only question 1

each member of the oject is to be submitted as a 4-7-page paper. Also, each group will make a erPoint presentation to the class on their analysis and recommendations. ents will read Hays County Integrated Delivery System case and will present it to the class through ncial statement and operating indicator analysis. 402 on your er and presentation should answer the following questions: 1. Develop a statement of operations for 2017 using Tables II, IV-A, IV-B, and IV-C (at the end of this case study) and a balance sheet for 2017 (you can assume the format and numbers are correct on the 2016 balance sheet in Tablet, and you can further assume that all balances on the 2016 balance sheet carry forward to the 2017 balance sheet with the exception of accounting for the profit or loss from the 2017 statement of operations). Analyze the financial statements using ratio analysis with benchmarks found in Table III and identify strengths and weaknesses and then make recommendations for improvement in 2018. 2. The Treasury Department has issued final regulations on the ACA (Affordable Care Act] requirements for not-for-profit hospitals. Hospitals must be in compliance with regulations beginning in 2016. Please explain the requirements to me; please identify the penalties for noncompliance found in the IRS regulations (501(r)); and please recommend ways to protect our tax-exempt status. 3. Analyze my capitated managed care agreement with the city. Using differential cost analysis for 2017 data, tell me the full cost-profit/loss and the differential cost-profit/loss. Should we renew the contract for next year at present rates, or should we ask for a rate increase, and if so, how much rate increase do we need to cover our full cost? To cover our differential cost? ng about retiring this year and has asked us if we want to buy her practice. an annual income of $250,000 for the next 30 years. If we can put the purchase 404 405 405 Ratios for 2016 Trends on 405 Recomanendations for 2018 402 Case Study: Hays County Integrated Delivery System TABLE Hays County IDS Balance Sheet as of December 31, 2016: Assets Assets 2016 Current Assets Cash and cash equivalents Marketable securities Accounts receivable less allowances Inventories at cost Other current assets Total Current Assets $ 816,875 8,100,500 17.250,000 2.368,000 8,992.500 37.527.875 11,250,000 50,509.500 5,063,250 4.466.750 91,289.500 (38.376,231) 52.913.269 90,441,144 Land and improvements Buildings Fixed equipment Movable equipment Property. Plant, and Equipment Less accumulated depreciation Total Property, Plant, and Equipment TOTAL ASSETS Current Liabilities Current portion of long-term debt Accounts payable and accrued expenses Estimated amounts due to third-party payers Other current liabilities Total Current Liabilities Long-term debt, net of current portion TOTAL LIABILITIES $ 10,151,000 8,400,000 8.423.750 10,500,000 37.474.750 25,000,000 62.474.750 Net Assets Unrestricted Temporarily restricted Permanently restricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS 742,625 16,000,000 11,223.769 27.966,394 $90,441,144 1:58 KLART. I bect to http//www.cbc.com/termsof- Case Study: Hays County Integrated Delivery System $ 76.725.792 7,000,000 TABLE IL Hays County IDS Actual Expenses (S) through December 31, 2017 Wages, Taxes, Benefits (90% variable, 10% fixed) Professional Fees and Commissions (fixed) Drugs (variable) Medical and Other Supplies (variable) Food (variable) Purchased Services (variable) Repairs and Maintenance (fixed) Utilities (fixed) Interest (fixed) Depreciation (fixed) 8,000,000 8,500,000 7.500,000 6,500,000 8,000,000 9,000,000 8,021,440 3,000,000 TOTAL EXPENSES $142,247,232 TABLE III Selected Industry Financial and Productivity Ratios for Urban Hospital ($175-400 million revenue) Optum 2015 Hays County Hospital 1.44 1.87 47.60 18.80 91.60** 56.30 2.17** 0.87 11.47 2.59 4.22 51.38 Financial Ratios Liquidity Ratios Current ratio Collection period ratio Days cash-on-hand, short-term sources Days cash-on-hand, all sources Capital Structure Ratios Net asset financing ratio Debt service coverage ratio Efficiency Ratios Total asset turnover ratio Age of plant ratio Fixed asset turnover ratio Current asset turnover ratio Inventory turnover ratio Profitability Ratios Excess margin Operating margin Return on net assets Operating Indicators Length of stay-acute Occupancy rate--acute Productivity Ratios Cost per acute discharge equivalents Salaries per acute discharge equivalents Nursing Service RNs as a percent of total nursing LPNs as a percent of total nursing Nursing assistants as a percent of total nursing Full-Time Equivalent Employees (FTES) Per occupied bed Salary per FTE 5.10 4.14 9.50 4.10 52.30 $11,076 $4,270 56.99 4.0" 39.1 4.86 $62,306 *See Optum (2017) for 2015 data. **Optum 2014 data (see Optum 2016). Optum number is adjusted for acute discharge equivalents. "See Health Forum (2015) for nursing personnel dan Case Study: Hays County Integrated Delivery System 405 2017 2015 5.931 TABLE IV-A Hays County IDS Discharges Service (LOS) 2013 Acute() 6,777 SNF (30) 239 Rehab (20) 155 Home Health 7,298 Emergency 27.915 Outpatient 16,826 247 2014 6,354 243 157 6,082 30,062 18.355 2016 5.931 251 162 3.650 34.354 159 4.866 32,207 19,884 5.931 255 164 3.650 36,500 26,000 22.942 LOS length of stay. SNF skilled nursing facility TABLE IV-B Percentage of Discharges by Payer 2013 2014 2016 2015 26 2017 28 24 25 24 27 28 22 26 30 1 4 2 5 39 3 39 Medicare Medicaid Commercial Managed Care-discount Managed Care-capitation Bad Debt Charity 39 33 32 o o 5 5 NO 2 2 2 3 2 2 2 2 1 2 TABLE IV-C 2017 Charges per Discharge/Visit (5) HCH Acute SNE 40,000 30,000 40,000 Rehab St. Teresa 38,200 28,000 38,000 300 1,500 500 400 Home Health Emergency Outpatient 1,600 600 5NF Skilled nursing facility LA ONE TOLERANT. AS total www.ce.com/terms-of- 06 Case Study: Hays County Integrated Delivery System TABLE V Radiology Department Procedures Tech Minutes Supply Expense Machine Minutes 2017 Volume Procedure Radiology Chest 2 view Chest 4-view Hand 14 10 10 20,000 28 20 10 5 5 5 15,000 7.000 4,000 Arm 10 10 5 Foot 5 5 5 1,000 10 10 5 6.000 30 30 15 3.000 Les Fluoroscopy Ultrasound Abdomen 15 10 10 5.000 5.622 Other 10 10 10 Nuclear Medicine Scan 60 30 30 2.000 CT Head without contrast 50 30 30 60 200 45 300 Head with contrast Body without contrast Body with contrast 75 75 30 30 400 60 100 45 500 Case Study: Hays County Integrated Delivery System 407 TABLE VI-A Salary Survey of Area Hospitals Average Hourly Rates (in dollars, without benefits), December 2017 Position HCH St. Teresa Chief Executive Officer 595.00 595.00 Chief Operating Officer 390.00 386.00 Chief Nursing Officer 175.00 172.00 Director Clinical Services 230.00 226.00 Director Support Services 150.00 149.00 Chief Medical Officer 295.00 291.00 Chief Financial Officer 312.00 280.00 Chief Compliance Officer 140.00 135.00 Chief Information Officer 225.00 222.00 Head Nurse 43.00 38.00 Staff RN 37-40 33.00 Staff LPN 24.70 21.00 Nursing Assistant 14.80 11.00 Laboratory Tech 31.68 28.00 Radiology Tech 29.72 26.00 Food Server 12.45 9.45 Housekeeper 12.41 9.00 Administrators Below Chiefs 40.73 37.00 Clerk 20.23 17.00 Respiratory Therapist 27.25 30.14 ROM PHI 3 l 14 n NT 19/12 each member of the oject is to be submitted as a 4-7-page paper. Also, each group will make a erPoint presentation to the class on their analysis and recommendations. ents will read Hays County Integrated Delivery System case and will present it to the class through ncial statement and operating indicator analysis. 402 on your er and presentation should answer the following questions: 1. Develop a statement of operations for 2017 using Tables II, IV-A, IV-B, and IV-C (at the end of this case study) and a balance sheet for 2017 (you can assume the format and numbers are correct on the 2016 balance sheet in Tablet, and you can further assume that all balances on the 2016 balance sheet carry forward to the 2017 balance sheet with the exception of accounting for the profit or loss from the 2017 statement of operations). Analyze the financial statements using ratio analysis with benchmarks found in Table III and identify strengths and weaknesses and then make recommendations for improvement in 2018. 2. The Treasury Department has issued final regulations on the ACA (Affordable Care Act] requirements for not-for-profit hospitals. Hospitals must be in compliance with regulations beginning in 2016. Please explain the requirements to me; please identify the penalties for noncompliance found in the IRS regulations (501(r)); and please recommend ways to protect our tax-exempt status. 3. Analyze my capitated managed care agreement with the city. Using differential cost analysis for 2017 data, tell me the full cost-profit/loss and the differential cost-profit/loss. Should we renew the contract for next year at present rates, or should we ask for a rate increase, and if so, how much rate increase do we need to cover our full cost? To cover our differential cost? ng about retiring this year and has asked us if we want to buy her practice. an annual income of $250,000 for the next 30 years. If we can put the purchase 404 405 405 Ratios for 2016 Trends on 405 Recomanendations for 2018 402 Case Study: Hays County Integrated Delivery System TABLE Hays County IDS Balance Sheet as of December 31, 2016: Assets Assets 2016 Current Assets Cash and cash equivalents Marketable securities Accounts receivable less allowances Inventories at cost Other current assets Total Current Assets $ 816,875 8,100,500 17.250,000 2.368,000 8,992.500 37.527.875 11,250,000 50,509.500 5,063,250 4.466.750 91,289.500 (38.376,231) 52.913.269 90,441,144 Land and improvements Buildings Fixed equipment Movable equipment Property. Plant, and Equipment Less accumulated depreciation Total Property, Plant, and Equipment TOTAL ASSETS Current Liabilities Current portion of long-term debt Accounts payable and accrued expenses Estimated amounts due to third-party payers Other current liabilities Total Current Liabilities Long-term debt, net of current portion TOTAL LIABILITIES $ 10,151,000 8,400,000 8.423.750 10,500,000 37.474.750 25,000,000 62.474.750 Net Assets Unrestricted Temporarily restricted Permanently restricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS 742,625 16,000,000 11,223.769 27.966,394 $90,441,144 1:58 KLART. I bect to http//www.cbc.com/termsof- Case Study: Hays County Integrated Delivery System $ 76.725.792 7,000,000 TABLE IL Hays County IDS Actual Expenses (S) through December 31, 2017 Wages, Taxes, Benefits (90% variable, 10% fixed) Professional Fees and Commissions (fixed) Drugs (variable) Medical and Other Supplies (variable) Food (variable) Purchased Services (variable) Repairs and Maintenance (fixed) Utilities (fixed) Interest (fixed) Depreciation (fixed) 8,000,000 8,500,000 7.500,000 6,500,000 8,000,000 9,000,000 8,021,440 3,000,000 TOTAL EXPENSES $142,247,232 TABLE III Selected Industry Financial and Productivity Ratios for Urban Hospital ($175-400 million revenue) Optum 2015 Hays County Hospital 1.44 1.87 47.60 18.80 91.60** 56.30 2.17** 0.87 11.47 2.59 4.22 51.38 Financial Ratios Liquidity Ratios Current ratio Collection period ratio Days cash-on-hand, short-term sources Days cash-on-hand, all sources Capital Structure Ratios Net asset financing ratio Debt service coverage ratio Efficiency Ratios Total asset turnover ratio Age of plant ratio Fixed asset turnover ratio Current asset turnover ratio Inventory turnover ratio Profitability Ratios Excess margin Operating margin Return on net assets Operating Indicators Length of stay-acute Occupancy rate--acute Productivity Ratios Cost per acute discharge equivalents Salaries per acute discharge equivalents Nursing Service RNs as a percent of total nursing LPNs as a percent of total nursing Nursing assistants as a percent of total nursing Full-Time Equivalent Employees (FTES) Per occupied bed Salary per FTE 5.10 4.14 9.50 4.10 52.30 $11,076 $4,270 56.99 4.0" 39.1 4.86 $62,306 *See Optum (2017) for 2015 data. **Optum 2014 data (see Optum 2016). Optum number is adjusted for acute discharge equivalents. "See Health Forum (2015) for nursing personnel dan Case Study: Hays County Integrated Delivery System 405 2017 2015 5.931 TABLE IV-A Hays County IDS Discharges Service (LOS) 2013 Acute() 6,777 SNF (30) 239 Rehab (20) 155 Home Health 7,298 Emergency 27.915 Outpatient 16,826 247 2014 6,354 243 157 6,082 30,062 18.355 2016 5.931 251 162 3.650 34.354 159 4.866 32,207 19,884 5.931 255 164 3.650 36,500 26,000 22.942 LOS length of stay. SNF skilled nursing facility TABLE IV-B Percentage of Discharges by Payer 2013 2014 2016 2015 26 2017 28 24 25 24 27 28 22 26 30 1 4 2 5 39 3 39 Medicare Medicaid Commercial Managed Care-discount Managed Care-capitation Bad Debt Charity 39 33 32 o o 5 5 NO 2 2 2 3 2 2 2 2 1 2 TABLE IV-C 2017 Charges per Discharge/Visit (5) HCH Acute SNE 40,000 30,000 40,000 Rehab St. Teresa 38,200 28,000 38,000 300 1,500 500 400 Home Health Emergency Outpatient 1,600 600 5NF Skilled nursing facility LA ONE TOLERANT. AS total www.ce.com/terms-of- 06 Case Study: Hays County Integrated Delivery System TABLE V Radiology Department Procedures Tech Minutes Supply Expense Machine Minutes 2017 Volume Procedure Radiology Chest 2 view Chest 4-view Hand 14 10 10 20,000 28 20 10 5 5 5 15,000 7.000 4,000 Arm 10 10 5 Foot 5 5 5 1,000 10 10 5 6.000 30 30 15 3.000 Les Fluoroscopy Ultrasound Abdomen 15 10 10 5.000 5.622 Other 10 10 10 Nuclear Medicine Scan 60 30 30 2.000 CT Head without contrast 50 30 30 60 200 45 300 Head with contrast Body without contrast Body with contrast 75 75 30 30 400 60 100 45 500 Case Study: Hays County Integrated Delivery System 407 TABLE VI-A Salary Survey of Area Hospitals Average Hourly Rates (in dollars, without benefits), December 2017 Position HCH St. Teresa Chief Executive Officer 595.00 595.00 Chief Operating Officer 390.00 386.00 Chief Nursing Officer 175.00 172.00 Director Clinical Services 230.00 226.00 Director Support Services 150.00 149.00 Chief Medical Officer 295.00 291.00 Chief Financial Officer 312.00 280.00 Chief Compliance Officer 140.00 135.00 Chief Information Officer 225.00 222.00 Head Nurse 43.00 38.00 Staff RN 37-40 33.00 Staff LPN 24.70 21.00 Nursing Assistant 14.80 11.00 Laboratory Tech 31.68 28.00 Radiology Tech 29.72 26.00 Food Server 12.45 9.45 Housekeeper 12.41 9.00 Administrators Below Chiefs 40.73 37.00 Clerk 20.23 17.00 Respiratory Therapist 27.25 30.14 ROM PHI 3 l 14 n NT 19/12