During an hour-long presentation to faculty, Sobel also discussed a wide range of topics, including cutting the school's deficit in half this year, appointing several new department chairs, continued improvement in meeting medical school accreditation standards and announced the newly merged department of microbiology, immunology and biochemistry, effective in January.
But before Sobel's address, WSU President M. Roy Wilson said he is optimistic for 2017 after a rough year financially and one that caused a lot of stress on the medical school's staff and students.
"It's been a tough year, I understand that. Last year we found a shell game was going on and the school was at least $30 million in deficit," Wilson said. "The university relieved half of that debt, but we still have half this year. That $30 million is down to $17 million. That is an extraordinary performance."
Wilson said there have been many difficult cuts to align revenue with expenditures. "Don't lose sight that your performance is so much better than a year ago," he said.
For 2017, Wilson said Sobel and other top medical school executives have a growth plan he believes will grow clinical and research revenue.
"I am seeing the big picture and seeing the savings that have been done, the operating efficiencies, and the chairs understanding what their responsibilities are like never before," Wilson said.
He also encouraged faculty to "stay the course" and not be tempted by outside offers to leave the medical school during rough economic times. DMC and other hospitals have hired several Wayne State physicians the past several months.
"There may be temptations elsewhere, but I think you will be happy you stayed the course when you look back at this difficult time," he said. "The university, after years of deficits, has a surplus of $19 million. It is that positive from the university that will help."
Wilson also said he will become chairman-elect next year of the Association of American Medical Colleges and chairman in October 2018. "I fully expect to talk about this turnaround at that (AAMC) meeting," he said.
As part of the turnaround, Sobel announced that a record number of 5,200 students applied to the medical school, topping the previous high of about 4,000. Graduate programs for M.D.-Ph.D candidates also are growing, nearly topping 400, he said.
He said test scores for step 1 of the United States Medical Licensing Examination taken by students was higher than national averages for the second consecutive year. The school's residency match rate was higher this year than national average for the fifth straight year.
Research grants from the National Institutes of Health also were up this year to 617 projects from 593 in 2015. Overall, research funding totaled $117 million in 2015 from $94.5 million in 2014, Sobel said.
"We've had some revenue growth, but mostly (the savings) have come from expense reductions," Sobel said. "We have to grow the operation in a thoughtful manner."
Overall, the medical school, Wayne State University Physician Group and related operations projects to cut losses from $30 million in 2015 to $11.6 million in 2017, to $5.5 million in 2018 and break even by 2019, Sobel said.
This year, $6 million to $8 million is expected to be saved by 40 faculty members either retiring or on the path to retirement, Sobel said. About eight will go through the detenuring process, he said. About 65 physicians or scientists have been deemed unproductive or underproductive, although some have improved.
"Out of several hundred, this is a very small number," said Sobel, adding that the school is looking for further administrative cost savings next year. "We are hoping with the financial turnaround we will move into a hiring situation. We have a number of initiatives planned and we need to grow," he said.
For example, Sobel said Wayne State plans to open a new neuroscience translational research institute under the oversight of David Rosenberg, M.D.
"We are now hiring several individuals. This is a major investment by the university and we are grateful for the support," Sobel said.
Sobel also congratulated many department chairs who now determine their own budgets and are responsible for their own overhead costs.
"We are involving department chairs in the budget decision making process," Sobel said. "Before they were disenfranchised. They had had to work very hard to do things they never had to do before."
"Citing 'incompatible cultures' with DMC, Wayne State medical school to seek other hospital partners" originally appeared in Crain's Detroit Business.