UCLA Health needed help developing and implementing a new enterprise-wide funds flow model, including all components of the health system and school of medicine (SOM).
Like many academic medical centers, UCLA’s David Geffen School of Medicine and UCLA Health were facing heightened economic pressures due capacity constraints, increasing competition, pressure on revenue from commercial payers, static state funding, and growing competitiveness for faculty and research funding. The complexity of UCLA’s current funds flow arrangements was identified as a major impediment to the essential changes that were needed to ensure long-term sustainability.
ECG was retained to evaluate and revise UCLA’s funds flow structure and introduce contemporary methodologies that align incentives, increase transparency, and promote sustainability.Working closely with executive, clinical, and academic leaders, ECG conducted a comprehensive assessment of the existing funds flow arrangements among SOM and health system constituents. Through stakeholder interviews and an extensive review of the outdated and separately negotiated financial agreements among departments, ECG illustrated the convoluted funding process, including payments and alignment between intended use and actual expenditures.
We then proposed alternative funds flow models and developed recommendations for transitioning to this new approach, including an implementation work plan with key action items and transition strategies. To ensure a thoughtful and stable transition to the new funds flow methodologies, ECG developed detailed future-state simulations for each business unit. We projected and analyzed the implications of modifying the funds flow and any payment variances so mitigation tactics could be identified.ECG developed and recommend funds flow models for clinical services, education, and department administration. We also explored alternative models for research and service and development, which will be utilized by UCLA as part of planning efforts moving forward.
In aggregate, ECG provided new funds flow methodologies to allocate approximately $845 million.
