San Francisco DPH forwards balanced FY18-FY20 budget to mayor after EHR, UC funding adjustments

The San Francisco Department of Public Health commission voted to forward the department's proposed fiscal 2018through2020 budget to the Mayor's Office after staff said new initiatives correct earlier two-year imbalances.

Greg Wagner, the department's chief financial officer, and budget director Jenny Louie told commissioners the budget package includes a rebalanced funding plan for a multi-year electronic health record implementation and other departmental needs. "After finalizing the Epic contract, we are expecting $247 million of implementation costs over three years," Louie said, describing a combination of one-time appropriations, project funds and revenue-transfer mechanisms to cover the cost while meeting two-year targets.

Louie identified a recent change in the UC affiliation agreement that produced a $10.3 million shortfall and said the department combined that with other deficits to produce roughly a $12 million gap that staff addressed by shifting expenditures across years and identifying offsets. "We have been working with the hospital executive team and UCSF to understand these projections and the long-term outlook," Wagner said, adding the department will exercise enhanced oversight of vacancies and pursue revenue cycle opportunities to mitigate ongoing pressure.

Budget staff also described operational strains from a recent citywide financial system rollout that broke links to the department's GHX procurement module. Louie said temporary staff and a new interface will be required to maintain operations and automate reconciliation in the next 12 to 18 months.

The proposed budget includes program-level items staff highlighted during the hearing: recognition of an anticipated one-time $8 million state payment tied to a past mental-health claims adjustment, expansion of a successful Laguna Honda hepatitis C treatment pilot (from 11 to 23 patients) funded largely by offsets, and an expansion of specialty pharmacy locations to increase patient access to high-cost medications.

Commissioners asked about the process with UCSF and oversight for the EHR project. Wagner and Louie said they are conducting more detailed reviews, have asked for audits of some costs, and are establishing procedures to review vacancy refills and billing opportunities tied to the Epic implementation.

A motion to accept and forward the proposed budget to the Mayor's Office was made, seconded and approved by voice vote. With commission approval, the department will submit the proposal to the Comptroller and the Mayor, who is scheduled to release a citywide proposed budget on June 1.