Key Messages: Administrative Affairs Meeting August 17, 2017

Basic Science and Clinical Departments, Centers

 

Health System Financials (Doug Lischke)

  • Mr. Lischke provided an overview of unaudited Health System financials for FY2017.
  • Overall the balance sheet remains very healthy, assets total $4.5B and Investments returned 12.4% for the fiscal year.
  • The $39.2M operating margin well exceeded budget, driven by Medical Center volume and higher acuity / CMI.
  • FY2017 was a successful year similar to FY2016, with a good margin near 2%. Operating cash flow of $186.2M is strong; approximately $10M lower than last year.
  • Mr. Lischke reported that the long range (7-year) financial plan from UPG, SOM and MC came together smoothly and reflects continued solid performance expected: an anomaly in the industry. There is, however, considerable uncertainty in the industry. 

 

Consolidated SOM/UPG Financials (Allison Holt)

 

Mouse Per Diem Costs (Dr. Steven S. Wasserman)

  • Dr. Wasserman reported that per diem mouse costs are decreasing from $1.05 to $0.99.

 

Renting External Space (Dr. Steven S. Wasserman, Jessica Hurley Smith)

  • Dr. Wasserman stated that there is an effort underway to shorten the timeline for renting external space, due to the arduous process required.
  • Administrators are encouraged to put in future initial leasing requests to Ms. Smith, who will then put them in contact with UVA Real Estate to begin the detailed form and state process, which requires that contracts meet state agency requirements.
  • Dr. Wasserman stated that due to the length of time it takes to execute a lease, allowing six (6) months is wise; also, the market for property close to grounds is scarce. 

 

Budget System Project Update (Anelia Farhi)

  • Ms. Farhi stated that there are extenuating factors affecting the Budget System Project, including a tentative plan for the University to restructure its accounting structure during the year after Ufirst and Workday implementation.

 

Re-introduction of Susan Rumsey (Anne Kromkowski)

  • As of July 31, 2017, Susan Rumsey returned to her previous role as UPG Chief Financial Officer.
  • Ms. Kromkowski expressed gratitude on behalf of the group to Beth Allen, who did an excellent and effective job of fulfilling her duties as interim CFO in Ms. Rumsey’s absence.

 

UPG Accounting Update (Beth Allen)

  • Ms. Allen stated that with the transition to Epic, opportunities exist to streamline processes and UPG is reviewing options when possible.
  • There has been a change to the allocation of the registration fee as established in the current MOU with the Medical Center. The fee will now be allocated as a fixed amount instead of a percentage. The fee will be split by 12 and distributed 1/12 each month beginning in July, based upon Net Patient Service Revenue.
  • Discussions are underway with the Medical Center regarding simplifying the facility fee process going forward. Updates will be provided once further discussions have occurred.
  • At the end of FY2017, UPG worked with the auditors to extend the amortization period for the CRP pension plan. Expenses will be amortized for 12 years, which is the remaining expected lifetime for participants (rather than the remaining expected time of service, which was 2.5 years).
  • Chargebacks will continue at the budgeted amount of $12.9M for FY2018.

 

Departmental Business Development Update (Dave Stebbins)

  • Mr. Stebbins introduced the UPG Business Development team, and outlined the services they provide.
  • The Business Development team consists of subject matter experts who are available to ensure consideration and standardization of financial, legal, HR and IT matters for external projects outside of UVA grounds.
  • Services available include project management, strategic planning, due diligence/vetting, coordination of legal, financial, credentialing and facilities services and Telemedicine.
  • Mr. Stebbins stated that the Business Development team intends to set up meetings with each department to determine how they can be of assistance. Additionally, department administrators are encouraged to contact the Business Development team as project needs arise.

 

 

Key Messages from Clinical Chairs Committee Meetings June 13, 2017 and July 11, 2017

Key Messages from Clinical Chairs Committee Meeting June 13, 2017

Robin Parkin, Epic Phase 2 Administrator, provided an Epic update focusing on the Command Center plan for Epic Go-Live, the Super User Support Plan and what to expect at Go-Live.

UPG Interim CFO Beth Allen provided an overview of UPG financial performance and operations. The consolidated balance sheet at the end of April showed a 0.8% decline in net assets over the 10-month period in FY2017, while cash on hand remained strong at $33.5M. The consolidated accrual-based UPG income statement for FY2017 showed an operating deficit of $12.3M through April, reflecting the first year of a new Health System Funds Flow model and transition to mission-based financial reporting for the clinical departments. Total revenue was marginally favorable to budget (1%), and indigent care revenue was over budget with mid-year projections indicating that this revenue would exceed budget for the year by roughly $7.8M. Total pension expense for the fiscal year is expected to be $25.8M; the unbudgeted cost of which is expected to be $15.3M. While this is not a direct cash outlay, it reflects annual expense and therefore can create an operating loss. Workload trends reflect strong productivity in March with lower productivity in April, and higher productivity is expected in May and June based on trend data from FY2015 and FY2016. Clinical departments as a whole are exceeding the 65th percentile in productivity. Investment results for the 9-month period ending March 31, 2017, showed positive returns with strong market conditions. Cash collections from patient care services exceed cumulative year-to-date targets but April results reflect low collections due to a Medicare processing issue. Below are the slides Ms. Allen presented at the meeting.

 

 

 

 

 

 

 

Corey Feist provided a contracting update. UPG and UVAMC have contracts with Anthem expiring December 31, 2019. In May 2017, UPG and UVAMC representatives began negotiations for new contracts to be effective upon expiration. UPG has received commitment from UVAMC Associate VP for Business Development and Finance Larry Fitzgerald that the Medical Center contract will not be signed unless UPG terms are met. Melanie Lewis has been chairing the Performance-Based Contracting Committee and discussing strategy with the group. Feedback and questions can be directed to Ms. Lewis: msl4a@hscmail.mcc.virginia.edu

Brad Haws shared feedback from the June 1 UPG Discussion Session with providers and UPG Board of Directors public members. Roughly 100 clinicians attended the two-hour event, which provided clarity on some issues and brought clinician questions and concerns to light. Further dialogue and forums can be expected in the near future. UPG members are encouraged to submit input of any kind to the new email address designated for feedback: upgfeedback@virginia.edu. Link to video footage of the presentation can be found here as well as a copy of the slide presentation and an executive summary of the event.

 

Key Messages from Clinical Chairs Committee Meeting July 11, 2017

Brad Haws provided an update on UPG’s involvement with the Ufirst initiative and solicited input from the group on their recommendation to obtain faculty input regarding the UPG Board’s decision about whether or not to participate in Ufirst. Mr. Haws explained that there are two parts to the initiative: changes in technology using the Workday IT platform, and changes in management and staffing structure. The UPG Board of Directors wants to ensure the feedback from UPG’s constituents is received to help inform the Board’s decision. Pat Hogan, UVA EVP and COO, plans to bring a presentation to the UPG Board of Directors at the September 2017 meeting and, we believe, ask for UPG’s participation in all of Ufirst. The chairs asked to be educated about the details of Ufirst including a list of pros and cons.

Dr. Levine plans to step down as UPG President in September 2017. An election for his replacement will take place during the September 2017 Clinical Chairs Meeting. Nominations can be sent to Brad Haws. Nominees will be asked to provide biographical information upon acceptance.

There are two public members of the UPG Board of Directors who will be rotating off the Board in December: Mr. James Rutrough and Ms. Ella Strubel. The Nominating Committee of the UPG Board of Directors requests that Public Director nominations be sent to Brad Haws or Corey Feist.

UPG Interim CFO Beth Allen provided a summary of the FY2018 budget. The UPG Consolidated budget reflects a loss of $15.8M before transfers and $10.6M after transfers. The 21 clinical departments represent an $8.2M loss before transfers and $3M after transfers. UPG has worked with actuarial firm AON Hewitt to assist with analysis on the future expenses of the retirement plans. Should rates change, the possible fluctuation of the expense is significant, which UPG is monitoring closely. However, both the CSRP and CRP plans are well funded with the expectation that the CRP plan will be fully funded by FY2021. Overall, the impact of the expense is concerning to the overall performance of the group practice plan; however, the expense is an amortization cost and not a direct cash outlay. Below are the slides Ms. Allen presented at the meeting.

UPG Chief of Audit and Billing Quality Melanie Lewis provided an Epic Go-Live update. Indications from implementation team members are that implementation has gone well with some issues to address. Most Go-Live areas are meeting their Key Performance Indicators. Clinical Pathology issues need attention; Medical Center charges are roughly 66% while UPG is 97%. Feedback from departments was that most were doing well but there was some difficulty with charges being posted and concern about long registration times. There were 1300 tickets outstanding and over 6,000 tickets received to date. There is an increase in manual work-arounds, which should be avoided when possible in favor of reporting issues and submitting tickets to optimize the system during implementation. Brad Haws expressed appreciation to the group for their dedication and hard work throughout the transition.

 

Team Member Spotlight: Dawn Bourne, DNP, RN, FNP-BC

Dawn Bourne, DNP, RN, FNP-BC

In addition to her day-to-day duties as a nurse practitioner in the Department of Family Medicine, Dawn Bourne plays an integral part in two UVAHS programs designed to enhance patient experience throughout treatment at the Medical Center and after discharge.

The first, the Ethics Consult Service at UVAMC, was a natural fit for Dawn to become involved with: Her research and dissertation as a DNP (Doctorate of Nursing Practice) student at UVA School of Nursing was on moral distress in primary care providers. “Ethical issues often arise in patient care when a provider knows the appropriate action to take, but is prevented from taking it because of something outside of their control,” explains Dawn.

As a branch of the Ethics Consult Service, the Moral Distress Consult Service addresses ethical issues that arise which are not specific to one patient. “We meet with the entire team,” says Dawn. “For example, we go to several ICUs on a regular basis and talk about issues that happen in the unit – we try to help troubleshoot what we have the power to change.”

In contrast, individual ethics consults most often involve specific cases and are noted in patient charts, with follow up like other consult services. The issues at hand are generally complex and emotionally charged, such as the withdrawal of life sustaining treatment and surrogate decision maker questions. The service is available 24 hours per day, 365 days per year thanks to the individuals who make up the on-call team: an interdisciplinary group made up of 8-10 consultants including physicians, nurses, a chaplain and social workers. “In many systems, the ethics committee is physician-only”, says Dawn. “It’s really important to UVA that this is an interdisciplinary team because everyone brings something to the table when it comes to these ethically, clinically and socially complex issues.”

Dawn also plays a vital role on the Family Medicine Transitional Care Management team, which follows patients after discharge. Within two days of their leaving the Medical Center, a patient is contacted by a RN Care Coordinator to review their case and tie up any loose ends in preparation for their follow-up visit. “This helps patients understand why their follow-up appointment is important, so they attend more often,” explains Dawn. She adds, “This is a truly collaborative effort because it has formed a more robust bridge between the inpatient and outpatient teams to address all aspects of patient care including social workers and clinical psychologists. There are many social determinants of health that having an interdisciplinary team helps address.”

The success of the team’s efforts are reflected in readmissions data: Between September 2016 and February 2017, 30-day all-cause readmissions were reduced from 31% to 6%.

 

Workload Trends FY2017

From the CEO’s Desk: Benefits Update and Opportunities to Learn More About UPG

As you may recall, planned changes to the Clinicians Supplemental Retirement Plan (CSRP), due to become effective on January 1, 2017, were delayed in order to allow time for evaluation of potential alternatives.

There were two major factors that required changes to the CSRP: First, it was in danger of failing federal non-discrimination testing, which would lead to a taxable event for all participants; and second, funding the plan was becoming increasingly costly to departments.

Throughout fall 2016, meetings were held to offer faculty members the opportunity to discuss the upcoming benefit changes. During these meetings, some faculty members indicated that they did not feel their best interests were being adequately represented. UPG executive leadership and the Board of Directors took this feedback very seriously, and determined that a pause in action was necessary so that other possible solutions could be considered.

Extensive analysis by actuarial firm AON Hewitt revealed a previously unknown option: If the CSRP is tested in aggregate with the staff pension plan, it is no longer in imminent danger of failing federal testing. Therefore, the review committee recommended to the UPG Board of Directors that all currently employed clinicians remain in the existing plan.

While this solution addressed the issue of fairness, it remained clear that the CSRP had to be changed going forward in order to mitigate departmental expense.

On January 19, 2017, the UPG Board of Directors approved a resolution stating that all clinicians hired before January 1, 2017, would remain in the existing CSRP with no change having been made to their plan or benefits, while all new hires (on or after January 1, 2017) be enrolled in the new defined contribution plan.

For UPG executive leadership, this process of working collaboratively with faculty to find a viable solution to a complex issue led to an important development on a broader scale. It became apparent that we need to do a more effective job of clearly communicating the scope of UPG’s role and services to our constituents.

In this vein, I have asked for some time on upcoming departmental faculty meeting agendas in order to provide an overview of the structure and value of UPG as it relates to Health System partners and our clinicians directly. So far I have attended seven faculty meetings and I’m pleased to report that meaningful dialogue has ensued at each.

We are planning to host a longer evening session from 5:00-7:00 on May 4, during which we will get into greater detail and offer ample opportunity for discussion and questions. In order to inform our presentation and ensure that we are addressing the issues that are most important to you, we welcome questions and feedback in advance of the May 4 event. Please send your input to:

Refreshments will be provided at the May 4 session. I look forward to having the chance to talk further with you and your colleagues there.

As always, thank you for being a member of the UPG community.

Sincerely, Brad

Brad Haws

Brad Haws