UPG Pension Benefit Update

  1. To recap the resolution approved by the UPG Board of Directors in January 2017: All clinicians hired before January 1, 2017, had no changes made to their existing pension benefits. All new hires as of January 1, 2017 were enrolled in the new defined contribution plan. This decision was made to address the concern of fairness for all clinicians, ensure the financial health of existing pension benefits, and continue to provide top tier benefits for new clinicians.
  2. Funding of the existing defined benefit plans (both the CRP and CSRP), is solid and viable, having experienced a strong recovery from the combination of factors that affected funding in recent years.
  3. Chargebacks to departments were unusually high in FY2017. Infusing the plans with cash, along with strong market returns, improved the funding ratios substantially — as evidenced by the table of trends below. The goal is a funding level of at least 80% – this ensures funding for the expected payouts. This 80% goal is well above the federal government minimum standard funding target. Our financial statements indicate that we are currently at 125% of the federal government minimum standard funding target.
    Funded ratios 2011 2012 2013 2014 2015 2016 2017
    CRP 84% 71% 80% 81% 73% 75% 86%
    CSRP 64% 65% 78% 80% 70% 62% 73%

    **Please don’t hesitate to contact Christine Rudge with any remaining questions: CR2J@virginia.edu

Financial and Operations FY2017: Summary

  1. FY2017 financials reflect the first year of a new Health System Funds Flow model and transition to mission-based financial reporting for the 21 SOM Clinical Departments, which impacted both revenue and expenses compared to prior year. The overall draft income statement showed an operating margin of $2.1 million on revenue that exceeded budget, including a year-end infusion of $4.0 million from the SOM and Medical Center, combined, in support of the Clinical Departments.
  2. All financial metrics were trending positive at year-end.
  3. FY2017 included completion of two major facilities transactions – transfer of TCH building to Medical Center, and sale of Northridge clinic building to Medical Center.
  4. Received the benefit of strong investment returns, and building cash in anticipation of Epic revenue cycle transition July 1.

From the CEO’s Desk: Lean Management Update

Brad Haws

We are proud that UPG has led the Health System in using Lean management practices in administrative operations in order to serve as efficient stewards of Health System resources. The following is an update on some important results of those efforts.

  • UPG has had Lean projects in every unit in the past 24 months.
  •  To date, UPG Lean projects have created $2.5M of value for the Health System. 
  • Generated margin in administrative unit in FY2016 and rebated $380K of fees back to clinical units.
  • Last year, UPG was the only organization in the Health System not to add a single FTE. UPG’s FY18 budget continues this trend.
  • Lean Successes include:
    • Zion Crossroads
      • Redesigned scheduling process, reducing rate of errors from 30% to near zero.
      • Reduced referral errors from 30% to near zero so that patient connects with the right physician for their condition the first time.
      • Improved communication between physicians and staff.
    • Life of a Surgical Charge
      • Developed automated OR log in Epic, used by 11 Clinical Departments
        • Estimated increase of $800K/year in collections by adding Accustream to identify missed charges.
        • Time savings of ~960 hours/year.
    • In FY17, Billing and Collections teams have seen a 20% increase in productivity while absorbing a 14% decrease in time processing.
      • Charges and collections are up 8.2%.
      • Timely adjustments are down 60% from $1,217,217 to $481,204.
      • 35 process improvements identified; 33 of which have been implemented.
    • Electronic Enrollment with Medicare, Medicaid and VA.
      • Reduces held charges and increases timely payment
    • Monthly Financial Close Cycle
      • Shortened close cycle from 16th to 10th business day
      • More timely financial statements to the Health System
      • Eliminated waste
      • Team freed up to work on other projects
    • Physician Hiring Platform
      • Creation of a streamlined hiring platform for providers, aligning credentialing and date of hire with ability to bill for services.

Workload Trends FY2017

Key Performance Indicators: Workload Trends

workloadtrends