Listen to Regents Retreat on Health & Pension Benefits

In the discussion on health and pension costs at the Sept. 12 Regents retreat, there were a number of disturbing elements.  Some regents seemed to have forgotten their own 2010 decision to go to a two tier pension but retain the basic defined benefits format.  The whole defined benefit vs. defined contribution debate seemed to start up again as if it had not occurred earlier.

Erroneous statements were made by one Regent that Stanford and Harvard had no pension plan, when – as was pointed out – what they have is a generous defined contribution plan (although not a defined benefit plan).  It was said that now that the state has a new plan for CalPERS, etc., UC should conform to the state (although UC just made a considerable effort not to be included in the state plan after it initially was).  In general, since the Regents are the trustees of the pension fund, their comments suggested a significant lack of understanding about basic information.
Several Regents suggested that if we cut the benefits, we could use the savings to raise salaries.  But since benefits have preferred tax status and cash does not, on the face of it, moving a dollar from benefits to cash is a reduction in total compensation to the employee.  This discussion was not the highlight of the retreat.
You can hear the discussion at:

Listen to Regents Meeting of Sept. 11, 2012 in Two Parts

We have previously posted audio excerpts from the Sept. 11, 2012 session of the Regents dealing with the UCLA hotel and the UCLA teaching center.  The web source on which we park audio from the Regents is again operational so here is the full meeting, divided into two parts as per the agenda below.

Tuesday, September 11, 2012
Meeting Agenda, University of California Regents
Part 1
1:00 pm Committee on Compliance and Audit (Regents only session)
1:10 pm Committee of the Whole – Public Comment (open session) – includes public testimony on UCLA hotel project
1:30 pm Committee on Compliance and Audit (open session)
Part 2:
3:00 pm Committee on Grounds and Buildings (open session)

Since our earlier posts outlined what went on in the sessions on the hotel and teaching center, much of the agenda has been described.  However, the Committee on Compliance and Audit discussed a variety of issues related to the child abuse scandal at Penn State with the theme of whether such events could occur at UC.  There were also reports on tech initiatives including common payroll and personnel systems across the campuses.  There was also discussion of the outfall in terms of safety issues that resulted from an agreement between the DA of Los Angeles and the Regents arising out of a case in which a student lab assistant died in a fire at UCLA.  As noted on other prior posts on this blog, a UCLA faculty member is still being prosecuted by the DA despite the deal with the Regents.
Apart from the two UCLA building projects, Buildings and Grounds dealt with two other projects at UC-Santa Barbara and UC-San Francisco.  The latter was interesting because there was a discussion of a “dean’s tax” on that campus to provide a financial backstop to the project.  There is a contrast between that approach and the approach taken to the UCLA hotel.  Various deans at UCLA have been cited as supporting the hotel project, but no dean has been asked to provide any backstop funding.  It is easy to praise a project the central administration wants if you have no skin in the game.
Part 1 of the meeting (which runs up until Building and Grounds) can be heard at the link below: [Public testimony on the UCLA hotel comes at the start of this part]
Part 2 of the meeting (Building and Grounds) can be heard at:

Listen to Hotel Echoes in Regents Reluctant Go-Ahead for UCLA Medical Facility

We noted yesterday that the website where we usually park audio for Regents meetings, archives.org, is having a tech heart attack.  Recovery is promised, maybe by the end of today.  In the meanwhile, we will continue to post excerpts.

After the Regents Building and Grounds Committee rubber stamped the hotel (except for bathrooms and loading docks!), it went on to consider a proposal for a new Teaching and Learning Center for the Health Sciences.  The presentation was by Steve Olsen and Dean Eugene Washington of the Med School.  In this case, we came close to a repeat of the March Regents meeting on the UCLA hotel (which the Regents at that time refused to endorse).  Part of the Regents’ complaint back in March was that apart with defects in the hotel, they were more generally being presented with a fait accompli with yes or no decisions.  They wanted options early in the process and not just on the hotel but for other projects in the future.
In the case of the medical teaching center, the Regents had problems with both the plan – vague though it was – and the lack of real alternative options.  The teaching center was said to cost in the neighborhood of $120 million.  Unlike the hotel, however, the sum was to be raised by grants, not projected revenue streams so at least there was no flaky business plan.  It was said that the teaching center was needed to ensure accreditation of UCLA’s med school.  An earlier accreditation review was said to have complained that teaching was taking place in scattered buildings.  But let’s put aside the implausibility of UCLA’s med school losing its accreditation because of teaching in multiple buildings and move on – since no one on the Regents committee questioned that notion.  None of them must have read in the proposal the following description of the med school which would appear to suggest that un-accrediting of the School was, well, unlikely:

“The David Geffen School of Medicine is internationally recognized as a leader in medical education, research, and patient care. It currently has more than 2,000 full-time faculty members, 1,300 residents, more than 750 medical students, and almost 400 Ph.D. candidates.  The medical education program prepares its graduates for distinguished careers in clinical practice, teaching, and public service through a multidisciplinary and collaborative approach to problem solving…”
Anyway, the new facility is proposed to be located on the corner of Tiverton and LeConte, just west of the botanical garden.  UCLA was requesting approval of $3.96 million to develop more detailed plans.  You can find the proposal at:
The facility would contain 120,000 gross square feet but only 68,500 square feet would be usable.  That gap caught the eye of various Regents.  First, it seemed awfully specific for a project which as yet is represented as not having even conceptual architectural plans.  Second, it seemed inefficient to lose that much space in a plan.  Third, when you divide the usable square feet by the projected cost, you get a cost per square foot which, as one Regent pointed out, was well beyond the cost of Class A space in Manhattan.
So what to do?  The committee was facing the possibility of doing what they did in March and not endorsing the planning money.  Various Regents said they wanted to see alternative plans including options for physical downsizing (smaller facility) and lower costs before allocating funds.  They wanted the option of simply buying a commercial building to be considered.  They didn’t take seriously the official proposal’s statement that three alternatives were already considered:
“1) a new building; 2) renovation of existing facilities; and 3) a no project alternative.” 

In the end, however, the Regents went ahead on the word of Patrick Lenz, VP for Budget and Capital Projects of UCOP, that true alternatives would be prepared by UCLA for the November meeting.
As with the hotel, the larger problem is not any specific project but the fact that the Regents approve vast sums for construction without any real ability to follow up or even independently ascertain what alternatives there might be or whether the projects live up to the promises made once constructed.
You can hear this segment of the Regents Sept. 11 meeting at the links below:
Part 1
Part 2

Food for Thought on Retirement at UC

Inside Higher Ed today unveiled a survey of human resource executives in higher education.  The full survey can be downloaded from that source and the link is at the bottom of this post.  But start with the observation that much of higher ed operates with defined contribution pension plans such as TIAA-CREF.  Thus, there is no particular incentive for older faculty to retire built into the pension.

As can be seen below, higher ed HR execs thus worry that older faculty are not retiring, making it difficult to recruit new faculty.  UC, with its defined benefit system, does have a built-in retirement incentive.  And stock market gyrations – although they affect the funding of the plan – do not affect the basic retirement incentives as seen by participants.
The survey also shows that worries about retiree health care can adversely affect retirement incentives.  In most cases (including UC), retiree health benefits are not guaranteed in the same way that (defined benefit) pensions are guaranteed.  That’s something to think about as such benefits are manipulated for immediate budgetary reasons or even long-term cost reasons.  The basic lesson is that benefit plans are more than costs; they affect behavior.  A focus only on costs can obscure potential perverse employee incentives that changing benefits can bring about – such as excessively delaying retirement.  It’s the kind of lesson everyone knows but, paradoxically, is often ignored or forgotten in practice.

A chart from the survey can be seen below.  Click on it for a clearer image.

The article with a link to the detailed survey is at:

Waiting for Details on the September 11-13 Regents Meeting

The Regents are meeting Sept. 11-13 at UC-San Francisco.  Below is the preliminary agenda – which includes the architectural plans for UCLA’s Hotel Super-Grandeand an “Action Approval” for some plans related to Health Sciences at UCLA.  At the moment (7 am today), the detailed agenda items are not yet posted.


Tuesday September 11
1:00 pm Committee on Compliance and Audit (Regents only session)
1:10 pm Committee of the Whole – Public Comment (open session)
1:30 pm Committee on Compliance and Audit (open session)
3:00 pm Committee on Grounds and Buildings (open session) including:
GB3 Action Amendment of the Long Range Development Plan and Approval of Design Following Action Pursuant to California Environmental Quality Act, Luskin Conference and Guest Center, Los Angeles Campus and GB4 Action Approval of Preliminary Plans Funding, Teaching and Learning Center for Health Sciences, Los Angeles Campus

Wednesday, September 12
9:00 am Committee of the Whole: Board Retreat (open session – includes public comment session)
Public Comment Period (20 minutes), Opening Remarks, Balance Sheet Strategies, Business and Finance Strategies, Lunch Break, Enrollment-Tuition-Financial Aid Strategies, Other Potential Strategies, Academic Considerations, Next Steps, Close 

[Note the word “tuition” on the agenda and the fact that there is a public comment period before that item.  Should be an interesting morning.]


Thursday, September 13
8:30 am Committee of the Whole – Public Comment (open session)
9:30 am Committee on Long Range Planning (open session)
9:45 am Committee on Health Services (open session)
10:00 am Committee on Health Services (Regents only session)
10:40 am Committee on Finance (Regents only session)
11:20 am Committee on Compensation (Regents only session)
11:45 am Committee on Compensation (closed session)
12:15 pm Board (Regents only session)
12:30 pm Lunch
1:30 pm Committee on Compensation (open session)
2:00 pm Board (open session)
While we’re awaiting for the full posting by the Regents – including the super-grande plans for you-know-what – let’s have a little waiting music:
[youtube http://www.youtube.com/watch?v=7iGXP_UBog4?feature=player_detailpage]

Good News/Bad News

The good news is that reading this blog every day will keep you informed about UCLA and UC concerns.

The bad news, according to our friends down the road in Santa Monica at the Milken Institute, is that it can make you fat:
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Waistlines of the World: The Effect of Information and Communications Technology on Obesity

Summary:

Information and communications technologies have improved living standards around the world. But the increased amount of time that people devote to using computers, watching TV and playing video games- so-called “screen time” -is a significant factor in the global rise of obesity.

In Waistlines of the World: the Effect of Information and Communications Technology on Obesity,Institute researchers establish a direct connection between spikes in technology adoption and subsequent increases in obesity rates. The report charts the dramatic rise in obesity in 27 OECD countries.

The human and economic cost for the increasing weight of the world is high. Obesity in particular, and being overweight in general , are triggers for disability and many chronic diseases, with obesity being the fifth leading cause of death worldwide. In the United States, the medical-cost burden due to obesity climbed to 9.1 percent of annual medical spending in 2006, from 6.5 percent in 1998.

The causes for the obesity bulge are various, but the Milken Institute researchers chart the effect that the worldwide transition toward an information-based economy has had on work habits and lifestyle.

The good news? The study also found that in countries with high ICT investment rates, a 1 percent increase in the number of physically active people can prevent a 0.2 percent rise in obesity. The report makes recommendations for strategic solutions, and provides information about a number of programs and policies that governments, corporations, and non-profit groups around the world have pioneered to keep obesity in check.

Download the paper at
(But maybe you should print it out rather than read it online.)

No Meds for Riverside

UC-Riverside keeps trying to get state funding to open a med school.  But not successfully, so far:

From the Press-Enterprise (excerpt):
The latest Capitol attempt to secure state funding for UC Riverside’s school of medicine is all but dead after a key Senate committee blocked a bill to allocate $15 million from an expected legal settlement…

Full story at:
http://www.pe.com/local-news/politics/jim-miller-headlines/20120816-uc-riverside-med-school-funding-bill-stalls.ece

Blue Deal

From the LA Times yesterday:
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Nonprofit insurer Blue Shield of California said it resolved a lengthy contract dispute with UCLA and other UC system hospitals over reimbursements for patient care. Effective Sept. 1, Ronald Reagan UCLA Medical Center and the Santa Monica-UCLA Medical Center and Orthopaedic Hospital will be back in the Blue Shield network. The San Francisco health insurer said this new contract with all UC providers statewide runs through June 30, 2015…

Full story at
Fact of the matter is that although we have these disputes from time to time, big insurers don’t want to cut UC medical centers out of their networks and UC medical centers need patients from the big insurers. So the next time you read about a dispute like this one, don’t feel blue:
[youtube http://www.youtube.com/watch?v=9C1vJ2Z8aI0?feature=player_detailpage]

U-CVS-LA?

Why does the item below make me nervous?  From the LA Times (excerpt):


UCLA doctors to oversee 11 CVS in-store clinics: Doctors will serve as medical directors for 11 CVS MinuteClinics in Los Angeles County through an agreement with UCLA Health System.
Pharmacy giant CVS Caremark Corp. and UCLA Health System are teaming up to treat patients in 11 in-store clinics in Los Angeles County as one remedy to a growing shortage of primary care physicians. Under this arrangement, UCLA physicians will serve as medical directors overseeing 11 CVS MinuteClinics and the two entities will share electronic medical records.

…Drugstore chains and major retailers are opening more of these walk-in clinics to capitalize on the influx of newly insured patients under the Affordable Care Act. …A study by Rand Corp., a nonprofit think tank in Santa Monica, found these clinics provide care at 30% to 40% lower cost than similar care provided at a physician’s office and that the care provided for routine illnesses was of similar quality. But some physicians express concern about these clinics treating more patients with chronic and often serious illnesses such as diabetes and hypertension.
What could possibly go wrong?

Beyond the Headlines

The headline on a story in today’s Sacramento Beereads:

“2 UC Davis neurosurgeons accused of experimental surgery are banned from human research”

But, as is often the case, the story that follows is more complicated than the headline suggests.  It raises issues of bioethics related to the specific procedures described and also questions about management control in medical facilities.  I mention the latter because some readers will recall the body parts scandal at UCLA and the scrambled eggs/fertility clinic scandal at UC-Irvine.
We have a comment option on this blog which is rarely used but if medical professionals in particula have views on this story, it would be interesting to see them.
The full story is at