University of Colorado Board of Regents Finance Audit and Capital Study Session June 29, 2005 Richard D. Krugman, MD

1. University of Colorado Board of Regents Finance Audit and Capital Study Session June 29, 2005 Richard D. Krugman, MD Dean, School of Medicine President, University Physicians, Inc. University of Colorado

3. 2004UPI Expense Distribution(cash basis)

4. Challenges for Clinical Practice Plan Remaining viable and profitable in highly competitive and often hostile health care market. Additional burden of subsidizing missions and meeting expectations of the SOM.

5. University of Colorado School of MedicineComparison of Medical School Revenues2003 - 2004Funding Sources as a Percentage of Total Average Revenue

6. University of Colorado School of MedicineRevenue Sources Comparison1983 to 2004

7. University of Colorado School of MedicineAcademic Enrichment Fund ExpendituresFiscal Years 1983-20051

8. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP.

9. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP. Rising enrollment in catastrophic or high deductible health coverage plans.

10. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP. Rising enrollment in catastrophic or high deductible health coverage plans. 1990’s concern = impact of uninsured patients 2000’s concern = underinsured patient

11. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP. Rising enrollment in catastrophic or high deductible health coverage plans. 1990’s concern = impact of uninsured patients 2000’s concern = underinsured patient 4. Funding for Medicare & Medicaid over next decade.

12. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP. Rising enrollment in catastrophic or high deductible health coverage plans. 1990’s concern = impact of uninsured patients 2000’s concern = underinsured patient 4. Funding for Medicare & Medicaid over next decade. Technology driving more traditional hospital services to outpatient settings.

13. Physician-Hospital Compensation

15. Current & Developing Issues in Health Care2000 - 2010 After years of stability, healthcare costs and premiums on the rise = 15% of GDP. Rising enrollment in catastrophic or high deductible health coverage plans. 1990’s concern = impact of uninsured patients 2000’s concern = underinsured patient 4. Funding for Medicare & Medicaid over next decade. Technology driving more traditional hospital services to outpatient settings. Physician workforce shortages.

16. UPI Challenges Continued decline in physician reimbursement per unit of service. Physician recruitment, retention and competitive compensation. Need to develop new revenue sources as reimbursement for professional services declines. Collaboration with affiliated teaching hospitals regarding technology ownership and high cost structures.

17. Alignment of Incentives and Stature