Dear Colleagues,

I appreciate the time everyone took to attend our recent town halls, in person and virtually. As promised, I want to provide an update on UCSF Health’s financial situation.

There were many thoughtful questions raised during and following our town halls, so in addition to reviewing this message, I encourage you take a look at this VIDEO in which Chief Operating Officer Sheila Antrum and I discuss some of your more frequently asked questions.

Financial Summary

Similar to other health systems in the Bay Area and across the nation, we continue to face financial challenges. UCSF Health finished the month of February 2023 with a year-to-date operating revenue minus expenses of $244 million, which is $174 million behind budget. If we continue at this rate, we are projected to miss our budget by $300 million in fiscal year 2023 and are at risk of operating in the red within 12-18 months.

We Are Making Progress

Over the past two months, we have made some significant progress. Our patient volumes in many areas are returning to budgeted levels as many departments are working more efficiently to bring more patients into our open capacity. The positive response from patients and providers has been tremendous.

We also continue to manage our labor expenses to ensure we are staffing appropriately to the number of patients we are serving while maintaining high-quality, safe care and staff-to-patient ratios. Our hiring review process has resulted in the approval of more than 200 positions in the last three months (with the vast majority in clinical and clinical support areas). We continue to focus on reducing contract labor spending, as well as reducing our supply chain expenses. Our revenue cycle teams are setting a new standard for efficient collections that support our financial recovery.

With this progress, you may be wondering if our financial situation has stabilized. Not yet. Our costs remain significantly above budget. We are well on our way and will need to continue to improve operations and reduce our expenses to achieve our financial targets.

Financial Stability Supports Our Mission

In my first year at UCSF Health, I’ve had the opportunity to speak to so many team members across the enterprise, and I’ve heard one theme loud and clear: “We love working at UCSF Health because we are not a financially motivated organization. We love working for an organization that always puts our patients and our team first.”

Let me assure you: we will not waver from our mission and values; we will continue to put our patients and teams first even in the face of these financial challenges.

Since we receive no state funding to support our mission, at the same time, we must run a sound and efficient organization in order to have financial stability. That financial stability provides the necessary funds to invest in our people, our patients, our facilities, and our programs.

The health care market has changed post-COVID and so must UCSF Health. Together, we can address our financial challenges, and in doing so, transform how we run our business in ways that increase access to our care while creating a better care and work environment.

I have seen you overcome challenges in the past and know that working together, we will do so again. There is no other place I would rather be than at UCSF Health. Thank you for all that you do for our patients and each other.

Suresh Gunasekaran
President and CEO
UCSF Health