Before an auditorium full of University of Louisville Health Sciences Center faculty, staff and students on Wednesday, interim President Greg Postel gave a wide-ranging speech on the future of the university as it transitions away from two years of scandals and near-term budget cuts, focusing on possible actions UofL could take to meet the goals of its strategic plan.
Postel said that UofL was now in a time of “critically important transition” as it moves beyond just resolving the issues of its past — specifically cleaning up and reforming the UofL Foundation and replenishing the university’s endowment it manages — and starts “focusing our time and attention on the future.”
“I think it’s hard for faculty and staff to come to work every day and be excited about dealing with historic problems,” said Postel. “People come to work every day because they want to engage and they want to do something future oriented. We’ve been missing that at UofL. We really have been heavily focusing on the past and dwelling on things that happened before, and not looking at the future.”
Showing a slide with graphic reading “The Power of U,” Postel said this internal campaign for Health Sciences employees could serve as a great marketing tool to engage the community, as he was beginning to hear more people say “our hospital” and “our university.”
“I love it when people use those terms, because that’s what it is,” said Postel. “This is not a corporate entity where people just come to make a paycheck and go home. This an organization made up of people who have ownership of it. The faculty, staff and students are the university. So the more we think in those terms, the more successful we’ll be.”
Postel used the July 1 transition of University Hospital from KentuckyOne Health’s management back to University Medical Center as an example of how UofL can use grassroots engagement to give those on campus a sense of ownership and pride in success. Stating that the hospital in the KentuckyOne era “was being managed by a big national company,” he said decisions came from the top down, which “I don’t think fares very well in an academic setting. ”
“You saw people leaving, nurses were leaving, we were having trouble keeping the place staffed,” said Postel. “And the morale of the staff translated into the morale of the patients. The patient satisfaction scores were low, the quality scores were low. Everything that could be going wrong was starting to go wrong.”
By contrast, after six months of work preparing for the transition once it was announced in December, Postel said there was a “celebratory atmosphere” once UofL took back management of University Hospital, as faculty and students felt more engaged in the process. He added that this feeling had continued, as “you’re starting to see the patient satisfaction scores come back up. It’s a different place.”
Hits, misses and possibilities on meeting goals of UofL’s strategic plan
Noting that UofL issued its comprehensive strategic 2020 Plan in 2008, followed by additional details added four years later in its 21st Century Initiative, Postel went through each of its five pillars to determine what goals the university accomplished or fell short of meeting. He also threw out suggestions on strategies UofL could take in the future to better accomplish such goals — though, adding that these were only possibilities and that the campus community would have to get involved with input of their own.
For 2020 Plan’s pillar of educational excellence, Postel said that UofL has improved the ACT scores of its incoming freshmen and decreased its student-to-teacher ratio for classes, in addition to a number of campus improvements such as a new academic building, library renovations and expanded campus housing options. However, he added that enrollment and the number of undergraduate degree programs offered have remained flat, and the graduate rate is “one of our biggest problems,” as the six-year rate is only slightly above 50 percent and the four-year rate is only in the mid-20s.
As for what UofL could do in the future, Postel said it could strive for a “dramatically larger student body,” as its roughly 22,500 enrollment is far below the University of Kentucky’s 35,000 and the University of Cincinnati’s nearly 40,000. He also suggested the possibility of expanding UofL’s distance learning programs, noting that while many have complaints about such programs, the Arizona State University has been able to increase such students to nearly 100,000.
“I’m not saying we even necessarily aspire to something like that,” said Postel, referring to ASU’s program, “but it’s obvious that some schools are really making good on their effort to grow through this technique.”
Earlier this year, interim provost Dale Billingsley suggested a strategy of increasing UofL’s enrollment to 30,000, which would boost the university’s revenue significantly.
Moving on to the pillar of research and scholarship, Postel said that UofL easily exceeded its goal on the number of peer-reviewed publications, but despite modest increases in research expenditures, external funding, clinical trial activity, patent awards and licensing fees, such levels fell short of its goals. For instance, while research expenditures rose to $185 million from $150 million, that is still far short of the $500 million goal set in the 2020 Plan.
Postel also noted that UofL did not follow through on a goal to seek National Cancer Institute designation, which would have increased its revenue, but “for reasons that I never understood that goal was dropped and has not been pursued for the past several years.” Discussing future options UofL could take, Postel said that it would not happen overnight, a NCI designation is “achievable” and with the university’s grasp “if we invested and if this is something we really wish to do.”
Postel also said that possible options include building a scalable infrastructure to support a much larger research enterprise, creating a valid business plan to support research operations, and further developing industry partnerships, which he said are now in its infancy.
On the third UofL pillar of diversity and social justice, Postel said the university had successfully brought equity to women’s sports programs and that the number of minority faculty and students had gone up, though he said in his opinion this did not go up enough. Postel also noted that despite the increase in minority students and faculty, there remained a persistent achievement gap in retention and graduation rates, and there were not enough minority administrators. He added that while a campus climate survey was conducted a few years ago, the results were not published and he had yet to see it, suggesting that another one be taken and shared with the campus community so it could fix any problems that are identified.
Postel said that UofL had great success in meeting the fourth pillar of community engagements, as its Signature Partnership Initiative to help the West End of Louisville brought forth 21,000 instances of student engagement and 4,200 from faculty and staff, in addition to 250,000 hours of community services and work with over 200 community partner organizations.
He said UofL’s community engagement could serve as an engine for advancement of economic development, health care and education, noting the possibilities of the new Passport Health Plan headquarters at 18th and Broadway in West Louisville. While this new facility will employ 1,000 people and serve as an economic development hub for that part of the city, “the sky is the limit for what else can reside in this building,” as he is talking to various UofL departments to see who may want a presence there, in addition to talking to neighbors near the facility to see what they would want there.
The fifth pillar for UofL — the responsible stewardship of resources — has obviously been an issue, as despite the school’s successful $1 billion campaign, there is now a consensus that endowment funds were overspent by the UofL Foundation and have been depleted. While the market value of the endowment now stands at roughly $800 million, Postel said: “It may interest you to know the endowment goal in the 2020 plan was $3 billion. That speaks for itself… that was not achieved.”
Postel also noted that there had been a lack of a sustainable funding model for advancement, inconsistent stewardship of individual donors and a top down approach to fundraising priorities, but suggested that not only could UofL mount a new successful donor capital campaign, but “we could do it better.” Fundraising significantly decreased in the last fiscal year as the university’s scandals reached a peak and former President James Ramsey was forced out, as some of the largest donors are sitting on the sidelines for the time being as the foundation and university enact reforms to restore donor confidence.
Budget pain and foundation gain
Postel also addressed the sacrifices that had been made across the university since the $48 million shortfall was first announced this year, as expenses had to be cut drastically to make up for a loss in revenue in order to balance the budget. With the university keeping its promise to keep tuition flat this year for the first time in over a decade and a decline in financial support from the foundation, faculty and staff have had to withstand a salary and hiring freeze, as well as efforts to cut spending within each department.
“Everybody is making sacrifices,” said Postel. “This has been a very difficult time. We have all lost positions, we’ve had people leave our offices and not be replaced who are needed. And I don’t want see that continue. We’re going to fix that, but you can’t fix that in a month or two. It takes some planning and some work to get beyond those kinds of problems.”
Postel noted that he is suspending a new policy placing a 6 percent tax on procurements within each department, citing the heavily backlash and criticism it received. However, he added, that UofL needs a “cultural change” about being conservative with expenditures — which he said is already showing results, as July procurements had fallen 10 percent from the previous July.
“This is a huge cultural change,” said Postel. “Normally, cultural change does not occur quickly. We’ve had to force it because of very unusual circumstances and dwindling resources. And it’s a shame that this process didn’t start a couple of years ago because it would have been a lot less painful, but it is what it is. We were given a task to do in January in a very short time frame, and that has caused a lot of pain. So, I’m sorry and I’m appreciative.”
UofL spokesman John Karman told IL Thursday that in the first seven months of 2017, 89 UofL employees had lost their job as part of a reduction in force, but 50 were related to grants and not to the budget shortfall. Of those 89 employees, he said that 11 had since been rehired. Two weeks ago, five staffers were laid off in UofL’s fundraising department due to “ongoing university belt-tightening related to the budget shortfall.”
In a question and answer session after his presentation, a UofL employee asked Postel if he was optimistic about the future of the foundation after its recent turmoil, who answered, “My feeling is that the University of Louisville Foundation is already fine.”
While the foundation “doesn’t have the money in it that should be in it, and too much of it had been spent,” Postel added that its leadership had changed completely since last summer, as it has a completely new board and staff, new reforms and policies that put a check on spending and how resources are used, and a line item budget, in addition to a quality asset manager.
“The problem is that a lot of money was spent from the foundation,” said Postel. “The total dollar amount there is simply not adequate to support all of the things we need to support. So it needs to be replenished. And this is why one of the slides I listed in terms of what could be (was) we need to talk about the possibility of having a renewed donor campaign to rebuild the assets of the corporation so it can continue to provide support for those areas that benefit from it.”
Postel, who gave the same presentation a day earlier on the Belknap campus, said that he planned to hold more forums on the future of the university in late September when students are back for the fall semester.