Budget, Operational Excellence Report to the Campus

Susan Desmond-Hellmann, M.D., M.P.H.Chancellor UCSFChancellor, UCSF

May 18, 2010

Agenda

AGENDA

Agenda

• Reminder: Priorities• Report on UCSF’s FY 2010-11 budget status• Recommendations of the Administrative

and Operational Efficiencies Work Group• Feedback received from small group

sessionssessions• Next steps

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Priorities

PRIORITIES

Priorities

• Patients/Health• Discovery• Education• People• Business

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Where We Started

WHERE WE STARTED

Where We Started• Work Group formed February 2010• Charge: identify options for addressing ongoing

cuts in state funds, rising employee costs– Improve FY 2011 operating margin $28M– Improve FY 2011 operating margin $28M

to $40M• administrative efficiencies• new or increased revenue• net cost reductions

E d i l– Ensure we spend our money wisely– Create a culture that continually asks,

“Is there a better way?”

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Is there a better way?

Budget Status

BUDGET STATUS

Budget Status• The problem, FY 2011

Projected state/general fund shortfall = $28MProjected state/general fund shortfall $28MLess: Allocation of educational fees = $10MTotal net state/general fund shortfall = $18Mg

• Solving the problem– Central Administration: to shoulder largest share ofCentral Administration: to shoulder largest share of

reductions; 50%, if possible – Medical Center: to provide about one-third of the

solution by relinquishing all state fundssolution by relinquishing all state funds– Schools: to shoulder remaining burden

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Goal: reduce direct hit on schools

Operational Excellence: Findings

OPERATIONAL EXCELLENCE FINDINGS

Operational Excellence: Findings

• UCSF has amazing staff faculty• UCSF has amazing staff, faculty (there’s a good reason we’re in the top 10 in every category)F lt t ff k t l h d h• Faculty, staff work extremely hard; have suffered years of cutbacks, unfunded mandates

• But years of inadequate infrastructure, complex processes and a Lego-like structure (e.g., shadow systems, heavy paper use and ( g y y p playered processes) increasingly challenge our ability to function effectively

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Current Administrative StructureADMINISTRATIVE STRUCTURE

Department ManagerChair

CentralCentralAdministration

HR

FacultyPre

AwardIT

P t

HR

Finance

Post Award

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• Department administrative structure varies across departments• Fragmentation offers little opportunity to develop professionally

Operational Excellence: Findings

OPERATIONAL EXCELLENCE FINDINGS

Operational Excellence: Findings• Human Resources (example)

– Support for nearly 22,000 people (including UCSF paid/unpaid, UCOP, excluding Medical Center)

– 515 departmental HR head count• 190+ people dedicated to delivering services (50%+

time dedicated to HR)• Remaining 320+ people have significant overlap with g p p g p

other admin. functions (e.g., pre-award, post-award, finance)

– 90+ additional people in multiple, central HR functions– Data* suggests a 127:1 ratio (employees to HR staff);

UCSF’s ratio = 81:1

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* College and University Professional Association for Human Resources (CUPA)

Operational Excellence:

OPERATIONAL EXCELLENCE RECOMMENDATIONS

pRecommendations• Over three years, beginning in FY 2011y , g g

– Focus on administrators’

k th i j bwork, their jobs and the technology

• Excellence

that supports UCSFRegionalize core

• Accountability

• Cost reduction– Regionalize core

services (HR, IT, Finance, Research Ad i i t ti )

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Administration)

Moving Toward Operational ExcellenceOPERATIONAL EXCELLENCE

HRIT

Finance

Subject MatterE t

Faculty FacultyExpertsPre awardPost award ChairChair Department

ManagerDepartment

Manager

• All departments have equal access to expert services, tools and systems

• Staff can develop expertise and a career path while working

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Staff can develop expertise and a career path, while working closely with a department and being part of a community of colleagues

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Operational Excellence

OPERATIONAL EXCELLENCE

Operational Excellence

• Two things are different compared to my initial statements to the campus:

Feb. 2010

Budget issue: $28M $40M

May 2010

Budget issue: $18MBudget issue: $28M - $40M

Operational ExcellenceTimeline: 1 year

Budget issue: $18M

Operational ExcellenceTimeline: 3 yearsTimeline: 1 year Timeline: 3 years

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Long-Term Issues

LONG-TERM ISSUES

Long Term Issues• Financial unknowns loom

S b d– State budget• “Hopes for budget compromise dim amid Calif deficit”

Associated Press, May 15, 2010

– NIH budget• “Lawmakers Renew Commitment to Science

Spending Despite Budget-Deficit Fears”Spending, Despite Budget-Deficit FearsChronicle of Higher Education, April 29, 2010

– Health care reform• “Jobs affected by Health Care Reform”

San Francisco Chronicle, April 26, 2010

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Long-Term Issues

LONG-TERM ISSUES

Long Term Issues

• Daunting increases in employee costs projected

– Employee, retiree health care costs:health care costs:

FY 2011: $17M*

FY 2013: $52M*

– Campus retirement contributions :

FY 2011: $60M+*

FY 2013: $120M+** All funds

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Operational Excellence: Process

OPERATIONAL EXCELLENCE PROCESS

Operational Excellence: Process

• Work Group Process– Included more than 380 individuals campus-wide and

from all schools– Campus-wide email updatesCampus wide email updates

• Sharing Work Group’s Recommendations– Focus Group meetings with department chairs and

faculty from all four schools– Information posted on budget web side

(budget.ucsf.edu)– Campus-wide informational emails, updates– Campus Town Hall meeting

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Operational Excellence: Feedback

OPERATIONAL EXCELLENCE FEEDBACK

Operational Excellence: Feedback• More detail requested to fully

comprehend proposed changescomprehend proposed changes• Need for better infrastructure,

especially information technology• Lack of confidence given prior

experiences– Concerns about losing services

needed to get the job done, especially specialized services within certain areas

– Concerns about losing good employees

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employees

Next Steps: Central Administration

NEXT STEPS

Next Steps: Central Administration• HR Service Center in Financial and

Administrative Services (FAS)Administrative Services (FAS)– Sept. 30: Migration of all FAS HR activities

• Finance Service Center in FAS• Finance Service Center in FAS– Dec. 2010: Center up and running

• Information Technology• Information Technology– Evaluation underway

• Other HR Finance Service Centers• Other HR, Finance Service Centers– Evaluation underway

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Next Steps: Schools

NEXT STEPS

Next Steps: Schools• School of Medicine has

formed 2 committeesChancellor Exec Cabinetformed 2 committees

• Dean’s Steering Committee (faculty, staff)

SOM( y, )

– Evaluate options; submit recommendations for implementation,

SOMDean

implementation, communication

• Department Managers Work Group (dept mgrs)

SteeringCommittee

Group (dept mgrs)– Evaluate options; assess the

programmatic, financial i li ti d i

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implications; design, implement delivery models

Dept Managers

Next Steps: Schools

NEXT STEPS

Next Steps: Schools

• Schools of Dentistry, Nursing, and Pharmacyy g y– Focusing on implementing local efficiencies – Interfacing with SOM and campus through

committee representation

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My Commitment

COMMITMENT

My Commitment• Keep listening

Freq ent comm nication especiall if the• Frequent communication, especially if the budget or plans change

• Be sensitive to personal impact on employees,Be sensitive to personal impact on employees, their families

• Advocate for our campus– Seeking additional resources– Decreasing administrative requirements that do not

advance our missionadvance our mission

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Long-Term Focus

LONG-TERM FOCUS

• Focus on our mission

Long-Term Focus

– patient care, discovery, education

• Advance our priorities• Continue investing in our future• Strategic planning

– Update campus strategic plan, with a particular emphasis on Healthcare Reform impact

– Launch next version of Long Range au c e t e s o o o g a geDevelopment Plan (LRDP)

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