the Upper Payment Limits (UPL) to providers. Also critical is the fact the proposed budget did not assess a tax on the UPL funds we receive.


Yes! While changes must occur, the school’s leaders are committed and confident that we will succeed, if we make the necessary changes on a timely basis. Our current revenues cannot sustain all the things Brody has been doing. We are doing the current work in order to support our mission.


The Liaison Committee on Medical Education (LCME) is the accrediting body for all U.S. medical schools. LCME requires that all medical schools provide, at a minimum, the following in order to qualify for accreditation:

  • Basic Science Education
  • Admissions/Registrar
  • Student Affairs
  • Faculty Affairs
  • Research
  • Clinical Training in:
    • Medicine (general);
    • Surgery (general);
    • Pediatrics;
    • Family Medicine;
    • Obstetrics/Gynecology;
    • Psychiatry; and
    • Opportunities for a variety of Electives

Brody will meet and exceed all of the minimum LCME accreditation requirements listed above, and will also continue to emphasize a focus on primary care, which is a key aspect of our mission.

Beyond this, fulfilling the Brody mission requires the medical school to serve the needs of eastern North Carolina by assuring that we also provide:

  • Diversity Programs
  • Coronary Artery Disease (CAD)
  • Asthma
  • Chronic Obstructive Pulmonary Disease (COPD)
  • Hypertension
  • Obesity
  • Stroke
  • Cancer (Breast, Colon, Prostate and Lung)
  • Injury
  • High risk births

Where ECU Physicians has been providing funding for programs, units and services determined to not be core to the educational or service mission of Brody, other funding sources will need to be secured. Better aligned funding or revenue sources will be explored and sought for these important programs, even if they do not meet the definition of core for a medical school. Potential sources of revenue will vary from case to case, but will likely include the community, Vidant and non-state government and philanthropic options. These decisions will occur over a period of months.

In some cases, more appropriate funding sources may be secured through grants or contracts, with staff and faculty retained as ECU Physicians employees. In other cases, a different source of funds may require a change in the employment of staff and/or faculty to another entity, which may include the establishment of new private practices. For those programs where ECU Physicians funding will end and new sources of funding cannot be secured, the program or service will end. Employees may be transferred to suitable vacant available positions or laid-off, with eligible and appropriate benefits and support in seeking new employment being provided to those employees.

Brody is working closely with our partners at Vidant. As these services are evaluated, Brody and Vidant will jointly evaluate the possibilities of those services being assumed by Vidant. There are two basic ways that Vidant may assume the financial responsibility for those services:

  • They could be transferred to Vidant and become part of the Vidant organizational structure. In that case, the service’s employees would become employees of Vidant. Faculty titles and tenure would be reviewed for eligibility to continue on a case by case basis.

  • Alternatively, Vidant may contract for services with ECU Physicians, assuring that the financial responsibility is mitigated for Brody, in which case employees would remain ECU Physicians/Brody employees , although some or all of their day to day work responsibilities would be assigned and managed by Vidant leadership.

Positions within ECU Physicians and other positions funded in whole or in part with revenue from ECU Physicians are being reviewed to determine whether any changes in compensation (including increases) are appropriate. For clinical faculty, compensation levels will be aligned to their level of clinical productivity. Clinical faculty will receive specific targets consistent with national benchmarks that must be achieved to receive compensation at specific levels. Compensation levels will be adjusted up or down accordingly. If productivity is consistently and persistently inadequate, termination is a possibility.

We are looking at ways to create incentives to improve productivity, not just for individuals, but for entire units, where that is appropriate. With this in mind, we are looking at multiple ways to calculate compensation, including ways that provide younger/newer faculty opportunities to build their practices. Suggestions on how to best structure such incentives are welcome and should be discussed with your department chair.

The evaluation and analysis of every position employed by or paid (in whole or in part) with revenues from ECU Physicians includes a review of the portion of time the position dedicates to non-clinical responsibilities. Non-clinical responsibilities, like administration, teaching or research will be realigned to be properly paid from appropriate funding sources for those activities. For example, state funds appropriated for teaching will be realigned by formula to pay directly for the time individual people/positions conduct teaching-related activities, including preparation. In other words, every aspect of a clinical faculty member’s time must have a specific funding source to cover that percentage of their compensation.

We recognize that for our clinics to provide patient care at the highest levels of quality and optimal levels of patient experience a team approach is essential. This means that each member of the team in every clinic needs to provide their best effort for every patient every day. Amongst all the other work we are doing on the clinical transformation of ECU Physicians, we are also carefully examining the staffing levels at our clinics and will make adjustments where needed. In addition, appropriate compensation for all of our staff is very important. We have been working with the ECU Human Resources professionals for the past two years to bring our staff compensation rates closer to market levels and this will remain an area of ongoing study and adjustment.

The Ambulatory Access Standards will enhance how we work with patients in our clinics in a number of ways. The standards will create more uniformity of patient appointment schedules, clinic operating hours, lengths of appointments, dealing with No Show patients, and many other vital operational details. The overall intentions with the standards are basically three-fold: to provide the highest quality of patient care and ready access to appointments; to provide an outstanding work environment for our providers and clinical staff; and to provide long-term financial stability for ECU Physicians. The Standards also recognize the importance of operating ECU Physicians as a business, an approach that is essential for our long-range stability. The Standards are a fundamental step as ECU Physicians becomes a true group practice, rather than a federation of separately managed clinics.

The Brody School of Medicine will continue to encourage faculty to undertake government and corporate funded research. Faculty can, and should, pursue any available intramural funding opportunities offered by ECU, as well as those offered by foundations in the region and nationally. Unfortunately, we can no longer afford to cover research expenses from the clinical practice.

The Brody relationship with Vidant is strong today and strengthening. There is an explicit realization by executive leaders in both organizations that the paradigm-shifting changes occurring in healthcare are best met by Brody and Vidant working collaboratively and cooperatively. Both Brody and Vidant are undertaking similar evaluations, analysis and streamlining of their respective organizations. As we both work through that process, we are working closely to ensure that an action taken by one party is communicated and understood by the other organization. This will minimize or eliminate the impact to employees, students, patients, and the community. Both Brody and Vidant will emerge from this process stronger, working better together and much better positioned to lead eastern North Carolina into the future of health care.

Brody will have worked through the dramatic changes in health care and will have succeeded in transforming ourselves to assure financial sustainability and greater self-reliance, while continuing to deliver on our historic mission. In so doing, Brody will be in an enviable position to shape the future of health care in eastern North Carolina and to serve as a national model. The transformation on which we have embarked will ensure Brody has the ability to make needed investments in people, equipment, facilities and new ways and structures to deliver on our mission.

In 5 years, Brody will be at the center of a changed health care landscape in eastern North Carolina, in partnership with key allies. Physicians and hospitals will be more effectively networked together to provide comprehensive care to patients – both those who are sick and, increasingly, those we are helping to keep healthy. These physician-led networks, whether they will be called Accountable Care Organizations or something else, will be organized for the benefit of patients through a Patient Centered Medical Home (PCMH) with ubiquitous use of Electronic Health Records (EHR). These new ways of delivering care will provide Brody with new and better ways to train doctors in our eastern North Carolina communities. These Brody-trained doctors will continue to practice in eastern North Carolina in large numbers and, in turn, transform health care.

Yes. Some level of lay-offs will occur. We are currently evaluating every position in ECU Physicians as well as every position elsewhere in Brody funded (in whole or in part) with ECU Physicians revenues. While evaluation of further cuts will continue for some time to come, the first round of cuts required to assure financial sustainability will be about 100 positions. Of these, approximately 90 positions are being eliminated through attrition. That means approximately 10 jobs that people currently hold will be eliminated. Affected employees will be notified as soon as decisions to eliminate specific positions are made. We expect that will begin in August.

In addition, on a case-by-case basis, as non-core programs and services are realigned with more appropriate funding sources or transferred out of ECU Physicians, additional RIFs may occur. Most of these “RIFs” will actually be changes of employment to another organization. We hope these cuts, along with other financial controls and operational changes we are implementing across the practice plan, will suffice to establish financial sustainability. However, we will continually evaluate ECU Physicians’ financial position to determine if additional reductions in work force are required.

The dean and ECU Physicians leaders have decided that unless the specific language in the legislature’s approved budget bill prohibits it, CSS employees of ECU Physicians will be awarded the same salary increase for which Brody employees are eligible.


Creating Realistic Revenue Projections

  • A review by the practice plan finance committee of every position funded began in April and is continuing. All positions – regardless of funding source – in every clinical department are being reviewed. As a result, it is likely we will decrease some expenses through attrition of personnel.

  • In May, clinical departments were given aggressive targets to meet in developing their 2015 budgets, which will be finalized in July. No contract revenues are to be considered unless the contract is already in place and no increases in clinical revenue projections, as compared to last year, will be allowed.

Decreasing Expenses

  • Cuts will include the elimination of some programs. While decisions about specific program cuts are an iterative process that in some cases will take months to determine and execute, it is a process that deeply involves department chairs, faculty and even outside partners. Personnel decisions that must be made as a result of program elimination will be made on a case-by-case basis.

  • Additional staff reductions will also occur. Reduction in force plans will be developed this summer, while some positions have already been eliminated through attrition. Trimming over-staffed areas will decrease expenses and more correctly size ECU Physicians clinical and administrative units.

  • Central and overhead departments, including the Office of the Dean, will cut their budgets by approximately 10 percent.

  • The use of space in every clinic is being reviewed throughout the summer. Analysis thus far indicates that this review will lead to a consolidation of space and a reduced need for leased space. This action will lead to a decrease in expenses.

  • Funding for any research efforts historically provided by the practice plan will be eliminated in the new budget year beginning in July.

  • Compensation for faculty with low productivity in FY 2014 will be reduced; written targets will be given to each provider for FY 2015. Compensation levels will match productivity beginning in January 2015.

  • Faculty benefits are being reviewed and we will likely need to reduce the supplemental benefit structure.

Investing in the Future

  • We will begin the transformation in our clinical enterprise by improving and increasing access to care. The processes used to prioritize and schedule patient appointments will begin to change this July. This will increase revenues, and improve patient satisfaction and outcomes.

  • Related to the access to care initiative, an examination of every aspect of work in the clinics to dramatically improve the patient, faculty and staff experiences has begun. This includes efforts in improving patient safety and quality; expanding our work related to establishing patient-centered medical homes and accomplishing meaningful use of the electronic health records.

Increasing Revenues

  • Work to review specific aspects of the revenue cycle began in April in order to identify opportunities for improvements.

  • Comprehensive training of providers to improve documentation and coding to increase reimbursement begins in June.

  • Systems are being reviewed and, where needed, new systems will be put in place to capture the deductible and co-pay fees at the time of the actual visit.

  • We began in May to determine how we do a better job of upholding our current policy of retaining our own patient referrals within ECU Physicians when we are able to provide the needed service.

  • The workflow needed to cycle our patients through our clinics must be optimized across our practice. That effort has begun in our pediatrics clinic and will begin practice-wide expansion this fall.

Addressing Faculty Productivity

  • Beginning in April, there is a new emphasis on assuring compliance with the existing Faculty Leave policy while also revising the policy to eliminate the carry-forward leave option for the future.

  • In April, travel restrictions were put in place that limit international travel funded by the practice plan; when international travel is approved with non-ECU Physicians funds, vacation time must be used. For domestic travel, the individual must be presenting a paper, other information or be part of the host professional society leadership.

  • In June we begin to recalibrate clinical full-time equivalents for each provider in conjunction with assuring the appropriate allocation of time for teaching or administration based upon a careful review of those activities.

  • Finally, departmental meetings must be held during times that are least disruptive to the provision of clinical care. Each of these last four actions will increase faculty time in clinic or at the hospital and thus will increase revenues and productivity.

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