wednesday, january board finance committee palomar ... · 1/24/2018 · (c) non-voting membership....

BOARD FINANCE COMMITTEE

* WEDNESDAY, JANUARY 24, 2018 4:30 p.m. Meeting Palomar Medical Center Escondido, 2185 Citracado Parkway, Escondido, CA Raymond Family Conference Center, 2nd Floor1 1

PLEASE TURN OFF CELL PHONES OR SET THEM TO SILENT MODE UPON ENTERING THE MEETING ROOM

Time Form A Page

Target

CALL TO ORDER ................................................................................................................................................. ................. ............. 4:30

Public Comments2 .............................................................................................................................................. ............ 15 ............... 4:45

Information Item(s) ........................................................................................................................................... ............. 5 ............... 4:50

1. Board Finance Committee Follow‐up a. Levels of Acuity of ER Patients ....................................................................................................................

............. 5

...............

4:55

2. * Approval: Minutes – Wednesday, October 25, 2017 (ADD A –Pp21‐29) ........................................................ ............. 2 ............. 2 4:57

3. * Approval: Minutes – Wednesday, November 29, 2017 (ADD B – Pp30‐34) ................................................. .............. 2 ............. 3 4:59

4. * Approval: Finance Committee Notable Accomplishments – Calendar Year 2017 (ADD C – Pp35‐37) ........... .............. 4 ............. 4 5:03

5. * Approval: Annual Review of Finance Committee Bylaws (Clean P6) (Redline P7) ....................................... .............. 3 .......... 5‐7 5:06

6. * Approval: Annual Review of Board Responsibilities Procedure: §D Board Finance Committee (Clean P9) (Redline P10) .............................................................................................................................

.............. 3

........ 8‐10

5:09

7. * Approval: Resolution No. 02.12.18(04)‐01 Establishing the Date, Time and Location for the Regular Meetings of the Board Finance Committee and For the Board Budget Meeting for Calendar Year 2018 ........

.............. 3

...... 11‐12

5:12

8. * Approval: Annual Finance Committee Agenda ............................................................................................... .............. 3 ...... 13‐14 5:15

9. * Approval: Summary of Executed Budgeted Routine Physician Agreements (ADD D –Pp38‐78) .................... .............. 5 ...... 15‐16 5:20

10. * Approval: Resolution No. 02.12.18(05)‐02 of the Board of Directors of Palomar Health Designating Subordinate Officers of the District ................................................................................................................... ............. 5 ...... 17‐18 5:25

11. * Approval: December 2017 & YTD FY2018 Financial Report (ADD E –Pp79‐101) ............................................ ........... 10 ........... 19 5:35

12. Review: Balanced Scorecard – Finance Pillar (ADD F –Pp102‐105) ................................................................... ............. 5 ........... 20 5:40

Public Comments2 .............................................................................................................................................. ........... 15 ............... 5:55

ADJOURNMENT ................................................................................................................................................. ................. .............. 5:55

NOTE: The agenda—without public comments—is scheduled to last 55 minutes, starting at 4:30 p.m., with adjournment at 5:25 p.m.

Board Finance Committee – Voting Members

Jerry Kaufman, PT MA, Director – Chair Joy Gorzeman, RN, Director Doug Moir, MD, Director

Diane Hansen, Interim CEO Frank Martin, MD, CoS Palomar Medical Centers Escondido & Downtown Escondido

Charles Callery, MD CoS Palomar Medical Center Poway

Board Finance Committee – Alternate Voting Members

Board Alternate Dara Czerwonka, MSW

CoS Alternate – Palomar Medical Centers Escondido & Downtown Escondido

Sabiha Pasha, MD, CoS‐Elect

CoS Alternate – Palomar Medical Center Poway Edward Gurrola, MD, CoS‐Elect

Board Finance Committee – Non‐Voting Members

Hugh King, Interim CFO Frank Beirne, EVP Operations Alan Conrad, MD, EVP Physician Alignment

Karen Buckley, CNO Palomar Medical Center Escondido Larry LaBossiere, CNO Palomar Medical Centers Downtown Escondido & Poway

NOTE: If you have a disability, please notify us 72 hours prior to the event so that we may provide reasonable accommodations.

Asterisks indicate anticipated action. Action is not limited to those designated items. 1 Maps with directions to the Palomar Medical Center and to the Raymond Family Conference Center are attached as Agenda Pp i‐iii 2 5 minutes allowed per speaker with a cumulative total of 15 minutes per group. For further details & policy, see Request for Public Comment notices available in meeting room.

1

– Escondido

tlhd

Typewritten Text

i

tlhd

Typewritten Text

ii

tlhd

Typewritten Text

iii

Minutes Finance Committee – Wednesday, October 25, 2017

1 Form A ‐ October Minutes.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Tanya Howell, Secretary BY: Hubert U. King, Chief Financial Officer Background: The minutes of the Board Finance Committee meeting held on Wednesday, October 25, 2017, are respectfully submitted for approval (Addendum A).

Budget Impact: N/A

Staff Recommendation: Staff recommends approval of the Wednesday, October 25, 2017, Board Finance Committee minutes.

Committee Questions:

COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time:

2

Minutes Finance Committee – Wednesday, November 29, 2017

2 Form A ‐ November Minutes.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Tanya Howell, Secretary BY: Hubert U. King, Chief Financial Officer Background: The minutes of the Board Finance Committee meeting held on Wednesday, November 29, 2017, are respectfully submitted for approval (Addendum B).

Budget Impact: N/A

Staff Recommendation: Staff recommends approval of the Wednesday, November 29, 2017, Board Finance Committee minutes.



3

Notable Finance Committee Accomplishments for Calendar Year 2017

3 Form A ‐ BoD Finance Accomplishments 2017.docx

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: Attached for the Committee’s review and approval (Addendum C) is a summary of notable accomplishments in 2017 by the Board Finance Committee, under the leadership of Jerry Kaufman, Chair.

Budget Impact: N/A

Staff Recommendation: Approval



4

Annual Review of Board Finance Committee Bylaws

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: Annually, the Board Finance Committee is required to review the Bylaws of Palomar Health as they relate to the Committee and recommend any necessary revisions. The attached excerpt (presented both in clean and redline) was edited to reflect the new titles of the Interim President & Chief Executive Officer and Chief Financial Officer.

Budget Impact: None.




5

6.2.1 Finance Committee.

(a) Chairperson. The Chairperson of the Board may appoint the Treasurer of the Board as the Chairperson of the Finance Committee. (b) Voting Membership. The Finance Committee shall consist of six voting members, three members of the Board, the Interim President and Chief Executive Officer, and the Chief of Staff from each hospital. There shall be three alternate Committee members:

(i) One alternate shall be a member of the Board, also appointed by the Chairperson of the Board, who shall attend Committee meetings and enjoy voting rights on the Committee only when serving as an alternate for a voting Board Committee member; (ii) The second and third alternate Committee members shall be the Chiefs of Staff Elect from each hospital, who shall attend Committee meetings and enjoy voting rights on the Committee only when serving as an alternate for their respective Chief of Staff.

(c) Non-Voting Membership. The Chief Financial Officer, the Executive Vice President Operations, the Executive Vice President Physician Alignment, the Chief Nursing Officer Palomar Medical Center Escondido, and the Chief Nursing Officer Palomar Medical Centers Downtown Escondido and Poway. (d) Duties. The duties of the Committee shall include but are not limited to:

(i) Review the preliminary, annual operating budgets for the District and Facilities and other entities;

(ii) Develop and recommend to the Board the final, annual, operating budgets;

(iii) Develop and recommend to the Board a three-year, capital expenditure plan that shall be updated at least annually. The capital expenditure plan shall include and identify anticipated sources of financing for and objectives of each proposed capital expenditure in excess of $100,000;

(iv) Review and recommend approval of the monthly financial statements to the Board;

(v) Recommend to the Board cost containment measures and policies; (vi) Review annually those policies and procedures within its purview and

report the results of such review to the Governance, Audit and Compliance Committee. Such reports shall include recommendations regarding the modification of existing or creation of new policies and procedures; and

(vii) Perform such other duties as may be assigned by the Board.

6

6.2.1 Finance Committee.

(a) Chairperson. The Chairperson of the Board may appoint the Treasurer of the Board as the Chairperson of the Finance Committee. (b) Voting Membership. The Finance Committee shall consist of six voting members, three members of the Board, the Interim President and Chief Executive Officer, and the Chief of Staff from each hospital. There shall be three alternate Committee members:

(i) One alternate shall be a member of the Board, also appointed by the Chairperson of the Board, who shall attend Committee meetings and enjoy voting rights on the Committee only when serving as an alternate for a voting Board Committee member; (ii) The second and third alternate Committee members shall be the Chiefs of Staff Elect from each hospital, who shall attend Committee meetings and enjoy voting rights on the Committee only when serving as an alternate for their respective Chief of Staff.

(c) Non-Voting Membership. The Executive Vice President Finance Chief Financial Officer, the Executive Vice President Operations, the Executive Vice President Physician Alignment, the Chief Nursing Officer Palomar Medical Center Escondido, and the Chief Nursing Officer Palomar Medical Centers Downtown Escondido and Poway. (d) Duties. The duties of the Committee shall include but are not limited to:

(i) Review the preliminary, annual operating budgets for the District and Facilities and other entities;

(ii) Develop and recommend to the Board the final, annual, operating budgets;

(iii) Develop and recommend to the Board a three-year, capital expenditure plan that shall be updated at least annually. The capital expenditure plan shall include and identify anticipated sources of financing for and objectives of each proposed capital expenditure in excess of $100,000;

(iv) Review and recommend approval of the monthly financial statements to the Board;

(v) Recommend to the Board cost containment measures and policies; (vi) Review annually those policies and procedures within its purview and

report the results of such review to the Governance, Audit and Compliance Committee. Such reports shall include recommendations regarding the modification of existing or creation of new policies and procedures; and

(vii) Perform such other duties as may be assigned by the Board.

7

Review of Lucidoc Policy 26952 Board Responsibilities for Board Finance Committee

5 Form A ‐ Board Responsibilities ‐ Finance.docx

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: The Board Finance Committee is required to periodically review Lucidoc Procedure 26952 Board Responsibilities as it relates to the Committee and recommend/approve any revisions.

§D.1.i. was amended to reflect the current title “Interim President & Chief Executive Officer” (see attached, presented both in clean and redline versions).

Budget Impact: N/A

Staff Recommendation: Staff recommends approval of §D Board Finance Committee as corrected.



8

D. Board Finance Committee: It is the responsibility of the Board Member to provide oversight to ensure the financial viability of the organization through the effective establishment of sound policies and development of a system of controls to safeguard the preservation and use of assets and resources. 1. Responsibilities:

a. Review and approve annual and long range operating cash, operational and Capital Budgets for the System.

b. Develop and maintain sound understanding of the services of the District's revenues and expenses and its economic environment.

c. Approve methods of financing major capital asset renovations, replacements and additions.

d. Review financial reports and operating statistics on a regular basis to ensure that the organization takes appropriate action in response to operating trends in achievement of financial goals.

e. Evaluate and approve financial plans for new business ventures, programs, and services and establish criteria to measure their ongoing viability.

f. Develop programs and communications in order to enhance the understanding of other members in regard to financial matters of the system.

g. Provide a brief one page summary of committee accomplishments to the board as part of the Board annual self-evaluation.

h. Perform other duties as may be assigned by the Committee Chair/Treasurer of the Board.

i. Committee Chair is responsible for consulting with the Interim President & Chief Executive Officer on unbudgeted expenditures pursuant to Palomar Health policy 14779, Expenditure and Requisition Approval Authority.

2. Requirements: a. Interest and willingness to commit time and energy to completion of Finance

Committee responsibilities and meeting requirements. b. A knowledge of basic Healthcare finance issues and economics and a willingness to

expand ones knowledge in the areas of financial management, productivity, revenue and cash management, alternative delivery systems and prepared health plans, governmental payor systems, etc.

c. An understanding of systems of Internal Control and Audit Committee. d. An interest in the development of Information Technology and systems that support

the use of such. e. Commitment to comply with the other requirements of Board members as outlined in

the member's position description.

9

D. Board Finance Committee: It is the responsibility of the Board Member to provide oversight to ensure the financial viability of the organization through the effective establishment of sound policies and development of a system of controls to safeguard the preservation and use of assets and resources. 1. Responsibilities:

a. Review and approve annual and long range operating cash, operational and Capital Budgets for the System.

b. Develop and maintain sound understanding of the services of the District's revenues and expenses and its economic environment.

c. Approve methods of financing major capital asset renovations, replacements and additions.

d. Review financial reports and operating statistics on a regular basis to ensure that the organization takes appropriate action in response to operating trends in achievement of financial goals.

e. Evaluate and approve financial plans for new business ventures, programs, and services and establish criteria to measure their ongoing viability.

f. Develop programs and communications in order to enhance the understanding of other members in regard to financial matters of the system.

g. Provide a brief one page summary of committee accomplishments to the board as part of the Board annual self-evaluation.

h. Perform other duties as may be assigned by the Committee Chair/Treasurer of the Board.

i. Committee Chair is responsible for consulting with the Interim President & Chief Executive Officer on unbudgeted expenditures pursuant to Palomar Health policy 14779, Expenditure and Requisition Approval Authority.

2. Requirements: a. Interest and willingness to commit time and energy to completion of Finance

Committee responsibilities and meeting requirements. b. A knowledge of basic Healthcare finance issues and economics and a willingness to

expand ones knowledge in the areas of financial management, productivity, revenue and cash management, alternative delivery systems and prepared health plans, governmental payor systems, etc.

c. An understanding of systems of Internal Control and Audit Committee. d. An interest in the development of Information Technology and systems that support

the use of such. e. Commitment to comply with the other requirements of Board members as outlined in

the member's position description.

10

Board Finance Committee Meeting Schedule Calendar Year 2018

6 Form A ‐ Calendar .doc

TO: Board Finance Committee

MEETING DATE: Wednesday, January 24, 2018

FROM: Tanya Howell, Secretary

BY: Hubert U. King, Chief Financial Officer

Background: Based on key financial dates regarding the monthly closing of financial results, as well as the calendars of the Board members on the Committee, Board Finance Committee meetings for the 2017 calendar year were held at 4:30 p.m. on the fourth Monday of the month. Based on a request by Committee Chair Jerry Kaufman, it is recommended that the schedule for the 2018 calendar year be virtually the same, with all regular meetings to be held in the Raymond Family Conference Center on the 2nd Floor of Palomar Medical Center at 2185 Citracado Parkway in Escondido, with a new meeting start time of 4:00 p.m. It is further recommended that the regular meeting schedule be amended with the following exception:

The meeting for the months of November and December has historically been held as a combined meeting during the last week in November or the first week in December. The following date is proposed for the combined meeting:

o Wednesday, November 28, 2018

As the Board Budget Meetings are scheduled in conjunction with financial timelines, the Board Finance Committee has historically borne the responsibility for scheduling those meetings. In order to ensure that a final budget is passed prior to the beginning of Fiscal Year 2019 on July 1, 2018, it is recommended that the Board add one or more special Board Budget Meetings, to be held in the Raymond Family Conference Center on the 2nd Floor of Palomar Medical Center at 2185 Citracado Parkway in Escondido. It is further recommended that both of the following dates for those meetings be held in Board members’ calendars, pending confirmation from the Financial Planning team of the need for one or both:

o Monday, June 4, 2018, and Tuesday, June 12, 2018, with the time of the meetings to be determined by the Board

Resolution No. 02.12.18(04)‐01 presenting the recommended schedule is attached for the Committee’s review and approval.

Budget Impact: N/A

Staff Recommendation: Meeting schedule as per discussion at meeting and resulting Board Finance Committee approval.


COMMITTEE RECOMMENDATION:

Motion:

Individual Action:

Information:

Required Time:

11

RESOLUTION NO. 02.12.18(04)‐01

RESOLUTION OF THE BOARD OF DIRECTORS OF PALOMAR HEALTH ESTABLISHING THE DATE, TIME AND LOCATION

FOR THE REGULAR MEETINGS OF THE BOARD FINANCE COMMITTEE AND FOR THE BOARD BUDGET MEETING

FOR CALENDAR YEAR 2018

WHEREAS, Palomar Health (the "District") is a local health care district duly organized and existing under The Local Health Care District Law, constituting Division 23 of the Health and Safety Code of the State of California (the "District Act"); and,

WHEREAS, the Board of Directors (the "Board") is required, pursuant to Section 54954 of the California Government Code and Section 5.7.2 of the Palomar Health Bylaws, to pass a resolution adopting the time, place and location of the regular Board meetings; and,

WHEREAS, the Board Finance Committee (the “Committee”) has been counseled by the Board to comply with Section 5.7.2 of the Palomar Health Bylaws when adopting the time, place and location of the regular Committee meetings for the remainder of Calendar Year 2018; and,

WHEREAS, the Committee is required, pursuant to Lucidoc Policy 21793: Establishing Board Meeting Dates to establish by Resolution the regular meetings of the Committee;

NOW, THEREFORE, BE IT RESOLVED by the Committee that the following schedule of regular meetings will apply for the remainder of Calendar Year 2018:

2018 BOARD FINANCE COMMITTEE MEETING SCHEDULE

Wednesday January 24, 2018

Wednesday May 23, 2018

Wednesday September 26, 2018

Wednesday February 28, 2018

Wednesday June 27, 2018

Wednesday October 24, 2018

Wednesday March 28, 2018

Wednesday July 25, 2018

Wednesday November 28, 2018

Wednesday April 25, 2018

Wednesday August 22, 2018

Combined November/ December Meeting Due to Holiday Conflicts

NOW, THEREFORE, BE IT FURTHER RESOLVED by the Committee that each meeting will begin at 4:00 p.m. and will be held in the Raymond Family Conference Room at Palomar Medical Center Escondido, 2185 Citracado Parkway, Escondido, California 92029.

NOW, THEREFORE, BE IT FURTHER RESOLVED by the Committee that on behalf of the Full Board of Directors, a Board Budget Meeting shall be scheduled, to be held on one or both of the dates listed below in the Raymond Family Conference Room at Palomar Medical Center Escondido, 2185 Citracado Parkway, Escondido, California 92029, time TBD.

Monday June 4, 2018

AND/OR Tuesday

June 12, 2018

PASSED AND ADOPTED at a meeting of the Board of Directors of Palomar Health held on February 12, 2018, by the following vote: AYES:

NOES:

ABSTAINING:

ABSENT:

Dated: February 12, 2018 BY: ATTESTED: Joy Gorzeman, RN Chair, Board of Directors Raymond McCune, RN Secretary, Board of Directors

12

Board Finance Committee Annual Agenda

7 Form A ‐ Annual Agenda.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: A schedule of recurring topics for review at the Board Finance Committee meetings in the coming year is attached. As the dates for the Board Budget Meetings originate through this Committee, the dates for both “hold the dates” are included.

Budget Impact: N/A




13

1

BOARD FINANCE COMMITTEE – ANNUAL AGENDA CALENDAR YEAR 2018

MONTH TOPICS1

JANUARY

Notable Accomplishments for Calendar Year 2017

Annual Review of Finance Committee Bylaws

Annual Review of Lucidoc Policy 26952 Board Responsibilities ‐ §D FinanceCommittee

Resolution Establishing the Date, Time & Location for Regular Meetings for Calendar Year 2018

Review of Annual Agenda

Review of the FY2019 Budget Development Timeline

Financial Report – December 2017 & YTD FY2018

Balanced Scorecard – Finance Pillar

FEBRUARY Financial Report – January 2018 & YTD FY2018


MARCH Financial Report – February 2018 & YTD FY2018


APRIL Financial Report – March 2018 & YTD FY2018


MAY Financial Report – April 2018 & YTD FY2018


JUNE 4th and/or JUNE 12th Special Board Budget Meeting – Targeted “Hold the Date” options

JUNE Financial Report – May 2018 & YTD FY2018


JULY

Annual Adoption of Statement of Investment Policy – FIN‐11

General Obligation Bonds – Tax Levy for Coming Year

Annual Establishment of Appropriations Limit for the Fiscal Year

Financial Report – June 2018 & YTD FY2018 – Statistics Only


AUGUST Financial Report – June 2018 & YTD FY2018 – Pre‐Audit; July 2018 & YTD

FY2019


SEPTEMBER Financial Report – August 2018 & YTD FY2019


OCTOBER Financial Report – September 2018 & YTD FY2019


Combined NOV/DEC Meeting

Financial Report – October 2018 & YTD FY2019


1 Omissions from listing:

Monthly approval of minutes from prior month’s meeting

Follow‐ups from prior meetings as needed

Periodic approvals of new/renewing Physician/Medical Staff/Physician Recruitment Agreements

Periodic requests for approval of banking matters

14

Executed, Budgeted, Routine Physician Agreement Board Summary Report

TO: Board Finance Committee

MEETING DATE Wednesday, January 24, 2018

BY: Hubert U. King, Chief Financial Officer

Background: The following Executed, Budgeted, Routine Physician Agreements became effective as noted below:

PHYSICIAN/GROUP TYPE OF AGREEMENT

July 2016

James H. Schultz, MD Department Chair Agreement – Family

Medicine – PMC Escondido

October 2016

Sabiha Pasha, MD Chief of Staff Elect Agreement – PMC

Escondido

Mission Infectious Disease & Infusion Consultants, Inc. (Sandeep Soni, MD)

Medical Director Agreement – Antibiotic Stewardship Program – Pharmacy

January 2017

Charles Callery, MD Chief of Staff Agreement – PMC Poway

Mark Goldsworthy, MD Department Chair Agreement – Anesthesia

– PMC Escondido

William Grant, MD Department Chair Agreement – Anesthesia

– PMC Poway

Edward Gurrola, MD Chief of Staff Elect – PMC Poway

Edward Gurrola, MD Quality Management Committee Chair

Agreement – PMC Poway

Allan Hansen, MD Medical Staff Peer Review Committee Chair

Agreement – PMC Poway

Shannon Hart, DO Department Chair Agreement – OB/GYN –

PMC Escondido

Badalin Helvink, MD Department Chair Agreement – Psychiatry

– PMC Escondido

Badalin Helvink, MD Department Chair Agreement – Psychiatry

– PMC Poway

Hidden Valley Surgical Medical Group, Inc. (Frank Martin, MD)

Chief of Staff Agreement – PMC Escondido

Gregory Langford, MD Department Chair Agreement – OB/GYN –

PMC Poway

September 2017

AKANE Institute of Allergy, Asthma & Sleep Medicine, Inc. (Anoop Karippot, MD)

Amendment #1 – Medical Director Agreement – Sleep Lab

Southern California Permanent Medical Group (SCPMG) (Sandra L. Freiwald, MD)

Department Chair Agreement – Surgery – PMC Escondido

15

Executed, Budgeted, Routine Physician Agreement Board Summary Report

November 2017

Arch Health Medical Group Agreement for Service – EKG Reading Panel

Anna Gelberg, MD Medical Director Agreement – Med/Surg &

Telemetry – PMC Poway

Graybill Medical Group, Inc. Agreement for Service – EKG Reading Panel

December 2017

ACCMG Anesthesia Services

The standard Form A and Abstract Table for each are included as Addendum D.


COMMITTEE RECOMMENDATION:

Motion:

Individual Action:

Information:

Required Time:

16

DESIGNATION OF SUBORDINATE OFFICERS OF THE DISTRICT

9 Form A ‐ Desig Subordinates.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hugh King, Chief Financial Officer Background: Attached for the Committee’s review and approval is a Resolution designating current officers of the District. This Resolution supersedes previous such Resolutions. The designation begins with the Interim President and CEO and includes those Executives who have been granted signature authority for the District. In addition, for certain banking matters, a specified individual from the Finance Department also needs to be designated as an authorized non‐officer signatory.

There are various requests for the production of this designation of officers of the District, including that for “corporate” officers, which are satisfied by the Certificate of Incumbency, which names the officers who have been so designated by title in the Resolution. The Interim CEO is granted authority by District Bylaws to designate officers; the State of California requires approval by the Board.

Budget Impact: N/A

Staff Recommendation: The current Resolution [12.11.17(12)‐01] was adopted in December of 2017. As the Executive Management Team has changed since that date, adoption of an updated Resolution, No. 02.12.18(05)‐02, is recommended.



17

CERTIFICATE OF INCUMBENCY

1

I, Debbie Hollick, Assistant to the Board of Directors of Palomar Health, a California Healthcare District, do hereby certify that the following individuals hold the offices of Interim President and Chief Executive Officer; Interim Chief Financial Officer; Executive Vice President Strategy; Executive Vice President Operations; Vice President Revenue Cycle; and Director Finance. I further certify that the signature opposite the name and title of such individual is his or her genuine signature. Name Title and Phone Number Signature Diane L. Hansen Interim President and Chief Executive

Officer

(760) 740‐6395

Hubert U. King Chief Financial Officer (760) 740‐6385

Frank Beirne Chief Operations Officer (760) 740‐6365

Della Shaw Chief Strategy Officer (442) 281‐3265

Pam Sime Chief Human Resources Officer (760) 740‐6335

Stephanie Love Director Finance (442) 281‐3733

IN WITNESS HEREOF, I do hereby attest to the above individuals, positions, and signatures. _________________________________ Debbie Hollick Assistant to the Board of Directors Dated: __________________________

18

December 2017 & YTD FY2018 Financial Report

10 Form A ‐ Financial Report.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: The Board Financial Report (unaudited) for December 2017 and YTD FY2018 is submitted for the Finance Committee’s approval (Addendum E).

Budget Impact: N/A




19


11 Form A ‐ BSC.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Hubert U. King, Chief Financial Officer Background: The Balanced Scorecard results for December 2017 are included as Addendum F for review and discussion at the meeting.

Budget Impact: N/A

Staff Recommendation: Information only



20

1

BOARD FINANCE COMMITTEE CALENDAR YEAR 2017

ATTENDANCE ROSTER MEETING DATES:

MEMBERS 1/25/17 2/22/17 3/22/17 5/2/17 6/5/17 6/28/17 7/26/17 8/23/17 9/27/17 10/25/17

DIRECTOR JERRY KAUFMAN, PT MA – CHAIR P P P P P P P P P P

DIRECTOR JOY GORZEMAN, RN P P P P P P P P P P

DIRECTOR HANS C. SISON, LVN P P P P E P P E P P

BOB HEMKER, PRESIDENT & CEO P P P P P P P P P E

FRANK MARTIN, MD COS PALOMAR MEDICAL CENTERS ESCONDIDO &

DOWNTOWN ESCONDIDO P P P E P P P P E E

CHARLES CALLERY, MD COS PALOMAR MEDICAL CENTER POWAY

P P P P P P P P P P

DIRECTOR JEFF GRIFFITH, EMT‐P – ALTERNATE

SABIHA PASHA, MD ALTERNATE COS PALOMAR MEDICAL CENTERS ESCONDIDO & DOWNTOWN ESCONDIDO

ALT ALT

EDWARD GURROLA, MD ALTERNATE COS PALOMAR MEDICAL CENTER POWAY

STAFF ATTENDEES

DIANE HANSEN, EVP FINANCE P P P P P P P P P P

FRANK BEIRNE, EVP OPERATIONS P P P P P P P P P P

ALAN CONRAD, MD, EVP PHYSICIAN ALIGNMENT E P E P P P P E P P

LARRY LABOSSIERE, RN CNO PALOMAR MEDICAL CENTERS POWAY &

DOWNTOWN ESCONDIDO P P E E E E E P P E

KAREN BUCKLEY, RN CNO PALOMAR MEDICAL CENTER ESCONDIDO

P P P P P P E E E P

TANYA HOWELL – ASSISTANT P P P P P P P P P P

INVITED GUESTS SEE TEXT OF MINUTES FOR NAMES OF GUEST PRESENTERS

21

tlhd

Typewritten Text

ADDENDUM A

DRAFT

BOARD FINANCE COMMITTEE – MEETING MINUTES – WEDNESDAY, OCTOBER 25, 2017

1. AGENDA ITEM CONCLUSION/ACTION FOLLOW UP/RESPONSIBLE PARTY FINAL?

DISCUSSION

CALL TO ORDER

The meeting – held in the Raymond Family Conference Center on the 2nd floor of Palomar Medical Center, 2185 Citracado Parkway, Escondido, CA – was called to order at 4:31 p.m. by Chair Jerry Kaufman, who requested that all cell phones be turned off or set to silent mode

ESTABLISHMENT OF QUORUM

Quorum was established by the presence of Directors Gorzeman, Kaufman and Sison and Drs. Callery and Pasha

NOTICE OF MEETING

The agenda (as Notice of Meeting) was posted at Palomar Health’s Administrative Office, which is consistent with legal requirements. The full agenda packet was posted on the Palomar Health web site, on Friday, October 20, 2017; and notice of that posting was made via email to the Board and staff.

PUBLIC COMMENTS

None filed

INFORMATION ITEMS

None

1. BOARD FINANCE COMMITTEE FOLLOW‐UP Information only Y

SUPPLY INITIATIVE Diane Hansen, EVP Finance, introduced Steve Ellis, Director of Supply Chain Services, noting that he would be making a presentation on our strategic supply

management efforts and our affiliation with UMCSC Mr. Ellis noted that the last presentation he’d made to this Committee was in May, then utilized the presentation included in the agenda packet as Addendum A

to provide information to the Committee SLIDE 2 – ANNUAL OPERATING BUDGET KEY PLAN DRIVERS

o We are pursuing $3M as a starting point for supply expense reductions in the budget for this year, including the absorption of inflation o When we joined UMCSC, which is now known by the new name of Captis, there were about 64 other members, and now there are about 70

Captis is a Latin term meaning “to hold the attention of” and “to capture” o All the listed risks are always going to be present

SLIDE 3 – OPPORTUNITIES AND RESULTS o As of October 1, 2017, we had achieved just under $3M in savings o We are currently reviewing/negotiating 96 new contracts that will provide additional savings opportunities

The easy opportunities have been captured, but we still have $1.6M more in opportunity through the remainder of the year o Out of 8 new members, Palomar Health placed Second in voting for the 2017 Captis New Member of the Year Award

SLIDE 4 – CAPTIS RESULTS AND OPPORTUNITIES o Provides a sample of some of the savings we’ve achieved through pricing improvements

22

DRAFT



DISCUSSION

SLIDE 5 ‐ NON‐CAPTIS RESULTS AND OPPORTUNITIES o Provides detail on both completed and in‐progress savings opportunities

SLIDE 6 – BENCHMARK MEASUREMENTS o On the HCO Index Comparison graphic, our goal is to be closer to the bottom left o The opportunity ratio of 9.5% indicates the value opportunity at the optimal pricing (best tier) with the benchmarking comparison tool (PriceLYNX)

The calculation is: $45M X 9.5% = $4,275,000 o Index Trend

If Mr. Ellis is doing his job of cost reductions properly, this number should be going down, and it has been reduced from 50.7 in April 2017 to 47.6 in October 2017

Results are partly collectively, partly due to partnerships with other organizations Over the last few months, there has also been pricing improvement through Captis If we do nothing, the number will continue to go down, as it lags, but we will continue to review supply spend and continue with all of our other

expense management efforts SLIDE 7 – FY2018 Quarter 1 Results

o The Prosthesis line includes implants, etc. o Volume is less than quarter one of last fiscal year o Units of Service (UOS)

The first column is just a comparison to the fixed budget, not adjusted to volume (e.g., dollars budgeted/dollars spent) The UOS for surgeries is “per case” The UOS is broken down based on volume for each category (e.g., based on the volume we had, what SHOULD the amount have been)

o Adjusted Bud (Adjusted Dis) are based on adjusted discharges for the entire system (e.g., here’s how much we spent and here’s how much we should have spent based on volume);

SLIDE 8 – OPERATING BUDGET Q1 VARIANCE IMPACT & HIGHLIGHTS o There is a lag with the Captis contract, as it usually takes 30‐45 days for the contract to be activated o There is also higher volume in some areas o There are variances in costs due to complications in procedures [e.g., Transcatheter Aortic Valve Replacement (TAVR), which is a less invasive procedure, but

carries high costs] TAVR is for patients who otherwise couldn’t get treatment, or for the sickest of the sick

o Captis rebates accounted for as revenue as opposed to being credited to the Supply Account o Volume Increases

There have been both a higher number and more complexity in the spine cases Cardiac Rhythm Management (CRM) utilizes pacemakers and other implantable cardiac devices, and we’ve seen a substantial growth in that area

o Hurricane Maria destroyed/damaged 88 manufacturing plants in Puerto Rico, and we’ve had to source from others due to that devastation, at an additional unanticipated cost of over $200K

o We also need to make sure we’re getting revenue from revenue‐producing procedures

23

DRAFT



DISCUSSION

Committee Q&A o Doesn’t the risk increase as you sign additional contracts?

There’s substantial risk in everything we do; however, we don’t want to source from just one manufacturer due to the potential for recalls, etc. o Is the government keeping up with our increases in costs?

Probably not, as we do get specific increases from Medicare, but they don’t cover the entire increases in costs o If CMS ever really moves into bundled payment and sticks with it—say ours is $30K—will we be able to work within that budget or will we lose money?

A lot of the supply categories are wrapped into DRGs, so we don’t get reimbursed for the specific procedure Frank Beirne, EVP Operations, noted that some of the technology isn’t factored into the Medicare program or our managed care contracts Are there options for not doing those procedures, and if we’re tied into a contract, are we stuck there?

(a) We are continually reviewing service lines to ensure they’re making money, because if we’re not getting the expected reimbursement, why would we continue to do them?

Based on the volume increases and costs, are we doing okay with spine? (a) Even if you look at it by physician, there are variances from physician to physician based on their supply preference (b) Mr. Beirne stated that we are spreading information around the organization and have monitors in the ORs to ensure that our physicians are only

using the products that we’ve agreed to utilize, as they have been requested to either use the product, or we’re not going to allow that elective procedure at our facility

THROUGHPUT INITIATIVE o Utilizing the presentation uploaded to the Internet page (http://www.palomarhealth.org/media/BoardMeetings/ip_20171025_3685.pdf) under separate

cover and emailed to the Committee on Tuesday, October 24, 2017, Karen Buckley, CNO for PMC Escondido; Mel Russell, Director Clinical Operations Improvement; and Mary Scott, Interim Director Clinical Resource Management, discussed patient throughput

o Split into three subcommittees to help create a systems approach and attempt to make it optimal for patients (e.g., the right bed at the right time, discharge at the right time, with the ability to stay at home)

Ms. Buckley began with a review of Patient Focused Rounds SLIDE 3 – LENGTH OF STAY (LOS)/LEVEL OF CARE: BENCHMARK COMPARISONS

o Based on the appropriateness of each DRG SLIDE 4 – PATIENT FOCUSED ROUNDS

o Rounds are done on a daily basis with each unit, and last 30‐45 minutes Provides time to discuss each patient and allows time for proactive planning for any discharge goals Not bed‐to‐bed, instead reports to the supervisor room to get it concise, then will take to bedside as appropriate

SLIDE 5 – PATIENT FOCUSED ROUNDS (CONTINUED) o Rae Anne Watson at Escondido, and Arnold De Luna at Poway conducted facilitator training, training nurse managers first, then training the supervisors in

order to provide continuation over the weekend There were checklists on which they were graded, and Quorum was there to review the processes and provide guidance on how things could be done

better o The facilitators are watching other units to ensure that we’re standardized in these processes on all units

24

DRAFT



DISCUSSION

SLIDE 6 – TIMELINE REVIEW o We have pretty well achieved what we need to do and just need to ensure that it’s hardwired, and the transition process has now begun

In response to a question about when patient throughput actually began, Ms. Buckley indicated that it was in 2013, but that we weren’t doing it this way until March 2017 o Mr. Beirne noted that the work that was being done wasn’t being done as efficiently, especially as service lines changed, moved, etc. o Ms. Buckley stated that she would anticipate that we’ll be doing patient throughput as part of our daily routine forever

SLIDE 7 – BED MANAGEMENT o Mr. Russell commented that throughput has the most touchpoints of anything else for a patient, and communication among the nursing units, management

and the physicians has shown the greatest improvement o Bed management’s goal is to decrease each of the touchpoints by 5 minutes, then we get the patient discharged following review by a physician and have 25

minutes less LOS SLIDE 10 – SMOOTHING

o We are looking at everything we can make smoother from point of entry through point of discharge Dashboard metrics have been developed with the assistance of Quorum Health We also utilize technology enablers, and are currently using Teletracker

SLIDE 11 – CAPACITY o If one clicks on the System Status dashboard on the Intranet, it provides information on capacity and directions to documentation for appropriate procedures

to follow SLIDE 12 – TIMELINE REVIEW

o Mr. Russell thanked the Executive Management Team for their support of the changes implemented in the timeline The telemetry protocol is being presented at several boards before implementation, and the district‐wide transfer center planning is in its infancy

SLIDE 13 – DASHBOARD METRICS o There are 4 quadrants designed to review status and manage to expectations o In response to an inquiry about the biggest two or three barriers, Mr. Russell indicated that they’ve identified a lot of ways to decrease the metrics as a team,

and he doesn’t really believe there are barriers SLIDE 14 – CASE MANAGEMENT/DISCHARGE PLANNING

o Ms. Scott indicated that she is now in her ninth week as the Interim Director of CRM The Case Management team does clinical work as well as working with payors The patient population with which they deal is pretty complicated, both physically and socio‐economically They also must maintain compliance with regulatory mandates

SLIDE 16 – CARE MANAGEMENT COORDINATION MODEL o This is a model Ms. Scott developed with a colleague o Unplanned admissions come through the ED, and they are looking at putting Social Workers in the ED soon o Care Progression puts all resources together o Care Transition are to post‐acute care

25

DRAFT



DISCUSSION

o Staff will be held accountable to national standards of practice SLIDE 17 ‐ CASE MANAGEMENT & CARE COORDINATION PROCESS

o We currently have nurses doing utilization review, and we need to move some of them back to the bedside o Plan of care can change by the minute o Medicare is very concerned about the care and safety of patients

SLIDE 18 – CURRENT FUNCTIONS: CRM DEPARTMENT o The CRM assistants work with the registered nursing staff and social works, elbow‐to‐elbow, to assist in the care progression and discharge planning

In response to a question about Slide 3, Jeannette Skinner, Vice President PMC Poway, noted that in determining LOS/Level of Care, a determination has to be made regarding what the best resource is for each patient, as well as the admissions criteria for each area, and there are many interrelated corollaries that are beyond the pinnacle of the practice paradigm o It may not even be a clinical practice, as getting the room cleaned or not can also cause a bottleneck o All are tracked under specific metrics, and we define what matters and track those metrics

We’re looking at the days/hours, and also looking at the level of care from the ED to the appropriate bed

Contract Labor o Diane Hansen, EVP Finance, discussed the Contract Labor Initiative, in follow‐up to budget discussions and efforts to reduce contract labor, noting that there

was no current impact to the budget

2. MINUTES – WEDNESDAY, SEPTEMBER 27, 2017

MOTION: By Director Gorzeman, seconded by Director Sison, and carried to recommend approval of the Minutes from the Wednesday, September 27, 2017, meeting – 5‐0 by the Committee, 3‐0 by Board members, Absent: 1

Y

No discussion

3. SUMMARY OF EXECUTED, BUDGETED, ROUTINE PHYSICIAN AGREEMENTS

MOTION: By Director Gorzeman, seconded by Director Sison, and carried to recommend approval of the Executed, Budgeted, Routine Physician Agreement for QMC Chair with Dr. Pasha – 5‐0 by the Committee, 3‐0 by Board members, Absent: 1

Forwarded to the November 13, 2017, Board of Directors meeting with a recommendation for approval

Y

Ms. Hansen indicated that she would like to pull the sleep lab physician agreement from the packet as there were some questions about FMV that needed to be answered before presentation to the Board

4. SEPTEMBER 2017 & YTD FY2018 FINANCIAL REPORT

MOTION: By Director Gorzeman, seconded by Director Sison and carried to recommend approval of the September 2017 & YTD FY2018 Financial Report as presented – 5‐0 by the Committee, 3‐0 by Board members, Absent: 1

Forwarded to the November 13, 2017, Board of Directors meeting with a recommendation for approval

N

Utilizing the presentation included as Addendum D in the agenda packet, Ms. Hansen reviewed the September financial report, noting that volume is still challenge o In response to an inquiry from the Committee regarding whether the lack of volume was county‐wide, Ms. Hansen indicated that we had a couple of surgeons

out, and deliveries had been down; however, in terms of the industry, the lack of volume is across the board

26

DRAFT



DISCUSSION

o She also noted that our reduction of LOS isn’t enough to say that initiative would be driving the lack of volume o We are anticipating a pretty significant flu season, but she doesn’t expect any large volume increases in the next couple of months

EXECUTIVE DASHBOARD – SEPTEMBER (SLIDE 3) o Adjusted Discharges – at 3,960 vs. a budget of 4,250 – had a negative variance of 6.82% o Acute Patient Days – at 9,122 vs. a budget of 10,131 – had a negative variance of 9.96% o Average Daily Census – at 304 vs. a budget of 338 – had a negative variance of 10.06% o Surgeries – at 1,253 vs. a budget of 1,291 – had a negative variance of 38

Inpatient Surgeries – at 731 vs. a budget of 759 – had a negative variance of 28 Outpatient Surgeries – at 522 vs. a budget of 532 – had a negative variance of 10

o Deliveries – at 387 vs. a budget of 375 – had a positive variance of 12 Kaiser deliveries – at 109 vs. a budget of 100 – had a positive variance of 9

o ER Visits – at 11,204 vs. a budget of 11,713 – had a negative variance of 4.35% o Operating Income – at $570K vs. a budget of $968K – had a negative variance of $398K, which was a lot better than had been anticipated

YTD Operating Income – at $1.14M vs. a budget of $4.31M – had a negative variance of $3.17M o Net Income – at a negative $857K vs. a budgeted negative $1M – had a positive variance of $143K o Operating Expenses/Adjusted Discharge – at $14,320 vs. a budget of $13,142 – had a negative variance of almost 9% o Average LOS – at 3.84 vs. a budget of 3.85 – had a slight positive variance of .26%

YTD Average LOS – at 3.88 vs. a budget of 3.85 – had a slight negative variance of .78% o YTD Case Mix – at 1.7 vs. a budget of 1.66 – had a positive variance of 2.41% o YTD Labor Productivity – at 95.5% vs. a budget of 100% ‐ had a negative variance of 4.5% o Days Cash on Hand – at 101.2 vs. a fiscal year‐end target of 131 – had a negative variance of 22.8%

Ms. Hansen reminded the Committee that she had previously indicated that it would be lower this month due to cash outlays In August and September 2 tranches of cash went to the state for IGT

(a) The first tranche was about $9M (b) Should see one of those come back in the month of October, which should help to offset the bond P&I of about $24M that will be paid out that

month (c) The other will likely not come through until November

The team is working to bring in cash o YTD Operating Income – at $1.1M vs. a budget of $4.3M – had a negative variance of $3.2M

Management has been having some great conversations in back to budget meetings and will be providing more of those thoughts to flesh through this Committee and on to the Board in the coming months

o YTD Net Income – at a $2.7M loss vs. a budgeted $1.6M loss – had a negative variance of $1.1M o YTD Operating Expenses/Adjusted Discharge – at 14,439 vs. a budget of 12,960 – had a negative variance of 11.41%

INCOME STATEMENT: MONTH‐TO‐DATE (SLIDE 4) o Ms. Hansen noted that Steve Ellis had talked about rebates from Captis, which are captured on the financial statements as Other Operating Revenue

27

DRAFT



DISCUSSION

o Total Net Revenue – at $60.9M vs. a budget of $60.7M – had a positive variance of $170K o Salaries, Wages & Contract Labor – at $26.4M vs. a budget of $26.2M – had a negative variance of $129K

We are still struggling, but that is better than it has been over the last 2 months It was favorable on a salary and wage basis by $386K, but contract labor was unfavorable by $500K We are doing a better job and putting focused efforts on reductions

o Supplies – at $8.8M vs. a budget of $8.0M – had a negative variance of $858K Variance was implant‐driven, so the team is looking at cost per case and digging into those numbers

o Professional Fees – at $11.2M vs. a budget of $11.0M – had a negative variance of $140K Not a lot in the actual pro fees side The invoices for the temporary parking lot were anticipated to have hit last fiscal year, but we had $500K in invoices and expenses that didn’t hit until this

fiscal year o Other – at $3.3M vs. a budget of $3.2M – had a negative variance of $66.9K

A large portion of that was due to utilities and the use of more air conditioning during the heat wave o Non‐operating revenues net – at negative $2.8M vs. a budgeted negative $3.3M – had a positive variance of $541K

Due to some budgeted dollars for the cleanup of the Downtown Escondido campus and the Ramona property Favorability is that we haven’t taken all of that yet and will continue the clean‐up over the remainder of the fiscal year

INCOME STATEMENT: YEAR‐TO‐DATE (SLIDE 5) o Ms. Hansen indicated that—unless there were specific questions—she would not cover this slide

There were no questions CURRENT VS. PRIOR YEAR‐TO‐DATE (SLIDE 6)

o Income from Operations – at $1.1M vs. a budget of $3.6M – had a negative variance of $2.5M PAYOR MIX (SLIDE 10)

o No significant changes

5. BALANCED SCORECARD – FINANCE PILLAR Information only Forwarded to the November 13, 2017, Board of Directors meeting as information

N

Ms. Hansen was prepared to utilize the presentation included in the agenda packet to review the September Balanced Scorecard results, but noted that a good portion of the information had already been discussed during the financial discussions o As there was another meeting immediately following this one, she suggested that the members of the Committee review the documentation at their leisure

after the meeting

PUBLIC COMMENTS

None filed

ADJOURNMENT The meeting was adjourned by Chair Kaufman at 5:56 p.m.

SIGNATURES: COMMITTEE CHAIR

28

DRAFT



DISCUSSION

JERRY KAUFMAN, PT MA

COMMITTEE

ASSISTANT

TANYA HOWELL

29

tlhd

Typewritten Text

1

BOARD FINANCE COMMITTEE CALENDAR YEAR 2017

ATTENDANCE ROSTER MEETING DATES:

MEMBERS 1/25/17 2/22/17 3/22/17 5/2/17 6/5/17 6/28/17 7/26/17 8/23/17 9/27/17 10/25/17 11/29/17

DIRECTOR JERRY KAUFMAN, PT MA – CHAIR P P P P P P P P P P P

DIRECTOR JOY GORZEMAN, RN P P P P P P P P P P P

DIRECTOR HANS C. SISON, LVN P P P P E P P E P P P

DIANE HANSEN, INTERIM PRESIDENT & CEO P

FRANK MARTIN, MD COS PALOMAR MEDICAL CENTERS ESCONDIDO &

DOWNTOWN ESCONDIDO P P P E P P P P E E P

CHARLES CALLERY, MD COS PALOMAR MEDICAL CENTER POWAY

P P P P P P P P P P P

DIRECTOR JEFF GRIFFITH, EMT‐P – ALTERNATE

SABIHA PASHA, MD ALTERNATE COS PALOMAR MEDICAL CENTERS ESCONDIDO & DOWNTOWN ESCONDIDO

ALT ALT

EDWARD GURROLA, MD ALTERNATE COS PALOMAR MEDICAL CENTER POWAY

BOB HEMKER, PRESIDENT & CEO P P P P P P P P P E

STAFF ATTENDEES

HUGH KING, INTERIM CHIEF FINANCIAL OFFICER P

FRANK BEIRNE, EVP OPERATIONS P P P P P P P P P P P

ALAN CONRAD, MD, EVP PHYSICIAN ALIGNMENT E P E P P P P E P P P

LARRY LABOSSIERE, RN CNO PALOMAR MEDICAL CENTERS POWAY &

DOWNTOWN ESCONDIDO P P E E E E E P P E P

KAREN BUCKLEY, RN CNO PALOMAR MEDICAL CENTER ESCONDIDO

P P P P P P E E E P P

TANYA HOWELL – ASSISTANT P P P P P P P P P P P

DIANE HANSEN, EVP FINANCE P P P P P P P P P P

INVITED GUESTS SEE TEXT OF MINUTES FOR NAMES OF GUEST PRESENTERS

30

tlhd

Typewritten Text

ADDENDUM B

DRAFT

BOARD FINANCE COMMITTEE – MEETING MINUTES – WEDNESDAY, NOVEMBER 29, 2017


DISCUSSION

CALL TO ORDER

The meeting – held in the Raymond Family Conference Center on the 2nd floor of Palomar Medical Center, 2185 Citracado Parkway, Escondido, CA – was called to order at 4:30 p.m. by Chair Kaufman, who requested that all cell phones be turned off or set to silent mode

ESTABLISHMENT OF QUORUM

Quorum was established – see roster for details

NOTICE OF MEETING

The agenda (as Notice of Meeting) was posted at Palomar Health’s Administrative Office, which is consistent with legal requirements. The full agenda packet was posted on the Palomar Health web site, on Wednesday, November 22, 2017; and notice of that posting was made via email to the Board and staff.

ADJOURNMENT TO EXECUTIVE SESSION

~ Pursuant to California Government Code §54954.5(h) REPORT INVOLVING TRADE SECRET Discussion will concern proposed new service Estimated date of public disclosure: May 2017

RESUMPTION OF OPEN SESSION

The Open Session was called to order at 4:59 p.m. by Chair Kaufman

ACTION RESULTING FROM EXECUTIVE SESSION DISCUSSION – IF ANY

None

PUBLIC COMMENTS

None filed

INFORMATION ITEMS

Diane Hansen, Interim President & CEO, stated that the minutes from the previous meeting had not yet been finalized, so presentation for approval would need to be postponed until the January 2018 meeting

1. APPROVAL: RESOLUTION NO. 12.11.17(12)‐01 OF THE BOARD OF DIRECTORS OF PALOMAR HEALTH DESIGNATING SUBORDINATE OFFICERS OF THE DISTRICT

MOTION: By Director Gorzeman, seconded by Director Sison, and carried to recommend approval of Resolution No. 12.11.17(12)‐01 of the Board of Directors of Palomar Health Designating Subordinate Officers of the District as presented – 6‐0 by the Committee, 3‐0 by Board members, Absent: 0

Forwarded to the December 11, 2017, Board of Directors meeting with a recommendation for approval.

Y

31

DRAFT



DISCUSSION

2. OCTOBER 2017 & YTD FY2018 FINANCIAL REPORT MOTION: By Director Gorzeman, seconded by Director Sison, and carried to recommend approval of the October 2017 & YTD FY2018 Financial Report as presented – 6‐0 by the Committee, 3‐0 by Board members, Absent: 0

Forwarded to the December 11, 2017, Board of Directors meeting with a recommendation for approval.

Chair Kaufman indicated that he would be interested to know whether patients presenting at the ER really need the ER or if they should actually have been seen in an Urgent Care setting

o Frank Beirne, EVP Operations, indicated that he would partner with the ER group and obtain a breakdown by level, which will also allow management to track those stats

N

Utilizing the presentation included as Addendum A of the agenda packet, Ms. Hansen presented the October 2017 and YTD FY2018 financial statements o Ms. Hansen introduced Hugh King, the new Interim Chief Financial Officer, who she has brought on board to help improve financial performance over

the next few months EXECUTIVE DASHBOARD – (SLIDE 3)

o Adjusted Discharges – at 4,046 vs. a budget of 4,391 – had a negative variance of 7.86% o Acute Patient Days – at 9,790 vs. a budget of 10,469 – had a negative variance of 6.49%

YTD Acute Patient Days – at 37,692 vs. a budget of 41,538 – had a negative variance of 9.26% Although volume continues to plague us, it appears to be a national phenomenon and is not just unique to us

o Average Daily Census – at 316 vs. a budget of 338 – had a negative variance of 6.51% o Surgeries – at 1,313 vs. a budget of 1,334 – had a negative variance of 21

Inpatient Surgeries – at 800 vs. a budget of 784 – had a positive variance of 16 Outpatient Surgeries – at 513 vs. a budget of 550 – had a negative variance of 37 Although the negative variance in Surgeries is continuing, being down 21 doesn’t present concerns, even though it is always nice to see those

volumes a little higher In response to an inquiry regarding whether Outpatient Surgeries could be broken out by type, Ms. Hansen replied, “Yes” In response to an inquiry regarding whether we could track where the surgeries that aren’t coming here are going, the answer was, “No” Kaiser has been very close to average for the past 12 months

32

DRAFT



DISCUSSION

o Deliveries – at 358 vs. a budget of 387 – had a negative variance of 29 Kaiser Deliveries – at 91 vs. a budget of 100 – had a negative variance of 9

o ER Visits – at 12,295 vs. a budget of 11,832 – had a positive variance of 463 o Average LOS – at 4.00 vs. a budget of 3.85 – had a negative variance of 3.90%

YTD Average LOS – at 3.92 vs. a budget of 3.85 – had a negative variance of 1.82% o Case Mix – at 1.73 vs. a budget of 1.65 – had a positive variance of 4.85%

Higher than had been anticipated YTD Case Mix – at 1.70 vs. a budget of 1.65 – had a positive variance of 3.03%

o Days Cash on Hand were at 87.1 vs. a fiscal‐year‐end target of 13 There have been several big cash outlays over the last couple of months for IGT, but we did receive one check back from IGT in early November for

$18M o Operating Income – at $291K vs. a budget of $1.1M – had a negative variance of $825K

Lower volumes made it hard to make back the revenue o Net Income was a Net Loss of $534K vs. a budgeted Net Loss of $3.8M – a positive variance of $3.3M

The budgeted loss had anticipated cleanup of assets and CIPs at the Downtown Escondido campus, and we hope to be closer to budget by year‐end o Operating Expenses/Adjusted Discharge– at $14.4K vs. a budget of $12.7K – had a negative variance of 13.11%

Contract labor efforts in SWC should help get us closer to the budgeted number o EBIDA Margin – at 8.38% vs. a budget of 4.15% ‐ had a positive variance of 4.23%

INCOME STATEMENT – MONTH‐TO‐DATE (SLIDE 4) o SWC – at $28.1M vs. a budget of $26.8M – had a negative variance of $1.2M

Contributors: $500K from Stop the Line training; PEP bonus payouts of $140K; Contract Labor of $586K o Supplies at $9.3M vs. a budget of $8.2M – had a negative variance of $1.1M

Contributors: $500K in implants Surgical volume with a total of 21 cases below budget

(a) We are doing higher‐cost cases, and in the cardiovascular arena we’ve done twice as many as last year (i) It is a good service line for us to be increasing

$400 in Pharmaceuticals (a) Challenges with drug shortages, as the hurricane wreaked havoc on numerous manufacturing facilities

$200K in General Surgery, with $110K just for sutures/needles At last month’s meeting, Steve Ellis, Director of Supply Chain Services, spoke about all the efforts he has underway and the initiatives as part of our

Mayo network to reduce costs, but we’re still struggling to get them under control o Pro fees – at $10.8M vs. a budget of $10.3M – had a negative variance of $538K

Consulting and legal fees, and there were also some accruals related to incentive comp for professional services These should be back to budget by the end of the year

o None of the union increases have been applied at this point, and since the contract wasn’t extended, there won’t be any retroactive monies to pay out

33

DRAFT



DISCUSSION

INCOME STATEMENT YTD (SLIDE 5) o We are seeing the same things as with MTD and are putting some processes in place to work back to budget

3. BALANCED SCORECARD – FINANCE PILLAR Information Only Forwarded to the December 11, 2017, Board of Directors meeting as information.

Y

Utilizing the presentation submitted under separate cover as Addendum B, Ms. Hansen reviewed the Finance Pillar of the Balanced Scorecard (BSC)

FINANCE PILLAR – CONSOLIDATED (SLIDE 1)

o There is still inconsistent use of the LEM tool, so we need to get everyone engaged in its use

As we’ve been working through the BSC, questions regarding what needs to be reported and the nuances being reviewed have arisen

LEM is the tool provided by Studer

o Status – 3 is a medium target; 2.92 is the actual

FINANCE STATUS REPORT – ORGANIZATION LEVEL (SLIDE 2)

o Everything that was in the financials is driving the results on this page

FINANCE STATUS REPORT – LEADER LEVEL (SLIDE 3)

o These results should mimic consolidated, but it’s generally only the higher‐level performers who are utilizing the tool and completing their LEM entries

BOARD MEMBER QUESTIONS

Director Gorzeman asked why the bond refinancing hadn’t been on today’s agenda, and Ms. Hansen indicated that there were still too many moving pieces that wouldn’t have been ready

o Numerous documents are still in process, the stub audit hasn’t yet been completed, and the team is still having weekly calls to ensure that we are on track to close before December 31st

o That discussion and request for approval will be provided at the full Board meeting on December 11th, and Ms. Hansen promised that the documentation would be posted and distributed to the Board prior to the meeting

PUBLIC COMMENTS

None

FINAL ADJOURNMENT MOTION: The meeting was adjourned by Chair Kaufman at 5:23 p.m.

SIGNATURES:

COMMITTEE CHAIR

JERRY KAUFMAN, PT MA

COMMITTEE ASSISTANT

TANYA HOWELL

34

35

tlhd

Typewritten Text

ADDENDUM C

1

Board of Directors – Finance Committee

Notable Accomplishments for Calendar Year 2017

The Finance Committee is comprised of three Directors from the Palomar Health Board of Directors (with identified alternates on an as‐needed basis), the Chiefs of Staff from Palomar Medical Centers Escondido & Downtown Escondido and Poway (with identified alternates on an as‐needed basis), and the Interim President & CEO. All members are voting members, and the Committee is a recommending body to the full Board of Palomar Health, where final action is taken. Under the leadership of Chair Jerry Kaufman, PT MA, the seated members for calendar year 20176 were:

Jerry Kaufman, PT MA – Director and Chair Frank Martin, MD Hans C. Sison, LVN – Director Charles Callery, MD Joy Gorzeman, RN – Director Bob Hemker/Diane Hansen

With the following exceptions, the Committee met monthly: (The May meeting, which was held the first week of June; and the December meeting, which was combined into a joint meeting for November/December, held the last week in November). At each meeting, the Committee conducted its Regular Business Matters agenda and reviewed/acted on informational/actionable agenda items. Following is a summary listing of notable accomplishments.

REGULAR BUSINESS MATTERS

Reviewed the order of actions to be taken by Executive Leadership, Management and Financial Planning in order to draft the FY2018 Capital and Operating Budgets to meet a presentation deadline to the Board of June 2017

Reviewed in detail and recommended for approval the District’s comprehensive monthly and Year‐to‐Date Financial Statements

Reviewed in detail the Balanced Scorecard Results for the Finance Pillar and the performance improvement efforts necessary to ensure June 2018 goals will be achieved

Reviewed in detail and recommended approval of several amendments to the Management Services Agreement with the Palomar Health Foundation, all of which had previously received approval by the Palomar Health Foundation Board

Annual/periodic review and recommendation for adoption of:

o Finance Committee Bylaws

o Board Responsibilities – Finance Committee

o Resolution Setting Property Tax Appropriations Limits

o Resolution Setting GO Bond Tax Levy and request to San Diego County for collection

o Board Policies

– Annual Adoption of Statement of Investment

– Annual Budget Approval

36

tlhd

Typewritten Text

tlhd

Typewritten Text

tlhd

Typewritten Text

2

Board of Directors – Finance Committee

Reviewed and recommended approval of numerous renewals and new agreements between the District and medical staff physicians:

o For medical services provided to the District, including those related to department closure

o For services rendered by members of the medical staff

Reviewed updates regarding the District’s Supply Chain efforts, including:

o An overview of the Supply Chain Department

o The Supply Chain Strategy, Performance and Outcomes

o Plans for supply savings in FY2018, including ongoing expense management programs within the District

o The District’s affiliations with the Group Purchasing Organization, Vizient, and our new aggregation network, Captis

Reviewed an update on the District’s Patient Throughput Initiative

Reviewed and recommended approval of separate Resolutions designating authorized officers/signatories for the District in accordance with changes in Board and Executive Management Team memberships

Reviewed and recommended approval of the 5‐Year Strategic Financial and Capital Plan for the District, which had been updated to reflect audited results for FY2016, the Board‐approved budget for FY2018, and baseline financial projections for FY2018‐2022

37

38

tlhd

Typewritten Text

ADDENDUM D

Palomar Medical Center Escondido Administrative Services Agreement

Medical Staff Department Chair

2016 Form A – Department Chair Contract

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Maria Sudak, VP Palomar Medical Center Escondido Background: Palomar Medical Center Escondido Medical Staff Department and Committee Chairs are provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Department and Committee Chairs to Palomar Health, and the duties to be performed as consideration for the stipend to assure compliance with Federal regulations.

Presented is the Contract for the following Department Chair:

Chair, Department of Family Medicine – James H. Schultz, M.D.




COMMITTEE RECOMMENDATION: Motion: X Individual Action: Information: Required Time:

39

tlhd

Typewritten Text

tlhd

Typewritten Text

PALOMAR HEALTH – AGREEMENT ABSTRACT Section

Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair Agreement AGREEMENT DATE July 1, 2016

PARTIES Family Medicine Department Chair – James Schultz, M.D.,

Palomar Medical Center Escondido Medical Staff, and Palomar Health

PURPOSE To provide administrative services on behalf of the Palomar Medical Center Escondido Medical Staff in accordance with Medical Staff Bylaws, Plans and Policies.

SCOPE OF SERVICES As per duties defined in the Palomar Medical Center Escondido Medical Staff Bylaws and Policies.

PROCUREMENT METHOD

Request For Proposal Discretionary

TERM July 1, 2016 – December 31, 2017

RENEWAL Automatic renewal for additional one year term unless terminated.

TERMINATION As described under §10

COMPENSATION METHODOLOGY

Monthly

FAIR MARKET VALUATION

Yes No – Date Completed:

BUDGETED YES NO – IMPACT:

EXCLUSIVITY NO YES – EXPLAIN:

JUSTIFICATION Position elected by the Medical Staff in accordance with Medical Staff Bylaws.

AGREEMENT NOTICED YES NO Methodology & Response: Elected by the Palomar Medical Center Escondido Medical Staff

ALTERNATIVES/IMPACT N/A

Duties Provision for Staff Education Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development Defined in the Palomar Medical Center Escondido Medical Staff Bylaws

COMMENTS

APPROVALS REQUIRED VP CFO CEO BOD Committee ____________ BOD

40


Medical Staff Chief of Staff Elect

Form A - Dr Pasha - CoS Elect PMCE.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Maria Sudak, VP PMC Escondido Background: Palomar Medical Center Escondido Medical Staff Chief of Staff and Chief of Staff Elect are provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Chief of Staff Elect to Palomar Medical Center Escondido, and the duties to be performed as consideration for the stipend to assure compliance with Federal regulations.

Presented is the Contract for the following:

Chief of Staff Elect – Sabiha Pasha, M.D.

Budget Impact: None




41


Reference

Term/Condition

Term/Condition Criteria TITLE Chief of Staff Elect Agreement

AGREEMENT DATE 11/01/2016

PARTIES Chief of Staff Elect – Sabiha Pasha, M.D., Palomar Medical

Center Escondido Medical Staff, and Palomar Health



PROCUREMENT METHOD


TERM 11/01/2016 – 12/31/2019

RENEWAL None



Monthly





JUSTIFICATION Chief of Staff Elect position elected by the Medical Staff in accordance with Medical Staff Bylaws.




COMMENTS


42

Agreement For Services – Mission Infectious Disease and Infusion Consultants Inc.

Form A - Mission Infusion ASP.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Alan Conrad, MD, Chief Physician Alignment Officer Background: Mission Infectious Disease and Infusion Consultants, Inc., will provide physician oversight of the Antimicrobial Stewardship Program (ASP), a program required by the State of California.

Budget Impact: Budgeted

Staff Recommendation: Approval of the Agreement for Services – Mission Infectious Disease and Infusion Consultants, Inc., and recommend approval by the full Board of Directors.



43


Reference

Term/Condition

Term/Condition Criteria TITLE ANTIBIOTIC STEWARDSHIP PROGRAM MEDICAL DIRECTOR

AGREEMENT AGREEMENT DATE 10-26-16

PARTIES Mission Infectious Disease and Infusion Consultants, Inc.

PURPOSE Mission Infectious Disease and Infusion Consultants, Inc.

will provide physician oversight of the Antimicrobial Stewardship Program (ASP), a program required by the state of California.

SCOPE OF SERVICES Antimicrobial stewardship PROCUREMENT

METHOD Request For Proposal Discretionary

TERM 1 year

RENEWAL Auto-renewal annually

TERMINATION 30 days after written notice of termination is received by the other party.


YES NO – DATE COMPLETED: 1/12/18


Per hour



JUSTIFICATION Replaces existing agreement.

AGREEMENT NOTICED YES NO Methodology & Response:

ALTERNATIVES/IMPACT This contract transitions medical directorship to the infectious disease specialist who has the highest volume of referrals at Palomar Health, and is therefore in a better position to influence other medical staff members.

Duties Provision for Staff Education Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development

COMMENTS


44

Palomar Medical Center Poway Administrative Services Agreement

Medical Staff Chief of Staff

Form A - Callery.cos.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Chief of Staff is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Chief of Staff to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.

Presented is the contract for the following:

Chief of Staff – Charles Callery, M.D.

Budget Impact: None

Staff Recommendation: Approval.



45


Reference

Term/Condition

Term/Condition Criteria TITLE Chief of Staff Contract

AGREEMENT DATE

1/1/17 PARTIES

Charles Callery, M.D. and Palomar Medical Center Poway

PURPOSE To provide administrative services on behalf of the Palomar Medical Center Poway Medical Staff in accordance with the Medical Staff Bylaws, Plans, and Policies.

SCOPE OF SERVICES As per duties defined in the Palomar Medical Center Poway Medical Staff Bylaws and Policies.

PROCUREMENT METHOD


TERM 1/1/17-12/31/19

RENEWAL None

TERMINATION As described under Section 5 of the contract.




Monthly



JUSTIFICATION Chief of Staff position elected by the Medical Staff in accordance with the Medical Staff Bylaws.

AGREEMENT NOTICED YES NO Methodology & Response: Elected by the Palomar Medical Center Poway Medical Staff.


Duties Provision for Staff Education Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development Defined in the Palomar Medical Center Poway Medical Staff Bylaws

COMMENTS


46






Chair, Department of Anesthesia – Mark Goldsworthy, M.D.





47


Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair Agreement AGREEMENT DATE January 1, 2017

PARTIES Anesthesia Department Chair – Mark Goldsworthy, M.D, Palomar

Medical Center Escondido Medical Staff, and Palomar Health



PROCUREMENT METHOD


TERM January 1, 2017 – December 31, 2019




Monthly









COMMENTS


48


Medical Staff Department Chair- Anesthesia

Form A - Grant.anesthesia.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Department Chair – Anesthesia, is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Department Chair – Anesthesia, to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Department Chair - Anesthesia – William Grant, M.D.

Budget Impact: None




49


Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair - Anesthesia

AGREEMENT DATE

1/1/17 PARTIES

William Grant, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/18

RENEWAL None





Monthly



JUSTIFICATION Department Chair - Anesthesia position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


50


Medical Staff Chief of Staff-Elect

Form A - Gurrola.coselect.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Chief of Staff-Elect is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Chief of Staff-Elect to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Chief of Staff-Elect – Edward Gurrola, M.D.

Budget Impact: None




51


Reference

Term/Condition

Term/Condition Criteria TITLE Chief of Staff-Elect Contract

AGREEMENT DATE

1/1/17 PARTIES

Edward Gurrola, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/19

RENEWAL None





Monthly



JUSTIFICATION Chief of Staff-Elect position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


52


Medical Staff Committee Chair – Quality Management Committee (QMC)

Form A - Gurrola.qmc.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Committee Chair – QMC, is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Committee Chair – QMC, to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Committee Chair – QMC – Edward Gurrola, M.D.

Budget Impact: None




53


Reference

Term/Condition

Term/Condition Criteria TITLE Committee Chair – Quality Management Committee (QMC)

AGREEMENT DATE

1/1/17 PARTIES

Edward Gurrola, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/19

RENEWAL None





Monthly



JUSTIFICATION Committee Chair - QMC position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


54


Medical Staff Committee Chair- Medical Staff Peer Review Committee (MSPRC)

Form A - Hansen.msprc.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Committee Chair – MSPRC, is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Committee Chair – MSPRC, to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Committee Chair - MSPRC – Allan Hansen, M.D.

Budget Impact: None




55


Reference

Term/Condition

Term/Condition Criteria TITLE Committee Chair – Medical Staff Peer Review Committee

(MSPRC)


PARTIES Allan Hansen, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/18

RENEWAL None





Monthly



JUSTIFICATION Committee Chair - MSPRC position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


56



2016 Form A – PMC Family Medicine Chair Contract



Chair, Department of OB/GYN – Shannon Hart, D.O.





57


Reference

Term/Condition


PARTIES OB/GYN Department Chair – Shannon Hart, D.O., Palomar




PROCUREMENT METHOD






Monthly









COMMENTS


58






Chair, Department of Psychiatry – Badalin Helvink, M.D.





59


Reference

Term/Condition


PARTIES Psychiatry Department Chair – Badalin Helvink, M.D., Palomar




PROCUREMENT METHOD






Monthly









COMMENTS


60


Medical Staff Department Chair- Psychiatry

Form A - Helvink.psychiatry.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Department Chair – Psychiatry, is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Department Chair – Psychiatry, to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Department Chair - Psychiatry – Badalin Helvink, M.D.

Budget Impact: None




61


Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair – Psychiatry

AGREEMENT DATE

1/1/17 PARTIES

Badalin Helvink, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/18

RENEWAL None





Monthly



JUSTIFICATION Department Chair – Psychiatry position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


62


Medical Staff Chief of Staff

Form a - PMC Chief of Staff Contract.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Maria Sudak, VP Palomar Medical Center Escondido Background: Palomar Medical Center Escondido Medical Staff Chief of Staff and Chief of Staff Elect are provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Chief of Staff to Palomar Health, and the duties to be performed as consideration for the stipend to assure compliance with Federal regulations.

Presented is the Contract for the following:

Chief of Staff – Franklin Martin, M.D.

Budget Impact: None




63


Reference

Term/Condition

Term/Condition Criteria TITLE Chief of Staff Agreement


PARTIES Chief of Staff – Franklin Martin, M.D., Palomar Medical Center

Escondido Medical Staff, and Palomar Health



PROCUREMENT METHOD


TERM 01/01/2017 – 12/31/2019

RENEWAL None



Monthly





JUSTIFICATION Chief of Staff position elected by the Medical Staff in accordance with Medical Staff Bylaws.




COMMENTS


64


Medical Staff Department Chair- OB/GYN

Form A - Langford.ob.gyn.122016.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, VP Palomar Medical Center Poway Background: Palomar Medical Center Poway Medical Staff Department Chair – OB/GYN, is provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Department Chair – OB/GYN, to Palomar Medical Center Poway and the duties to be performed as consideration for the stipend to assure compliance with federal regulations.


Department Chair – OB/GYN – Gregory Langford, M.D.

Budget Impact: None




65


Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair – OB/GYN

AGREEMENT DATE

1/1/17 PARTIES

Gregory Langford, M.D. and Palomar Medical Center Poway



PROCUREMENT METHOD


TERM 1/1/17-12/31/18

RENEWAL None





Monthly



JUSTIFICATION Department Chair – OB/GYN position elected by the Medical Staff in accordance with the Medical Staff Bylaws.




COMMENTS


66

Outpatient Sleep Lab Medical Director Agreement

Form A ‐ Outpatient Sleep Lab Medical Director Agreement.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Maureen Malone, MPA, HSA, AVP Clinical & Diagnostic Services Background: This is a one‐year extension of the current Medical Director Agreement with AKANE Institute of Allergy, Asthma, & Sleep Medicine (Anoop Karippot, MD).

Budget Impact: There is no variance impact to the budget as the cost of agreement is budgeted.

Staff Recommendation: Recommend approval



67


Reference

Term/Condition

Term/Condition Criteria TITLE AKANE Institute – Medical Directors Agreement

AGREEMENT DATE Original: 09-01-2014

Amendment: 09-01-2017 PARTIES AKANE Institute (Dr. Anoop Karippot) & Palomar Health

PURPOSE Medical Directorship for Sleep Laboratory

SCOPE OF SERVICES Medical oversight, program development and clinical quality.

PROCUREMENT METHOD

X Request For Proposal Discretionary

TERM This was a 1 year renewal of his 2 year tenure.

RENEWAL Yes

TERMINATION 08-31-2018


X YES NO – DATE COMPLETED: 01-11-2018


AMA FMV provided by Physician Development.

BUDGETED X YES NO – IMPACT:

EXCLUSIVITY X NO YES – EXPLAIN: He can be on medical staff at other facilities, but cannot be medical director for another lab.

JUSTIFICATION Require Medical Directorship for regulatory compliance and also to assist with achieving Sleep Lab certification of accreditation.

AGREEMENT NOTICED YES X NO Methodology & Response:

ALTERNATIVES/IMPACT

Duties X Provision for Staff Education X Provision for Medical Staff Education X Provision for participation in Quality Improvement X Provision for participation in budget process development

COMMENTS

APPROVALS REQUIRED VP CFO CEO X BOD Committee Finance BOD

68



2017 Form A – PMC Surgery Chair Contract

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Alan Conrad, M.D., Chief Physician Alignment Officer Background: Palomar Medical Center Medical Staff Department and Committee Chairs are provided a stipend for services performed as required by the Medical Staff Bylaws. This agreement serves to document the relationship of the Medical Staff Department and Committee Chairs to Palomar Health, and the duties to be performed as consideration for the stipend to assure compliance with Federal regulations.


Chair, Department of Surgery – Sandra Freiwald, M.D. on behalf of SCPMG





69


Reference

Term/Condition

Term/Condition Criteria TITLE Department Chair Agreement AGREEMENT DATE September 1, 2017

PARTIES Surgery Department Chair – Sandra Freiwald, M.D. on behalf of

SCPMG, Palomar Medical Center Escondido Medical Staff, and Palomar Health



PROCUREMENT METHOD


TERM September 1, 2017 – December 31, 2018

RENEWAL None



Monthly


NO YES – DATE COMPLETED: December 18, 2015







COMMENTS


70

AGREEMENT FOR SERVICE‐ EKG READING PANEL ARCH HEALTH MEDICAL GROUP

Board Finance 9‐27‐17

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Frank Beirne, Chief Operations Officer Background: Arch Health Medical Group (AHMG) has physicians who are members of the medical staff at Palomar Medical Center Escondido and Palomar Medical Center Poway, with clinical privileges relevant to Cardiology. Palomar Health has engaged AHMG to interpret EKG’s to assure uninterrupted coverage to inpatients, specifically unassigned patients who may require an EKG interpretation. This agreement compensates AHMG affiliated Cardiologists for their services from November 1, 2017, through October 31, 2019, using the 2017 Reimbursement rate for San Diego County – Medicare Code 93010 EKG Interpretation and Report.

Budget Impact: Unbudgeted.




71


Reference

Term/Condition

Term/Condition Criteria Recital TITLE Agreement for Service – EKG Reading Panel, Palomar Health

and Arch Health Medical Group

AGREEMENT DATE 11-1-17

Recital PARTIES Palomar Health and Arch Health Medical Group

Section F PURPOSE Ensure uninterrupted coverage to unassigned patients requiring EKG Interpretation

Section F SCOPE OF SERVICES EKG Interpretation

PROCUREMENT METHOD


Section 5 TERM November 1, 2017 through October 31, 2019

Section 5 RENEWAL No

Section 5 TERMINATION Either party may terminate the agreement by providing a 60-day written notice.

Section 4a.


YES NO – DATE COMPLETED: 2017 Medicare Reimbursement Rate for San Diego

Section 4a.


2017 Reimbursement Rate for San Diego – Medicare Code 93010 – EKG Interpretation and Report

BUDGETED YES NO – IMPACT: Minimal


Section C JUSTIFICATION Ensure timely and uninterrupted coverage for unassigned patients who may need an EKG interpretation.


ALTERNATIVES/IMPACT


COMMENTS


72

Anna Gelberg, MD Medical Director Agreement

PMC Poway

Board Finance ‐ Form A‐Anna Gelberg, MD ‐ Medical Director.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Jeannette Skinner, RN Vice President, PMC Poway Background: The term of the original contract expired. A new contract has been executed.

The contract represents the duties of the Medical Director in support of the Medical, Surgical and Telemetry Acute Care Units, and shall be responsible for the medical direction of the Program and the performance of the other medical administrative services as outlined to the reasonable satisfaction of the Hospital.

Budget Impact: None

Staff Recommendation: Approval Committee Questions:


73

PALOMAR HEALTH – AGREEMENT ABSTRACT

Section Reference

Term/Condition

Term/Condition Criteria

TITLE Medical Director Agreement

AGREEMENT DATE December 5, 2017

PARTIES Palomar Health Anna Gelberg, MD

PURPOSE To serve as Medical Director of the Medical, Surgical and Telemetry Acute Care and to ensure proper management of the Program.

SCOPE OF SERVICES Physician shall serve as medical director of the Medical, Surgical and Telemetry Acute Care Units and shall be responsible for the medical direction of the Program and the performance of the other medical administrative services set forth in the agreement, including all Physician’s duties as Medical Director shall include the duties listed in Exhibit A. Physician shall abide by all policies and procedures of the Medical Staff.

PROCUREMENT METHOD


TERM December 5, 2017 to November 21, 2018

RENEWAL None TERMINATION Either party may terminate this Agreement without cause upon

thirty (30) days’ prior written notice. FAIR MARKET

VALUATION YES NO – DATE COMPLETED: OCTOBER 5, 2017


Hospital shall pay Physician within sixty (60) days from receipt of Physician’s timesheets. The parties agree that the payment of the compensation provided is expressly conditioned upon Physician preparing and submitting complete and accurate logs as required under Section 5 of the agreement.



JUSTIFICATION Hospital owns and operates several acute hospitals and other facilities, which require physician leadership and support of the Medical, Surgical and Telemetry Acute Care Units at Pomerado Hospital aka PMC Poway “Program”


ALTERNATIVES/IMPACT Medical oversight is needed for the “Program”. Duties Provision for Staff Education

Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development

COMMENTS APPROVALS REQUIRED X- VP X-CFO XCEO XBOD Committee Finance X-BOD

74

AGREEMENT FOR SERVICE‐ EKG READING PANEL GRAYBILL MEDICAL GROUP

Board Finance ‐ Form A ‐ EKG Reads ‐ Graybill.doc

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Frank Beirne, Chief Operations Officer Background: Graybill Medical Group has physicians who are members of the medical staff at Palomar Medical Center Escondido and Palomar Medical Center Poway, with clinical privileges relevant to Cardiology. Palomar Health has engaged Graybill to interpret EKG’s to assure uninterrupted coverage to inpatients, specifically unassigned patients who may require an EKG interpretation. This agreement compensates Graybill affiliated Cardiologists for their services from November 1, 2017, through October 31, 2019, using the same rate utilized by the Arch Health Partners on‐call Cardiologists.

Budget Impact: Unbudgeted.




75


Reference

Term/Condition

Term/Condition Criteria Recital TITLE Agreement for Service – EKG Reading Panel, Palomar Health

and Graybill Medical Group

AGREEMENT DATE 11-1-17

Recital PARTIES Palomar Health and Graybill Medical Group

Section F PURPOSE Ensure uninterrupted coverage to unassigned patients requiring EKG Interpretation

Section F SCOPE OF SERVICES EKG Interpretation

PROCUREMENT METHOD


Section 5 TERM November 1, 2017 through October 31, 2019

Section 5 RENEWAL No

Section 5 TERMINATION Either party may terminate the agreement by providing a 60-day written notice.

Section 4a.


YES NO – DATE COMPLETED: 2017 Medicare Reimbursement Rate for San Diego

Section 4a.


2017 Reimbursement Rate for San Diego – Medicare Code 93010 – EKG Interpretation and Report

BUDGETED YES NO – IMPACT: Minimal


Section C JUSTIFICATION Ensure timely and uninterrupted coverage for unassigned patients who may need an EKG interpretation.


ALTERNATIVES/IMPACT


COMMENTS


76

Professional and Administrative Services Agreement for Anesthesia Services

ACCMG – 1-24-18

TO: Board Finance Committee MEETING DATE: Wednesday, January 24, 2018 FROM: Frank Beirne, Chief Operations Officer Background: Anesthesia Consultants of California Medical Group (ACCMG) provides exclusive anesthesia professional medical services to Palomar Health (Palomar) facilities. ACCMG has provided services to Palomar for a number of years and has been responsive in expanding its capacity to meet the growth in surgical activity at all sites. ACCMG provides coverage for the elective and emergency surgical schedule and provides round-the-clock in-house coverage to support the trauma program and OB services. This agreement represents a renewal of the exclusive agreement for three years until December 14, 2020.

Budget Impact: Budgeted




77

PALOMAR HEALTH - AGREEMENT ABSTRACT Section

Reference

Term/Condition

Term/Condition Criteria TITLE Professional and Administrative Services Agreement for

Anesthesia Services

Preamble AGREEMENT DATE December 15, 2017

Preamble PARTIES Anesthesia Consultants of California Medical Group, Inc. and Palomar Health

Recitals E PURPOSE To provide professional anesthesia medical coverage in the surgical departments at all Palomar Health facilities.

2.1, 2.2

SCOPE OF SERVICES Professional medical coverage 24 hours per day, 365 days per year for surgery, Trauma, emergency and OB services.

PROCUREMENT METHOD


8.1 TERM Three years

8.1 RENEWAL None

8.3.1 8.3.1.1.1

TERMINATION With cause with 90-day written notice and failure of the noticed party to cure the breach. For cause as defined in the agreement.

Section 4a.


YES NO – DATE COMPLETED: N/A – not directly compensated by Palomar Health

7.4


Fair Market Value

BUDGETED YES NO – IMPACT: None

EXCLUSIVITY NO YES – EXPLAIN: As approved by Medical Staff

JUSTIFICATION Required for ongoing provision of surgical and other invasive services requiring anesthesia


ALTERNATIVES/IMPACT No other interested/qualified providers on staff. Would need to source alternative coverage if group were unable to meet stated needs.


COMMENTS

APPROVALS REQUIRED CAO CFO CEO BOD Committee FINANCE BOD

78

1

Fiscal Year 2018Financial Performance*Supplemental Section includes Arch Health Partners and Consolidating Schedule

Passion. People. Purpose.TM

December 2017

79

tlhd

Typewritten Text

ADDENDUM E

tlhd

Typewritten Text

Title

TextTitle Text 2Table of Contents

Management Discussion and Analysis .................................................................................................................. 3-6

Executive Year‐to‐Date Financial Performance .................................................................................................... 7Income Statements

Month‐to‐Date ......................................................................................................................................... 8Year‐to‐Date ............................................................................................................................................ 9Current vs. Prior Year‐to‐Date ................................................................................................................. 10Monthly Trend ......................................................................................................................................... 11

Budget Comparison Statistical IndicatorsStatistical Indicators ................................................................................................................................ 12‐13Payor Mix ................................................................................................................................................. 14 ER Payor Mix .......................................................................................................................................15Case Mix Index ........................................................................................................................................ 16

Balance SheetsExcludes G.O. Bonds ............................................................................................................................... 17Includes G.O. Bonds ................................................................................................................................ 18

Cash Flow Statement .....................................................................................................................................19Investment Fund: Quarterly Yield Analysis ................................................................................................... 20

Supplemental Information

Condensed Combining Statement of Net Position ........................................................................................ 22

Condensed Combining Statement of Revenue, Expenses & Changes in Net Position ................................. 23

80

Title

TextTitle Text 3Management Discussion and Analysis

Palomar Health CFO Monthly Management Discussion and Analysis For the Period Ended December 31, 2017

Summary Results of Operations

For the month of December 2017, operations resulted in an overall loss of $3.61M, compared to a budgeted net operating income of $1.61M, a decrease of $5.32M from the same period in the prior year. Year‐to‐date net income from operations was a loss of $1.57M, compared to a positive budget of $7.59M, a decrease of $10.1M from prior year. The annual decline in monthly and annual operating income consists primarily of accrued wages, increases in contract labor and supplies, and a decline in volume. Further analysis is presented in the following sections.

December Operating Expenses/Adjusted Discharges were below budget by 9.37%. EBIDA margin and EBIDA were below budget by 6.55% and $4.41M, respectively. On a year‐to‐date basis, Operating Expenses/Adjusted Discharges were below budget by 11.2%. EBIDA margin and EBIDAwere below budget by .85% and $3.40M, respectively.

Patient Utilization

Inpatient Services

Hospital admissions for both campuses were up 9.3% over the previous month; however, YTD admissions remained at 10.3% less than FY18 budget. Similarly, ADC for both campuses increased 7.5% from November, yet YTD ADC remained at 9.9% below FY18 budget. The majority of this monthly increase was related to the early onset of the flu season. The December case mix index (CMI) declined in December from prior period at 1.69 of 1.8% compared to the previous 5‐month average of 1.71. The hospital’s average length of stay (ALOS) was 3.85, which isslightly lower than the 12‐month average of 3.89 days due to the implementation of the Patient Throughput Initiative (bedmanagement). Deliveries were 6.9% higher than in the previous month; however, YTD volume remained at 6.9% less than FY18budget. Inpatient surgeries were down 4.4% from November, which continues the YTD decrease of 3.3% from FY18 budget. The drop in surgicalvolume was primarily related to a seasonal decline. Poway saw the greatest decline in Inpatient surgeries of 22.8% compared to the previousmonth. Overall, there continues to be an increase in cardiovascular and cardio rhythm management (CRM) cases compared to the previous year, while orthopedic volume has seen a year‐over‐year decline.

Outpatient and Ancillary Services

Outpatient surgeries declined by 5.2% compared to previous months and remained 5.5% behind FY18 budget on a year‐to‐date basis. The monthly decline was due to seasonal declines as well as some capacity issues. The greatest decline in OP surgery was 18.0% at the Poway campus. Total Emergency Department visits increased 2.6% from November, while YTD volume was slightly down by .4% from FY18 budget.

81

Title


Outpatient registrations declined by 509, or 4.3%, over the previous month and remained 4.4% behind FY18 budget. On a YTD basis, outpatient registrations declined by 3,428, or 4.4%, compared to the same period last year.

Financial Performance

Operating Revenues

Net patient service revenue (NPR) for the month of December was $60.4M, a slight increase of $314K from the previous month; however, $4.25M less than budgeted. The relatively flat performance in NPR was primarily due to the decline in surgery volumes. Adjusted discharges for December were 4,089, an increase of 181 from November and 4.6% ahead of FY18 budget. Acute patient days for the month were 9,623, an increase of 961 days and 11.1% ahead of budget. The average daily census (ADC) was 310, an increase of 11 and 7.5% below budget.

Year‐to‐date net patient revenue was $363.0M, a $3.7M, or 1.0%, increase over the same period last year. This increase was primarily due to pricing changes in payor contracts.

Other Operating Revenue

December saw a decline in other operating revenues of $152.2K, or 15.8%, primarily due to the decline in available NICU beds and related lowerRady Children’s census. This trend will likely continue for the remainder of FY18.

Operating Expenses

Operating expenses for December were $64.8M, a $4.37M increase, or 7.2%, from previous month, and an increase of $3.2M from the same period last year. An aggressive review of operational productivity and efficiency improvements is ongoing, as are active searches for reductions to or deferral of costs. The contributors to the negative monthly variance are discussed in further detail below.

Salaries & Wages were higher than budget by $1.0M, or 3.6%, for December, due primarily to the union settlement and the unpaid union step increases of approximately $1.8M. On a YTD basis, Salaries & Wages were $8.9M higher than recorded at the same time the previous year. This is primarily due to annual merit increases, union step increases and an increase in FTEs. December year‐to‐date labor productivity was below budget by 4.5%.

Benefits were below budget by $168K. This favorable variance is primarily attributable to seasonality in the employer portion of payroll taxesand anticipated savings in group insurance for the first half of FY18.

82

Title


Contract Labor was above budget by $1.3M. This unfavorable variance is primarily attributable to a national shortage of nurses, as well as mandatory training and the need for additional staff for surveys. In addition, several interim leadership positions, including Director of Surgery,Director of Women’s’ Services, Director of Case Management and CFO are included in Contract Labor.

Professional Fees were above budget by $725K. This unfavorable variance is primarily attributable to the new CEP contract and accrued EKG reads by Arch physicians.

Supplies were below budget by $325K for the month of December. This favorable variance is primarily attributable to the decline in surgery volumes.

Purchased Services were below budget by $1.5M. This favorable variance is primarily attributable to a budget increase for unrealized seasonal volume.

Depreciation was below budget by $291K. This favorable variance is primarily attributable to lower capital expenditures through the month ofDecember. Actual capital expenditures through December were $843K compared to the budgeted amount of $1.3M.

Other Direct Expenses were above budget by $36K. This unfavorable variance is primarily attributable to hospital leadership and association annual dues, facility license renewal and holiday program gift cards.

Net Non‐Operating Revenue/Expenses

Net Non‐operating revenue for the month was a negative $668K, which is an improvement of $844K over the previous month, primarily due to the reduction in the revenue bond accrued interest expense.

Payor Mix, Days in AR and Cash Collections

The Gross Revenue financial class saw a shift to both Self‐Pay accounts as well to Medicare payors. This is a marked increase in these payors compared to the previous 12‐month average, which could contribute to the decline in reimbursement. Cash collections decreased to $55.5M, less than 1% from the previous 12‐month average of $55.6M. Days in Net AR decreased from 74.3 days to 70.9 days due to the revenue cycleinitiative to improve operational processes and cash collection efforts.

Balance Sheet

Cash and Equivalents increased in December by $3.9M over the previous month. Days Cash on Hand (DCOH) increased to 99.5 days from 98.3 in the previous month. Payment from payors continues to be the most critical operating challenge. Cash from the issuance of the 2017 revenue bonds will not be included in the DCOH ratio until released from escrow. Management is continuing to pursue strategies with our payors to

83

Title


improve incoming payments. In addition, the District recently engaged Huron Healthcare to provide revenue cycle process and operational improvements and to assist with revenue collection efforts for improved cash flow.

Bond debt increased by $60.1M due to the recent issuance of the 2017 Certificates of Participation. Intended uses for the funds are to financethe construction, improvement, renovation and equipping of the campuses and related healthcare facilities.

Refinancing of the 2010 Certificates of Participation resulted in lowering of the debt payment for FY18 by $1.2M from previous years.

84

Title

TextTitle Text 7Executive Dashboard

Actual Budget Variance Prior Year Actual Budget Variance Prior Year

Dec‐17 Dec‐17 Dec‐16 Dec‐17 Dec‐17 Dec‐16

Key Volumes

Adjusted Discharges 4,089 4,391 (6.88%) 4,277 23,954 26,064 (8.10%) 25,067

Acute Patient Days 9,623 10,131 (5.01%) 10,099 55,977 62,138 (9.92%) 60,084

Average Daily Census 310 338 (8.28%) 326 304 338 (10.06%) 327

Surgeries 1,192 1,291 (7.67%) 1,661 7,640 7,918 (3.51%) 9,908

Inpatient 697 759 (8.17%) 898 4,554 4,654 (2.15%) 5,430

Outpatient 495 532 (6.95%) 763 3,086 3,264 (5.45%) 4,478

Deliveries 355 375 (5.33%) 330 2,140 2,298 (6.88%) 2,113

ER Visits 11,873 11,431 3.87% 12,021 70,789 71,081 (0.41%) 69,005

Key Statistics

Average LOS by Days 3.85 3.85 0.00% 3.78 3.89 3.85 (1.04%) 3.90

Average LOS‐Observation by Hrs 24.83 24.83

Case Mix 1.69 1.66 1.81% 1.66 1.71 1.66 3.01% 1.66

Labor Productivity 95.6% 100.0% (4.4%) 97.5%

Days Cash on Hand 99.5 131.0 (24.1%) 110.3

Financial Performance

Operating Income (3,605,375) 1,611,310 (5,216,685) 1,712,029 (1,572,136) 7,589,057 (9,161,193) 8,548,862

Net Income (4,273,224) (387,049) (3,886,175) 84,503 (8,473,548) (7,325,929) (1,147,619) (3,075,463)

Oper. Expenses/Adj. Dschg 14,969 13,687 (9.37%) 13,416 14,539 13,069 (11.25%) 13,278

EBIDA Margin 2.64% 9.19% (6.55%) 11.52% 7.54% 8.39% (0.85%) 10.39%

EBIDA 1,618,810 6,030,457 (4,411,647) 7,298,277 27,781,005 31,180,485 (3,399,480) 38,012,121

Note: Financial Performance excludes GO Bonds

Month‐to‐Date Year‐to‐Date

85

Title

TextTitle Text 8

Income Statement: Month‐to‐DateConsolidated

Actual Budget VarianceDec-17 Dec-17 Dec-17 Volume Rate/Eff Actual Budget Variance

Adjusted Discharges 4,089 4,391 (302)

Operating RevenueGross revenue 321,665,335 349,367,317 (27,701,982) (24,028,451) (3,673,531) 78,666.01 79,564.41 (898.39)

Deductions from revenue (261,236,949) (284,691,074) 23,454,125 19,580,211 3,873,914 (63,887.74) (64,835.13) 947.40

Net patient revenue 60,428,386 64,676,243 (4,247,857) (4,448,241) 200,384 14,778.28 14,729.27 49.01

Other operating revenue 812,185 966,239 (154,054) (66,455) (87,599) 198.63 220.05 (21.42)

Total net revenue 61,240,571 65,642,482 (4,401,911) (4,514,696) 112,785 14,976.91 14,949.32 27.58

Operating ExpensesSalaries, wages & contract labor 31,241,228 28,884,609 (2,356,619) 1,986,598 (4,343,217) 7,640.31 6,578.14 (1,062.17)

Benefits 7,211,047 7,379,334 168,287 507,529 (339,242) 1,763.52 1,680.56 (82.96)

Supplies 8,560,070 8,885,124 325,054 611,093 (286,039) 2,093.44 2,023.49 (69.95)

Prof fees & purch svcs 10,835,095 11,628,922 793,827 799,803 (5,976) 2,649.82 2,648.35 (1.46)

Depreciation 3,639,577 3,930,303 290,726 270,315 20,411 890.09 895.08 4.99

Other 3,358,929 3,322,880 (36,049) 228,538 (264,587) 821.45 756.75 (64.71)

Total expenses 64,845,946 64,031,172 (814,774) 4,403,875 (5,218,649) 15,858.63 14,582.37 (1,276.27)

Income from operations (3,605,375) 1,611,310 (5,216,685) (110,821) (5,105,864) (881.73) 366.96 (1,248.68)

Property tax revenues 1,425,000 1,425,000 -

Nonoperating revenues, net (2,092,849) (3,423,359) 1,330,510

Net Income (4,273,224) (387,049) (3,886,175)

EBIDA Margin 2.64% 9.19% (6.55%)

1= Property Tax Revenue excludes G.O. Bonds Levy

2= Non-Operating Income (Expense) excludes G.O. Bonds Interest

Variance Dollars/Adjusted Discharges

1

2

1

86

Title

TextTitle Text 9

Income Statement: Year‐to‐DateConsolidated

Actual Budget VarianceDec-17 Dec-17 Dec-17 Volume Rate/Eff Actual Budget Variance

Adjusted Discharges 23,954 26,064 (2,110)

Operating RevenueGross revenue 1,940,467,565 1,968,767,430 (28,299,865) (159,380,727) 131,080,862 81,008.08 75,535.89 5,472.19

Deductions from revenue (1,577,433,054) (1,602,263,141) 24,830,087 129,710,529 (104,880,442) (65,852.59) (61,474.18) (4,378.41)

Net patient revenue 363,034,511 366,504,289 (3,469,778) (29,670,198) 26,200,420 15,155.49 14,061.71 1,093.78

Other operating revenue 5,556,018 5,297,521 258,497 (428,859) 687,356 231.95 203.25 28.69

Total net revenue 368,590,529 371,801,810 (3,211,281) (30,099,057) 26,887,776 15,387.43 14,264.96 1,122.48

Operating ExpensesSalaries, wages & contract labor 168,220,393 163,146,023 (5,074,370) 13,207,417 (18,281,787) 7,022.64 6,259.44 (763.20)

Benefits 42,824,398 43,720,412 896,014 3,539,367 (2,643,353) 1,787.78 1,677.43 (110.35)

Supplies 52,600,903 50,114,806 (2,486,097) 4,057,023 (6,543,120) 2,195.91 1,922.76 (273.15)

Prof fees & purch svcs 65,620,927 64,043,412 (1,577,515) 5,184,607 (6,762,122) 2,739.46 2,457.16 (282.30)

Depreciation 21,885,484 23,581,785 1,696,301 1,909,053 (212,752) 913.65 904.76 (8.88)

Other 19,010,560 19,606,315 595,755 1,587,221 (991,466) 793.63 752.24 (41.39)

Total expenses 370,162,665 364,212,753 (5,949,912) 29,484,688 (35,434,600) 15,453.06 13,973.79 (1,479.28)

Income from operations (1,572,136) 7,589,057 (9,161,193) (614,369) (8,546,824) (65.63) 291.17 (356.80)

Property tax revenues 8,550,000 8,550,000 -


Net Income (8,473,548) (7,325,929) (1,147,619)

EBIDA Margin 7.54% 8.39% (0.85%)


2= Non-Operating Income (Expense) excludes G.O. Bonds Interest

Dollars/Adjusted DischargesVariance

2

111

87

Title

TextTitle Text 10

Current vs. Prior Year‐to‐DateConsolidated

Current Year Prior YearDec-17 Dec-16 Change Volume Rate/Eff Actual Budget Variance

Adjusted Discharges 23,954 25,067 (1,113)

Operating RevenueGross revenue 1,940,467,565 1,836,233,002 104,234,563 (81,530,591) 185,765,154.26 81,008.08 73,253.00 7,755.08

Deductions from revenue (1,577,433,054) (1,476,921,757) (100,511,297) 65,576,811 (166,088,108) (65,852.59) (58,918.97) (6,933.63)

Net patient revenue 363,034,511 359,311,245 3,723,266 (15,953,780) 19,677,046 15,155.49 14,334.03 821.45

Other operating revenue 5,556,018 6,678,574 (1,122,556) (296,535) (826,021) 231.95 266.43 (34.48)

Total net revenue 368,590,529 365,989,819 2,600,710 (16,250,316) 18,851,026 15,387.43 14,600.46 786.97

Operating ExpensesSalaries, wages & contract labor 168,220,393 157,753,744 (10,466,649) 7,004,425 (17,471,074) 7,022.64 6,293.28 (729.36)

Benefits 42,824,398 41,778,058 (1,046,340) 1,854,988 (2,901,328) 1,787.78 1,666.66 (121.12)

Supplies 52,600,903 49,869,778 (2,731,125) 2,214,268 (4,945,393) 2,195.91 1,989.46 (206.45)

Prof fees & purch svcs 65,620,927 63,181,166 (2,439,761) 2,805,307 (5,245,068) 2,739.46 2,520.49 (218.96)

Depreciation 21,885,484 24,594,258 2,708,774 1,092,010 1,616,764 913.65 981.14 67.49

Other 19,010,560 20,263,953 1,253,393 899,740 353,653 793.63 808.39 14.76

Total expenses 370,162,665 357,440,957 (12,721,708) 15,870,738 (28,592,446) 15,453.06 14,259.42 (1,193.64)

Income from operations (1,572,136) 8,548,862 (10,120,998) (379,578) (9,741,420) (65.63) 341.04 (406.67)

Property tax revenues 8,550,000 7,900,000 650,000


Net Income (8,473,548) (3,075,463) (5,398,085)

EBIDA Margin 7.54% 10.39% (2.85%)

1= Property Tax Revenue excludes G.O. Bonds Levy2= Non-Operating Income (Expense) excludes G.O. Bonds Interest

Variance Dollars/Adjusted Discharges

1111

2

88

Title

TextTitle Text 11

Income Statement: Monthly TrendConsolidated

Fiscal YearJul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 2018

Adjusted Discharges 3,865 4,086 3,960 4,046 3,908 4,089 23,954

Operating Revenue

Gross revenue 317,273,636 331,797,115 315,065,088 338,655,391 316,011,001 321,665,335 1,940,467,565

Deductions from revenue (258,228,835) (269,421,052) (255,094,069) (277,555,739) (255,896,415) (261,236,949) (1,577,433,054)

Net patient revenue 59,044,801 62,376,063 59,971,019 61,099,652 60,114,586 60,428,386 363,034,511

Other operating revenue 777,645 976,507 950,912 1,074,349 964,419 812,185 5,556,018

Total net revenue 59,822,446 63,352,570 60,921,931 62,174,001 61,079,005 61,240,571 368,590,529

Operating Expenses

Salaries, wages & contract labor 27,037,247 27,790,703 26,428,463 28,062,628 27,660,125 31,241,228 168,220,393

Benefits 7,282,912 7,222,947 6,869,231 7,194,619 7,043,641 7,211,047 42,824,398

Supplies 8,106,059 9,530,476 8,882,011 9,347,983 8,174,303 8,560,070 52,600,903

Prof fees & purch svcs 10,619,923 11,615,531 11,207,387 10,870,139 10,472,853 10,835,095 65,620,927

Depreciation 3,645,579 3,678,134 3,644,607 3,619,410 3,658,177 3,639,577 21,885,484

Other 3,117,123 2,955,333 3,320,596 2,787,740 3,470,839 3,358,929 19,010,560

Total expenses 59,808,843 62,793,124 60,352,295 61,882,519 60,479,938 64,845,946 370,162,665

Income from operations 13,603 559,446 569,636 291,482 599,067 (3,605,375) (1,572,136)

Property tax revenues 1,425,000 1,425,000 1,425,000 1,425,000 1,425,000 1,425,000 8,550,000

Nonoperating revenues, net (2,570,801) (2,748,103) (2,851,813) (2,250,927) (2,936,921) (2,092,849) (15,451,412)

Net income (1,132,198) (763,657) (857,177) (534,445) (912,854) (4,273,224) (8,473,548)

EBIDA Margin 8.19% 8.56% 8.48% 8.38% 8.96% 2.64% 7.54%


2= Non‐Operating Income (Expense) excludes G.O. Bonds Interest

1

2

89

Title

TextTitle Text 12Statistical Indicators

Fiscal Year Budget

Jul‐17 Aug‐17 Sep‐17 Oct‐17 Nov‐17 Dec‐17 2018 2018

Adjusted Discharges ‐ Consolidated

North 2,983 3,199 3,011 3,140 2,929 3,137 18,400 19,794

South 898 883 951 895 977 944 5,549 6,271

Consolidated 3,865 4,086 3,960 4,046 3,908 4,089 23,954 26,064

Patient Days ‐ Acute

North 7,951 8,014 7,581 7,982 7,108 7,879 46,515 48,212

South 1,408 1,407 1,541 1,808 1,554 1,744 9,462 13,926

Consolidated 9,359 9,421 9,122 9,790 8,662 9,623 55,977 62,138

Observation Discharges

Consolidated 676 694 647 705 717 724 4,163 3,975

Average Length of Stay ‐ Acute

North 4.09 3.98 4.02 4.06 3.96 3.96 4.01 3.80

South 3.23 3.26 3.15 3.79 3.16 3.42 3.41 4.02

Consolidated 3.94 3.85 3.84 4.00 3.78 3.85 3.89 3.85

Average Length of Stay ‐ Observation By Hours

North 25.27 25.27

South 22.91 22.91

Consolidated 24.83 24.83

Average Daily Census ‐ Acute

North 256 259 253 257 237 254 253 262

South 45 45 51 58 52 56 51 76

Consolidated 302 304 304 316 289 310 304 338

Kaiser Average Daily Census

Consolidated 78.26 58.32 63.00 54.32 66.10 72.74 65.47 87.40

Surgeries ‐ Inpatient Only

North 603 606 652 614 554 559 3,588 3,731

South 124 150 142 164 158 122 860 869

Consolidated 727 756 794 778 712 681 4,448 4,600

Surgeries ‐ Outpatient Only

North 249 315 299 300 294 308 1,765 1,857

South 229 241 223 213 228 187 1,321 1,407

Consolidated 478 556 522 513 522 495 3,086 3,264

Surgeries ‐ CVS Cases

North 19 13 19 22 17 16 106 54

South ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Consolidated 19 13 19 22 17 16 106 54

Total Surgeries

North 871 934 970 936 865 883 5,459 5,642

South 353 391 365 377 386 309 2,181 2,276

Consolidated 1,224 1,325 1,335 1,313 1,251 1,192 7,640 7,918

90

Title

TextTitle Text 13Statistical Indicators

Fiscal Year Budget


Outpatient Registrations (includes Lab)

North 6,872 7,169 7,082 7,450 6,446 6,014 41,033 43,307

South 5,707 5,788 5,495 5,801 5,362 5,285 33,438 34,658

Consolidated 12,579 12,957 12,577 13,251 11,808 11,299 74,471 77,881

ER Visits (includes Trauma) ‐ Outpatient Only

North 7,455 8,187 7,540 8,089 7,604 7,824 46,699 47,316

South 2,372 2,850 2,280 2,733 2,542 2,558 15,335 14,746

Consolidated 9,827 11,037 9,820 10,822 10,146 10,382 62,034 62,062

ER Admissions (includes Trauma) ‐ Inpatient Only

North 1,169 1,285 1,128 1,162 1,107 1,188 7,039 7,318

South 266 260 256 311 320 303 1,716 1,700

Consolidated 1,435 1,545 1,384 1,473 1,427 1,491 8,755 9,018

Total ER Visits (includes Trauma & Admissions)

North 8,624 9,472 8,668 9,251 8,711 9,012 53,738 54,634

South 2,638 3,110 2,536 3,044 2,862 2,861 17,051 16,447

Consolidated 11,262 12,582 11,204 12,295 11,573 11,873 70,789 71,081

ER Conversion (ER Admission as %‐age of ER Visits)

North 13.6% 13.6% 13.0% 12.6% 12.7% 13.2% 13.1% 13.4%

South 10.1% 8.4% 10.1% 10.2% 11.2% 10.6% 10.1% 10.7%

Consolidated 12.7% 12.3% 12.4% 12.0% 12.3% 12.6% 12.4% 12.8%

Trauma Cases

North 162 166 139 163 149 143 922 839

South ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Consolidated 162 166 139 163 149 143 922 839

Trauma Admissions

North 103 95 80 100 91 88 557 485

South ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Consolidated 103 95 80 100 91 88 557 485

Deliveries

North 251 291 288 282 267 278 1,657 1,693

South 71 95 99 76 65 77 483 605

Consolidated 322 386 387 358 332 355 2,140 2,298

91

Title

TextTitle Text 14Payor Mix

23%

23%

23%

22%

25%

23%

25%

14%

15%

13%

15%

14%

13%

14%

7%

7%

7%

6%

5%

7%

5%

15%

16%

17%

17%

15%

15%

14%

1%

1%

3%

2%

2%

2%

3%

21%

21%

21%

21%

20%

22%

22%

14%

14%

13%

13%

14%

14%

14%

2%

2%

1%

2%

2%

2%

2%

2%

2%

2%

2%

3%

2%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

PY AVG

Jul‐17

Aug‐17

Sep‐17

Oct‐17

Nov‐17

Dec‐17

Jan‐18

Feb‐18

Mar‐18

Apr‐18

May‐18

Jun‐18

MEDICARE ALL MCAR MGD ALL MEDI‐CAL ALL MCAL MGD ALL SELF PAY ALL MGD CARE ALL CAP ALL COV‐CA ALL OTHER ALL

92

Title

TextTitle Text 15Payor Mix: Emergency Department

15%

16%

16%

16%

16%

17%

18%

12%

12%

12%

12%

12%

13%

13%

10%

8%

8%

7%

9%

6%

6%

21%

23%

24%

24%

23%

22%

21%

4%

4%

5%

6%

2%

6%

6%

25%

24%

24%

24%

24%

25%

24%

7%

7%

7%

7%

8%

8%

7%

2%

2%

1%

1%

2%

2%

1%

4%

3%

3%

2%

5%

2%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

PY AVG

Jul‐17

Aug‐17

Sep‐17

Oct‐17

Nov‐17

Dec‐17

Jan‐18

Feb‐18

Mar‐18

Apr‐18

May‐18

Jun‐18

MEDICARE MCAR MGD MEDI‐CAL MCAL MGD SELF PAY MGD CARE CAP COV‐CA OTHER

93

Title

TextTitle Text 16Case Mix Index

Fiscal Year Budget


Case Mix Index

North 1.60 1.58 1.62 1.62 1.62 1.59 1.60 1.49

South 1.41 1.42 1.33 1.49 1.54 1.43 1.44 1.32

Consolidated 1.56 1.55 1.56 1.60 1.60 1.56 1.57 1.46

Case Mix Index (excludes Deliveries)

North 1.72 1.69 1.76 1.75 1.75 1.72 1.73 1.67

South 1.56 1.65 1.52 1.64 1.65 1.59 1.60 1.58

Consolidated 1.69 1.68 1.71 1.73 1.73 1.69 1.71 1.66

Case Mix Index ‐ Medicare Only

North 1.78 1.76 1.89 1.79 1.95 1.81 1.83 1.80

South 1.75 1.73 1.53 1.68 1.75 1.69 1.69 1.68

Consolidated 1.77 1.76 1.78 1.76 1.88 1.77 1.79 1.77

94

Title

TextTitle Text 17

Balance Sheet: Excludes G.O. Bonds

Assets Dec‐17 Nov‐17 Jun‐17 Liabilities Dec‐17 Nov‐17 Jun‐17

Current Assets Current Liabilities

Cash on hand 44,091,519 56,084,766 66,077,368 Accounts payable 31,280,129 23,281,655 33,808,502

Cash marketable securities 120,893,113 104,996,412 157,180,569 Accrued payroll 21,373,137 25,930,678 16,670,225

Total cash & cash equivalents 164,984,632 161,081,178 223,257,937 Accrued PTO 23,634,935 23,502,329 23,754,402

Accrued interest payable 1,960,275 1,753,750 3,556,438

Patient Accounts Receivable 355,910,344 341,461,177 348,571,235 Current portion of bonds 11,355,000 14,060,000 13,515,000

Allowance on accounts (215,911,792) (193,452,797) (228,299,821) Est. third party settlements 6,702,847 14,037,763 3,896,344

Net accounts receivable 139,998,552 148,008,380 120,271,414 Other current liabilities 46,757,871 48,256,289 40,690,444

Total current liabilities 143,064,193 150,822,463 135,891,355

Inventories 10,890,108 10,759,513 10,428,531

Prepaid expenses 2,589,956 2,777,437 3,396,376 Long Term Liabilities

Est. third party settlements 16,942,683 16,942,683 16,942,683 Other LT liabilities 166,696 186,047 6,278

Other 15,413,178 20,612,598 9,529,822 Bonds & contracts payable 671,400,732 591,535,852 606,055,086

Total current assets 350,819,109 360,181,790 383,826,763 Total long term liabilities 671,567,427 591,721,899 606,061,364

Non‐Current Assets Total liabilities 814,631,620 742,544,362 741,952,719

Restricted assets 102,429,762 53,724,519 53,533,284

Restricted other 348,098 347,976 347,288 Deferred inflow of resources‐

Board designated 21,577,699 22,421,466 ‐ unearned revenue 7,985,462 7,996,239 8,040,866

Total restricted assets 124,355,558 76,493,962 53,880,572 Total liabilities and deferred inflow

of resources 822,617,082 750,540,601 749,993,585

Property, plant & equipment 1,550,636,891 1,559,659,246 1,545,122,079

Accumulated depreciation (530,933,040) (537,339,402) (508,941,185) Net Position

Construction in process 35,064,723 31,367,898 32,631,660 Unrestricted 774,127,521 779,000,086 902,573,957

Net property, plant & equipment 1,054,768,574 1,053,687,742 1,068,812,554 Restricted for other purpose 348,098 347,976 347,288

Board designated 21,577,699 22,421,466 ‐

Investment related companies 7,145,938 7,261,146 5,759,958 Total net position 796,053,318 801,769,528 902,921,245

Prepaid debt insurance costs 10,374,480 3,395,820 3,527,946

Other non‐current assets 3,963,687 3,855,311 88,878,276 Total liabilities, deferred inflow of

Total non‐current assets 1,200,608,237 1,144,693,981 1,220,859,306 resources and net position 1,610,684,937 1,544,313,890 1,644,873,964

Total assets 1,551,427,346 1,504,875,770 1,604,686,070

Deferred outflow of resources‐

loss on refunding of debt 59,257,592 39,438,120 40,187,894

Total assets and deferred outflow

of resources 1,610,684,937 1,544,313,890 1,644,873,964

95

Title

TextTitle Text 18

Balance Sheet: Includes G.O. Bonds

Assets Dec‐17 Nov‐17 Jun‐17 Liabilities Dec‐17 Nov‐17 Jun‐17

Current Assets Current Liabilities

Cash on hand 44,091,519 56,084,766 66,077,368 Accounts payable 31,280,129 23,281,655 33,808,502

Cash marketable securities 120,893,113 104,996,412 157,180,569 Accrued payroll 21,373,137 25,930,677 16,670,225

Total cash & cash equivalents 164,984,632 161,081,178 223,257,937 Accrued PTO 23,634,935 23,502,329 23,754,402

Accrued interest payable 6,584,200 5,452,890 8,831,029

Patient Accounts Receivable 355,910,344 341,461,177 348,571,235 Current portion of bonds 16,589,480 19,294,480 20,622,127

Allowance on accounts (215,911,792) (193,452,797) (228,299,821) Est. third party settlements 6,702,847 14,037,763 3,896,344

Net accounts receivable 139,998,552 148,008,379 120,271,414 Other current liabilities 38,772,409 40,260,050 32,649,578

Total current liabilities 144,937,137 151,759,844 140,232,207

Inventories 10,890,108 10,759,513 10,428,531

Prepaid expenses 2,589,956 2,777,437 3,396,376 Long Term Liabilities

Est. third party settlements 16,942,683 16,942,683 16,942,683 Other LT liabilities 166,696 186,047 6,278

Other 18,815,858 28,113,344 9,668,741 Bonds & contracts payable 1,299,570,172 1,217,924,924 1,228,736,069

Total current assets 354,221,789 367,682,534 383,965,682 Total long term liabilities 1,299,736,868 1,218,110,971 1,228,742,347

Non‐Current Assets Total liabilities 1,444,674,004 1,369,870,816 1,368,974,554

Restricted assets 126,668,623 72,072,493 83,537,006

Restricted other 348,098 347,976 347,288 Deferred inflow of resources‐

Board designated 21,577,699 22,421,466 ‐ unearned revenue 7,985,462 7,996,239 8,040,866

Total restricted assets 148,594,420 94,841,935 83,884,294 Total liabilities and deferred inflow

of resources 1,452,659,467 1,377,867,055 1,377,015,420

Property, plant & equipment 1,550,636,891 1,559,659,246 1,545,122,079

Accumulated depreciation (530,933,040) (537,339,402) (508,941,185) Net Position

Construction in process 35,064,723 31,367,898 32,631,660 Unrestricted 170,147,521 175,966,058 304,272,402

Net property, plant & equipment 1,054,768,574 1,053,687,743 1,068,812,554 Restricted for other purpose 348,098 347,976 347,288

Board designated 21,577,699 22,421,466 ‐

Investment related companies 7,145,938 7,261,146 5,759,958 Total net position 192,073,317 198,735,500 304,619,690

Prepaid debt insurance costs 12,797,904 5,835,024 6,056,409

Other non‐current assets 3,963,687 3,855,311 88,878,276 Total liabilities, deferred inflow of

Total non‐current assets 1,227,270,523 1,165,481,160 1,253,391,491 resources and net position 1,644,732,784 1,576,602,555 1,681,635,110

Total assets 1,581,492,313 1,533,163,694 1,637,357,173

Deferred outflow of resources‐

loss on refunding of debt 63,240,472 43,438,861 44,277,937

Total assets and deferred outflow

of resources 1,644,732,784 1,576,602,555 1,681,635,110

96

Title

TextTitle Text 19Cash Flow Statement

Dec-17 YTDCASH FLOWS FROM OPERATING ACTIVITIES: Income (Loss) from operations (3,605,375) (1,572,136) Adjustments to reconcile change in net assets to net cash provided from operating activities: Depreciation Expense 3,639,577 21,885,484 Provision for bad debts 6,235,511 25,460,351

Changes in operating assets and liabilities: Patient accounts receivable 1,774,317 (45,187,494) Property Tax and other receivables (198,264) 33,336,002 Inventories (130,595) (461,577) Prepaid expenses and other current assets 302,689 (579,560) Accounts payable 7,998,474 (2,528,373) Accrued compensation (4,424,936) 4,583,443 Estimated settlement amounts due third-party payors (7,334,916) 2,806,503 Other current liabilities 306,002 (36,555,542) Net cash provided from (used by) operating activities 4,562,484 1,187,101

CASH FLOWS FROM INVESTING ACTIVITIES: Net (purchases) sales of investments (69,649,186) (28,422,670) Income (Loss) on investments 77,659 479,228 Investment in affiliates (1,468,776) (8,164,701) Net cash provided from (used by) investing activities (71,040,303) (36,108,143)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Receipt of G.O. Bond Taxes 5,881,400 7,436,236 Receipt of District Taxes 5,397,683 6,941,759 Net cash provided from non-capital financing activities 11,279,083 14,377,995 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds on asset sale 0 992,260 Acquisition of property plant and equipment (4,720,409) (10,421,073) Net Proceeds from issuance of debt 48,907,638 48,907,638 G.O. Bond Interest paid 0 (6,164,223) Revenue Bond Interest paid (962,389) (14,152,276) Payments of Long Term Debt (19,351) (20,605,128) Net cash used in capital and related financing activities 43,205,489 (1,442,802)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,993,247) (21,985,849)

CASH AND CASH EQUIVALENTS - Beginning of period 56,084,766 66,077,368

CASH AND CASH EQUIVALENTS - End of period 44,091,519 44,091,519

97

Title

TextTitle Text 20

% of Portfolio Maturity Actual to Benchmark TotalInvestment Account: at 12/31/2017 Date Yield Benchmark Variance Yield

Fidelity-Institutional Portfolio Treasury Fund 11.22% Demand 0.67% 0.28% (1) 0.39% 0.08%

State Treasurer Local Agency Investment Fund 45.24% Demand 1.20% 0.28% (1), (2) 0.92% 0.54%

Morgan Stanley 43.54% Various (0.39%) (0.19%) (3) (0.20%) (0.17%)6.64% (4) (7.03%)

Total: 100.00% TOTAL YIELD: 0.45%

PRIOR QUARTER: 0.58%

(1) Approximate average of 90 day T-Bills

(2) LAIF annual average return based upon monthly yields PRIOR YEAR: (0.29%)

(3) BC Intermediate Government Credits

(4) S&P 500

Investment Fund - Quarter Ended December 31, 2017 Yield Analysis

98

Title

TextTitle Text 21

Supplemental Information

99

Title

TextTitle Text 22

CONDENSED COMBINING STATEMENT OF NET POSITIONAS OF DECEMBER 2017

PH ARCH Eliminations TotalASSETS

Current assets 378,121,926 9,864,862 - 387,986,788 Capital assets -- net 1,054,768,574 3,868,043 - 1,058,636,617 Noncurrent assets 148,074,685 40,477 (3,145,099) 144,970,063 Other receivables 527,127 675,895 (1,203,022) -

Total Assets 1,581,492,312 14,449,277 (4,348,121) 1,591,593,468

Deferred outflow of resources 63,240,472 - - 63,240,472

1,644,732,784 14,449,277 (4,348,121) 1,654,833,940

LIABILITIES AND NET POSITION

Current liabilities 142,707,633 12,946,453 (1,203,022) 154,451,064 Long-term Liabilities 1,301,966,372 57,171 - 1,302,023,543

Total liabilities 1,444,674,005 13,003,624 (1,203,022) 1,456,474,607

Deferred inflow of resources - deferred revenue 7,985,462 - - 7,985,462

Total liabilities and deferred inflow of resources 1,452,659,467 13,003,624 (1,203,022) 1,464,460,069

Invested in capital assets — net of related debt (68,816,790) - - (68,816,790) Restricted 29,319,234 - - 29,319,234 Unrestricted 231,570,873 1,445,653 (3,145,099) 229,871,427 Total Net Position 192,073,317 1,445,653 (3,145,099) 190,373,871

1,644,732,784 14,449,277 (4,348,121) 1,654,833,940

1- Includes GO Bonds

TOTAL ASSETS AND DEFERRED OUTFLOW OF RESOURCES

TOTAL LIABILITIES, DEFERRED INFLOW OF RESOURCES AND NET POSITION1

100

Title

TextTitle Text 23

CONDENSED COMBINING STATEMENT OF REVENUE, EXPENSES, AND CHANGES IN NET POSITIONFOR THE SIX MONTHS ENDED DECEMBER 2017

PH Arch Eliminations Total

OPERATING REVENUE:Net patient service revenue 326,163,347 13,688,337 - 339,851,684 Shared risk revenue 36,871,163 4,635,781 - 41,506,944 Other revenue 5,556,018 93,526 (56,820) 5,592,724 PH Program revenue - 949,332 (949,332) -

Total operating revenue 368,590,528 19,366,976 (1,006,152) 386,951,352

OPERATING EXPENSES 348,277,181 31,278,949 (1,006,152) 378,549,978 DEPRECIATION AND AMORTIZATION 21,885,484 608,692 - 22,494,176

Total operating expenses 370,162,665 31,887,641 (1,006,152) 401,044,154

INCOME (LOSS) FROM OPERATIONS (1,572,136) (12,520,665) - (14,092,801)

NONOPERATING INCOME (EXPENSE):Investment income 479,227 1,946,729 (1,945,099) 480,857 Interest expense (30,807,665) (3,359) - (30,811,024) Property tax revenue 19,249,998 - - 19,249,998 Other - net (1,503,443) (225,461) - (1,728,904)

Total nonoperating expense - net (12,581,883) 1,717,909 (1,945,099) (12,809,074)

CHANGE IN NET POSITION (14,154,019) (10,802,756) (1,945,099) (26,901,875)

Interfund - Arch Health Partners (98,355,114) 8,398,419 - (89,956,695) Other Net Position Adjustments (37,239) - (1,200,000) (1,237,239)

NET POSITION - Beginning of year 304,619,689 3,849,990 - 308,469,679

NET POSITION - End of year1 192,073,317 1,445,653 (3,145,099) 190,373,870

1- Includes GO Bonds

101

102

tlhd

Typewritten Text

ADDENDUM F

1

Status

Target 3.00

Actual 3.16

Summary

• Improvements in utilization of the LEM, with additional progress still needed

• Overall Finance Pillar score improved from 2.92 to 3.16, though there is still significant opportunity for improvement compared to budget

Finance Pillar ‐ ConsolidatedNovember 2017

Risk Areas

• Productivity Labor Dollars

• Cost per Department Unit of Service

• Inefficiencies due to Patient Holds

• Premium Pay Dollars

• Pressure on Reimbursement Dollars

103

2

Operating Margin Days Cash on Hand Cost per Adjusted Discharge

Target – 2.84%

Actual – 0.66%

Target – 100%

Actual – 78%

Target – 100%

Actual – 88%

Action Items

• Deliver operational productivity and efficiency improvements

• Monitor cash projections • Manage cash expenditures and

activity• Continue temporary hold on

capital spend• Identify opportunities in cash

collections with new vendor in place

• Manage cost per UOS

• Identification of budgeted expenses that can be delayed/eliminated

• Ramp up the position control process

• Implement ad‐hoc work team to manage premium pay

Finance Status Report – Organization LevelNovember 2017

104

3

Productivity* Cost per UOS*

Target – 3.00

Actual – 3.12

Target – 3.00

Actual – 3.15

Action Items

• Continue weekly meetings with VPs and Directors to address department level action plans to achieve budget by fiscal year‐end

• Focused effort on LEM compliance to improve utilization of reporting tool

• *Based on entered metrics

• Implement monthly departmental business reporting and reviews

• Increase compliance with data entry so results are reflective of entire district

Finance Status Report – Leader LevelNovember YTD 2017

105

wednesday, january board finance committee palomar ... · 1/24/2018 · (c) non-voting membership....

Documents