Alameda Health System Fis iscal 2021 Operating and Capital Budget - - PowerPoint PPT Presentation

Alameda Health System

Delvecchio Finley, CEO Kim Miranda, CFO

Fis iscal 2021 Operating and Capital Budget Process and Tim imeline

March 12, 2020 1

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Fiscal 2021 Budget Goals and Principles

STRATEGIC AND LONG TERM FOCUS

Focus on stabilization after SAPPHIRE implementation and continued operational improvement. CY2019 actual will serve as the baseline budget with selected strategic programs layered over baseline.

SUSTAINABLE INCLUSIVE & ACCOUNTABILITY

Inclusive of all areas of AHS. Staff, physicians, Board and community stakeholders provided input to drive an accountable and committed budget.

BALANCED

Achieve balanced direction based on historical trends, ensuring resources necessary to sustain highest quality care to meet community needs for the population of Alameda County. Generate sufficient revenue to cover AHS operating cost and contribute to capital needs. Cash flow from operation is not expected to be sufficient to pay prior years recoupments from supplemental programs.

CONTINUOUS IMPROVEMENT

Leverage the GPO, benchmarking analytical tools (clinical and

• perational) and the new SAPPHIRE system to continue our

clinical, operational and revenue cycle improvement.

FY 2021 Budget Process

Dec- January Feb-March April - May AHS ELT developed FY2021 DRAFT Objectives and Goals Budget Volume Statistics (baseline) developed based

• n calendar year 2019 with

input from operation leaders. With historical actual

• perational labor standard

and benchmarking guideline, Operational leaders will evaluate various data point to set the FY2021 labor standard. AHS Staff and Leadership retreat provides Board updates on FY2021 baseline budget. Budget Training to AHS department leaders. Budget targets distributed to SBUs/departments. Budget process involved feedback from Dyad leaders (Chairs, Admin.) Budget Oversight reviews from Feb-March for all SBUs/Support services. Budget update provided to Finance Committee in March Budget Process, assumptions and draft proforma- presented to Board at April Board retreat for feedback. Budget Oversight committee will address any outstanding questions and develop final draft of FY2021 Budget. SBUs/Support services to review final budget and targets. AHS staff to develop operational plan detailed plans- SMART goals and TNM dashboard draft FY2021 pro forma to be presented at Finance Committee in May. FY2021 pro forma to be presented to full Board in May. AHS staff to finalize TNM dashboard draft FY21 Board Approval process for Budget FY21 at June Finance committee and at Full Board June. FY21 Operational Plan/TNM dashboard for approval (June/ July) Spread FY20 budget across SBU and 12 months.

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June- July

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Process 3

Budget 2021 Volume Overview

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Actual FY2019 Actual CY2019 Budget FY2021 %Variance GENERAL ACUTE PATIENT DAYS 80,669 78,093 81,003 3.7% GENERAL ACUTE DISCHARGES 14,905 15,146 15,751 4.0% SURGERIES 8,854 8,972 8,972 0.0% EMERGENCY VISITS 98,695 104,004 104,428 0.4% DELIVERIES 1,270 1,270 1,270 0.0% CLINIC VISITS 334,075 326,814 334,712 2.4% PES Visits 13,069 11,951 13,140 9.9% SNF PATIENT DAYS 101,894 101,390 102,601 1.2% SNF DISCHARGES 362 368 368 0.0% ACUTE REHAB PATIENT DAYS 8,348 8,474 8,476 0.0% ACTUE REHAB DISCHARGES 583 606 606 0.0% BEHAVIORAL HEALTH PATIENT DAYS 24,765 25,099 25,099 0.0% BEHAVIORAL HEALTH DISCHARGES 2,733 2,881 2,881 0.0%

Budget 2021 Volume Assumptions

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8,854 9,056 8,972 8,972 1,270 1,326 1,270 1,270 98,695 101,968 104,004 104,428 95,000 96,000 97,000 98,000 99,000 100,000 101,000 102,000 103,000 104,000 105,000

• 2,000

4,000 6,000 8,000 10,000 Actual FY2019 Projected FY20 Actual CY2019 Budget FY2021

General Acute Care Key Ancillary Volume Trend

SURGERIES DELIVERIES EMERGENCY VISITS

▪ General Acute Care days budgeted for 3.7% increase from Calendar Year 2019 due to additional 15 beds re-open at SLH 3rd Floor. ▪ Improve in through-put with a moderate increase in HGH ICU and Step-Down Units. ▪ HGH and SLH ED visits remain flat comparing to Calendar Year 2019. AHD ED visit is budgeted with a 2.6% increase with improvement in ED efficiency. ▪ Delivery volume and Surgery cases also budgeted flat in FY21.

Budget 2021 Volume Assumptions

6 ▪ Acute Rehab Days remains flat; not anticipating any increase in patient days. ▪ 6-Bed Sub-Acute at FMT will be converted to SNF beds and additional 9-Beds will be added at FMT SNF in FY21. ▪ With additional nine SNF beds, anticipate SNF Days will increase by 1.2%.

Budget 2021 Volume Assumptions

7 ▪ Inpatient Behavior Health Days remain flat as patient volume has reached maximum capacity (99% Occupancy) ▪ PES Eq. Days is budgeted with 88% increase as a result of changing charges to capture all service hours provided. Visits are flat.

▪ Anticipate Ambulatory Clinic volume to rebound back to FY2019 Actual level after SAPPHIRE implementation and improve in efficiency in Specialty Clinics. 8

Inflation Assumptions

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ALAMEDA HEALTH SYSTEM Revise: 01/27/20 Operating Budget 2021 2021 Operating Budget Inflation Rate Assumptions 2021 Budget 2021 Comments Expenses Labor Contract Labor (Registry) 0.0% Overall Salary Increases 3.5% Source: AHS HR & MOU Contracts Benefits (% of Total Salaries) Non Labor Contract Physician Services Medical Supplies 0.9% Source: Vizient Price Change Project (2nd Quarter, 2019) 53700 IV Irrigation Solutions 3.0% Source: Vizient Price Change Project (2nd Quarter, 2019) 53600 Oxigen Medical Gases 5.4% Source: Vizient Price Change Project (2nd Quarter, 2019) Other Supplies 1.8% Source: Vizient Price Change Project (2nd Quarter, 2019) 54300 FOOD-OTHER 1.5% Source: AHS Food Service Department 54500 CLEANING SUPPLIES 1.8% Source: Vizient Price Change Project (2nd Quarter, 2019) 55100 LAB REAGENTS 3.5% Source: AHS Clinical Lab 54600 OFFICE SUPPLIES 2.6% Source: Vizient Price Change Project (2nd Quarter, 2019) Drugs & Pharmaceuticals 4.0% Source: Vizient Pharmaceutical Consultant Utilities 57700 Utilities Electricity 7.0% Source: 57800 Utilities Gas 8.0% 57900 Utilities Water 5.0%

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FY20 FY21 1 HPAC 33,196 34,800 Based on Tangerine estimate 2 County EMS 395 395 Same amount each year 3 County Trauma 5,266 5,266 Same amount each year 4 Measure A 117,699 117,699 Amount pending more recent analysis 5 AHD Parcel Tax 4,983 4,983 Amount pending updated information 6 Waiver GPP 74,917 66,490 Assume 5 year extension at lower amount. FY22&23 exact cash unknown 7 PRIME 19,688 - Program retires. Revenue rolls over to QIP 8 Medi-Cal Managed Care EPP 38,000 35,000 New payment program for services provided to Medi-Cal Managed Care patients. Reserve $5m IGT A obligation 9 Medi-Cal Managed Care QIP 25,000 35,758 Assume PRIME fund rolls over, with target 57% per Dr. Gupta Assume QIP is extended, with target 90% per Dr.

• Gupta. Reserve $5m IGT A obligation

10 Medi-Cal Managed Care Rate Range 30,000 30,000 Assume same distribution as prior years. May change based on enrollment

Governmental Supplemental Revenue Programs

PROGRAMS Comments Budget (In Thousands)

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FY20 FY21 11 Medi-Cal SNF Cost Settlement 9,000 9,000 Medi-Cal SNF supplemental 12 AB915 12,800 9,000 Hospital outpatient non-FQHC supplemental 13 Capital Transfer for AB915 (3,800) Included in above 14 Hospital Fee 3,700 3,700 Direct grant portion only 15 Physician SPA 3,600 3,600 Annual non-ACA amount. Hoping to resolve until before 2023 16 MAA 4,000 4,000 Medi-Cal Administrative Activities 17 Prop 56 1,000 18 Subtotal 379,444 359,691 19 Contingent 20 AB85 Realignment - FY21 46,000 Depending how other programs are doing. Pending contract with County 21 AB85 Realignment - FY20 38,000 Depending how other programs are doing. $46m cash already received, with $8m reserved 22 AB85 Realignment - FY18 15,000 To be finalized June 2020 23 Medi-Cal Managed Care GME&IME 4,165 6,000 Pending CMS approval. Depending on timig of approval, potential to move revenue to FY21 24 Medi-Cal Managed Care GME&IME 15,000 Pending CMS approval FY17-FY19 25 Medi-Cal Managed Care Rate Range 9,590 FY16-18 reserve 26 Subtotal 57,165 76,590 34 Total 436,609 436,281 PROGRAMS Comments Budget

Budget 2021 Key Drivers

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CY2019 Actual EBIDA 33,438 Budget 2021 Key Drivers + Volume Growth (12,200)

• CPI

(28,653)

• BHS one time Retro Payment

(23,000)

• Supplemental Revenue Adjustment

17,909 + Labor Standard Improvement + Payor Rate Increase 5,400 Sub-total (40,544) Above /Below Target (7,106) Pending Items: + BHS FY19 Retro & New Rate TBD

• SAPPHIRE

TBD +/- Manager Budget Review TBD + Program Pro-forma TBD +/- Other Initiatives TBD