Key Messages from UPG Board of Directors Meeting June 15, 2017

Financial Performance and Operations

UPG Interim CFO Beth Allen provided information on 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. Ms. Allen submitted resolutions for approval of the FY2018 Consolidated Budget, and Approval of the Group Practice Fund Budget for 2018. Both were unanimously approved with no abstentions.

Fiduciary Training

Mr. David Pettit, outside counsel for UPG from firm Lenhart Pettit, provided training information with regard to the fiduciary duty of the UPG Board of Directors as the governing body of the Foundation. The function of the UPG Board of Directors is to make decisions about the operations of UPG, and to exercise oversight and planning to enable UPG to fulfill its best interest and mission in support of UVA Health System. Directors are legally bound to discharge their duties in accordance with their good faith business judgment of the best interests of UPG. Mr. Pettit emphasized the point that in order for a decision to be made in good faith, UPG directors must be fully informed of all the facts and circumstances associated with the decision before they take action.


UVA EVP COO Patrick Hogan addressed the Board with regard to the letter he had received from UPG Board Chair Dr. Kate Acuff on May 30, 2017, about the Ufirst initiative, which stated that UPG Board members felt that that they needed more information and proof of concept to outsource UPG’s Human Resources and Payroll functions to the University as a vendor. Mr. Hogan stated that he would be happy to provide further information on the initiative before asking them to vote on the issue of UPG participating in Ufirst. Mr. Hogan stated that a 15% savings could be promised by participation in Ufirst. A number of options were discussed regarding UPG employees, including employees remaining at UPG and UPG using the Workday IT platform. Mr. Hogan stated that he plans to present more data to the UPG Board at its meeting in September.

Audit Plan

UPG Board of Directors charter requires partnership with an independent audit firm. Members of the Audit Committee voted to engage BDO for the third consecutive year. A resolution to engage BDO for the FY2017 independent audit was passed unanimously with no abstentions.

Consent Agenda

A resolution approving Scopes of Practice for UPG Outreach Practitioners was approved, as were resolutions honoring retiring Department Chairs Thomas Leinbach, D.D.S. and M. Norman Oliver, M.D., M.A.

Key Messages from Board of Directors Meetings: December 2016, January 2017, March 2017

Key Messages from UPG Board of Directors Meeting December 7, 2016

The theme for this meeting was changes underway across UPG. Mr. Haws outlined external influences affecting change, and internal initiatives involving UPG. In his leadership remarks, Dr. Shannon also addressed the issue of change being the new normal in healthcare.

Representatives from UPG’s audit firm, BDO, presented information from the FY2016 Annual Audit Report, as well as consolidated financial statements and supplemental information for the past two fiscal years. There were no new notes for improvement in FY2016.

Professor DeMong, a UPG Board member, provided a financial analysis of UPG which showed that the organization has demonstrated profitability, stability and low financial risk over the past five (5) years. 2016 was an unusual year with several unique pressures to the income statements and cash flow statements; it is most likely that these will not be repeated and therefore should not be of concern for the financial outlook of UPG.

Mr. Haws provided an update on the Clinicians Supplemental Retirement Program (CSRP), outlining developments to this point: A Special Meeting of the UPG Board of Directors was convened in November 2016, during which they passed a resolution delaying changes to the CSRP in order to allow for more time to consider potential alternatives. Actuarial firm AON Hewitt was commissioned again for analysis, and their experts discovered that if the clinician pension plan were tested in aggregate with the staff plan, it would no longer be in imminent danger of failing federal testing. Investigation was still underway regarding departmental cost of maintaining the plan. The Board unanimously passed a resolution stating that all clinicians hired on or after January 1, 2017, be enrolled in the new defined contribution plan.

Key Messages from UPG Board of Directors Meeting January 19, 2017

This Special Meeting was convened to consider a resolution stating that all clinicians hired before January 1, 2017, would remain in the existing CSRP, while all new hires on or after that date would be enrolled in the new defined contribution plan. After new Board Chair Kate Acuff introduced Dr. Robert Thiele as a new faculty director to the Board, this resolution was discussed and unanimously approved.

Key Messages from UPG Board of Directors Meeting March 16, 2017

Ms. Acuff and Mr. Haws began this meeting with leadership remarks. Ms. Acuff focused on the leadership role played by UPG as a key collaborator in the clinical and academic mission of the Health System, contributing significant funds during this challenging time for healthcare financing. There is a clear need for resilience and collaboration in this uncertain climate.

Mr. Haws also stressed the importance of resilience, instead of resistance, when it comes to change. Across the UVA Health System, big changes are being implemented at a challenging time in the healthcare industry. These system-wide initiatives either involve millions of dollars or thousands of people, or both. UPG has aligned itself  with these initiatives, as a strategic partner of the Health System.

Dean Wilkes provided a research overview from the School of Medicine. Between FY15 and FY16, UVA moved from 40th to 35th in the NIH rankings of medical schools, according to total NIH grant awards. The School of Medicine has engaged in several partnerships across UVA grounds, including the Data Science Institute, the UVA Brain Institute and cluster hiring: recruiting multiple faculty members across disciplines who work in a particular interdisciplinary field with potential for broad impact. Dean Wilkes discussed three of the major initiatives underway at the School of Medicine: the Strategic Hiring Initiative, Pinn Scholars and the CTSA application. Top current priorities for the School of Medicine include executing the development of the Inova/UVA Genomics Institute, continued development of the regional Medical School campus at Inova, aggressive investment in research and faculty recruitment and increasing the NIH portfolio to $150M within 3 years.

In her last Board of Directors meeting as UPG Chief Financial Officer, Susan Rumsey provided updated financial results through January, and operations results through February. While revenues are in target range, the numbers on the expense side are not as favorable. Ms. Rumsey stated that there were two important things to consider regarding expenses: departmental incentives were over budget, and the impact of the high cost of the pension plan. The balance sheet represents a strong cash position, with liquidity having been created going into the Epic revenue conversion. Patient care volumes have been strongly above target all year, contributing to Ms. Rumsey’s optimism regarding the budget cycle.

UPG Chief of Human Resources and Development Brenda Jarrell provided an update on Ufirst operations and technology. This initiative is intended to eliminate inconsistencies across the system and define HR as a whole, and is on track to become effective in July 2018. The UPG legal team is currently working with the University General Counsel’s office to ensure that legal boundaries are carefully evaluated and keenly observed.

Mr. Haws provided an update on changes in clinical operations and proposed a resolution to enter into a management agreement with Novant for Regional Primary Care North Primary Care Clinics. Extensive discussion ensued with regard to UPG’s assumed risk under the proposed agreement, focusing on ways to ensure UPG is protected financially with an outsourced manager. The resolution passed with three opposed and one abstention.

Mr. Haws provided an update on the Epic, with focus on timeline and workflow scenarios in preparation for Go-Live. The system has been designed and built; testing is underway and end user training is scheduled for April and May.




Call for Nominations: UPG Board of Directors Affiliated Committees

There are several current opportunities for faculty to become involved in the proceedings of the UPG Board of Directors: One opportunity to serve as a full Board Member, multiple openings on Board-Affiliated Committees, and several opportunities to participate in the meetings as a Board Associate.

The following is a summary of available appointments and pertinent information regarding vacancies. We welcome and encourage nominations for all of these vacancies: Your input is an asset to UPG and the UVA Health System. In the spirit of collaboration, we encourage faculty and the Board to work together toward our shared goals.

Please send nominations to Melanie Evans ( by Tuesday, November 29, 2016. Voting will take place in early December via Survey Monkey.

Board Membership Opportunity

Faculty Director

  • Member of School of Medicine Clinical Faculty to serve on the UPG Board of Directors
  • UPG Board Composition: 10-12 Public Members; six (6) Ex-Officio Members; three (3) Faculty Directors; and two (2) University Representatives
  • Faculty Director serves a three (3) year term; eligible to serve a total of three (3) terms
  • The seat is currently held by Dr. Phillips; his term expires at the end of 2016
  • Appointment is effective January 1, 2017
  • Position to be elected by majority vote of Clinical Staff
  • Bylaws stipulate that no two Faculty Directors should be members of the same department
    • Other two current faculty directors: Radiology and Head + Neck Surgery

Board-Affiliated Committee Opportunities

Audit Committee

  • Committee charge:  Assist UPG Board of Directors in fulfilling oversight responsibilities of UPG internal control systems
    • Review financial information and practices; take responsibility for audit process
  • Five vacancies: Two (2) Medical Departments; Two (2) Surgical Departments; 1 Ancillary Department
  • Term:  Three (3) year term; eligible to serve a total of three (3) terms

Finance Committee

  • Committee charge:  Assist UPG Board of Directors in fulfilling oversight responsibilities of UPG financial operations and related risk
    • Assume responsibility for investing, budgeting and financial reporting
  • One (1) Vacancy
  • Term:  Four (4) year term; eligible to serve a total of three (3) terms

Investment Subcommittee:

  • Committee charge:  Assist Finance Committee in fulfilling its oversight responsibilities
    • Oversee UPG financial operations
    • Assume responsibility for investing and financing activities
  • One (1) Vacancy
  • Term:  Four (4) year term; eligible to serve a total of three (3) terms

Board Associate Opportunity

UPG Board of Directors Faculty Participant

  • While not formal members of the Board, this is an opportunity to expose junior faculty to the business of medicine
  • UPG solicits nominations of Clinical Faculty for three (3) individuals to participate in UPG board meetings and events for one (1) year terms
  • Participants to date: Dr. Brad Kesser,  Dr. Jaideep Kapur, Dr. Quanjuan Cui, Dr. John Jane Jr., Dr. James Browne, and Dr. Jared Christophel