Mission aligned management and allocation: a successfully implemented model of mission-based budgeting

Abstract

In response to declining funding support and increasing competition, medical schools have developed financial management models to assure that resource allocation supports core mission-related activities. The authors describe the development and implementation of such a model at the University of Wisconsin Medical School. The development occurred in three phases and included consensus building on the need for mission-based budgeting, extensive faculty involvement to create a credible model, and decisions about basic principles for the model. While each school may encounter different constraints and opportunities, the authors outline a series of generic issues that any medical school is likely to face when implementing a mission-based budgeting model. These issues include decisions about the amounts and sources of funds to be used in the budgeting process, whether funds should be allocated at the department or individual faculty level, the specific metrics for measuring academic activities, the relative amounts for research and teaching activities, and how to use the budget process to support new initiatives and strategic priorities. The University of Wisconsin Medical School's Mission Aligned Management and Allocation (MAMA) model was implemented in 1999. The authors discuss implementation issues, including timetable, formulas used to cap budget changes among departments during phase-in, outcome measures used to monitor the effect of the new budget model, and a process for school-wide budget oversight. Finally, they discuss outcomes tracked during two years of full implementation to assess the success of the new MAMA budget process.