• Analyze the financial performance and financial condition of Palomar Health.
• ProviderecommendationstotheboardofdirectorsabouthowPalomarHealthcanachieveisstrategicobjectiveswithfinancialsuccess.

APA, Please reference to review

BOARD FINANCE COMMITTEE * WEDNESDAY, DECEMBER 2, 2015 4:00 p.m. Meeting Palomar Medical Center, 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 CALL TO ORDER ...................................................................................................................... Time Form A Page .............. ........... Target 4:00 Public Comments2 ................................................................................................................ ......... 15 ............ 4:15 Information Item(s) ........... 5 ............ 4:20 1. * Approval: Minutes - Wednesday, October 28, 2015 (ADD A-Pp5-9) ............................... ........... 2 .......... 2 4:22 2. * Approval: Summary of Executed, Budgeted, Routine Physician Agreements (ADD BPp10-21)................................................................................................................................ ........... 3 .......... 3 4:25 3. * Approval: October 2015 & YTD FY2016 Financial Report (ADD C-Pp22-37) ......... ......... 10 .......... 4 4:35 Public Comments2 ................................................................................................................ ......... 15 ............ 4:50 ADJOURNMENT ....................................................................................................................... ................ ............ 4:50 Board Finance Committee - Voting Members Jerry Kaufman, PT MA, Director - Chair Jeff Griffith, EMT-P, Director Aeron Wickes, MD, Director Bob Hemker, CEO Jeff Rosenburg, MD, CoS PMC & PHDC Paul Neustein, MD, CoS POM Board Finance Committee - Alternate Voting Members Board Alternate: CoS Alternate - PMC & PHDC: CoS Alternate POM: Dara Czerwonka, MSW Frank Martin, MD Charles Callery, MD Board Finance Committee - Non-Voting Members Diane Hansen, EVP Finance Frank Beirne, EVP Operations Alan Conrad, MD, EVP Physician Alignment Maria Sudak, CNO PMC June Gower, CNO POM & PHDC 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. 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 1 i ii iii Minutes Finance Committee - Wednesday, October 28, 2015 TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: Tanya Howell, Secretary BY: Diane Hansen, EVP Finance Background: The minutes of the Board Finance Committee meeting held on Wednesday, October 28, 2015, are respectfully submitted for approval (Addendum A). Budget Impact: N/A Staff Recommendation: Staff recommends approval of the Wednesday, October 28, 2015, Board Finance Committee minutes. Committee Questions: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - Minutes.doc 2 Executed, Budgeted, Routine Physician Agreements Board Summary Report TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 BY: Diane Hansen, EVP Finance Background: The following Executed, Budgeted, Routine Physician Agreements became effective during the months of August & October of 2015. The standard Form A and Abstract Table for each agreement are included in Addendum B. PHYSICIAN TYPE OF AGREEMENT AUGUST 2015 Escondido OB/GYN Medical Group, Inc., dba North County Women's Specialists Obstetrics & Gynecology On-Call Services Agreement - PMC Richard Just, MD Investigational Review Committee Chair Agreement OCTOBER 2015 Brian Le, MD Erwin Omens, MD X-Ray Medical Group Radiation Oncology, Inc. Staff Recommendation: Emergency Ophthalmology Call Coverage Agreements - POM Radiation Oncology Agreement Approval COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: 3 October 2015 YTD FY2016 Financial Report TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: Diane Hansen, EVP Finance Background: The Board Financial Report (unaudited) for October 2015 and YTD FY2016 is submitted for the Finance Committee's approval (Addendum C). Budget Impact: N/A Staff Recommendation: Approval Committee Questions: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - Financial Report.doc 4 $''(1'80\u0003$ 5 B A C O A R D F I N A N C E C O M M I T T E E M E E T I N G T T E N D A N C E R O S T E R & M E E T I N G M I N U T E S A L E N D A R Y E A R 2 0 1 5 MEETING DATES: 1/28/15 2/25/15 3/25/15 4/22/15 5/27/15 6/24/15 7/29/15 P E P P P P P P P P E E P E E P P P P E E P P P P P P P E P P P E P P P P P E P P P PAUL NEUSTEIN, MD, COS POM E P P E E P E P E E E JEFF ROSENBURG, MD, COS PMC & PHDC DARA CZERWONKA, MSW - BOARD ALTERNATE E P P P P P P P E P E E ALT GUEST ALT ALT MEMBERS DIRECTOR JERRY KAUFMAN, PT MA - CHAIR E DIRECTOR JEFF GRIFFITH, EMT-P E DIRECTOR AERON W ICKES, MD BOB HEMKER, PRESIDENT & CEO LINDA GREER, RN - 2 ND BOARD ALTERNATE 2/4/15 8/26/15 ALT 10/28/15 P ALT ALT CHARLES CALLERY, MD, COS ALTERNATE POM ALT FRANK MARTIN, MD, COS ALTERNATE PMC/PHDC STAFF ATTENDEES ALT DIANE HANSEN, EVP FINANCE 9/30/15 P P P P P P P FRANK BEIRNE, EVP OPERATIONS P P P P P P P P P E P E ALAN CONRAD, MD, VP PHYSICIAN ALIGNMENT JUNE GOWER, RN, PHD, INTERIM CNO PHDC & POM P E E E E CHERYL OLSON, INTERIM VP POM/PHDC P MARIA SUDAK, RN, INTERIM VP PMC/CNO PMC E E P P P E P E P P E TANYA HOWELL - SECRETARY P P P P P P P P P P P KIM COLONNELLI, RN, CNO PHDC & POM E P P E P P JODI MANSFIELD, INTERIM EVP OPERATIONS INVITED GUESTS P P P P P SEE TEXT OF MINUTES FOR NAMES OF GUEST PRESENTERS 1 6 BOARD FINANCE COMMITTEE - MEETING MINUTES - WEDNESDAY, OCTOBER 28, 2015 1. AGENDA ITEM CONCLUSION/ACTION FOLLOW UP/RESPONSIBLE PARTY FINAL? DISCUSSION CALL TO ORDER nd The meeting - held in the Raymond Family Conference Center on the 2 Floor of Palomar Medical Center, 2185 Citracado Parkway, Escondido, CA - was called to order at 4:02 p.m. by Chair Jerry Kaufman, who reminded everyone to turn off or silence their cell phones The agenda was posted at the District's Administrative Offices, and the full agenda packet was posted on the Board Meetings page of the District's web site on Wednesday, October 21, 2015, which is consistent with legal requirements. Notice of posting was also made via email to the Board and staff members. ESTABLISHMENT OF QUORUM Quorum comprised of Directors Kaufman and Wickes, CEO Bob Hemker and PMC Chief of Staff Jeff Rosenburg; Director Czerwonka arrived after the votes on items 1 and 2 PUBLIC COMMENTS There were no public comments INFORMATION ITEM(S) None 1. MINUTES - WEDNESDAY, SEPTEMBER 30, 2015 MOTION: By Mr. Hemker, seconded by Director Wickes and carried to approve the Minutes from the Wednesday, September 30, 2015, meeting - 4-0 by the Committee, 2-0 by Board members; Absent: 2 Ms. Hansen pointed out that the template still bore the date Wednesday, August 26, 2015, in the minutes header, noting that set of minutes SUMMARY OF EXECUTED BUDGETED ROUTINE PHYSICIAN AGREEMENTS MOTION: By Director Wickes, seconded by Mr. Hemker and carried to recommend approval of the executed budgeted routine physician agreements as presented - 4-0 by the Committee, 2-0 by Board members; Absent: 2 No discussion 3. SEPTEMBER 2015 & YTD FY2016 FINANCIAL REPORT 2. Y correction had already been made to the original Forwarded to the November 9, 2015, Board of Directors meeting with a recommendation for approval Y MOTION: By Director Czerwonka, seconded by Director Wickes and carried to recommend approval of the September 2015 and YTD FY2016 Financial Report as presented. 5-0 by the Committee, 3-0 by Board members; Absent: 1 N Forwarded to the November 9, 2015, Board of Directors meeting with a recommendation for approval Additional information on the decrease in surgeries will be provided by Ms. Hansen and Mr. Beirne at next month's meeting Ms. Hansen will review ER Visits and will provide the Payor Mix for those cases at next month's meeting Utilizing an updated presentation, Ms. Hansen presented the financial report for September 2015 and YTD FY2016, noting that she had added a slide. FINANCIAL PERFORMANCE DASHBOARD (SLIDE 3) MONTH-TO-DATE o Adjusted Discharges: 4,162 vs. a budget of 4,085, a positive variance of just slightly under 2% o Acute Patient Days: 9,842 vs. a budget of 10,199, a negative variance of 3.5% This is consistent from last month to this, and it means that LOS as budgeted is lower than anticipated, which is good news as we move to value-based purchasing o ADC: 328 vs. a budget of 340, a negative variance of 12 o Operating Income: $637K vs. a budget of $454K o Net income: Net loss of $444K vs. a budgeted net loss of $729K, a positive variance of $285K Ms. Hansen commented that this was a good, solid financial performance for the month YEAR-TO-DATE o Adjusted Discharges: 12,661 vs. a budget of 12,527, a positive variance of 1.07% 2 7 BOARD FINANCE COMMITTEE - MEETING MINUTES - WEDNESDAY, OCTOBER 28, 2015 1. AGENDA ITEM CONCLUSION/ACTION FOLLOW UP/RESPONSIBLE PARTY FINAL? DISCUSSION o o Acute Patient Days: 29,921 vs. a budget of 31,277, a negative variance of $1,356 ADC: 325 vs. a budget of 340 Reflective of the negative variance in patient days o Operating Income: $1.79M vs. a budget of $1.52M, a favorable variance of $270K o Net Income: Net loss of $2.025M vs. a budgeted net loss of $2.017M, a negative variance of 7,500 Much better than last year Shows that we are maintaining consistent performance o Operating Expenses/Adjusted Discharges: $12.07K vs. a budget of $12.15, a slight positive variance of .65% o EBIDA Margin %: 11.36 vs. a budget of 11.58%, a slight negative variance of .22% o EBIDA Dollars: $18.9M vs. a budget of $19.3M, a negative variance of $329K KEY VOLUMES (SLIDE ADDED AFTER PACKET DISTRIBUTION - ATTACHMENT 1) o Ms. Hansen stated that she didn't get all the indicators in for this month's packet, as she will also be adding them for ALOS, Case Mix Index, Labor Productivity and DCOH o Surgeries MTD: 1,626 vs a budget of 1,663 YTD: 4,944 vs. a budget of 5,023, a slight negative variance of 79 for the first quarter Some of the changes are based on the transition, as we lost some outpatient surgeries because the physicians took their cases elsewhere How can we make that up and how might it grow as we move to the new campus? Frank Beirne, EVP Operations, said that the variance could be attributable to something as simple as how we allocated the case count (a) Indicated an interest in seeing the same period YTD to see if we are actually losing or growing, as well as breaking the surgeries down to inpatient and outpatient (b) Otherwise, there was nothing obvious that jumped out to explain the variance Mr. Beirne also indicated the variance might be attributable to something as simple as vacation time for one or more physicians Della Shaw, EVP Strategy, reminded the Committee that the service line leaders would be discussing trends in surgery at the Special Board meeting later this evening She indicated they would also be preparing a year-on-year review by doctor, which they will then doing on a monthly basis o Deliveries MTD: 376 vs. a budget of 399 YTD: 1,206 vs a budget of 1,253, a negative variance of 47 o ER Visits MTD: 12,522 vs. a budget of 11,886 YTD: 36,700 vs. a budget of 35,729, a positive variance of 971 Last year ER Visits were about 15% higher than budgeted, and they are already almost 3% higher vs. budget again this year o ALOS (not on slide) MTD: 3.94 vs. a budget of 4.03 YTD: 3.95 vs. a budget of 4.03. a negative variance of .08 o DCOH YTD at 109.4 Ms. Hansen forewarned the Committee that $23M had gone out in the month of October related to bond principle and interest payments The team will be working to build cash throughout the year About half that much will again go out in the month of April Ms. Hansen said it is probably too early to foreshadow the effect of ICD-10, as we are working with a new coding team, as well as working to get new staff onboarded/oriented Case Mix is also unavailable as there are about 20 more charts that need to be coded before those numbers can be run MTD INCOME STATEMENT (SLIDE 5) o SWB: Favorable vs. budget by $92.3K We are doing good work in terms of productivity and managing to volume o Benefits: Favorable vs. budget by $500K HR was able to negotiate a reduction in our group health insurance rate, which was budgeted higher than the new rate, so we should continue to see some favorability There was also some favorability in the pension benefit, but that should even out over the course of the year 3 8 BOARD FINANCE COMMITTEE - MEETING MINUTES - WEDNESDAY, OCTOBER 28, 2015 CONCLUSION/ACTION 1. AGENDA ITEM FOLLOW UP/RESPONSIBLE PARTY FINAL? DISCUSSION Additional savings have been budgeted in terms of benefits for the second half of the year Supplies: Unfavorable vs. budget by $336K Driven primarily by implants, as implants comprised $250K of the variance Director Wickes stated that he thought the center for excellence initiative would drive the expense down and was reminded that revenue will also be up, but it isn't delineated separately on the income statement o Pro Fees: Unfavorable vs. budget by $420K Largest thing driving that variance was a 3-month catch-up payment to a vendor in the amount of $132K The other driver is merely the timing of expenses Ms. Hansen anticipates pro fees to be okay by the end of the year YTD INCOME STATEMENT (SLIDE 6) o Supplies: Negative variance vs. budget of $376K, driven entirely by the September variance o SWB: Negative variance vs. budget of $1M $600-$800K of that variance is things that were budgeted but weren't done due to the decision to close PHDC o Depreciation: Positive variance of $699K, which will continue as we are holding on capital expenditures o Net Income: Negative variance vs. budget of $7.4K INCOME STATEMENT: CURRENT VS. PRIOR YEAR (SLIDE 7) o Total Net Revenue: Positive variance vs. prior year of $7.1M o Net Income: Positive variance vs. prior year of $1.2M o Strong improvement and performance over last year INCOME STATEMENT: MONTHLY TREND (SLIDE 8) o Net Income Before Operations shows a continued strong improvement for the year CASH FLOW STATEMENT (SLIDE 9) o Will not be reviewed tonight, but if you have any questions, please reach out o Director Wickes asked about the negative variance in Investment in Affiliates, as it seemed to go up considerably, and he wanted to know if it all went to Arch Ms. Hansen stated that, although a large portion of that amount is related to Arch, there are several other Joint Ventures in which we participate that contributed to that variance PAYOR MIX (SLIDE 12) o Ms. Hansen stated that there wasn't anything too significant, with variances of 1% or 2% between payors from August and/or prior year average Ms. Hansen then turned the floor back over to Chair Jerry Kaufman, who stated that he will be working with Ms. Hansen to develop an educational session for the Board on the basics of hospital financing, to likely be presented before a regular Board meeting in the near future o Ms. Hansen asked the Board members to let her know if there were specific things about which they would like more information, as she wants to be sure she provides everything they need in the curriculum PUBLIC COMMENTS o There were no public comments ADJOURNMENT The meeting was adjourned at 4:26 p.m. COMMITTEE CHAIR JERRY KAUFMAN, PT MA SIGNATURES: COMMITTEE SECRETARY TANYA HOWELL 4 9 $''(1'80\u0003% 10 Obstetrics and Gynecology On-Call Service Agreement for Palomar Medical Center TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: Frank T. Beirne, Executive Vice President Operations Palomar Health Background: Palomar Health Downtown Campus provides a comprehensive twenty-four (24) hour Obstetric and Gynecologic inpatient care unit. In connection with the operation of the unit and the fact that Palomar Medical Center does not provide Obstetric and Gynecological inpatient care, the hospital must arrange for qualified physicians to be available seven (7) days per week, twenty-four (24) hours a day, to accept, assess, appropriately treat and transfer as necessary to Palomar Health Downtown Campus, Obstetric and Gynecologic patients presenting at Palomar Medical Center. The Medical Group shall provide physician coverage within thirty (30) minutes of call received from Palomar Medical Center, seven (7) days per week, twenty-four (24) hours per day for unassigned OB/GYN patients presenting at Palomar Medical Center. This shall include providing assistance to the Medical Staff and Hospital staff in the emergent management of their OB/GYN patients. This amendment will extend existing agreement for one additional year or until transition of services is complete. Budget Impact: Budgeted Staff Recommendation: Approval Committee Questions: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - OB-GYN On-Call - Amendment #1 8-18-15.doc 11 PALOMAR HEALTH - AGREEMENT ABSTRACT Section Reference Term/Condition Recitals TITLE Recitals AGREEMENT DATE Recitals PARTIES Recitals B-E PURPOSE Agreement 1.1 SCOPE OF SERVICES Agreement 4.1 Agreement 4.1 PROCUREMENT METHOD TERM RENEWAL Term/Condition Criteria Obstetrics and Gynecology on-call Service Agreement for Palomar Medical Center Original: August 20, 2012 Extension: August 19, 2015 Palomar Health and Escondido OB-GYN Medical Group, Inc. dba North County Women's Specialists. Palomar Health operates an Obstetrics and Gynecology Unit at Palomar Health Downtown Campus that provides comprehensive, twenty-four (24) hour Obstetric and Gynecologic inpatient care (\"Unit\").In connection with the operation of the Unit and the fact that Palomar Medical Center does not provide Obstetric and Gynecological inpatient care, Hospital must arrange for qualified physicians to be available seven (7) days per week, twenty-four hours (24) a day, to accept, assess, appropriately treat and transfer as necessary to Palomar Health Downtown Campus, Obstetric and Gynecologic patients presenting at Palomar Medical Center. Palomar Medical Center consists of facilities and equipment owned by Hospital and staffed by Hospital employees in house. Hospital and Medical Group acknowledge and agree that this Agreement shall supersede the agreements, if any, previously entered into by the parties for the provision of On-Call Obstetrics and Gynecology Services (\"Services\").It is the intent of both Hospital and Medical Group that the terms and conditions of this Agreement, and the manner in which services are to be performed hereunder, fulfill and comply with all requirements of any applicable \"safe harbor\" or exception to the Stark and Anti-Kickback Statute laws and regulations, including, but in no way limited to, the applicable requirements set forth in regulations promulgated by the Department of Health and Human Services, Office of Inspector General, and the Ethics in Patient Referral Act. The Medical Group will provide on-call physician coverage within Thirty (30) minutes of call received from Palomar Medical Center, seven (7) days per week, twenty-four (24) hours per day for unassigned OB/GYN patients presenting at Palomar Medical Center. This shall include providing assistance to the Medical Staff and Hospital staff in the emergent management of their OB/GYN patients. Request For Proposal Discretionary August 19, 2012 until August 18, 2015. This extension will roll over for one year or until transition of services from PHDC is complete. a) The contract may be extended for two (2) separate one (1) year terms based on consistency of meeting performance indicator as listed in Exhibit E i) First renewal as of August 19, 2015 12 Agreement 4.2.1.1 6.26 TERMINATION Either party may terminate this agreement, without cause or penalty, by giving no less than ninety (90) days' prior written notice to the other party. COMPENSATION METHODOLOGY Fair Market value assessment of the agreement by independent human resources consulting firm. BUDGETED YES NO - IMPACT: EXCLUSIVITY NO JUSTIFICATION To provide on-call OB-GYN coverage seven (7) days a week, Twenty-four (24) hours a day for unassigned OB/GYN patients presenting at Palomar Medical Center. AGREEMENT NOTICED YES NO ALTERNATIVES/ IMPACT Palomar Medical Center does not provide OB/GYN inpatient care, the hospital must arrange for qualified physician on-call coverage. Duties Provision for Staff Education Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development YES - EXPLAIN: Methodology & Response: COMMENTS APPROVALS REQUIRED VP CFO CEO BOD Committee BOD 13 Palomar Medical Center Administrative Services Agreements Investigational Review Committee Chair TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: Maria Sudak, Vice President Palomar Medical Center Background: The Chair of the Investigational Review Committee is provided a stipend for services performed. This agreement serves to document the relationship of the Investigational Review Committee Chair to Palomar Health and the Medical Staff. It also details the duties to be performed as consideration for the stipend to assure compliance with federal regulations. Dr. Just has served as the Chair of the IRB and this amendment reflects a continuance of his services. Budget Impact: $12,000 Staff Recommendation: Approval Committee Questions: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - Just_ Richard G_ M.D. - Amendment 2 to 7-1-12 Committee Chair Agreement - 7-114.doc 14 PALOMAR HEALTH - AGREEMENT ABSTRACT Section Reference Term/Condition Term/Condition Criteria TITLE Preamble Medical Staff Investigational Review Committee Chair Agreement AGREEMENT DATE Preamble August 31, 2015 Recital PARTIES 1) Richard G. Just, M.D. Section 2 SCOPE OF SERVICES 1) As per duties defined in Medical Staff By-laws and policies Request For Proposal Section 4 PROCUREMENT METHOD TERM Section 4 RENEWAL Effective August 31, 2015 thru August 31, 2016 with automatic Roll-over after initial term. None Section 5 TERMINATION 1) As described under section 5 Section 3.1 COMPENSATION METHODOLOGY This amendment will reflect an increase in monthly compensation in order to fall within fair market value. BUDGETED YES NO - IMPACT: EXCLUSIVITY NO JUSTIFICATION These positions are elected or appointed by the Medical Staff in accordance with Medical Staff by-laws. YES NO Methodology & Response: AGREEMENT NOTICED Discretionary YES - EXPLAIN: Specialty Physician Elected/appointed by the Palomar Medical Center Medical Staff ALTERNATIVES/IMPACT N/A Duties Defined by the Medical Staff COMMENTS This agreement template was developed by legal counsel. This position is voted upon by Active members of the Medical Staff. APPROVALS REQUIRED VP CFO CEO BOD Committee ____________ BOD 15 POMERADO HOSPITAL InInsert Subject Here EMERGENCY ON-CALL AGREEMENT BRIAN LE, M.D. TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: . Cheryl Olson, RN, MS, NEA-BC Interim Vice President, Pomerado and PHDC BACKGROUND: This contract represents the On-Call Agreement with Brian Le, MD. Physician shall serve as a member of the On-Call Panel on a rotating basis and provide On-Call Coverage for the specialty of Ophthalmology in accordance with the Hospital bylaws, rules and regulations, policies and procedures of Palomar Health. BUDGET IMPACT: None STAFF RECOMMENDATION: Approval COMMITTEE QUESTIONS: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - Le, Brian- ED On-Call Agreement- 2015.doc 16 PALOMAR POMERADO HEALTH - AGREEMENT ABSTRACT Section Reference Term/Condition TITLE Term/Condition Criteria Emergency On-Call Agreement AGREEMENT DATE December 1, 2015 PARTIES 1) Pomerado Hospital 2) Brian Le, M.D. Recitals E PURPOSE To serve on the On-Call Panel as required by the medical staff bylaws, and rules and regulations, of Pomerado Hospital. Exhibit A SCOPE OF SERVICES To provide On-Call coverage pursuant to the On-Call Agreement for the specialty of Ophthalmology at Pomerado Hospital. Request For Proposal 5 PROCUREMENT METHOD TERM N/A RENEWAL None 6 TERMINATION 1. Immediate for cause 2. Not less than 90 days of written notice without cause 2 COMPENSATION METHODOLOGY Monthly payment on or before the 15th of the month with supporting documentation. BUDGETED YES NO - IMPACT: EXCLUSIVITY NO JUSTIFICATION Need for continued Ophthalmology consultation call coverage for the Emergency Department. AGREEMENT NOTICED YES Discretionary The term of this agreement shall commence effective as of December 1, 2015 through August 31, 2018. YES - EXPLAIN: NO Methodology & Response: ALTERNATIVES/IMPACT N/A 1 Duties Physician shall provide On-Call Panel Coverage and professional services in accordance with the Hospital's bylaws, rules and regulations, policies and procedures. COMMENTS APPROVALS REQUIRED Officers CFO CEO BOD Committee Finance BOD 17 POMERADO HOSPITAL InInsert Subject Here EMERGENCY ON-CALL AGREEMENT ERWIN OMENS, M.D. TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: . Cheryl Olson, RN, MS, NEA-BC Interim Vice President, Pomerado and PHDC BACKGROUND: This contract represents the On-Call Agreement with Erwin Omens, MD. Physician shall serve as a member of the On-Call Panel on a rotating basis and provide On-Call Coverage for the specialty of Ophthalmology in accordance with the Hospital bylaws, rules and regulations, policies and procedures of Palomar Health. BUDGET IMPACT: None STAFF RECOMMENDATION: Approval COMMITTEE QUESTIONS: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - Omens, Erwin- ED On-Call Agreement- 2015.doc 18 PALOMAR POMERADO HEALTH - AGREEMENT ABSTRACT Section Reference Term/Condition TITLE Term/Condition Criteria Emergency On-Call Agreement AGREEMENT DATE December 1, 2015 PARTIES 1) Pomerado Hospital 2) Erwin Omens, M.D. Recitals E PURPOSE To serve on the On-Call Panel as required by the medical staff bylaws, and rules and regulations, of Pomerado Hospital. Exhibit A SCOPE OF SERVICES To provide On-Call coverage pursuant to the On-Call Agreement for the specialty of Ophthalmology at Pomerado Hospital. Request For Proposal 5 PROCUREMENT METHOD TERM N/A RENEWAL None 6 TERMINATION 1. Immediate for cause 2. Not less than 90 days of written notice without cause 2 COMPENSATION METHODOLOGY Monthly payment on or before the 15th of the month with supporting documentation. BUDGETED YES NO - IMPACT: EXCLUSIVITY NO JUSTIFICATION Need for continued Ophthalmology consultation call coverage for the Emergency Department. AGREEMENT NOTICED YES Discretionary The term of this agreement shall commence effective as of December 1, 2015 through August 31, 2018. YES - EXPLAIN: NO Methodology & Response: ALTERNATIVES/IMPACT N/A 1 Duties Physician shall provide On-Call Panel Coverage and professional services in accordance with the Hospital's bylaws, rules and regulations, policies and procedures. COMMENTS APPROVALS REQUIRED Officers CFO CEO BOD Committee Finance BOD 19 Palomar Health Palomar Health and Medical Director Service Agreement Radiation Oncology Service TO: Board Finance Committee MEETING DATE: Wednesday, December 2, 2015 FROM: Sheila Brown, RN Vice President of Continuum Care Background: X-Ray Medical Group Radiation Oncology, Inc. (\"X-Ray Medical\") provides radiation oncology professional and medical director services to Palomar Health. X-Ray Medical has provided services to Palomar Health for a number of years and has been responsive to the medical staff and health system in meeting their clinical needs and those of the patients. The physicians of X-Ray Medical are well trained, bringing expertise to Palomar Health for the full range of both traditional and contemporary methods of radiation therapy. Budget Impact: None Staff Recommendation: Approval Committee Questions: COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time: Form A - X-Ray Medical Group.doc 20 PALOMAR HEALTH - AGREEMENT ABSTRACT Section Reference Term/Condition TITLE AGREEMENT DATE PARTIES Term/Condition Criteria Professional and Medical Director Services Agreement Radiation Oncology Services October 16, 2015 Palomar Health and X-Ray Medical Group Radiation Oncology Recital D PURPOSE Exhibit A 1.1 SCOPE OF SERVICES Provide on-site medical services for the Radiation Oncology outpatient clinic with business hours from 8:00am to 4:30, Monday through Friday PROCUREMENT METHOD Request For Proposal 5.1 Exhibit TERM RENEWAL Exhibit 5.2 Exhibit 5.21.1 5.2.2 Exhibit 2.1 Exhibit 2.2 TERMINATION COMPENSATION METHODOLOGY To provide professional radiation oncology services, clinical oversight and certain administrative services at Palomar Medical Center. x Discretionary This agreement shall commence upon the effective Date and shall continue until August 31,2020 unless terminated soon as provided in this agreement No Either Party may terminate this agreement without cause or penalty, by giving no less than (90) ninety days written notice. Group shall have the right to immediate terminate this agreement In consideration for Group's services under this agreement, Hospital shall pay group the sole aggregate amount of $2,500.00 per each Kaiser Permanente member when a CPT code is 77261, 77262, 77263 are performed by Group. Fair Market Value, the parties agree that the total compensation paid under this agreement represents Fair Market Value for the services. X NO - IMPACT: BUDGETED YES EXCLUSIVITY NO X YES - EXPLAIN: Hospital based physician for Radiation Therapy Department services. JUSTIFICATION Hospital based physician For Radiation Therapy Department Services AGREEMENT NOTICED YES X NO Methodology & Response: Continuation with present provider ALTERNATIVES/IMPACT Duties None x Provision for Staff Education x Provision for Medical Staff Education x Provision for participation in Quality Improvement x Provision for participation in budget process development COMMENTS APPROVALS REQUIRED X VP X CFO X CEO X BOD Committee ____________ BOD 21 \u0003\u0003$''(1'80\u0003& FINANCIAL PERFORMANCE FOR OCTOBER 2015 FISCAL YEAR 2016 22 FYTD16 OCTOBER - TABLE OF CONTENTS EXECUTIVE YEAR-TO-DATE FINANCIAL PERFORMANCE DASHBOARD ................................................................................................................................. 3 INCOME STATEMENTS MONTH-TO-DATE ............................................................................................................................................................................................ 5 YEAR-TO-DATE ................................................................................................................................................................................................ 6 CURRENT VS. PRIOR YEAR-TO-DATE .................................................................................................................................................................... 7 MONTHLY TREND ............................................................................................................................................................................................ 8 BUDGET COMPARISON STATISTICAL INDICATORS STATISTICAL INDICATORS ................................................................................................................................................................................... 9 PAYOR MIX ................................................................................................................................................................................................... 11 CASE MIX INDEX ............................................................................................................................................................................................ 12 SUPPLEMENTAL INFORMATION BALANCE SHEETS EXCLUDES G.O. BONDS................................................................................................................................................................................... 14 INCLUDES G.O. BONDS ................................................................................................................................................................................... 15 CASH FLOW STATEMENT ....................................................................................................................................................................................... 16 23 FYTD16 OCTOBER - EXECUTIVE FINANCIAL PERFORMANCE DASHBOARD Year-to-Date Month-to-Date Indicator Actual 4,258 10,235 330 Adjusted Discharges Acute Patient Days Average Daily Census Operating Income Net Income Operating Expenses (w/o Depr. ) / Adj. Dschg $ $ $ Adjusted Discharges Acute Patient Days Average Daily Census 861,447 $ (656,645) $ 12,166 $ 3 Budget 4,221 10,539 340 699,965 $ (488,096) $ 12,208 16,919 40,156 326 16,748 41,816 340 2,646,992 $ (2,682,020) $ 12,097 $ Change 0.88% (2.88%) (2.88%) 161,482 (168,549) 0.35% 1.02% (3.97%) (3.97%) Operating Income Net Income Operating Expenses (w/o Depr. ) / Adj. Dschg $ $ $ 2,215,040 $ (2,506,055) $ 12,168 431,952 (175,965) 0.58% EBIDA Margin % EBIDA $ (Earnings before Dept. & Int. Exp.) 11.33% 11.61% $ 25,368,160 $ 25,934,452 $ (0.28%) (566,292) 24 4 FYTD16 OCTOBER - EXECUTIVE FINANCIAL PERFORMANCE DASHBOARD Actual Key Volumes Surgeries Inpatient Outpatient Deliveries ER Visits Key Statistics Average LOS Case Mix * Labor Productivity Days Cash on Hand Month-to-Date Budget Variance Prior Year 1,572 894 678 383 12,591 1,759 939 820 402 11,908 3.92 1.41 4.03 1.38 (10.63%) (4.79%) (17.32%) (4.73%) 5.74% 2.73% 2.17% Actual Year-to-Date Budget Variance Prior Year 1,814 892 922 369 11,619 6,489 3,540 2,949 1,589 49,291 6,781 3,575 3,206 1,655 47,637 (4.31%) (0.98%) (8.02%) (3.99%) 3.47% 6,684 3,416 3,268 1,655 46,340 4.05 1.38 3.94 1.37 97.8% 96.5 4.03 1.38 100.0% 80.0 2.23% (0.72%) (2.2%) 20.6% 4.02 1.38 95.3% 86.0 * As of September 2015 25 FYTD16 OCTOBER - INCOME STATEMENT: MONTH-TO-DATE CONSOLIDATED - ADJUSTED DISCHARGES Actual Revenue: Gross Revenue Deductions from Rev Net Patient Revenue Other Oper Revenue Total Net Revenue $ Expenses: Salaries, Wages & Contr Labor Benefits Supplies Prof Fees & Purch Svc Depreciation Other Total Expenses Net Inc Before Non-Oper Income Property Tax Revenue 1 Non-Operating Income 12 Net Income (Loss) EBIDA Margin $ Budget 288,715,413 $ 285,814,828 $ (232,969,924) (230,294,026) 55,745,489 55,520,802 1,117,580 1,070,525 56,863,069 56,591,327 24,843,699 6,749,113 7,847,397 8,921,813 4,199,072 3,440,528 56,001,622 24,373,140 7,208,478 7,604,240 8,894,657 4,359,756 3,451,091 55,891,362 861,447 699,965 1,258,333 (2,776,425) 1,258,333 (2,446,394) (656,645) $ 11.23% (488,096) $ 11.70% Variance Volume Rate/Eff Variance 2,900,585 (2,675,898) 224,687 47,055 271,742 (470,559) 459,365 (243,157) (27,156) 160,684 10,563 (110,260) 5 F $ U F F F U F U U F F U 161,482 F $ 2,505,366 $ (2,018,687) 486,678 9,384 496,062 (213,648) (63,187) (66,656) (77,968) (38,216) (30,251) (489,927) 6,136 $ Actual $/Adjusted Discharges Budget Variance 395,219 $ 67,805.40 $ 67,712.59 $ (657,211) (54,713.46) (54,559.12) (261,991) 13,091.94 13,153.47 37,671 262.47 253.62 (224,320) 13,354.41 13,407.09 92.82 (154.35) (61.53) 8.85 (52.68) (256,911) 522,552 (176,501) 50,812 198,900 40,814 379,667 (60.34) 122.72 (41.45) 11.93 46.71 9.59 89.17 155,346 $ 5,834.59 1,585.04 1,842.98 2,095.31 986.16 808.02 13,152.10 202.31 $ 5,774.26 1,707.77 1,801.53 2,107.24 1,032.87 817.60 13,241.26 165.83 $ 36.48 (330,031) U (168,549) U (0.47%) F= Favorable variance U= Unfavorable variance 1= Property Tax Revenue does not include G.O. Bonds Levy 2= Interest Expense does not include G.O. Bonds Interest 26 FYTD16 OCTOBER - INCOME STATEMENT: YEAR-TO-DATE CONSOLIDATED - ADJUSTED DISCHARGES Actual Revenue: Gross Revenue Deductions from Rev Net Patient Revenue Other Oper Revenue Total Net Revenue $ 1,134,778,348 $ 1,128,509,159 $ (915,520,027) (909,353,271) 219,258,321 219,155,888 4,644,009 4,281,000 223,902,330 223,436,888 Expenses: Salaries, Wages & Contr Labor Benefits Supplies Prof Fees & Purch Svc Depreciation Other Total Expenses Net Inc Before Non-Oper Income Property Tax Revenue 1 Non-Operating Income 2 Net Income (Loss) EBIDA Margin Budget $ 6 Variance Volume Rate/Eff Variance $/Adjusted Discharges Actual Budget Variance 6,269,189 (6,166,756) 102,433 363,009 465,442 F $ U F F F 11,522,275 $ (9,284,655) 2,237,620 43,710 2,281,330 (5,253,086) $ 67,071.24 $ 3,117,899 (54,111.95) (2,135,187) 12,959.30 319,299 274.48 (1,815,888) 13,233.78 67,381.73 $ (54,296.23) 13,085.50 255.61 13,341.11 (310.48) 184.28 (126.20) 18.87 (107.33) (1,517,040) 1,446,316 (619,392) (235,737) 859,849 32,514 (33,490) U F U U F F U (979,418) (293,753) (303,794) (367,046) (178,055) (136,648) (2,258,714) (537,622) 1,740,069 (315,598) 131,309 1,037,904 169,162 2,225,224 5,727.59 1,717.85 1,776.57 2,146.47 1,041.25 799.11 13,208.85 (31.78) 102.85 (18.65) 7.76 61.35 10.00 131.52 97,442,723 27,324,255 30,373,442 36,184,820 16,579,086 13,351,012 221,255,338 95,925,683 28,770,571 29,754,050 35,949,083 17,438,935 13,383,526 221,221,848 2,646,992 2,215,040 431,952 F $ 5,033,332 (10,362,344) 5,033,332 (9,754,427) - (607,917) U (2,682,020) $ (2,506,055) $ (175,965) U 11.33% 11.61% (0.28%) 22,616 $ 409,336 $ 5,759.37 1,615.00 1,795.23 2,138.71 979.91 789.11 13,077.33 156.45 $ 132.26 $ 24.19 F= Favorable variance U= Unfavorable variance 1= Property Tax Revenue does not include G.O. Bonds Levy 2= Interest Expense does not include G.O. Bonds Interest 27 FYTD16 OCTOBER - INCOME STATEMENT: CURRENT VS. PRIOR YEAR-TO-DATE CONSOLIDATED - ADJUSTED DISCHARGES Revenue: Gross Revenue Deductions from Rev Net Patient Revenue Other Oper Revenue Total Net Revenue October 15 YTD October 14 YTD Variance $ 1,134,778,348 $ 1,017,931,869 $ (915,520,027) (808,413,883) 219,258,321 209,517,986 4,644,009 4,375,859 223,902,330 213,893,845 116,846,479 (107,106,144) 9,740,335 268,150 10,008,485 Expenses: Salaries, Wages & Contr Labor Benefits Supplies Prof Fees & Purch Svc Depreciation Other Total Expenses Net Inc Before Non-Oper Income Property Tax Revenue 1 Non-Operating Income 2 Net Income (Loss) EBIDA Margin $ Variance Volume F $ U F F F 97,442,723 27,324,255 30,373,442 36,184,820 16,579,086 13,351,012 221,255,338 95,024,922 25,352,010 29,034,482 32,947,401 18,121,217 12,025,871 212,505,903 2,646,992 1,387,942 1,259,050 F $ 5,033,332 (10,362,344) 4,633,333 (5,575,895) 399,999 F (4,786,449) U (2,682,020) $ 11.33% 445,380 $ 13.84% (2,417,801) U (1,972,245) U (1,338,960) U (3,237,419) U 1,542,131 F (1,325,141) U (8,749,435) U 29,786,180 $ (23,655,376) 6,130,804 128,044 6,258,848 (2,780,569) (741,837) (849,592) (964,089) (530,253) (351,895) (6,218,235) 40,613 $ Rate/Eff 7 $/Adjusted Discharges Actual FY15 Actual FY14 87,060,299 $ 67,071.24 $ 61,925.53 $ (83,450,768) (54,111.95) (49,179.58) 3,609,531 12,959.30 12,745.95 140,106 274.48 266.20 3,749,637 13,233.78 13,012.16 362,768 (1,230,408) (489,368) (2,273,330) 2,072,384 (973,246) (2,531,200) 1,218,437 $ 5,759.37 1,615.00 1,795.23 2,138.71 979.91 789.11 13,077.33 156.45 $ 5,780.81 1,542.28 1,766.30 2,004.34 1,102.40 731.59 12,927.72 84.43 $ Variance 5,145.71 (4,932.37) 213.34 8.28 221.62 21.44 (72.72) (28.92) (134.37) 122.49 (57.52) (149.61) 72.02 (3,127,400) U (2.51%) F= Favorable variance U= Unfavorable variance 1= Property Tax Revenue does not include G.O. Bonds Levy 2= Interest Expense does not include G.O. Bonds Interest 28 FYTD16 OCTOBER - INCOME STATEMENT: MONTHLY TREND CONSOLIDATED - ADJUSTED DISCHARGES Jul Statistics: Admissions - Acute 2,559 46 10,001 3,489 3.91 85.10 322 1,701 446 11.6% 12,010 13,497 108 4,276 Admissions - SNF Patient Days - Acute Patient Days - SNF ALOS - Acute ALOS - SNF ADC Surgeries Births ER to Admit Rate Total ER Visits OP Registrations Days Cash On Hand Adjusted Discharges Revenue: Gross Revenue Deductions from Rev Net Patient Revenue Other Oper Revenue Total Net Revenue $ Expenses: Salaries, Wages & Contr Labor Benefits Supplies Prof Fees & Purch Svc Depreciation Other Total Expenses Net Inc Before Non-Oper Income Property Tax Revenue 1 Non-Operating Income12 Net Income (Loss) EBIDA Margin 282,264,519 $ (227,047,960) 55,216,559 1,081,337 56,297,896 2,478 36 10,078 3,557 4.01 86.76 325 1,617 384 11.4% 12,168 12,785 106 4,223 282,578,347 $ (228,675,091) 53,903,256 1,371,301 55,274,557 Sep 2,520 40 9,842 3,472 3.94 77.16 328 1,626 376 11.6% 12,522 12,703 109 4,162 281,220,068 $ (226,827,050) 54,393,018 1,073,791 55,466,809 Oct 2,596 35 10,235 3,386 3.92 89.11 330 1,545 383 11.8% 12,591 13,332 97 4,258 YTD 10,153 157 40,156 13,904 3.94 84.27 326 6,489 1,589 11.6% 49,291 52,317 97 16,919 288,715,413 $ 1,134,778,348 (232,969,924) (915,520,027) 55,745,489 219,258,321 1,117,580 4,644,009 56,863,069 223,902,330 24,348,496 7,106,723 7,454,352 9,228,032 4,204,533 3,435,765 55,777,901 24,550,982 6,827,021 7,405,446 8,756,553 3,955,678 3,150,797 54,646,477 23,699,546 6,641,398 7,666,247 9,278,423 4,219,803 3,323,922 54,829,339 24,843,699 6,749,113 7,847,397 8,921,813 4,199,072 3,440,528 56,001,622 97,442,723 27,324,255 30,373,442 36,184,820 16,579,086 13,351,012 221,255,338 519,995 628,080 637,470 861,447 2,646,992 1,258,333 (2,605,543) $ Aug 8 (827,215) $ 11.14% 1= Property Tax Revenue does not include G.O. Bonds Levy 2= Interest Expense does not include G.O. Bonds Interest 1,258,333 (2,640,090) (753,677) $ 10.83% 1,258,333 (2,340,285) (444,482) $ 12.13% 1,258,333 (2,776,425) (656,645) $ 11.23% 5,033,332 (10,362,344) (2,682,020) 11.33% 29 FYTD16 OCTOBER - STATISTICAL INDICATORS Jul-15 Aug-15 Sep-15 Adjusted Discharges - Consolidated North 3,305 3,308 3,248 South 956 899 899 Cons 4,276 4,223 4,162 Oct-15 Nov-15 9 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 YTD Budget 3,272 980 4,258 13,133 3,734 16,919 13,105 3,646 16,748 Patient Days - Acute North 7,979 8,012 South 2,022 2,066 Cons 10,001 10,078 7,841 2,001 9,842 8,279 1,956 10,235 32,111 8,045 40,156 33,615 8,201 41,816 Observation Discharges Cons 719 764 717 658 2,858 2,584 Average Length of Stay - Acute North 3.92 3.99 South 3.88 4.07 Cons 3.91 4.01 3.90 4.11 3.94 3.94 3.83 3.92 3.94 3.97 3.94 4.03 4.01 4.03 Average Daily Census - Acute North 257 258 South 65 67 Cons 322 325 261 67 328 267 63 330 261 65 326 273 67 340 Surgeries - Inpatient Only North 732 690 South 193 174 Cons 925 864 666 191 857 671 185 856 2,759 743 3,502 2,882 659 3,541 Surgeries - Outpatient Only North 514 502 South 255 239 Cons 769 741 476 285 761 367 311 678 1,859 1,090 2,949 2,214 992 3,206 8 11 38 34 Surgeries - CVS Cases North 7 South Cons 7 Total Surgeries North 1,253 South 448 Cons 1,701 12 - - - - - 12 8 11 38 34 1,204 413 1,617 1,150 476 1,626 1,049 496 1,545 4,656 1,833 6,489 5,130 1,651 6,781 30 FYTD16 OCTOBER - STATISTICAL INDICATORS Jul-15 Aug-15 Sep-15 Outpatient Registrations (includes Lab) North 9,531 8,984 8,862 South 3,966 3,801 3,841 Cons 13,497 12,785 12,703 Oct-15 Nov-15 10 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 YTD Budget 9,241 4,091 13,332 36,618 15,699 52,317 34,459 17,605 52,064 ER Visits (includes Trauma) - Outpatient Only North 8,211 8,375 8,533 8,499 South 2,411 2,411 2,540 2,605 Cons 10,622 10,786 11,073 11,104 C/Day 343 348 369 358 33,618 9,967 43,585 354 32,666 9,318 41,984 341 ER Visits (includes Trauma) - Inpatient Only North 1,110 1,075 1,161 1,184 South 278 307 288 303 Cons 1,388 1,382 1,449 1,487 4,530 1,176 5,706 4,495 1,158 5,653 Total ER Visits (includes Trauma & Admission) North 9,321 9,450 9,694 9,683 South 2,689 2,718 2,828 2,908 Cons 12,010 12,168 12,522 12,591 38,148 11,143 49,291 37,161 10,476 47,637 11.9% 10.6% 11.6% 12.1% 11.1% 11.9% ER Conversion (ER Admissions as %-age of ER Visits) North 11.9% 11.4% 12.0% 12.2% South 10.3% 11.3% 10.2% 10.4% Cons 11.6% 11.4% 11.6% 11.8% Trauma Cases North 134 South Cons 134 Trauma Admissions North 80 South Cons 80 Deliveries North South Cons 314 132 446 122 122 151 151 168 168 575 575 515 515 77 96 - 77 101 101 96 354 354 345 345 281 103 384 283 93 376 276 107 383 1,154 435 1,589 1,171 484 1,655 80.39 87.40 - Kaiser Average Daily Census Cons 79.23 81.55 79.57 N/A 31 FYTD16 OCTOBER - PAYOR MIX 11 Jun-16 May-16 Apr-16 Mar-16 Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 24% 14% Sep-15 22% 13% Aug-15 21% 14% 22% 15% PY AVG 23% 15% 0% 10% 20% MEDICARE MCAR MGD 7% 13% 8% Jul-15 30% MEDI-CAL 13% 9% 13% 6% MCAL MGD 22% 11% 2% 4% 3% 24% 11% 2% 5% 2% 24% 11% 2% 5% 15% 10% 40% 1% 12% 50% SELF PAY 1% 23% 1% 60% MGD CARE 12% 24% 70% CAP 11% 80% COV-CA 90% OTHER 2% 4% 2% 2% 100% 32 FYTD16 OCTOBER - CASE MIX INDEX Jul-15 Case Mix Index North 1.41 South 1.31 Cons 1.39 Aug-15 Sep-15 1.35 1.17 1.31 Oct-15 12 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 YTD Budget 1.42 N/A 1.36 N/A 1.41 N/A 1.39 1.27 1.37 1.41 1.29 1.38 Case Mix Index (excludes Deliveries) North 1.53 1.58 1.55 N/A South 1.51 1.47 1.52 N/A Cons 1.52 1.56 1.54 N/A 1.55 1.50 1.54 1.52 1.50 1.52 Case Mix Index - Medicare Only North 1.71 1.80 South 1.57 1.57 Cons 1.67 1.72 1.68 1.56 1.65 1.64 1.60 1.63 1.56 N/A 1.54 N/A 1.55 N/A 33 SUPPLEMENTAL INFORMATION 13 34 FYTD16 OCTOBER - BALANCE SHEET CONSOLIDATED (EXCLUDES G.O. BONDS) Current Month Assets Current Assets Cash on Hand Cash Marketable Securities Total Cash & Equivalents Prior Month Prior Fiscal Year End $20,088,638 117,642,642 137,731,280 $40,692,945 117,595,009 158,287,954 $44,254,404 140,516,398 184,770,802 482,643,453 (347,138,260) 135,505,193 413,615,730 (285,691,888) 127,923,842 337,095,767 (212,811,109) 124,284,658 Inventories Prepaid Expenses Est Third Party Settlements Other Total Current Assets 10,044,821 1,628,080 1,138,901 22,355,814 308,404,089 9,978,443 2,667,768 1,687,831 22,708,055 323,253,893 9,861,433 1,758,164 1,687,831 9,558,555 331,921,443 Non-Current Assets Restricted Assets Restricted Other Board Designated Total Restricted Assets 78,155,606 345,867 23,245,285 101,746,758 54,391,253 345,791 23,430,513 78,167,557 54,724,772 345,022 0 55,069,794 Property Plant & Equipment Accumulated Depreciation Construction in Process Net Property Plant & Equipment 1,538,106,402 (435,084,236) 30,439,719 1,133,461,885 1,538,076,770 (430,868,218) 30,008,100 1,137,216,652 1,537,946,172 (418,554,489) 29,071,384 1,148,463,067 Investment in Related Companies Deferred Financing Costs Other Non-Current Assets Total Non-Current Assets 3,726,308 4,071,057 60,441,834 1,303,447,843 3,593,296 4,099,951 58,517,397 1,281,594,853 3,686,343 4,184,632 53,377,109 1,264,780,945 $1,611,851,932 $1,604,848,746 $1,596,702,388 Patient Accounts Receivable Allowance on Accounts Net Accounts Receivable Total Assets 14 Current Month Prior Month Prior Fiscal Year End Liabilities Current Liabilities Accounts Payable Accrued Payroll Accrued PTO Accrued Interest Payable Current Portion of Bonds Est Third Party Settlements Other Current Liabilities Total Current Liabilities $18,491,269 18,563,451 20,481,977 12,519,503 11,070,000 13,174,821 49,239,837 143,540,858 $11,500,146 15,999,725 20,361,921 10,409,872 11,070,000 13,462,724 52,998,389 135,802,777 $24,282,376 20,671,198 20,677,294 4,150,120 11,070,000 11,574,043 33,455,538 125,880,569 Long Term Liabilities Other LT Liabilities Bonds & Contracts Payable Total Long Term Liabilities 633,600 578,598,783 579,232,383 655,374 578,557,885 579,213,259 418,221 578,435,191 578,853,412 General Fund Balance Unrestricted Restricted for Other Purpose Board Designated Total Fund Balance 865,487,539 345,867 23,245,285 889,078,691 866,056,406 345,791 23,430,513 889,832,710 891,623,385 345,022 0 891,968,407 $1,611,851,932 $1,604,848,746 $1,596,702,388 Total Liabilities / Fund Balance 35 FYTD16 OCTOBER - BALANCE SHEET CONSOLIDATED (INCLUDES G.O. BONDS) Current Month Assets Current Assets Cash on Hand Cash Marketable Securities Total Cash & Cash Equivalents Prior Month 15 Prior Fiscal Year End $20,088,638 117,642,642 137,731,280 $40,692,945 117,595,009 158,287,954 $44,254,404 140,516,398 184,770,802 482,643,453 (347,138,260) 135,505,193 413,615,730 (285,691,888) 127,923,842 337,095,767 (212,811,109) 124,284,658 Inventories Prepaid Expenses Est Third Party Settlements Other Total Current Assets 10,044,821 1,628,080 1,138,901 27,738,233 313,786,508 9,978,443 2,667,768 1,687,831 26,911,711 327,457,549 9,861,433 1,758,164 1,687,831 9,659,635 332,022,523 Non-Current Assets Restricted Assets Restricted Other Board Designated Total Restricted Assets 89,610,667 345,867 23,245,285 113,201,819 65,524,986 345,791 23,430,513 89,301,290 76,157,138 345,022 0 76,502,160 Property Plant & Equipment Accumulated Depreciation Construction in Process Net Property Plant & Equipment 1,538,106,402 (435,084,236) 30,439,719 1,133,461,885 1,538,076,770 (430,868,218) 30,008,100 1,137,216,652 1,537,946,172 (418,554,489) 29,071,384 1,148,463,067 Investment in Related Companies Deferred Financing Costs Other Non-Current Assets Total Non-Current Assets 3,726,308 7,982,442 60,441,834 1,318,814,288 3,593,296 8,031,363 58,517,397 1,296,659,998 3,686,343 8,176,230 53,377,109 1,290,204,909 $1,632,600,796 $1,624,117,547 $1,622,227,432 Patient Accounts Receivable Allowance on Accounts Net Accounts Receivable Total Assets Current Month Prior Month Prior Fiscal Year End Liabilities Current Liabilities Accounts Payable Accrued Payroll Accrued PTO Accrued Interest Payable Current Portion of Bonds Est Third Party Settlements Other Current Liabilities Total Current Liabilities $18,491,269 18,563,450 20,481,977 15,752,069 15,559,260 13,174,821 49,239,837 151,262,683 $11,500,147 15,999,725 20,361,921 12,564,916 15,559,260 13,462,724 52,998,389 142,447,082 $24,282,376 20,671,199 20,677,294 9,861,041 15,001,279 11,574,043 33,455,538 135,522,770 Long Term Liabilities Other LT Liabilities Bonds & Contracts Payable Total Long Term Liabilities 633,600 1,167,196,764 1,167,830,364 655,374 1,165,424,747 1,166,080,121 418,221 1,164,569,194 1,164,987,415 289,916,597 345,867 23,245,285 313,507,749 291,814,040 345,791 23,430,513 315,590,344 321,372,225 345,022 0 321,717,247 $1,632,600,796 $1,624,117,547 $1,622,227,432 General Fund Balance Unrestricted Restricted for Other Purpose Board Designated Total Fund Balance Total Liabilities / Fund Balance 36 16 FYTD16 OCTOBER - CASH FLOW STATEMENT October CASH FLOWS FROM OPERATING ACTIVITIES: Income (Loss) from operations Adjustments to reconcile change in net assets to net cash provided by operating activities: Depreciation Expense Provision for bad debts $ 861,447 YTD $ 2,646,992 4,199,072 4,783,159 16,579,086 16,944,534 (12,364,510) 162,687 (66,378) 906,676 6,991,122 2,683,781 261,027 (2,443,908) 5,974,176 (28,165,068) 1,675,257 (183,388) 90,119 (5,791,107) (2,303,066) 2,149,708 5,768,601 9,411,668 (23,948,162) 28,050 (1,992,370) (25,912,482) (13,825,903) 958,757 (7,156,788) (20,023,934) 321,237 189,554 510,791 718,661 627,480 1,346,141 (444,301) 0 (710,717) (21,774) (1,176,792) (1,577,902) (6,765,233) (2,840,606) (3,715,900) (14,899,641) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (20,604,307) (24,165,766) CASH AND CASH EQUIVALENTS - Beginning of period 40,692,945 44,254,404 20,088,638 $ 20,088,638 Changes in operating assets and liabilities: Patient accounts receivable Property Tax and other receivables Inventories Prepaid expenses and other current assets Accounts payable Accrued compensation Estimated settlement amounts due third-party payors Other current liabilities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Net (purchases) sales of investments Income (Loss) on investments Investment in affiliates Net cash used in investing activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Receipt of G.O. Bond Taxes Receipt of District Taxes Net cash used in non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of property plant and equipment G.O. Bond Interest paid Revenue Bond Interest paid Payments of Long Term Debt Net cash used in activities capital and related financing activities CASH AND CASH EQUIVALENTS - End of period $ 37 Palomar Health Operating and Capital Budgets Fiscal Year 2014 Presentation to Board of Directors June 24, 2013 1 FY2014 Budget Drivers Strategic Initiatives 10-Year Financial and Capital Plan Guidelines Strategic Growth Opportunities Expense Management Focus on Compensation and Benefits Outsourcing / Insourcing Solutions Governmental Payor Changes - Sequestration, ValueBased Purchasing, MediCal Reimbursement - Acute and Skilled Services 2 FY2014 Operating Budget Recap Key Volume Indicators Palomar Palomar Health North Health South Change % Change % Consolidated Change % INPATIENT Discharges Acute SNF - SubAcute 2,606 11.8% (297) (63.1% ) (331) (53) (5.3% ) (8.1% ) 2,275 8.0% (350) (31.1% ) Patient Days Acute SNF - SubAcute 7,703 8.2% (21,517) (73.3% ) (2,588) 539 (9.8% ) 1.2% 5,115 4.2% (20,978) (28.9% ) (0.14) (3.3% ) (17.34) (27.8% ) (0.20) 6.72 (4.7% ) 10.2% (0.15) (3.5% ) 2.04 3.2% Avg Length Of Stay Acute SNF Deliveries 767 23.8% (6) (.5% ) 762 17.2% Inpatient Surgeries 360 6.0% (10) (.6% ) 350 4.6% Change = FY2013 (Dec 2012 through Mar 2013 annualized) vs. FY2014 Budget 3 FY2014 Operating Budget Recap Key Volume Indicators Palomar Palomar Health North Health South % Change % Change Consolidated Change % OUTPATIENT ER Visits O/P Registrations O/P Surgeries Home Health Visits 12,464 14.8% (527) (2.0% ) 11,937 10.7% 3,765 7.2% 6,614 16.5% 10,379 11.2% 235 5.0% 809 27.4% 1,044 13.7% 1,038 2.3% 0 0.0% 1,038 2.3% Change = FY2013 (Dec 2012 through Mar 2013 annualized) vs. FY2014 Budget 4 FY2014 Payor Mix by Gross Revenue CMS 4.2% Ins 1.1% Work Comp 0.8% Self-Pay 5.5% Medicare 24.9% Mgd Care Cap 1.9% Mgd Care 30.9% 5 Sr HMO 11.7% Medi-Cal 13.2% Sr Cap 5.8% FY2014 Key Revenue Assumptions/Considerations Rates - Inpatient and Outpatient - 8% Overall Increase - Commercial Contracts / 3rd Party Reimbursement reflect market - Medicare and MediCal reflect non-negotiated mandated reductions - At-Risk Capitation Contracting - continuing current relationships - Bad Debt/Uncompensated Care 5.22% FY2013, and FY2012, were 4.7%, 4.8% respectively 6 Key Inflationary Assumptions/Considerations FY2014 Budget FY2013 Budget 1.0% 0.5% 0.0% 0.5% 0.5% 3.0% 0.0% 1.0% 0.5% 0.0% 0.5% 0.5% 3.0% 0.0% Supplies: Pharmaceuticals Prosthesis (Non-tech Price Changes) Surgical Instruments Surgical Supplies Other Medical Food Other Minor Equipment/Instruments 7 Compensation and Benefits Key Assumptions/Considerations 8 Overall salary, wage and registry costs are $13.9 million (or 4.7%) lower than FY2013 (including $7.5 million reduction to registry usage) resulting from: - Reduction in Force, improved efficiencies, premium pay management and other labor initiatives - Merit increases and labor contract changes that account for a $6.4 million reinvestment in our employees Benefits expenses are $5.8 million lower than FY2013 Total Productive FTE's are 3,126 compared to 3,227 in FY2013 Adherence to Productivity Labor Standards Adherence to Nurse Staffing Ratios Reduction in Force: 155 Productive FTE's Recap of Salaries and Wages Palomar Health Consolidated FY 2013 Base Salary Expense (1) $ (1) FY 2013 Registry Expense Increase / (Decrease) due to: Labor Contracts and Merit Adjustments Volume, Labor Std Adj's and Reductions in Staff 6,447,221 (20,363,373) Total Salary and Registry Expense FY 2014 282,228,553 Estimated Salary and Registry Expense FY 2013 (Increase) / Decrease FY13 To FY14 % (Increase) / Decrease FY13 To FY14 (1) Based on Dec 2012 through March 2013 annualized 9 283,686,566 12,458,139 (1) 296,144,705 $ 13,916,152 4.70% Recap of Productive FTE's by Service Palomar Health North Palomar Health South Central Outreach Productive FTE's by Service Type: Total 753.45 723.95 390.74 107.66 54.00 316.89 223.15 115.81 33.03 22.97 67.81 132.39 83.33 99.79 0.68 0.50 - 1,070.34 1,046.89 575.04 273.58 160.30 FY 2014 Budgeted Productive FTE's 2,029.80 711.85 283.53 100.97 3,126.15 Estimated Productive FTE's FY 2013 (YTD Pay Period Ending May 4, 2013) 2,055.55 743.29 319.48 108.45 3,226.77 25.75 31.44 35.95 7.48 100.62 Daily Hospital Services (Nursing Units) Ancillary Services General / Support Services Administrative Services Fiscal Services (Increase) / Decrease FY13 To FY14 % (Increase) / Decrease FY13 To FY14 3.12% (Increases) / Decreases in FTE's Due to: Volume Changes (173.00) 5.77 (27.84) 6.90 (188.17) Reduction in Force, elimination of transformation functions, other changes in labor standards and miscellaneous labor efficiencies (1) 198.75 25.75 (1) I.T. Outsource 51 FTE's, PCCC 83 FTE's, RIF 155 FTE's 10 25.67 31.44 63.79 35.95 0.58 7.48 288.79 100.62 Recap of Benefits FY 2014 Budget FY13 Projected (1) Change FY2014 vs. FY2013 % (Increase) / Decrease Group Health Insurance 33,941,238 34,251,174 309,936 0.9% FICA 19,161,352 20,791,733 1,630,381 7.8% Pension 10,590,455 14,399,998 3,809,543 26.5% 3,080,350 3,180,987 100,637 3.2% 157,859 209,990 52,131 24.8% 1,262,305 1,170,276 (92,029) -7.9% 68,193,559 74,004,158 Workers Compensation Group Life Insurance Other Benefits Total Benefit Expense (1) Based on Dec 2012 through March 2013 annualized 11 5,810,599 7.9% Recap of Supplies FY 2014 Budget FY 2013 Projected (1) Change 2014 vs. 2013 (Increase) / Variance Due Decrease to Rate Implants / Prosthesis 17,320,972 19,016,019 Surgical Supplies 13,717,826 13,475,523 (242,303) Pharmaceuticals 15,402,637 13,593,957 (1,808,680) Other Medical Supplies 15,769,279 15,876,357 107,078 Food 4,032,309 4,697,648 665,339 Office Supplies and Forms 1,689,704 1,324,146 (365,558) Minor Equipment 3,267,731 2,733,555 (534,176) Other Non-Medical Supplies 13,284,570 13,373,354 88,784 Total Supplies Expense 84,485,028 84,090,559 (394,469) (1) Based on Dec 2012 through March 2013 annualized 12 1,695,047 Variance Due to Volume % Change 3,260,506 (1,565,459) 8.9% 867,045 (1,109,348) -1.8% (689,582) (1,119,098) -13.3% 1,414,070 (1,306,992) 0.7% 1,052,064 (386,725) 14.16% (256,550) (109,008) -27.61% (309,141) (225,035) -19.54% 1,189,721 (1,100,937) 0.66% 6,528,134 (6,922,603) -0.47% Recap of Professional Fees FY 2014 Budget ED Call / Trauma / Hospitalists / OB, OB Anesthesia, Perinatology FY 2013 Projected (1) Change FY2014 vs. FY2013 (Increase) / Decrease % Change 17,977,397 16,916,762 (1,060,635) -6.27% Other Physician Fees 8,272,197 7,122,054 (1,150,143) -16.15% Consulting Fees 5,628,580 3,421,029 (2,207,551) -64.53% (2) Legal Fees 660,632 (330,966) (991,598) -299.61% External Audit Fees 387,501 322,442 (65,059) -20.18% Other Professional Fees 2,645,185 2,058,422 (586,763) -28.51% Total Professional Fees 35,571,492 29,509,743 (6,061,749) -20.54% (1) Based on Dec 2012 through March 2013 annualized (2) Includes one time FY2013 reversal of expenses 13 Recap of Purchased Services FY 2014 Budget FY 2013 Projected (1) Change 2014 vs. 2013 (Increase) / Decrease 5,204,138 6,189,369 Information Systems - Outsourcing, Hardware, and Maintenance 27,306,531 20,241,125 (7,065,406) -34.91% Maintenance and Repair 13,101,383 7,887,287 (5,214,096) -66.11% Linen Services 2,487,368 2,935,591 Management Services 1,046,356 697,403 Other Purchased Services 14,632,480 14,836,247 Total Purchased Services 63,778,256 52,787,022 Medical Purchased Services (1) Based on Dec 2012 through March 2013 annualized 14 985,231 % Change 15.92% 448,223 15.27% (348,953) -50.04% 203,767 (10,991,234) 1.37% -20.82% Recap of Other Direct Expense FY 2014 Budget FY 2013 Projected (1) Change 2014 vs. 2013 (Increase) / Decrease % Change Building and Equipment Rental 9,891,289 9,220,893 (670,396) -7.27% Utility Expense 8,583,728 7,234,793 (1,348,935) -18.65% Professional Liability / Insurance Expense 6,062,572 5,989,800 (72,772) -1.21% License / Tax 2,056,884 1,577,758 (479,126) -30.37% Telephone 1,232,098 1,347,523 115,425 8.57% 862,614 1,105,122 242,508 21.94% Advertising/Marketing 2,054,918 1,328,266 (726,652) -54.71% Other Direct Expense 6,494,712 3,941,372 (2,553,340) -64.78% 37,238,815 31,745,527 (5,493,288) -17.30% Outside Training / Tuition Reimbursement Total Other Direct Expense (1) Based on Dec 2012 through March 2013 annualized 15 Recap of Depreciation Expense Total Palomar Health FY 2014 Budget Depreciation on Current Assets 50,316,086 Amortization on Current Software Licensing Fees Additional Depreciation on: CIPs FY 2014 Capital Budget 6,262,103 1,031,514 568,453 Total FY 2014 Budget 58,178,156 (1) Projected FY 2013 (Increase) / Decrease FY13 To FY14 % (Increase) / Decrease FY13 To FY14 (1) Based on Dec 2012 through March 2013 annualized 16 $ 61,042,053 2,863,897 4.69% FY2014 Budgeted Initiatives and Strategies Budgeted Income Benefit 4,000,000 - 2014 Budgeted Initiative Capitation Management Improvement Initiative Pharmaceutical Expense Management Strategy VHA Imperative Initiative Information Systems Outsourcing and Strategy Business Development Strategies - Volume Growth Meaningful Use Achievement - Stage 2 2,000,000 1,800,000 Patient Throughput Initiative (LOS, Patient Status, Denials) Palomar Continuing Care Center (Annualized $1 Million) Mayo Clinic Affiliation - 1st Year GRAND TOTAL 17 1,500,000 (9,034,633) 500,000 $ Budgeted Expense Reduction 3,170,000 2,000,000 4,000,000 9,738,919 (730,000) Net 2014 Budgeted Benefit 4,000,000 3,170,000 2,000,000 4,000,000 2,000,000 1,800,000 1,500,000 704,286 (230,000) 765,367 $ 18,178,919 $ 18,944,286 FY 2013 Operating Budget Recap ($ In thousands) Revenue: Gross Revenue Net Revenue Other Operating Revenue Total Operating Revenue Expenses: Salaries, Wages, Registry, Benefits Supplies Depreciation Other Total Operating Expense Projected FY13 (1) Projected FY14 % Change FY13 to FY14 2,012,928 508,722 12,994 $ 521,716 2,390,447 574,217 11,786 $ 586,003 2,729,883 610,046 11,805 $ 621,851 14.20% 6.24% 0.16% 6.12% 309,260 76,250 21,323 101,163 507,996 362,104 82,287 57,388 114,884 616,663 282,228 84,485 58,178 204,783 629,674 22.06% -2.67% -1.38% -78.25% -2.11% $ $ Operating Income 13,720 (30,660) Non-Operating Income Interest Expense Property Tax Revenue Income (Loss) 4,471 (2,942) 12,686 27,935 $ 5.4% 6.7% 9.1% 10.0% 97,429 $ 4.84% Net Margin % OEBIDA Margin (Excl Property Tax Rev) OEBIDA Margin (Incl Property Tax Rev) EBIDA Margin Total Uncompensated Care Total Uncompensated Care as % of Gross 18 Results FY12 (1) FY May YTD actual + June budget $ $ $ (7,823) -74.48% 3,934 (29,670) 13,300 (43,096) $ 3,226 (33,628) 13,300 (24,925) -18.00% -13.34% 0.00% 42.16% -7.4% 4.6% 6.8% 7.5% 112,024 $ 4.69% -4.0% 8.1% 10.2% 10.8% 142,576 5.22% FY 2013 Operating Budget Recap ($ In thousands) FY 2009 Net Income from Ops (Excluding Interest Expense) Less: Depreciation Expense OEBIDA OEBIDA Margin (Excl Property Tax Rev) OEBIDA Margin (Incl Property Tax Rev) EBIDA EBIDA Margin Total Uncompensated Care Total Uncompensated Care as % of Gross Note: Net Income/(Loss) after Non-Op Income 19 FY 2010 FY 2011 Projected FY 2012 FY 2013 Budgeted FY 2014 $ 9,476 $ 17,035 $ 11,514 $ 13,720 $ (30,660) $ 21,215 21,359 21,346 21,323 57,388 $ 30,692 $ 38,395 $ 32,861 $ 35,044 $ 26,728 $ 6.9% 9.9% 8.2% 11.0% 6.7% 9.3% 6.7% 9.1% 4.6% 6.8% $ 48,772 $ 58,045 $ 56,119 $ 52,200 $ 43,962 $ 10.9% 12.4% 11.5% 10.0% 7.5% 74,557 4.7% 82,012 4.9% 81,887 4.5% 97,429 4.9% 112,024 4.7% $ 11,477 $ 24,488 $ 30,968 $ 27,935 $ (43,096) $ (7,823) 58,178 50,356 8.1% 10.2% 66,881 10.8% 142,576 5.8% (24,925) FY2014 Operating Budget - Key Highlights FY2012 Actual FY2013 Projected (May YTD + June Budget) FY2014 Budget Change 276.3 101,124 39,973 302.0 110,230 43,567 344.7 125,824 47,501 42.7 15,594 3,934 Productive FTEs 2,836 3,227 3,126 (101.0) 3.1% Operating Expenses (w/o Depreciation & Interest) per Adjusted Discharge 12,175 12,837 12,031 (806) 6.3% Income Statement Summary: Total Operating 521,716,000 586,003,000 621,851,000 35,848,000 6.1% Statistics: Average Daily Acute Patient Days Adjusted % Change 14.1% 14.1% 9.0% Total Operating 507,996,000 616,663,000 629,674,000 13,011,000 2.1% Operating Income 13,720,000 (30,660,000) (7,823,000) 22,837,000 74.5% Net Income 27,935,000 (43,096,000) (24,925,000) 18,171,000 42.2% EBIDA 52,200,000 43,962,000 66,881,000 22,919,000 52.1% 309,260,000 362,104,000 350,423,000 (11,681,000) 3.2% Supplies 76,250,000 82,287,000 84,485,000 2,198,000 2.7% Depreciation 21,323,000 57,388,000 58,178,000 790,000 1.4% Other Expenses 101,163,000 114,884,000 136,588,000 21,704,000 18.9% Interest Expense 2,942,000 29,670,000 33,628,000 3,958,000 13.3% Expenses Detail: Salaries