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President’s Quarterly Report and Review of Financial StatementsAs at December 31, 2016

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© 2017 Canadian Institute for Health Information

Cette publication est aussi disponible en français sous le titre Rapport trimestriel du président et revue des états financiers au 31 décembre 2016.

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Table of contents President’s update ...................................................................................................................... 4

Strategic activities and outcomes .......................................................................................... 4

Financial highlights and statements ............................................................................................ 7 Balance sheet ($000) as at December 31, 2016 .................................................................... 9 Operating budget ($000) for the 9-month period ended December 31, 2016 ....................... 12 Capital budget ($000) for the 9-month period ended December 31, 2016 ........................... 14

President’s Quarterly Report and Review of Financial Statements as at December 31, 2016

4

President’s update Strategic activities and outcomes The following are key accomplishments for each of the corporate goals for the third quarter of 2016–2017.

Be a trusted source of standards and data quality Deliver more timely, comparable and accessible data across the health continuum.

Key accomplishments Outreach and stakeholder activities

• At the request of the Ontario Ministry of Health and Long-Term Care (MOHLTC), CIHI presented an updated methodology for identifying cases with coronary artery disease (CAD) and quality-based procedures (QBP) using data from the Discharge Abstract Database (DAD) and National Ambulatory Care Reporting System (NACRS) in November 2016. The updated methodology will enable the ministry to leverage readily available data for CAD QBP implementation for information and planning purposes.

Collaboration and partnership activities

• Following several discussions throughout the third quarter, CIHI has received verbal confirmation from the Ontario MOHLTC that they intend to use CIHI’s NACRS for collecting information about opioid-related emergency department (ED) visits in Ontario. It is anticipated that data collection will begin in April 2017.

• CIHI participated in the Opioid Conference and Summit held in Ottawa November 18 and 19, 2016. The conference was hosted by the Honourable Jane Philpott, federal Minister of Health, and the Honourable Eric Hoskins, Ontario’s Minister of Health and Long-Term Care. CIHI committed to continuing to contribute to the development of a pan-Canadian prescription opioid surveillance system and to the national evidence base on opioid use and related harms.

Priority themes and populations

• Building on our experience implementing and supporting interRAI assessments, CIHI has begun a project to support the Ontario Ministry of Child and Youth Services (MCYS) in implementing the interRAI Child and Youth Mental Health (ChYMH) standardized assessment tool in 250 agencies across the province.

• In December 2016, CIHI provided key provincial Continuing Care Reporting System (CCRS) data to British Columbia to support a provincial initiative to link clinical and quality-of-life data. This data will be used for detailed analyses of quality of life for seniors in residences. CIHI plans to provide ongoing support to B.C. in utilizing Resident Assessment Instrument (RAI) clinical data. CIHI will promote the results of this initiative in the long-term care patient-reported experience measures (PREMs).


5

Expand analytical tools to support measurement of health systems Deliver reporting tools, methods and information that enable improvements in health care, health system performance and population health.

Key accomplishments

• On November 30, 2016, Hospital Standardized Mortality Ratio (HSMR) results for 2015–2016 (excluding Quebec) were publicly reported in Your Health System: In Brief and In Depth.

Outreach and stakeholder activities

• CIHI released its population grouping methodology (POP) (version 1.0) on December 15, 2016, and has assisted 6 jurisdictions with downloading and implementing the POP software. POP is specifically targeted to help health ministries and health regions analyze their data and make predictions about the health care needs of their jurisdictions.


• In November 2016, CIHI signed an amendment to the Data Sharing Agreement with the Institute for Clinical Evaluative Sciences (ICES). This amendment will both strengthen CIHI’s relationship with ICES and highlight CIHI’s value to a significantly broader audience, as the number of data sets provided to ICES will increase.

• CIHI received the 2016 Information Technology Association of Canada (ITAC) Ingenious Award for the project Care Planning Tools: Changing Practice Among Alberta First Nations Communities. The project was a collaboration between CIHI and the First Nations and Inuit Health Branch of Health Canada, interRAI, Momentum Healthware, the First Nations Alberta Technical Services Advisory Group, Alberta Health Services and Alberta Health. This initiative was awarded the 2016 Canadian Health Informatics Award in the summer 2016 (as reported in the President’s Update Q1, 2016–2017).


• CIHI updated the Canadian Association of Paediatric Health Centres (CAPHC) benchmark reporting tool contained within CIHI Portal to include data on pediatric mental health. This data, in addition to the existing data on ED visits and asthma-related cases, provides key information on the health of children and youth in Canada in a user-friendly manner to drive decision-making by senior management in participating pediatric facilities.


6

Produce actionable analysis and accelerate its adoption Collaborate with stakeholders to increase their ability to use data and analysis to accelerate improvements in health care, health systems and the health of populations.

Key accomplishments Outreach and stakeholder activities

• CIHI partnered with the Canadian Cardiovascular Society (CCS) to deliver 2 sessions at the October 2016 Canadian Cardiovascular Congress in Montréal. The sessions sought to engage cardiac care clinicians to accelerate the use of quality indicators to drive improvements in cardiac care. CIHI profiled our data and processes that ensure good information quality, as well as our work on Cardiac Care Quality indicators.

• CIHI hosted a Peer Learning Day in Toronto on December 6, 2016, that focused on patient-centred measurement. The goal was to promote better use of patient-centred data to the participants — representatives from different levels of the health care system across the country, including managers, patients and clinical leaders. Presenters and panellists included experts in the use of patient-reported experience measures (PREMs) and patient-reported outcome measures (PROMs), clinical leaders and decision-makers, as well as representatives from the Cleveland Clinic and the Bureau of Health Information, New South Wales, Australia.


• In early October 2016, CIHI co-chaired and sponsored the Canadian Health Workforce Conference. Held in Ottawa, the conference attracted more than 200 health workforce planners from across Canada, the United Kingdom, Australia, New Zealand, the World Health Organization (WHO) and the Organisation for Economic Co-operation and Development (OECD). The Parliamentary Secretary to the Minister of Health provided the keynote address.


• On October 24, 2016, CIHI hosted a symposium at the CAPHC Annual Conference in Halifax. The symposium showcased the development, implementation and implications of the new Paediatric Rehabilitation Reporting System (PRRS) project.

• CIHI delivered the first 2 webinars in a 3-part series on seniors and health system performance. The series examines how health care professionals can use CIHI’s health indicators to address issues related to seniors’ health care, and how organizations can use health system performance data to develop action plans for improvement.

• Meeting with the Western Sparsely Populated Regions Advisory Group, which includes senior leaders from rural regions across the Western provinces and territories, the group explored topics like how to identify appropriate rural community comparators, how to define “rural” in CIHI’s analytical products and analytical support for rural regions with limited analytical capacity.


7

Financial highlights and statements In March 2016, CIHI’s Board of Directors approved the 2016–2017 Operational Plan and Budget for up to $104.3 million, including $101.5 million for operations, $1.5 million in capital expenditures and $1.3 million as a provision for the windup of the CIHI Pension Plan.

Based on year-to-date progress made on core functions and key initiatives to achieve the strategic goals identified in CIHI’s Strategic Plan, 2016 to 2021, as well as activities planned for the remainder of the year, management estimates that CIHI’s overall year-end projection will be a balanced budget of approximately $106.3 million, reflecting additional sources of revenue:

Category

2016–2017 annual year-end

projection

2016–2017 annual approved

budget

Total budget $106.3 million $104.3 million

Operating $103.8 million $101.5 million

Capital $2.2 million $1.5 million

CIHI Pension Plan $0.3 million $1.3 million

Known financial variances to the approved budget The following represents the significant annual known financial variances to the approved budget based on the recent review. This builds on the first and second quarterly reports.

• Health Canada approved a carry-forward of $832,000 from 2015–2016 for some key projects that were underspent last year (e.g., web redevelopment project, Learning Management System replacement project, Prescription Drug Abuse project, eQuery project).

• Funding for The Commonwealth Fund 2017 International Health Policy Survey was recently approved by Health Canada, with work starting in January 2017 and continuing through to the second quarter of 2017–2018. Revenue projections for 2016–2017 have been included at $115,000.

• CIHI has embarked upon a multi-year project with the Ontario Ministry of Health and Long-Term Care to support development of a Child and Youth Mental Health Reporting System. Additional funding of $309,000 has been added to the budget to cover anticipated project work in 2016–2017.

• Additional revenues of approximately $95,000 are associated with a higher volume of external data requests, offset by a $45,000 decrease in Portal revenues, compared with a $1 million budget.


8

• Compensation and external and professional services increased by $2.4 million during 2016–2017, primarily because additional contract staff and consultants were hired to support projects and to ensure resource capacity for priority themes. This will allow us to make progress on our strategic directions. Examples of key initiatives affected include the enhancement of automated patient experience reporting measures, work on medical assistance in dying and work with the Canadian Institutes of Health Research on the Strategy for Patient-Oriented Research.

• Rent savings of $541,000 were generated from the space consolidation in CIHI’s Toronto office.

• Information technology capital spending plans increased due to the required acquisition of new custom servers and software licences to expand the capacity of MicroStrategy servers. This was partially offset by acquisitions to be postponed to 2017–2018.

• Furniture and leasehold improvement capital spending for 2016–2017 is $593,000 higher for the year, due to expanded leasehold improvements in the Ottawa office (to be recovered from the landlord) and the fit-up and additional furniture required for the consolidated space in the Toronto office.

• The provision for the windup of the CIHI Pension Plan remains at $307,000, reduced from an initial provision of $1.3 million. Savings of $993,000 have been repurposed to priority initiatives during 2016–2017.

Known year-to-date financial variances

• Although actual results for the 9 months ended December 31, 2016, are slightly different from the approved budget, based on the recent review, CIHI expects to use all of Health Canada’s annual funding allocation.

• Management will monitor the budgets and ensure that resources are best allocated between the operating and capital budgets to meet this fiscal year’s deliverables and commitments. If resources become available before the end of the fiscal year, they will be redirected to priority initiatives and pressure points.

Financial statements

• Financial statements included in the following section present CIHI’s financial position as at December 31, 2016, with detailed results of operations for the first 9 months of the fiscal year.

• Notes to the financial statements provide details related to specific lines of each statement.

• The closing balances of the balance sheet accounts in the following section are reasonably in line with the organization’s operating cycle.


9

Balance sheet ($000) as at December 31, 2016

Balance sheet December 31, 2016

$

March 31, 2016 (audited)

$

Assets

Current assets

Cash and short-term investments (note 1) 13,287 10,500

Accounts receivable (note 2) 8,470 7,440

Prepaid expenses (note 3) 2,301 3,928

Total current assets 24,058 21,868

Long-term assets

Capital assets (note 4) 6,225 7,570

Accrued pension benefits (note 5) 1,320 1,013

Total long-term assets 7,545 8,583

Total assets 31,603 30,451

Liabilities and net assets

Current liabilities

Accounts payable and accrued liabilities (note 6) 5,342 4,507

Deferred contributions — Health Information Initiative (note 7)

2,365 —

Unearned revenue (note 8) 6,281 5,545

Total current liabilities 13,988 10,052

Long-term liabilities

Deferred contributions — expenses of future periods (note 9)

969 3,070

Deferred contributions — capital assets (note 10) 3,689 5,242

Lease inducements (note 11) 2,534 1,802

Total long-term liabilities 7,192 10,114

Net assets 10,423 10,285

Total liabilities and net assets 31,603 30,451


10

Notes to balance sheet as at December 31, 2016 1. Cash and short-term investments: Presented net of outstanding cheques as at

December 31, 2016. Short-term investments include $12.6 million in term deposits, which will yield 0.92% and mature within 60 days.

2. Accounts receivable: Relates to the sale of products and services, including the provision of the Core Plan through provincial/territorial bilateral agreements. Also included in receivables are provincial/territorial contributions for specific programs and projects, including $1.4 million from the Ontario Ministry of Health and Long-Term Care for the Ontario Trauma Registry, the Ontario Mental Health Reporting System, the Ontario Health Based Allocation Model (including the Data Surveillance project), the Ontario Ambulatory Care Collection and Reporting System Proof of Concept project and the Child and Youth Mental Health Reporting System. The government refunds receivable as at December 31, 2016, are nil. Subsequent to quarter end and up to January 13, 2017, approximately $1.0 million of receivables has been received.

3. Prepaid expenses: Represents payments that have yet to be recognized as expenses, consisting of $1.6 million in software and maintenance, $372,000 in rent deposits to landlords for office space and $329,000 in other expenses.

4. Capital assets: Presented net of accumulated amortization, including $3.2 million of computers and telecommunications equipment, $811,000 of furniture and $2.2 million of leasehold improvements. The capital assets are amortized over their estimated useful lives using the straight-line method: 5 years for computer hardware/software and office/ telecommunications equipment, 10 years for furniture and lease term for leasehold improvements. Assets acquired during the year are amortized beginning in the month of acquisition.

5. Accrued pension benefits: Represents the accumulated cash contributions made by CIHI net of the sum of the current and prior years’ accounting pension expense for the registered retirement plan. In November 2014, a decision to wind up the pension plan effective December 31, 2015, was approved by CIHI’s Board of Directors. A $307,000 payment to the plan was made in June 2016 to settle the anticipated windup deficit.

6. Accounts payable and accrued liabilities: Operational in nature. The accounts payable of $3.2 million is mostly current (less than 30 days). The accrued liabilities represent an estimate of $2.2 million for goods received and services rendered up to the end of the quarter (e.g., external and professional services, advisory groups, printing, travel) as well as payroll and benefit accruals. The government remittances payable as at December 31, 2016, are $817,000.


11

7. Deferred contributions — Health Information Initiative: Related funding is recognized as revenue in the same period as the related expenses are incurred. Contributions received from Health Canada but not yet recognized as revenue are recorded as Deferred contributions — Health Information Initiative. Funding recognized but not received at the end of the period is recorded as Receivable — Health Information Initiative.

8. Unearned revenue: Includes contributions received, for which expenses have not yet been incurred. The contributions are recognized as revenue in the same period as the related expenses are incurred. The balance consists of $1.6 million of funding contributions from the B.C. Ministry of Health for special projects and $4.6 million in Core Plan and Portal billings related to the fourth quarter.

9. Deferred contributions — expenses of future periods: Represents unspent restricted contributions. The funding is recognized as income to match the occurrence of specific expenditures for projects and activities.

10. Deferred contributions — capital assets: Represents contributions provided for the purpose of capital assets acquisitions. The deferred contributions are recognized as revenue on the same basis as the amortization of the related capital assets.

11. Lease inducements: Represents leasehold improvement allowances, other inducements and free rent received/provided over the years for the Toronto, Ottawa and Victoria offices. The inducements are amortized over the period of their respective leases.


12

Operating budget ($000) for the 9-month period ended December 31, 2016

Operating budget

Actual year to date

$

Year-end projection

(12 months) $

Approved budget

(12 months) $

Variance budget versus

projection $

Revenues

Sales (note 1) 1,357 2,667 2,572 95

Core Plan (note 2) 13,043 17,391 17,391 —

Health Information Initiative (note 3) 58,745 80,702 78,907 1,795

Funding — other (note 4) 1,839 2,853 2,485 368

Other revenue (note 5) 115 166 180 (14)

Total revenues 75,099 103,779 101,535 2,244

Expenses

Compensation (note 6) 57,522 77,959 76,951 (1,008)

External and professional services (note 7)

2,717 6,269 4,897 (1,372)

Travel and advisory committee expenses (note 8)

2,288 3,293 3,353 60

Office supplies and services (note 9) 430 585 584 (1)

Computer and telecommunications (note 10)

5,060 6,696 6,578 (118)

Occupancy (note 11) 6,944 8,977 9,172 195

Corporate provision (note 12) — — — —

Total expenses 74,961 103,779 101,535 (2,244)

Surplus (deficit) 138 — — —


13

Notes to operating budget for the 9-month period ended December 31, 2016 1. Sales: Includes CIHI’s products and services over and above those sold as part of the

Core Plan (e.g., on a fee-for-service basis).

2. Core Plan: Represents subscription revenue from the bilateral agreements with provincial/territorial governments.

3. Health Information Initiative: Represents Health Canada’s current-year funding allocation recognized as revenue to match the operating expenses incurred. As well, it includes deferred contributions received in prior years recognized as revenue to match the capital assets amortization.

4. Funding — other: Represents contributions from provincial/territorial governments and other agencies for special projects (e.g., The Commonwealth Fund International Health Policy Survey, Ontario Ambulatory Care Collection and Reporting System Proof of Concept project, Paediatric Rehabilitation Reporting System project, Child and Youth Mental Health Reporting System project) or specific programs (e.g., Ontario Mental Health Reporting System, Ontario Trauma Registry, Ontario Health Based Allocation Model [including the Data Surveillance project]). The funding is recognized as revenue in the same period as the related expenses are incurred.

5. Other revenue: Includes interest income generated from the bank accounts and ad hoc short-term investments as well as miscellaneous income.

6. Compensation: Includes salaries, benefits and pension expense for both full-time employees and agency/contract staff.

7. External and professional services: Includes accruals for services rendered to date. At the end of December, the unrecorded contractual commitments pertaining to this fiscal year were in the order of $1.2 million.

8. Travel and advisory committee expenses: Includes travel expenses for staff and for Board of Directors and advisory committee members, as well as facility costs relating to CIHI’s education sessions and externally hosted meetings.

9. Office supplies and services: Includes printing, postage/courier/distribution, office equipment and supplies, and insurance costs.

10. Computer and telecommunications: Includes supplies, software/hardware support and maintenance, minor software costs and upgrades, telecommunications line charges and long-distance charges, and depreciation of computers and telecommunications assets.

11. Occupancy: Includes rent, facility maintenance and depreciation of furniture and leasehold improvements.

12. Corporate provision: Set aside by management; essentially a contingency for emerging issues and year-end adjustments (e.g., benefits/pension costs, revenue shortfall).


14

Capital budget ($000) for the 9-month period ended December 31, 2016

Capital budget

Actual year to date

$

Year-end projection

(12 months) $

Approved budget

(12 months) $

Variance budget versus

projection $

Furniture and office equipment 167 182 50 (132)

Leasehold improvements 699 701 240 (461)

Information technology and telecommunications

254 1,286 1,204 (82)

Total 1,120 2,169 1,494 (675)

Note The above excludes $731,000 of commitments up to January 5, 2017.

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