The California State Auditor today (Jan. 30) released the results of its probe into the finances, staffing and quality of patient care at the UCLA and UC San Francisco medical centers, noting that the level of patient care and satisfaction were among the highest in the nation.

State legislators requested the audit in June 2013 at the urging of the American Federation of State, County and Municipal Employees Local 3299. The report made only one recommendation: that the University of California more clearly detail the extent and purposes of revenue transfers from its medical centers to its schools of medicine.
“These latest audit results demonstrate that the university is not only in compliance with all relevant regulations governing our medical centers’ finances, staffing and quality of care, but often far exceeds them,” said Dr. John Stobo, senior vice president for health sciences and services at UC’s Office of the President.
Said Dwaine Duckett, vice president for human resources, “AFSCME called for this audit as a bargaining chip in labor negotiations and has cost California taxpayers hundreds of thousands of dollars. The results prove that the union’s most serious allegations about unsafe staffing levels and patient safety at our medical centers are completely without merit.”
UC has been in contract negotiations with AFSCME for more than a year. The union recently called for a strike authorization vote despite the university’s comprehensive offer that is equal to or better than agreements other unions have signed with UC since October. Should AFSCME call for a strike, it would be the third time in nine months that its workers have walked off their jobs. The May and November 2013 strikes at UC medical centers have cost the university more than $30 million — money that would have advanced physician education and world-class research.
Because of the complexity of the UC system — 10 major campuses, world-class research facilities, five medical centers and a division of agriculture and natural resources — the university opens its books routinely for a myriad of federal, state and local regulatory agencies, as many as 80 times a year, including more than 40 audits. Financial and programmatic data are made available and accessible, not only for these reviewers but also for the public through regular Web postings at

The latest state audit analyzed major categories of revenues and expenditures, annual profit and caseload volume, compensation, charity care and staffing levels from fiscal 2009 to fiscal 2013 at UCLA and UCSF medical centers.

The report concluded that key measures concerning quality of patient care at the two medical centers have remained stable, while patient satisfaction improved at both. It noted that the latest U.S. News & World Report hospital rankings rate Ronald Reagan UCLA Medical Center as the nation’s fifth-best hospital and UCSF Medical Center as seventh best.
“The percentage of UCSF Medical Center patients indicating they would definitely recommend the hospital to friends and family increased from 77 percent to 84 percent for the period we reviewed,” the audit said. “This statistic also increased at Ronald Reagan UCLA Medical Center and Santa Monica UCLA Medical Center and Orthopaedic Hospital.”

On staffing, the report concluded that levels increased at UCSF Medical Center and remained relatively flat at UCLA Medical Center, with both using more staff per patient, on average, than other hospitals do.
“The changes in staffing levels appear not to have altered key measures of the quality of patient care and of patient satisfaction, with the indicators we reviewed either improving or remaining stable,” the audit said.
With regard to the specific group of employees represented by AFSCME at UCSF Medical Center, the report said that staffing levels of aides and orderlies — non-technical personnel who provide direct nursing care to patients — increased by 18 percent.
On salaries, the report concluded that both medical centers complied with policies for establishing compensation rates and approving compensation increases, which “helped ensure their employees were appropriately compensated.” The report noted that CEO compensation at UCLA and UCSF medical centers, while higher than those of CEOs at UC Davis, UC Irvine and UC San Diego medical centers, is well below that of CEOs at other highly ranked medical centers such as the Cleveland Clinic and Cedars-Sinai Medical Center.

The report also pointed out that UCLA and UCSF medical centers followed state requirements for reporting their activities concerning the provision of charity care, which is free or discounted health care to certain patients. UCLA and UCSF faculty physicians not only provide charity care at their own facilities, but also at county medical centers.

The report noted that the size of fund transfers from UC medical centers to UC medical schools has increased substantially. UC’s medical schools — which receive the bulk of their funding from patient care revenue generated by the medical centers — train nearly half of California’s medical students and residents. At UCLA, the annual amounts of health system support nearly tripled from fiscal 2009 through fiscal 2013 to $103 million, and they nearly doubled at UCSF during that period to $58 million. The report found that these transfers are in line with other academic medical centers, and
reflect a growing gap between the revenue the schools generate from physicians’ services and the costs of operating clinical practices.
The report’s one recommendation was that UC should take steps to increase the transparency of its campuses’ health system support transfers, such as by annually issuing a report that describes the financial and programmatic impact of each campus’ health system support transfers. UC agreed that this recommendation was reasonable and has committed to issuing the first such report no later than the end of 2014.

The full state report is available online at