DPH reports lower overdose deaths, Laguna Honda bed reopening and budget pressures; commission accepts $77,000 EPIC gift and approves hospital policies

Director Tsai and department finance staff presented a mixed update to the San Francisco Health Commission on Oct. 6, reporting encouraging signs on overdose deaths while outlining fiscal pressures and operational changes at Laguna Honda Hospital.

"Get vaccinated," Director Tsai urged as he opened his report, stressing respiratory-season vaccination campaigns and noting that September's overdose deaths numbered 38 — "still 38 overdose deaths, too many," he said — the second-lowest monthly count since the OCME began tracking in 2020. Tsai also announced the reopening of Laguna Honda's South 5 unit, adding nearly 50 beds to help the hospital reach census goals.

On finances, Drew Morell, DPH chief financial officer, presented the fourth-quarter FY24-25 ending position showing a net positive of $110,800,000, net of a $25,300,000 deposit to the DPH management reserve. He described drivers behind the result: a $70,000,000 behavioral-health revenue surplus tied to payment-reform and EPIC electronic health-record go-live, a $69,500,000 ongoing revenue surplus at another division, and revenue recognition and prior-year settlement items. Morell warned the Commission that pending state and federal changes to Medicaid enrollment and funding could create future cuts and that the department must achieve $17,000,000 in CBO reductions by July 1.

Commissioners asked for clarifications about the reserve fund's purpose and whether previously awarded federal funds remain safe; Morell said the reserve is an unappropriated balance created under the city's administrative code to buffer short-term revenue variability and that much of the department's Medicaid reimbursement flows via the state, which is being watched closely for policy changes.

On formal actions, the Commission considered and approved a resolution recommending that the Board of Supervisors accept and expend a $77,000 gift from EPIC Systems Corporation to support federally qualified health centers and programs serving at-risk populations. Greg Wong presented the item; there was a motion and second, no public comment on the item, and commissioners voted in favor on the record.

Later in the meeting, Nazanin Zahir, chief quality officer for Laguna Honda Hospital, presented 28 policies for review and approval (two new policies, 20 revisions, and four deletions). A motion to approve was moved and seconded and the Commission voted 'aye' to adopt the policies.

The Commission also approved the consent action to adopt the previous meeting minutes and voted to enter a closed session to discuss pending litigation and privileged matters. Several public commenters had urged immediate operational responses on behavioral-health relocations; the Commission noted there was no agendized action on that topic that day.

Next steps for the department include continued stakeholder engagement on budget reduction planning, written follow-ups on vaccination-percentage sourcing for commissioners, and quarterly financial reporting that will drill into specific prior-year settlement assumptions and the components of anticipated revenue and risk.