UCSF 2011: A Focus on Operational Excellence (transcript)

February 17, 2010

Message to the Campus

By Chancellor Susan Desmond-Hellmann, MD, MPH

February 17, 2010

I appreciate the opportunity to speak to all of you today – and I’m sorry that I’m doing it by videotape – but I wanted to communicate broadly across the campus and in a timely manner. 

Our topic for today is the budget for next year, UCSF 2011, who we will be in the fiscal years 2011 and 2012.  I want to talk to you today about the situation, what you’ll see from me and my team, and what you can expect from me.

Let me start with the situation.  There are three things going on that are the fiscal realities of UCSF right now.  You all know that we had significant budget cuts last year, and we expect another $28 million in cuts from the State of California for this upcoming year.  So times in California remain tough.  In fact, we estimate that over the last 15 years, UCSF has seen our state funding decline by $90 million.  So state funding doesn’t look like it will improve any time soon.

On top of that, we have increasing health care costs, both for our current employees and for our retirees.  And finally, starting this spring, for the first time in 20 years, UCSF employees and UCSF will be making contributions to our retirement program.

Any one of these three things would be a big challenge for us, but in fact, we have all three coming at the same time.  So we’ve got to be really tough on budgeting.  We’re going to have to save money.  Knowing this, here’s what you are going to see happen on campus.  In addition to the normal budgeting process, where we’ll have budget letters and an executive budget committee that includes a member of our Academic Senate, I’ve also assembled an administrative and operating efficiencies work group.  Why this work group?  Well, I didn’t want us to budget business as usual.  I wanted us to take a step back this year and ask ourselves, first and foremost, let’s make sure that we’ll only have one year of furloughs.  I remain committed, as does UC President Yudof, to ending the furloughs in August of this year.  What that means is we will still have to save money and we’re going to need to be very thoughtful to avoid our greatest threat, which is mediocrity.

I formed this work group because I want us to focus on the size and budget of UCSF that is consistent with what appears to be the new normal for us, our new fiscal reality.  What that means is we are going to look at how we operate.  I’ve charged the group to look at every bit of how UCSF operates on the administrative and operational side of things.  How do we do our work so that we can put every dollar to use in service of our mission?  This group is going to ask, in creative ways, are we confident that the money at UCSF is spent on patients and health, discovery, and education – as you know, the top three priorities that I put forward for the campus. 

This is a tough project and we are going to be asking questions and working broadly across the campus. You can expect that you or your manager, or your colleagues, are going to be involved in this project. 

As I mentioned, this is going to become the new way we operate. We’re going to ask ourselves continually, how are we doing?  I need to be able to tell our legislators, our donors, our faculty, our staff, our patients, our students and our trainees that I’m convinced that UCSF is well run.  I don’t want to advocate on behalf of UCSF unless I’m confident that, in fact, we are spending our money wisely.

For me, this project is an important part of asking that question.  Are we sure, am I sure, that we are doing everything we can to put our money in service of the mission?

What can you expect from me?  Well, you can expect me to communicate as clearly and as honestly as I can.  I don’t like talking about saving money. I know this project makes people nervous and I know it makes people nervous because it gets to how we work and the possibility of things like layoffs.  I know that things in the categories of layoffs affect employees, affect colleagues, and most importantly, affect people’s lives, their families, and how they think about life in the future.  I regret that I’m even saying the word layoff, but I owe it to you and owe it to the campus to be honest about what’s in front of us.  I want you to know that we’ll be fair and responsible and thoughtful as we think about how we want to run the campus and the impact of those decisions on people’s lives.

I want to come back to what I said before.  As chancellor, I need to make sure that UCSF is excellent, that we have the talent and the resources to have the best university in the world.  Let me say a few words about specifics.  First of all, time lines.  We started the budget process this year in February, and I will hear back from the task force by the end of March.  Soon thereafter, you can expect to hear the output from the deliberations of my executive committee and my decisions on the next steps from the efficiencies work group.  It may not be until August or September that the state completes its budgeting process, if it’s at all like last year.  So our final decisions are likely to be late in the summer.  In addition, I want you to know how you can give input.  I’ll be looking very carefully to my executive committee for dialogue on this process. Each of you has a member on the executive committee to whom you can ask questions or give your feedback.  So please don’t hesitate to tell us how you are thinking or if you have questions or concerns about this process.

When I talk about our efficiencies project and how we approach budgeting for 2011 and 2012, I’m going to continually ask, are we contributing to making sure our campus stays at the top our game, the best university we can make?  We will get through these times. Things will get better. Despite the hard times we have now, I’m very confident that we’ll come through this as an even better university.  And you’ll hear more from me and my team, both about the project and the impact of the efficiencies project and the 2011 and 2012 budgeting process on how you work and on your work group. So, thank you for listening and I’ll be looking forward to more conversations and more interactions as we go through this process.

Thank you.