Standard

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• Standard Poors UpdateAugust 2005

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Agenda

• UCSF Overview
• Strategic Plan and FY 2006 Operations Workplan
• Financial Performance
• Long Range Development Plan
• Summary and Conclusions
• Appendix University of California Support

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UCSF Overview
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UCSF Medical Center has a proven track record of
healthcare excellence

• San Francisco's only university medical center.
• Two hospital locations with 574 available beds
  (650 licensed) including 513 at Moffitt/Long and
  61 at Mt. Zion as of June 30, 2005
• 37 percent of patients live in San Francisco
  63 percent come from neighboring counties,
  throughout California, and around the world1
• Principal teaching site for UCSF Schools of
  Medicine, Dentistry, Pharmacy, and Nursing as
  well as the UCSF Graduate Division
• FY 2005 included 167,822 patient days an ADC of
  460

Footnote 1. http//www.ucsfhealth.org/common/annu
alReport2004.pdf.
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UCSF Medical Center and UCSF Childrens Hospital
are recognized throughout the world as leaders in
Healthcare

• UCSF continues to maintain an outstanding
  national and international reputation1
• nationally designated Comprehensive Cancer Center
• nationally designated Centers of Excellence in
  womens health
• among the top five hospitals in the nation in the
  area of neurology and neurosurgery
• one of the nations largest centers for kidney
  and liver transplants performing the third
  largest number of transplants in the US in 20032
• internationally recognized for treating the spine
• UCSF Childrens Hospital is a hospital within a
  hospital with more than 150 pediatric
  specialists practicing in more than 50 areas of
  medicine2
• In 2004, UCSF MC received the equivalent of a
  perfect score from the Joint Commission on
  Accreditation of Healthcare Organization (JACHO).
  Only 17 percent of hospitals received
  accreditations with full standards compliance in
  20032.
• UCSF Faculty leaders in Patient Safety (100,000
  Lives Campaign)

Footnote 1. http/www.ucsfhealth.org/adult/about/
index.html. 2.http//www.ucsfheal
th.org/common/annualReport2004.pdf.
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UCSF Medical Center and UCSF Childrens Hospital
have been named to U.S. News World Reports
honor roll

• UCSF Hospital is ranked in the top 10 hospitals
  in the country
• UCSF Childrens Hospital is ranked in the top 20
  hospitals in the country
• Several of UCSFs programs were also rated among
  the top 15 in the nation.

• Hormonal disorders
• Neurology and Neurosurgery
• Pediatrics
• Respiratory disorders
• Digestive Disorders
• Ophthalmology

• Rheumatology
• Kidney Disease
• Ear, Nose and Throat
• Urology
• Psychiatry
• Gynecology

Footnote 1. All rankings from US News and World
Report July 18, 2005 issue http//www.usnews.com/
usnews/health/best-hospitals/honorroll.htm.
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UCSF is a leader a national leader in NIH funding
and is making significant investments in research
facilities

• UCSF was the fourth largest recipient of National
  Institutes of Health (NIH) research funds in
  2004, receiving 977 research awards valued at
  439 million1
• Development of the new research campus at Mission
  Bay is underway2
• Genentech Hall, The California Institute for
  Quantitative Biomedical Research (QB3) and The
  Arthur and Toni Rembe Rock Hall , a research
  facility for Genetics, Development and Behavioral
  Sciences are completed and occupied
• The Campus Community Center, Housing Complex and
  two parking structures will be completed in FY
  2006
• Construction on The Helen Diller Family Cancer
  Research Building is slated to begin in FY06.
• The Cardiovascular and Neurosciences research
  buildings are in the design phase.

Footnote 1. http//grants2.nih.gov/grants/award/t
rendsrnk04all1to500.htm. 2.
http//pub.ucsf.edu/missionbay.
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UCSF is well positioned for the the future

• Strong execution of the current strategic plan
• Strong volume growth
• Strong financial performance
• Strong commitment to the future plan

Footnote 1. http//grants2.nih.gov/grants/award/t
rendsrnk04all1to500.htm 2.
http//pub.ucsf.edu/missionbay
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Strategic Plan and FY 2006 Operations Workplan
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Our strategic plan for has six main goals

• Create Capacity for targeted, profitable growth
• Grow targeted services
• Plan for the development of a Mothers and
  Childrens Hospital
• Raise customer service/satisfaction to match
  recognized excellence of clinical care and
  research
• Target initiatives to improve operating
  performance, monitoring and management
• Launch enterprise-wide workforce development
  initiative

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the operations workplan for FY 2006 is tied to
the Medical Centers strategy
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Financial Performance
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Financial results significantly improved
from 2003 to 2004 and are even stronger in 2005

• FY 2005 income before other changes in net assets
  of 69.3 million, 13.8 million ahead of FY 2004
• Cash increased from 115.5 million at June 2004
  to 144.2 million at June 2005. Days Cash on
  Hand increased from 44.2 to 51.3
• Net Days in AR increased slightly from 64.8 days
  at June 2004 to 66.6 days at June 2005

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The results over the past five years indicate
sustained financial improvement
UCSF Medical CenterNet Income - Combined FY
2000 through FY 20051
thousands
Footnote 1. FY 2005 financial performance is
based on the unaudited financial statements while
all previous periods are based on audited
financial statements.
15

as Net Income has improved so too has cash
UCSF Medical Center Cash Balance1July 2002
June 2005
Thousands
Footnote 1. Includes restricted and
unrestricted cash.
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This improved performance has resulted in
stronger financial ratios
Footnote 1. Standard Poors U.S.
Not-For-Profit Health Care 2004 Median Ratios
publication date 10-Jun-2004. 2.
MADSC is Maximum Annual Debt Service Coverage.
3. FY 2005 financial performance
is based on the unaudited financial statements.
17

Volume in the Medical Centers key Service Lines
continue to grow
Trended Service Data Fiscal Years 2002 to 2005
Footnote 1. Excludes Well baby days
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resulting in a 15 increase in the Medical
Centers average daily census
UCSF Medical CenterAverage Daily Census FY 2001
through FY 2005
Average Daily Census
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Net income continues to grow
UCSF Medical Center Statements of Revenue,
Expenses and Net Income For the Years ended June
30, 2003, 2004 and 20051 (Dollars in thousands)
Footnote 1. FY 2005 financial performance is
based on the unaudited financial statements while
all previous periods are based on audited
financial statements.
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The balance sheet has improved
UCSF Medical Center Statements of Net Assets For
the Years ended June 30, 2003, 2004 and
20051 (Dollars in thousands)
Footnote 1. FY 2005 financial performance is
based on the unaudited financial statements while
all previous periods are based on audited
financial statements.
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as too has the cash balance
UCSF Medical Center Statements of Cash Flows For
the Years ended June 30, 2003, 2004 and
20051 (Dollars in thousands)
Footnote 1. FY 2005 financial performance is
based on the unaudited financial statements while
all previous periods are based on audited
financial statements.
22

Continued operational and financial success
secures capital funding of the current campuses
UCSF Medical Center Estimated Capital
Expenditure For the Years ended June 30, 2006,
2007 and 2008 (Dollars in thousands)
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Bed capacity will expand over the next three years
Bed Capacity Census ProjectionFY2001 FY2009
725
Long 13 32 Med/Surg beds
Moffitt 13 NE 16 ICU beds
675
Long 9 6 Med/Surg beds
662
MZ East Wing 13 Med/Surg beds
646
625
Moffitt 14 NE116 ICU beds
618
597
Close Moffitt 14 NE120 beds
575
MZ -- West Wing15 Med/Surg beds
574
Long 1 10 Observation beds
552
525
535
535
525
508
506
475
485
465
460
443
425
429
412
399
375
2001
2002
2003
2004
2005
2006
2007
2008
2009
Available Beds
Average Daily Census
Completed Projects
Planned Projects
Footnote 1. Moffitt 14 N E currently has 20
med/surg beds. In FY2008, these beds will be
taken offline and replaced and re-opened with 16
ICU beds. 2. All year ending
periods are June 30th. Projection years start
with FY2006 3. Increases in bed
capacity between 2001 and 2005 have been
accomplished through the opening of beds at Mt.
Zion
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Long Range Development Plan
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Seismic requirements and capacity needs must be
addressed

• The Need
• Seismic requirements (SB 1953)
• Repair Moffitt/Long by 2008
• Repair or replace Mount Zion by 2013 (OSHPD
  extension received).
• Increase capacity and improve functionality of
  hospitals
• The Process
• Joint School of Medicine and Medical Center
  effort
• Objective Highly functional hospital for
  patients and physicians
• Objective Link hospital services to academic
  programs.

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however current configuration and construction
costs are constraints to UCSFs growth

• Constraints
• All land is encumbered
• Parnassus space ceiling, access parking
• Mount Zion small campus limited research space
• Mission Bay new land is expensive and carries
  obligations to Redevelopment Agency.
• Community opinion keep Emergency Department
  (and related hospital) on Parnassus Heights.
• Finances all options are expensive.
• Timing/Phasing all options must assure
  uninterrupted patient care requires decant of
  existing volume to new facilities.

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UCSFs long term development plan is a bold
redesign of the Medical Centers facilities and
delivery system

• Programmatic Options
• Separate Cancer Hospital
• Separate Womens and Childrens Hospital
• Separate specialty surgery hospital
• Facility Options (over the next decade)
• Ambulatory Care Center at Mission Bay new small
  hospital at Mission Bay new tower on Parnassus
  maintain ambulatory care at Mount Zion.
• Ambulatory Care Center at Mission Bay new small
  hospital at Mount Zion new tower on Parnassus.

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Summary and Conclusions
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UCSF has the key Building Blocks for long term
success

• Commitment to Mission, Vision, Values
• Tradition of Medical Excellence focus on safety
  and quality
• World class faculty physicians
• Excellent Senior Management team
• Clear Strategic Plan and ability to execute
  Operations Workplan
• Shared goals for all staff
• Market and contracting strength
• Strong Relationship with top Medical School
• Strong UC and political support

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Appendix University of California Support
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Regents Hospital Working Capital Program

• In 1989, The Regents implemented internal
  hospital working capital facility using Short
  Term Investment Pool (STIP)
• Maximum total outstanding for hospitals - 15 of
  unrestricted STIP.
• Maximum individual hospital outstanding - 60 of
  hospital gross accounts receivable.
• Can be drawn for any working capital purpose,
  including debt service.

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UCSF Medical Center Available Cash from Hospital
Working Capital Program

• Availability of UC Working Capital based on A/R
  as of June 2005
• 60 X 258 Million Gross A/R
• 154.7 Million
• 55 Days of Cash
• Historical Debt Service Coverage, June 2005 7.1
  X
• Adjusted for Hospital Working Capital, June 2005
  adjusted debt service coverage 15.7 X