UCSF Medical Center Incentive Award Program Fact Sheet


For the past eight years, UCSF Medical Center has rewarded performance based on organizational goals through an Incentive Award Program (IAP) across all levels of management and staff. Begun in 2001, the program uses a pay-for-performance approach to focus staff on helping to improve patient safety and quality, patient satisfaction and financial performance throughout the medical center.

The program has been extremely successful by every standard. By focusing every member of its staff on key priorities, UCSF Medical Center has reduced expenses and increased revenue, reduced hospital-borne infections, improved the quality and safety of patient care, and improved patient satisfaction across the board.

The program also has helped enhance employee morale by unifying staff toward a common goal and rewarding employees for the role they play in the positive change, while creating an additional negotiating point in recruiting the best and brightest to work for UCSF Medical Center in an extremely competitive healthcare marketplace.

The UC Office of the President has created a similar incentive program for the leadership teams throughout the UC medical centers.

How the Programs Work

Each year, leaders from the five UC medical centers work together with the UC Office of the President to identify common system-wide goals. Those goals are intended to be efforts that can be applied throughout the five UC medical centers and those in which a system-wide approach is most successful. While the goals change each year, they consistently include the three elements of financial governance, patient safety and patient satisfaction.

These system-wide goals are applicable to senior leadership within the medical centers. Last year alone, these goals helped return $85 million to UC hospitals by cutting supply costs, reducing waste and realigning third-party payer contracts to better reflect the cost of patient care. At the same time, by focusing efforts on reducing catheter-associated bloodstream infections, UC hospitals reduced those infections by 40 percent.

In addition to organizational goals, each medical center department has its own set of goals, which are based on the stated objectives and priorities of the organization.

Incentive Awards at UCSF Medical Center

Virtually every employee* at UCSF Medical Center is eligible to receive an incentive payment based on the Medical Center’s success in meeting these goals.

Each goal includes three benchmark levels – threshold, target and outstanding – and pays every eligible, full-time Medical Center employee $150 for each goal achieved at the threshold level, $225 at the target level and $300 at the outstanding level. When the Medical Center achieves or surpasses the “outstanding” level for all three goals, eligible employees receive a payment of $900, plus up to $300 more depending on the achievement of his or her individual or department goal. 

Management and senior leadership have greater amounts of their annual pay tied to the success of these goals, rising with the manager’s level of responsibility.

* Employee must have been hired before April 1 of the plan year, have at least 50 percent time-on-paid status at time of payout, be on active payroll as of June 30th of the plan year, and have at least a “meets expectations” performance rating.

UCSF Results FY2009

In the fiscal year ending June 30, 2009 (FY09), UCSF Medical Center achieved the highest level of performance in the three institutional goals of the 2008-2009 Incentive Award Program. Each of these accomplishments represents an extraordinary amount of work by large teams of committed people.

Patient Quality and Safety: This year’s patient quality and safety organizational goals included three elements:

FY09 Goal Outcome
5% reduction in catheter-related bloodstream infections in the ICU, to 4.56 infections per 1,000 device-days 52% reduction, to 2.3 infections per 1,000 device-days.
5% reduction in adult hospital-acquired pressure ulcers, or bedsores, from 5.25% to an average incidence of 4.99% 7% reduction in pressure ulcers, to an average incidence of 4.85%
Development of electronic tool for reconciling medications at points of transfer within the hospital Electronic medication reconciliation fully implemented in both adult and pediatric units.

Patient Satisfaction: For eight years, UCSF has surveyed patients on a variety of measures, including whether they would recommend the medical center to others. The average mean score on this answer has risen consistently through the years and this year achieved the highest score ever, with a mean score of 89.9.

Financial Performance: In FY09, UCSF posted a net income of $80 million, on total operating revenues of $1.6 billion. This corresponds to an operating margin of 6.1 percent for FY09, compared to 3.0 percent in FY08. This operating margin is essential to UCSF Medical Center’s efforts to support academic programs at UCSF, as well as capital projects such as its information infrastructure, additional beds and major equipment. At a time when more than half of the nation’s medical centers are losing money, it is a tremendous feat to have streamlined UCSF’s finances to produce a positive net income to invest in the future.

Total UCSF Incentive Payments FY09

As a result of UCSF Medical Center achieving its “outstanding” performance goals for FY09, all eligible full-time Medical Center employees have received $900 for their incentive pay, plus a potential of $300 for department or individual goals. For those managers whose salaries are based more heavily on reaching performance goals, many also received their full level on the Incentive Award Program.

Overall, UCSF Medical Center was able to distribute Incentive Awards Program payments to 6,598 employees this year, for a total of $14.3 million in incentive payments. This includes management and staff, as well as union- and non-union-affiliated employees. Medical Center employees received their IAP payments in August and September, with second-tier management receiving theirs on October 1, after review by the Chancellor. Incentive awards for senior managers will be presented to the UC Regents in January, for review and approval.