University of California San Francisco Sam Hawgocd, MBBS Chancellor Arthur and Toni Rembe Rock Distinguished Professor Office of the Chancelior UCSF Box 0402 550 16th Street, Room 7107 San Francisco, CA 94143 tel: 415.476.6582 Sam.Hawgood@ucsf.edu March 12, 2018 Dear Colleagues: Thank you for your letter of March 6, 2018, to me and the UCSF Benioff Children?s Hospitals (BCH) Board of Directors. I know that I speak for the Board of Directors and my UCSF and UCSF Health management teams in expressing our profound admiration, respect and gratitude for the service you have provided, and continue to provide to children in Oakland. When Children?s Hospital and Research Center Oakland became part of the University of California on January 1, 2014, linking a storied standalone children's hospital with one of the nation?s leading academic medical centers, we shared a common vision the development of a single children?s health enterprise on two campuses, serving all children regardless of ability to pay, achieving financial stability, elevating quality of care for all children, and supporting innovations to improve the health of children locally and globally. Four years later, we remain fully committed to that vision and we have much to celebrate regarding our achievements to date: a Our new Outpatient Center, due to open next month, is becoming a reality due in large part to significant financial support facilitated through the University of California in the form of debt and philanthropy. 0 Many programs and physician specialties have integrated across both campuses and are flourishing. A substantial number of UCSF Benioff Children?s Hospital Oakland physicians have become facuity members of the UCSF School of Medicine. 0 Programs and collaborations in health equity have grown. a We have stabilized the financial state of the Federally Qualified Health Center (FQHC) and have markedly improved the efficiency of the programs run at this facility. We have built a regional group of independent physicians associated with UCSF Benioff Children?s Hospital Oakland, and have marketed BCH in Oakland and San Francisco. a A single instance of the electronic medical record is being implemented, which allows us to better serve and care for our patients. 0 The BCH Board of Directors has been built into a world-class group of committed and active volunteers. March 12, 2018 Page two However, we must acknowledge there is significant work to be done, including: a Achieving overall financial stability of the enterprise, which is critical for sustaining our mission long term. . Fully integrating our clinical practices which is key to realizing our vision of integrated enterprise acting in concert to deliver the best care for children. 0 Fully integrating the res'earch enterprise into the UCSF School of Medicine, which will allow us to take advantage of the extraordinary resources and reputation of the nation?s leading health research university. Our leadership team has thoughtfully considered plans to address these and many other issues and will continue to do so in conjunction with the Board of Directors. Importantly, our efforts will require changes to historical practices, and we understand that change is difficult. But the realities of the market, plus our desire to achieve our vision for BCH, require us to make these changes. fuiiy support the directions that we are taking, including the plan to complete integration of physician practices by 2020. support plans to get UCSF Benioff Children's Hospital Oakland to positive cash flow to fulfill our financial sustainability goals and address long?standing deficiencies in our facilities in Oakland I support efforts to integrate Children' 3 Hospital Oakland Research Institute into the UCSF research operation. Finally, as a pediatrician myself, I am committed to maintaining our incredible focus on children?s health and expanding health equity. You have raised several issues that I would iike to address. First, the question about leadership roles for Oakland physicians inside UCSF. We welcome such involvement, and we will redouble our efforts to include Oakland physicians in leadership opportunities. indeed, within the School of Medicine, we have been quite deliberate in including faculty members from BCHO on committees, for example the current search committee for the new Chair of the Department of Pediatrics.,Without compromising the rigid structural requirements for academic leadership inside an academic medical center, we welcome the application of individuals for academic leadership positions within our professional schools. Second, in your letter and in previous communications, you have implied that the UCSF affiliation may jeopardize service to the neediest children. i want to be clear: Public service is at the heart of the University of California and is integral to who UCSF is as a university and as a major provider of health care. Since the affiliation, UCSF has invested tens of millions of dollars into BCHO to ensure that our combined mission of service to all children is not and will not be compromised. This is a core principle for UCSF Benioff Children?s Hospitals. Again, we want to know about and address any concerns and issues, and thank you for your letter. We will move ahead, as we must, toward achieving the vision we laid out four years ago. Moreover, we hope that you will continue to actively and enthusiastically participate in and embrace our journey to become a world leading children 5 health enterprise. Sincer ly, Sam Hawgood, Chancellor Arthur and Toni Rembe Rock Distinguished Professor