UCSF Medical Group Financial Process October 2, 2006

Purpose of PSA Budget The PSA Budget defines the amount of the monthly PSA budgeted payment. The PSA Budget provides a planning tool to the department, Dean’s Office and Medical Center for recruitments, capital allocation and other discretionary expenditures.

Phases of the Budget Process The PSA Budget Process occurs in 3 phases: – Revenue Estimation – Cost Entry – Reconciliation and Evaluation Revenue Projections Cost Estimates PSA Budget Medical GroupMedical Center

Revenue Projections Revenue Projection is coordinated by the Medical Group. Planned contract increases(decreases) are taken into account. The revenue projection supplied by the Medical Group does not account for planned volume changes. Each department adjusts the revenue projection based upon new(lost) business lines, physician recruitment(losses) or other factors effecting volume.

Cost Estimation Cost Projections are coordinated by the Medical Center Decision Support Department. The DSS department creates a baseline budget and provides it to the departments via the web-based budget tool. Each department enters their appropriate cost assumptions into the tool based upon their planning for the year.

Reconciliation and Evaluation Global overhead expenses (IT, Cash Control, Space Fee) are defined in the PSA agreement. Medical Center Accounting provides those costs. Once the Revenue and Expense projections have been combined, the final budget is available for reconciliation. Based upon the outcome, the departments have a final opportunity to modify either portion of the the PSA Budget.