advancing the financial strength of los angeles county clinics• launched in 1995, nonprofit, hrsa...

2018 Capital Link 1 www.caplink.org

November 9, 2018

Advancing the Financial Strength of Los Angeles County Clinics

AFS3 102 Training Program

Jonathan Chapman, Director of CHC Advisory Services, Capital Link

Tony Skapinsky, Project Consultant, Capital Link


Capital Link - Overview

• Launched in 1995, nonprofit, HRSA national cooperative agreement partner

• Offices in CA, CO, FL, LA, MA, MO, and WV

• Over $1.1 billion in financing for over 230 capital projects

- Direct assistance to health centers and complementary nonprofit organizations in planning for and financing operational growth and capital needs

- Industry vision and leadership in the development of strategies for organizational, facilities, operational and financial improvements

- Metrics and analytical services for measuring health center impact, evaluating financial and operating trends and promoting performance improvement


Advancing Financial Strength (AFS) Program Overview

• One-Year Program Developed with CCALAC • Tools, Trainings, Technical Assistance

• Not a “CFO Training Program” but an integrated learning experience.

CEO/COO CMO/Clinical

Team CFO/Finance

Team Board

Members


Goal: Financial Sustainability and Access to High Quality Care

Improved Access & Financial

Sustainability

Staffing

Productivity

Utilization

Clinical Outcomes

Patient Satisfaction

Financial Operations


Advancing Financial Strength (AFS): Key Components

Customized with CCALAC to Improve Health Center Financial Sustainability and Increase Readiness for Growth.

• Understand: Assessments and Training on Metrics and Benchmarking; Improving Efficiencies (100 Series)

• Develop Action Plans: Training and Strategies for Performance Improvement (200 and 250 Series)

• Implement and Monitor: Technical Assistance, Support & Tracking (300 Series)


Advancing Financial Strength (AFS) at CCALAC: By the Numbers

• Program is in its third year!

• 50+ CCALAC health centers have participated

• Over 750 people attended one or more AFS training programs, many came to five or more

• Over 150 performance evaluation profiles completed for health centers and CCALAC (27 centers in first year; grew to 50 centers annually)

• 30 health centers have received hands-on, individualized technical assistance and coaching


AFS3 Program Upcoming Programs—Scheduled

December 11, 2018 - In-Person Training Morning Session:

• Identify the key drivers of performance and what high performers do well.

• Review key metrics and data dashboards for ongoing tracking and communication.

Afternoon Session: • Strategic RCM • Understanding your cost of care


Benchmarking - Origin

Originates from the chiseled horizontal marks that surveyors made in stone structures, into which an angle-iron could be placed to form a "bench" for a leveling rod


Benchmarking

1. A surveyor's mark cut in a wall, pillar, or building and used as a reference point in measuring altitudes. 2. A standard or point of reference against which things may be compared or assessed.


Think Thrice, Measure Twice, Cut Once


What to Measure?


How to Measure?


Benchmarking within Managing


Benchmarking/Dashboards and Updated Trends


What Does Success Look Like?

You can’t manage what you don’t know and… You can’t know what you don’t measure


Performance Benchmarking

WHAT do I want to track?

WHERE do I find this data?

WHICH metrics do I need?

HOW do I analyze it?

WHO needs to know?

Benchmarking/Best Practices


Creating Performance Dashboards

Explore your available reporting tools Look to Excel as a simple tool for charting

performance Time intensive to set up, then efficient for

routine reporting

Match your reporting objectives to your available data sources Annual data often most reliable:

Audits, UDS, OSHPD, etc. Monthly/quarterly data better support real-time

decision making: PMS systems, interim financials, etc.

Choose your financial and operational metrics

Limit what you are tracking (5-10 metrics) Stay consistent with your ratio definitions &

calculations

Identify your target audience

Dashboards should be customized Board members vs. executive management vs

clinic managers

Building Performance Dashboards


Capital Link Benchmarking Toolkit

www.caplink.org/resources/publications

http://www.caplink.org/resources/publications


Framing the Financial Health Context: Some Key Metrics

Metric Why This Is Important

1 Operating Margin Measuring stick of your business model; margins typically small but need to be positive

2 Bottom Line Margin Is performance dependent upon large capital grants and/or other sources of non-operating revenue?

3 Personnel-Related Expense Consumes 70-75% of budget; key driver of financial performance

4 Days Net Patient A/R Financial management starts with collecting your money efficiently

5 Days Cash on Hand Is there enough liquidity to keep operations running smoothly?

6 Physician Productivity (visits) Productivity is the basis for revenue generation

7 Mid-Level Productivity (visits) Productivity is the basis for revenue generation

8 Dental Provider Productivity (visits)

Productivity is the basis for revenue generation

*Capital Link Performance Benchmarking Toolkit


Financial Health: Some Key Metrics

• Operating Margin =

Change in Net Operating Assets / Total Operating Revenue

• Personnel-Related Expenses =

Salaries & Related Expenses + Fringes & Payroll Taxes + Professional/Contracted/Consultant Fees

Total Operating Revenues

• Days Cash on Hand =

Unrestricted Cash (Total Operating Expenses – Depreciation) / 360 days)


Operating Margin 2014 - 2017

2.8% 3.1%

5.5%

4.4%

3.5%

5.6%

6.3%

4.8%

1.9%

3.7% 4.3%

3.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2014 2015 2016 2017

CCALAC Operating Median CA FQHCs Median National Median


Bottom-Line Margin

5.9%

5.0%

6.3%

4.6%

5.5%

6.8% 7.3%

5.3%

3.3%

5.1% 5.5%

4.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2014 2015 2016 2017

CCALAC CA FQHCs Median National Median


Personnel-Related Expenses as a Percent of Operating Revenue

72.3% 72.0%

68.9%

72.1%

72.6%

70.8% 70.6%

72.5% 72.4%

70.9%

70.2%

71.8%

67.0%

68.0%

69.0%

70.0%

71.0%

72.0%

73.0%

2014 2015 2016 2017



Days in Net Patient Receivables

54 55 52

46 50

44

38 37

43 41 41 39

0

10

20

30

40

50

60

2014 2015 2016 2017



Days Cash on Hand

57

43

66

84

54

71 79

92

42

53

63 67

0

10

20

30

40

50

60

70

80

90

100

2014 2015 2016 2017



Physician Visits per Physician FTE

3,435 3,350 3,378 3,371 3,424

3,170 3,074 3,119 3,035 2,933 2,859 2,780

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2014 2015 2016 2017



Mid-Level Visits per Mid-Level FTE

3,332 3,134

3,332 3,233 3,031 2,957 2,963 3,022

2,535 2,443 2,439 2,401

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2014 2015 2016 2017



Dental Visits per Dental Provider FTE

2,233

2,510 2,282 2,303

2,718 2,528 2,457 2,414

1,927 1,904 1,819 1,762

0

500

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017



CCALAC Patients per Payer as a Percent of Total Patients

CCALAC Medi-Cal CCALAC Self-Pay

5% 3% 3% 3%

35%

28% 26% 24%

2014 2015 2016 2017

% of Self-Pay Collections % of Self-Pay Patients

82% 86% 85% 86%

54% 62% 62% 64%

2014 2015 2016 2017

% of Medi-Cal Collections % of Medi-Cal Patients


Median Growth Rates - Patients

1% 1%

13%

7%

4% 3%

7%

4% 3% 3%

5% 5%

0%

2%

4%

6%

8%

10%

12%

14%

2014 2015 2016 2017



Median Growth Rates – Visits

0%

5%

13%

10%

4%

6%

9% 7%

3%

5%

7% 6%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2014 2015 2016 2017



CCALAC Growth Rates by Service Line

21%

13%

7%

10%

20% 19%

0

0.05

0.1

0.15

0.2

0.25

DentalPatients

DentalVisits

MedicalPatients

MedicalVisits

MentalHealth

Patients

MentalHealthVisits


CCALAC Service Mix by Year

80% 78% 79% 77%

5% 6% 6% 10% 3% 4% 4% 5% 5% 4% 3%

3%

50%

60%

70%

80%

90%

100%

2014 2015 2016 2017

Enabling Visits as a Percentage of Total Visits

Mental Health Visits as a Percentage of Total Visits

Dental Visits as a Percentage of Total Visits

Medical Visits as a Percentage of Total Visits


How Does Your Health Center Compare?


Enhanced Performance Evaluation Profile


Evolving Business Models


Transition from FFS to Value-Based Reimbursement


Value Based Transition Transition from FFS to Value-Based Reimbursement


Fee for Service

• Volume

• Individual health

• Quality is a concern

• Stand-alone systems can thrive

• Little financial risk

• Manage revenues


Value-Based

• Outcomes

• Population health

• Quality is financial driver

• Collaboration is essential

• Increased financial risk

• Manage costs


Redesigned Incentives




Metric Why This Is Important

9 Medical Provider Productivity (patients) Becomes more important in transition to team-based care

10 Medical Team Productivity Who are your teams? How do they perform?

11 Cost (Revenue) Per Visit How are your visit costs changing over time?

12 Cost (Revenue) per Patient With the move to PCMH, how are patient costs changing?

13 Medical Support Staff Ratio How strategic is the staffing of the medical teams?

14 Non-Clinical Staff Ratio Non-clinical employees are not revenue drivers

15 Visit/Patient Growth Rates Are visits growing faster than patients? Is demand growing?

*Capital Link Performance Benchmarking Toolkit


Medical Patients per Medical Provider FTE

980

938

975

952

987

935 930 923

933

899

876 864

800

820

840

860

880

900

920

940

960

980

1,000

2014 2015 2016 2017CCALAC CA FQHCs Median National Median


Medical Team Productivity – Medical Patients per Medical Staff FTE

313

277

304

285

326

298 294 293

319

304 299

295

250

260

270

280

290

300

310

320

330

2014 2015 2016 2017



Cost per Patient and Visit

Operating Expense per Patient

Operating Expense per Visit

$779 $849

$898 $896 $800

$887 $959

$1,049

$0

$200

$400

$600

$800

$1,000

$1,200

2014 2015 2016 2017

CCALAC CA FQHCs Median

$177 $192

$204 $204 $188

$201 $220

$230

$0

$50

$100

$150

$200

$250

2014 2015 2016 2017

CCALAC CA FQHCs Median


CCALAC Medical Support Staff per Medical Provider


Additional Tools/Trainings


Strategic RCM Toolkit


RCM Patient Access Toolkit


RCM 250 Series Trainings


Cost of Care Training/Resources

NACHC Cost of Care Capital Link Cost Trends

Cost of Care Trends Online

http://www.caplink.org/index.php/component/jdownloads/download/14-financial-and-operational-performance/73-cost-of-care-trends-for-community-health-centers-2012-2016


What Does Success Look Like?

Time, Info, Resources to Plan

Productive Teams

Improved and Stable Operations

Staff and Patient Satisfaction

Improved Patient Outcomes

Financial Sustainability


Questions? Contact Us

Susan Petrie Chief Operating Officer Tel: 617-988-2248 [email protected] Jonathan Chapman Tel: 225-241-6855 Director of CHC Advisory Services [email protected]

Tony Skapinsky Project Consultant Tel: 805-544-2355 [email protected]

Cindy Barr Operations & Facilities Planner Tel: 304-876-6996 [email protected]

mailto:[email protected]




advancing the financial strength of los angeles county clinics• launched in 1995, nonprofit, hrsa...

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