Jonathan Curtright, Chief Executive Officer OPEN - HEALTH AFF - INFO - - PowerPoint PPT Presentation

Jonathan Curtright, Chief Executive Officer

OPEN - HEALTH AFF - INFO 2-1 June 18-19, 2020

MISSION Save and Improve Lives VISION Missouri’s Premier Academic Health System VALUES Respect • Responsibility • Discovery • Excellence

MU Health Care Foundation Principles

OPEN - HEALTH AFF - INFO 2-2

Leadership Focus and Alignment

Quality & Safety Efficiency & Financial Performance Strategic Planning

• Performance

Improvement quality & safety projects

• Vizient Quality &

Accountability Study Rankings

• COVID-19 Impact
• Efficiency and

Operations

• Labor expense

management

• Net Operating Income

and Margin

• Re-Emergence

planning and strength

• Academic Health

Center Planning with Kaufman Hall

• Clinical Scale Strategy

OPEN - HEALTH AFF - INFO 2-3

Strategic Initiatives – Golden Threads

Deliver World-Class Health Care, Including Precision Health, Regardless of Where They Live or Ability to Pay Fulfill Our Rural, Land-grant Mission Empower Our People Through A Culture of Innovation and Optimization Achieve Scale Needed to Support Clinical & Academic Excellence Cultivate Relationships to Increase Philanthropy

Strategic Imperatives

OPEN - HEALTH AFF - INFO 2-4

Performance Metrics

OPEN - HEALTH AFF - INFO 2-5

Operating Metrics: Quality and Safety

0.60 0.70 0.80 0.90 1.00 1.10 1.20 Observed:Expected

Mortality

0.2 0.4 0.6 0.8 1 1.2 1.4

Observed:Expected

Hospital Acquired Conditions - Infections

8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0%

30 Day Unplanned Readmissions

• Vizient rankings improving YTD
• Goal of top quartile each year
• Vizient rankings include 94 AHCs

OPEN - HEALTH AFF - INFO 2-6

Patient Safety Indicators

Top Quartile performance in nine

• ut of 10 PSI Metrics for Q3FY20

Latest Three Months through March 2020

Trends represent quarterly results since January 2016 OPEN - HEALTH AFF - INFO 2-7

CMI Adjusted Expense per Adjusted Discharge

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 Your Hospital 75th Percentile 50th Percentile 25th Percentile

Compared to our AAMC-COTH peers, we have had great success at improving and sustaining lower cost care delivery for

• ur patients

Source: AAMC-COTH Quarterly Survey of Hospital Operations & Financial Performance OPEN - HEALTH AFF - INFO 2-8

FY20 Performance

• February 2020

– FYTD Operating Income at $52M (7.1% margin) and with increasingly strong volume performance and stewardship and efficiency initiatives, we expected to end the year on budget

• March and April 2020

– Operating loss of $8M – Clinical volumes down 30-60%

• Projected year-end FY2020 $55M NOI
• Must fundamentally transform
• perations

$- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Average Daily Charge

Avg Dec-Feb Avg COVID

40% decrease in average daily charge due to deferring elective admissions, visits and procedures

OPEN - HEALTH AFF - INFO 2-9

MU Health Care Response to COVID-19

OPEN - HEALTH AFF - INFO 2-10

COVID-19 Tiered Response

• March 13 – Incident command established
• March 17 – Announced our first COVID-19 case
• March 18 – Activated Level 2 response
• March 22 – Activated Level 3 response
• May 14 – Moved to C.A.R.E. response (Continued Active Response

Environment to COVID-19)

Guided by Incident Command Structure

Incident Command Lead

• Operations Section Chief
• Finance Section Chief
• Planning Section Chief

Our timeline of response

OPEN - HEALTH AFF - INFO 2-11

Snapshots From Our Response

Testing for COVID-19 Keeping patients safe Offering temporary daycare Supplying & cleaning masks Partnering with the community Planning for the future

OPEN - HEALTH AFF - INFO 2-12

Keeping MU Health Care Informed

500 1,000 1,500 2,000 2,500 3,000 3,500 March 18 April 7 April 16 April 23 April 30 May 7 May 14 May 21

Virtual Town Halls

Views

Virtual town halls

• Provide updates
• Solicit feedback
• Answer questions
• Leadership visibility

OPEN - HEALTH AFF - INFO 2-13

FY2020 and 2021 with Impact of COVID-19

OPEN - HEALTH AFF - INFO 2-14

Short Term Actions – COVID-19 Response

• Liquidity and Capital Spending

– $35M WCH envelope project eliminated – $15M S. Providence real estate project eliminated – Closely managing all capital spend (COO, CFO) – 200+ days cash on hand. Increased from 190.

• Innovation and Academic Investments

– Telehealth and ambulatory services – Inpatient and ambulatory consolidations – Exclusive provider networks – Continued investments in academic excellence ($5M for NextGen, $15M Academic Support)

• Expense management

– 10% Executive comp. decreased for 3 months – 1,200+ furloughed/pay decease in Q1 FY2021 – 400+ paid FTEs decrease March/April 2020 – 350+ vacant positions eliminated – 129 agency contracts eliminated – 61 employees laid-off April/May 2020 – $75.8M April expense v. $85.6M March YTD

• Revenues and volumes

– $19.7M Stimulus funds (Consultant retained) – $17M DSH liability income – 90% of pre-COVID-19 clinical volumes

OPEN - HEALTH AFF - INFO 2-15

FY 2021 Budget - Major Assumptions

Expenses

• Labor management levers remain
• No merit salary adjustments
• Major consolidations
• Supply chain (Partners Co-Op,

Surgical Preference Cards, Implants) Revenues

• Volumes down approximately 20% in

aggregate for first quarter FY 2021

• Volumes on-budget October 2020
• Medicaid rate decrease for 3 months
• f FY2021
• Specialty pharmacy growth
• Exclusive custom provider network

OPEN - HEALTH AFF - INFO 2-16

We Will Re-emerge Stronger

• Significant gains in quality, safety, service, and efficiency
• Managing our expenses using multiple levers
• Re-emergence planning, volumes returning
• Transformations and consolidations now vs. future with COVID-

19 major accelerator

• Aggressive FY2021 budget -- net operating income of $70M

OPEN - HEALTH AFF - INFO 2-17

OPEN - HEALTH AFF - INFO 2-18