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UCSF hosts UC Regents, sparks controversy over acquisition of two hospitals

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UC Regents and its committees met to discuss at UCSF Mission Bay and will reconvene Thursday to hear from the public.


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UC Regents convened at UCSF Mission Bay Tuesday and Wednesday to discuss its investment portfolio, budget and benefits and UCSF’s acquisition of two hospitals.

On Tuesday, the Special Committee on Innovation Transfer and Entrepreneurship watched and responded to a presentation by Alex Bustamante, UC’s chief compliance and audit officer, on technology transfer and licensing royalties. Bustamante presented the Office of Ethics, Compliance and Audit Services’ vision for a more centralized and streamlined approach to licensee oversight.

Matt Hicks, a UC deputy audit officer, explained that over the past 14 years, the UC has conducted 50 audits at a total cost of $583,000, which found $6.6 million in underpaid fees, of which $2.6 million were recouped. As such, he said, a more streamlined and well-resourced auditing approach would increase the return on investment from these audits greatly.

Following this, UCSF Chancellor Sam Hawgood presented the campus’s strategy for commercializing marketable discoveries. He said the campus has begun partnering with other UCs, such as UC Berkeley, to fund projects and increase UCSF’s current investment portfolio of $260 million to $1 billion by 2030.

The following day, protestors represented by UAW 2865, UAW 5810 and UNITE-HERE Local 11 lined up outside UCSF’s Rutter Center in response to allegations of UC noncompliance with worker contracts reached last year following lengthy strikes by academic workers and postdoctoral scholars.

“Late last year, we held the largest strike in the history of higher education to secure the right to decent pay and fair treatment,” said Tanzil Chowdhury, a union leader and academic worker at UC Berkeley. “Since then, UC has withheld pay, incorrectly appointed workers, stalled grievances and used other tactics to intimidate workers and dodge their legal obligations. We will not let them off the hook.”

During the first public comment session Wednesday, over 50 individuals signed up to address the regents, according to Tricia Lyall, the secretary and chief of staff to the regents. Among them were representatives from UNITE-HERE Local 11, including co-president Ada Briceño and lead research analyst Jordan Fein.

Briceño and Fein spoke in support of the hotel workers striking at the Laguna Cliffs Marriott, owned by UC investment group Blackstone. According to Briceño, the workers demand diversity in hiring and a $5 wage increase. Both representatives called on the regents for their support.

“Now I have a safety net,” said Andrea Rodriguez, a housekeeper at the Laguna Cliffs Marriott and member of UNITE-HERE Local 11, of the union.

In addition, several undocumented students voiced their support for the UC’s Opportunity for All Campaign, which advocates for employment opportunities for all students across the UC campuses.

Silvia Rodriguez, a fourth year at UC Davis, shared the impact that Opportunity for All had on her educational experience.

“I’ve had to be financially independent since I moved out to UC Davis at age 18,” Rodriguez said. “Your unanimous vote in removing hiring restrictions to ensure equitable employment for all UC students positively changed my life and the lives of every growing undocumented student population at our campuses.”

At the Finance and Capital Strategies Committee meeting, the regents discussed the fiscal year 2023-2024, plans for funding different initiatives at UC campuses, UC retirement plans and updates on the state budget and UCPath.

For the fiscal year 2023-2024, Regents deliberated general revenue bond issuances, including for the UC central bank debt management system. Beginning in 2022, the central bank completed two transactions to fund new projects totaling $1.2 billion and refund $2.2 billion in existing bonds.

The committee also looked at studies comparing actual UC retirement plan experiences to the expected experiences to address continuities and gaps.

Further, the committee addressed the final 2023-24 state budget, which marked a 7.5% increase from the previous year, for a total of $329.2 million in ongoing funding. UCPath also shared an update on its commitment to providing accurate payroll and human resources services.

Meanwhile, the Academic and Student Affairs committee met to discuss improving financial aid offer letters. According to Shawn Brick, the executive director of student financial support in the UC Office of the President, language surrounding financial aid will be changed to increase understanding. He cited the example of swapping “room and board” for “housing and meals,” as well as the creation of a glossary to explain related terms.

In the afternoon, the Public Engagement and Development Committee discussed the UC Emeriti Association, which acts for the protection and improvement of benefits such as healthcare, and UC Natural Reserve System, or UCNRS. The committee also updated the regents on state governmental relations.

Kathleen Fullerton, associate vice president for state governmental relations, updated the regents on the 2023 state budget. Senate Bill 101 gave the university over $4.8 billion in state funds, and Fullerton talked about bills the university currently supports covering issues such as reproductive healthcare.

The Health Services Committee also met to discuss UCSF Health’s request for authority to acquire Dignity Health’s San Francisco hospitals Saint Mary’s Medical Center and Saint Francis Memorial Hospital, both of which have been serving the San Francisco community for over 100 years. This acquisition will allow UCSF Health to access immediate bed capacity to better meet patient demand, affirm the continuity of critical community programs in San Francisco and mitigate the disruption to the Parnassus campus during the upcoming six years of construction.

“This is an amazing opportunity for us to advance the health of the San Francisco community, preserve essential, unique (and) valuable services at both these institutions that have a long history in the city and also allow UCSF Health to meet unprecedented demands on our capacity in a way that benefits the community and allows greater access for citizens of not only San Francisco but the entire Bay Area,” said president and CEO of UCSF Health Suresh Gunasekaran.

Notably, UCSF will substantially maintain the existing employed physician and staff workforce and maintain critical programs in adolescent and adult behavioral health, burn, gender-affirming care and acute rehabilitation.

The next steps stated are to finalize due diligence and have both UCSF and Dignity Health affiliated leaders, staff, and faculty begin the integration planning. Over the next several months, they will finalize negotiating agreements. They expect to transition hospitals in 2024.

However, AFSCME 3299 representatives expressed discontent over the acquisition, in the context of unsatisfactory wages for UC frontline workers.

“This clearly isn’t a question of money,” said AFSCME 3299 President Kathryn Lybarger. “It’s about priorities.”

Later that day, the National Laboratories Committee met to approve the annual spend plan request, which Vice President of UC Labs Craig Leasure said included the estimated fees earned from Los Alamos National Laboratory and Lawrence Livermore National Laboratory, and the allocations for those fees.

Committee members also recommended Regent Jay Sures as the incoming voting director and chair of the board of directors of Triad National Security, LLC effective Jan. 1, 2024. Leasure explained that the operating agreement of the operation of Los Alamos National Laboratory, the Triad Company that operates the lab, is structured so the regents appoint the chair of Triad’s board of directors.

The regents will reconvene Thursday to hear from public commenters and other UC committees.

Chesney Evert, Sania Choudhary, Ratul Mangal, Laurel Spear and Lily Button contributed to this report.

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JULY 20, 2023