Key Messages from UPG Board of Directors Meeting September 21, 2017

Introductions and Leadership Remarks 

UPG Board of Directors Chair Kate Acuff made leadership remarks emphasizing the UPG Board of Directors’ commitment to fostering a collaborative relationship with other UVA Health System entities, while fulfilling its fiduciary duty to UPG and its constituents.

Dr. Acuff introduced new Department Chairs Martha Zeiger, M.D. (Department of Surgery), Stephen Park, M.D. (Department of Otolaryngology – Head and Neck Surgery), Susan Pollart, M.D. (Interim Chair, Department of Family Medicine) and Brian Hoard, D.D.S. (Department of Dentistry). Dr. Acuff also introduced Bobby Chhabra, M.D., who was elected President of UPG on September 12, 2017. Dr. Chhabra, via conference call, expressed intent to use his leadership role to further the success of UPG and the Health System as a whole.

In his leadership remarks, UVA EVP for Health Affairs Rick Shannon echoed Dr. Acuff’s sentiment regarding renewed conversation and collaboration between Health System leadership and UPG management in support of their shared purpose.

Dr. Shannon presented an overview of UVA Health System successes, opportunities for improvement, and strategies. UVA Health System has enjoyed unprecedented success over the past year, having been ranked the number one hospital in Virginia for the second year in a row. Dr. Shannon highlighted UVA’s capacity to respond to emergency situations, as evidenced by the response to the events of the weekend of August 12. Dr. Shannon stated that recent clinical growth in the existing footprint has been substantial, and that the operating budget and the balance sheet are strong and healthy: necessary conditions for the infrastructure investments that are underway. The positive performance and direction in which UVAHS appears to be headed is in stark contrast with many other academic medical centers. This is the result of a combination of factors including exceptional commercial rates and a unique relationship around Medicaid and indigent care, as well as growing patient volume. Dr. Shannon emphasized the strategic advantage of practice reform over payment reform and stated that looking to the future, markets outside of Charlottesville provide UVAHS with the greatest chance of relevance and long term stability – and that it is of critical importance that UVA is the first Health System to reach those markets. Good business opportunities are afforded by the newly formed partnerships with Novant and Inova.

UPG FY17 Year-End Financial Update

UPG CFO Susan Rumsey provided FY2017 Year-End, and FY2018 Year-to-Date financial updates. Ms. Rumsey’s slide deck is included for reference here.

Epic Phase 2 Update

Ms. Rumsey provided an update on Epic Phase 2. After July 1 Go-Live, the initiative is toward the end of phase 2, going into the beginning of the optimization phase with improvements scheduled to begin on October 1. Upgrades to the system are scheduled to begin in February 2018. The top five issues being tracked and addressed are: Provider schedules, system privileges, printing/labels, patient movement workflows and integration/workflow. Ms. Rumsey shared metrics showing how UVA is performing relative to other Health Systems that have gone through implementation.

Novant Health/RPC-North Primary Care Management Transition Update

UPG CEO Brad Haws provided an update on the transition in management of UPG Primary Care facilities in Culpeper (“Regional Primary Care North”) to Novant. Mr. Haws pointed out that the agreed upon administrative service fee cap at 10.3%, leaving a 5.5% service fee collected by UPG, is significantly different than the Charlottesville cost structure; data which demonstrates that UPG wants to meet the needs of clinics at lower cost while also delivering the clinics the benefit of UPG contracts. Mr. Haws outlined the Regional Primary Care-North Support Services Agreement and provided information on progress to date including the successful transition of 84 FTEs; as well as current challenges faced, of which the AXIA status of Novant employees is the most complex. Mr. Haws credited the overall smooth transition to cooperation on both sides and in particular the efforts of Alison Haines from Novant and Katie Fellows from UPG. 

UPG HR Future State/Ufirst

Mr. Haws and UVA Chief Human Resources Officer Kelley Stuck presented a framework for UPG HR Future State as a shared agreement of joint partnership to manage services: a relationship which differs from the previously discussed understanding that UPG was to treat UVA as a vendor with regard to Ufirst. In the agreed upon joint partnership of UPG HR Future State, UPG will retain its decision making role with the UPG CEO and UVA CHRO partnering to provide counsel and recommendations to the UPG Board of Directors. UPG will retain appropriate embedded staff to continue to provide localized services aligned with the new process design, while UVA Human Resources will partner with UPG to provide core services, consulting, counsel, training, strategic support and transactional support. All services will require ongoing collaboration between UPG and UVA HR, and will require memorandums of understanding (MOUs) to address specific responsibilities. UPG will adapt the Workday IT platform associated with Ufirst in response to department chairs’ requests on behalf of faculty for a more streamlined IT process with increased functionality.

UVA EVP COO Pat Hogan initiated discussion of the importance of data security as protected by UPG’s separate status from UVA. A multilevel approach to data security and protection through the use of a separate FEIN will be employed to maintain the desired confidentiality of UPG proprietary data, and UPG HR Future State MOUs will be designed with the importance of FOIA protections in mind. Due care will also be taken to ensure corporate lines are respected.

UPG HR Future State service agreements will be created in the coming months leading up to the July 2018 Go Live date. Service measures will be addressed to assess and maintain quality levels of services that are important to UPG constituents, and further study will be done on cost impact given the new joint partnership framework.

 

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.

Ufirst

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 (MAE8N@hscmail.mcc.virginia.edu) 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