Jonathan Curtright, Chief Executive Officer OPEN - HEALTH AFF - INFO 2-1 June 18-19, 2020
MU Health Care Foundation Principles MISSION Save and Improve Lives VISION Missouri’s Premier Academic Health System VALUES Respect • Responsibility • Discovery • Excellence OPEN - HEALTH AFF - INFO 2-2
Leadership Focus and Alignment Quality & Efficiency & Financial Strategic Planning Safety Performance • Performance • COVID-19 Impact • Re-Emergence Improvement quality & planning and strength safety projects • Efficiency and Operations • Academic Health • Vizient Quality & Center Planning with Accountability Study • Labor expense Kaufman Hall Rankings management • Clinical Scale Strategy • Net Operating Income and Margin 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 Strategic Empower Our People Through A Culture of Imperatives Innovation and Optimization Achieve Scale Needed to Support Clinical & Academic Excellence Cultivate Relationships to Increase Philanthropy OPEN - HEALTH AFF - INFO 2-4
Performance Metrics OPEN - HEALTH AFF - INFO 2-5
Operating Metrics: Quality and Safety Hospital Acquired Conditions - Infections Mortality 30 Day Unplanned Readmissions 1.4 1.20 14.0% 1.2 1.10 13.0% 1 Observed:Expected 1.00 12.0% Observed:Expected 0.8 0.90 11.0% 0.6 0.80 10.0% 0.4 0.70 0.2 9.0% 0 0.60 8.0% • Vizient rankings improving YTD • Goal of top quartile each year • Vizient rankings include 94 AHCs OPEN - HEALTH AFF - INFO 2-6
Patient Safety Indicators Latest Three Months through March 2020 Trends represent quarterly results since January 2016 Top Quartile performance in nine out of 10 PSI Metrics for Q3FY20 OPEN - HEALTH AFF - INFO 2-7
CMI Adjusted Expense per Adjusted Discharge $14,000 $12,000 Compared to our $10,000 AAMC-COTH peers, we have had great $8,000 success at improving and sustaining lower $6,000 Your Hospital cost care delivery for 75th Percentile $4,000 our patients 50th Percentile $2,000 25th Percentile $0 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 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 Average Daily Charge $14,000,000 • March and April 2020 $12,000,000 – Operating loss of $8M $10,000,000 – Clinical volumes down 30-60% $8,000,000 $6,000,000 • Projected year-end FY2020 $55M NOI $4,000,000 40% decrease in average daily charge due to deferring elective • Must fundamentally transform $2,000,000 admissions, visits and procedures $- operations Monday Tuesday Wednesday Thursday Friday Saturday Sunday Avg Dec-Feb Avg COVID OPEN - HEALTH AFF - INFO 2-9
MU Health Care Response to COVID-19 OPEN - HEALTH AFF - INFO 2-10
COVID-19 Tiered Response Guided by Incident Command Structure Incident Command Lead • Operations Section Chief • Finance Section Chief • Planning Section Chief Our timeline of 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) OPEN - HEALTH AFF - INFO 2-11
Snapshots From Our Response Keeping patients safe Testing for COVID-19 Supplying & cleaning masks Offering temporary daycare Partnering with the community Planning for the future OPEN - HEALTH AFF - INFO 2-12
Keeping MU Health Care Informed Virtual Town Halls 3,500 3,000 2,500 Virtual town halls • Provide updates 2,000 • Solicit feedback 1,500 • Answer questions • Leadership visibility 1,000 500 0 March 18 April 7 April 16 April 23 April 30 May 7 May 14 May 21 Views 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 • Expense management – $35M WCH envelope project eliminated – 10% Executive comp. decreased for 3 months – $15M S. Providence real estate project eliminated – 1,200+ furloughed/pay decease in Q1 FY2021 – Closely managing all capital spend (COO, CFO) – 400+ paid FTEs decrease March/April 2020 – 200+ days cash on hand. Increased from 190. – 350+ vacant positions eliminated – 129 agency contracts eliminated – 61 employees laid-off April/May 2020 – $75.8M April expense v. $85.6M March YTD • Innovation and Academic Investments • Revenues and volumes – Telehealth and ambulatory services – $19.7M Stimulus funds (Consultant retained) – Inpatient and ambulatory consolidations – $17M DSH liability income – Exclusive provider networks – 90% of pre-COVID-19 clinical volumes – Continued investments in academic excellence ($5M for NextGen, $15M Academic Support) OPEN - HEALTH AFF - INFO 2-15
FY 2021 Budget - Major Assumptions Expenses Revenues • Volumes down approximately 20% in • Labor management levers remain aggregate for first quarter FY 2021 • No merit salary adjustments • Volumes on-budget October 2020 • Major consolidations • Medicaid rate decrease for 3 months • Supply chain (Partners Co-Op, of FY2021 Surgical Preference Cards, • Specialty pharmacy growth Implants) • 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
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