Transcript Slide 1

Appropriations Committee
February 21, 2007
1
UCHC’S Primary Mission: Education and Research
•
3 Schools:
– Medical School (320 students)
– Dental School (160 students)
– Graduate School in bio-medical sciences (380 students)
•
Research: More than $90 million per year of innovative research is conducted and
discoveries are translated into advances in patient care e.g. cancer vaccines,
hormone therapies for Osteoporosis, new materials for Dental Implants, and Stem
Cell research.
•
Residency Training: For approx 600 residents/year who train in local hospitals
•
John Dempsey Hospital (JDH) and UConn Medical Group (UMG), the multi-specialty
faculty practice, are sites for learning and represent key elements in attracting
talented faculty who want to teach, do research and provide patient care.
(Time/reimbursement pressures mean that fewer community physicians now give
time to teaching.)
2
A Worthy Investment
•
Approximately 35% of School of Medicine graduates practice in the State, as do
46% of School of Dental Medicine graduates.
•
Dental School is historically #1 or #2 in the country.
•
Total minority enrollment has increased from 19.8% in Fall 1997 to 26.9% in Fall
2006.
•
School of Medicine national leader in innovative curriculum.
•
JDH is winner of Top 100 Award two years in a row (2005 and 2006).
•
Although Medical School is one of the smallest medical schools in the country
(ranking in the 15th percentile for number of medical students)
– SOM ranks 11th among 29 peer public medical schools in per dollar sponsored
research funding per faculty member
– Our GME program ranks in the 55th percentile for numbers of students
benchmarked against all public medical schools.
•
The Health Center has 5200 employees (71% union, 12% faculty, 3% managerial and
14% residents/graduate assistants/student payroll) and generates 11,371 other jobs
in the state economy and $938 million in Gross State Product.
3
UCHC: A Resource to the Community and the State
•
Service to Medicaid Patients
•
•
•
Clinical Service Collaboration:
•
•
Among the top 5 hospitals in state in Medicaid inpatient days as a percentage of total
inpatient days
Largest single provider of dental services to Medicaid clients and the under-and
un-insured
• 61% of patient visits to the UCHC dental clinic in Farmington are Medicaid clients
• 70% of all student/intern/resident dental care activity is service to Medicaid
clients
Department of Public Health, Department of Correction, Department of Mental Health &
Addiction Services, Department of Veteran Affairs (Rocky Hill), Department of Mental
Retardation
Community Service:
•
•
•
•
•
•
•
South Park Inn Medical Clinic (Hartford)
South Marshall Street Homeless Clinic (Hartford)
Connecticut Poison Control Center
YMCA Adolescent Girls Medical Clinic (Hartford)
Camp Courant Dental Screening Program
Migrant Worker Clinic
Covenant House (Willimantic)
4
UCHC: A Resource to Other Hospitals
•
Trained physicians and staff of Waterbury and St. Mary’s for regional
cardiac surgery and interventional cardiology program.
•
Trained staff and assisted ECHN in establishing a Level II nursery at
Manchester Hospital.
•
Pediatric dentistry program at CCMC.
•
Statewide Neonatal Transport Program and Regional Neonatal
Intensive Care Unit. In the past 18 months, premature babies came
to JDH from 109 Connecticut towns.
•
Provide workforce at Burgdorf Clinic.
•
Provide cardiac perfusionist services to St. Mary’s and Waterbury
Hospitals.
•
Regional dental emergency room service.
•
Training site for nursing, allied health schools.
5
State Support
• Is provided to the academic (education and research) enterprise only.
There are no state operating dollars (block grant and fringe benefit
support) in the hospital
• 15.9% of the Health Center budget is state supported
• 84.1% comes from other revenues (clinical, research, tuition, philanthropy)
STATE SUPPORT AS A PERCENT OF TOTAL EXPENSES
2 5.0 0 %
22.6%
20.5%
2 0 .0 0 %
18.2%
17.3%
16.6%
16.2%
FY 2004
FY 2005
FY 2006
17.4%
18.1%
15.9%
15.0 0 %
10 .0 0 %
5.0 0 %
FY 2001
FY 2002
FY 2003
Estimated Requested Requested
FY 2007
FY 2008
FY 2009
6
University of Connecticut Health Center
Excess/(Deficiency) by Fiscal Year
Before Special Appropriation in FY 00 and FY 01
$2,000,000
129,479
253,082
574,210
406,605
$(2,000,000)
$(6,000,000)
$(14,000,000)
(6,873,686)
(7,186,659)
$(10,000,000)
(12,353,851) (12,198,898)
FY
1999
FY
2000
FY
2001
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
Since FY 2000, $74 million in cost improvements have been realized through a combination of revenue
enhancement, cost containment and cost reduction activities.
John Dempsey Hospital
Excess/(Deficiency) by Fiscal Year
$11,000,000
8,134,796
5,563,565
$4,000,000
1,122,070
3,432,319 3,275,863
$(3,000,000)
( 5,579,333)
$(10,000,000)
$(17,000,000)
( 12,353,851)
( 13,869,271)
FY
19 9 9
FY
2000
FY
2001
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
Since FY 2002, the hospital’s financial success enabled it to generate funds sufficient to balance the Health
Center’s budget.
7
Academic Revenues
In-State Tuition and Fees
SoM resident
Research Awards by Fiscal Year
SoDM resident
$30,000
5.0%
3.5%
15.0%
5.0%
$25,000
10.4%
$115,000,000
15.0%
$20,000
98,825,833
96,229,654
15.0%
92,520,775
4.0%
90,072,487
$95,000,000
$15,000
8 0 , 7 8 1, 6 5 4
4.1%
$10,000
69,094,668
15.0%
14.6%
14.2%
4.0%
3.0%
15.3%
3.0%
$75,000,000
14.7%
3.9%
3.0%
1.1%
57,843,333
$55,000,000
48,038,708
$5,000
4 9 , 6 5 6 , 15 3
44,783,891
$0
$35,000,000
FY 1997
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY2006
FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09
*
*
Note: Board of Governors policy requires tuition be set betw een the 70th - 75th percentiles of U.S.
public schools, but w ith no annual increase higher than 15%.
State Appropriation by Fiscal Year
$82,000,000
3.84%
75,307,728
72,524,336
-1.60%
3.99%
0.17%
-0.65%
74,102,850
74,231,213
73,748,844
73,238,772
FY 2002
FY 2003
FY 2004
FY 2005
-0.69%
1.00%
76,161,417
76,920,245
FY 2006
FY 2007
$72,000,000
$62,000,000
$52,000,000
FY 2000
FY 2001
The t ot al increase over t he f ive year period FY 01 t o FY 06 was 1.1%.
One-t ime appropriat ion providing special def icit assist ance of $12.5 million in FY 00 and $4.4 million in FY 01 is not included in t he above graph.
Fiscal Year 2001 includes a one-t ime $3.1 million appropriat ion f or t he Research St rat egic Plan.
8 8
"ACADEMIC
GAP" BY FISCAL YEAR
$2 5, 0 0 0 , 0 0 0
20, 004, 870
$2 0 , 0 0 0 , 0 0 0
$15, 0 0 0 , 0 0 0
$10 , 0 0 0 , 0 0 0
$5, 0 0 0 , 0 0 0
13, 531, 458
12, 162, 842
8, 272, 212
7, 683, 263
2, 566, 507
992, 591
352, 271
$0
FY 2 0 0 2
FY 2 0 0 3
FY 2 0 0 4
FY 2 0 0 5
FY 2 0 0 6
E s t i ma t e d
E s t i ma t e d
FY 2 0 0 7
FY 2 0 0 8
E s t i ma t e d
FY 2 0 0 9
•The Academic Gap is the difference between the costs associated with the research and education
enterprise, including the costs of meeting state mandates, and the revenues received for that
purpose. Those revenues include tuition and fees, research grants and the state support. The State
Appropriation has remained essentially level for seven consecutive years. During the same period,
the Health Center survived financially by focusing on increasing other revenue sources. After a period
of significant growth, tuition and research revenue are now also leveling. Although JDH contributed
$19.3 million from 2002 through 2006 to fill the Academic Gap, it can no longer do so.
•FY 2008 State Appropriation Request is $93.5 million, comprised of inflation increases of $3.1 million
and Academic Gap funds of $13.5 million. This request represents a $16.6 million increase over the
FY 2007 level.
• FY 2009 State Appropriation Request is $103.2 million, comprised of inflation increases of $3.2
million and Academic Gap funds of $6.5 million. This request represents a $9.7 million increase over
the FY 2008 level.
9
University Of Connecticut Health Center
Summary of Sources and Uses of Funds
ACADEMIC GAP
Fiscal
Year
2002
Actual
Fiscal
Year
2003
Actual
Fiscal
Year
2004
Actual
Fiscal
Year
2005
Actual
Fiscal
Year
2006
Actual
Fiscal
Year
2007
Forecasted
Fiscal
Year
2008
Budget
Fiscal
Year
2009
Budget
Total Academic Revenues
181,040,822
201,711,316
212,737,493
218,933,985
224,722,073
235,626,179
257,241,716
272,121,599
Total Academic Expenses
279,561,866
297,386,411
312,573,020
327,343,298
338,777,023
351,677,982
380,167,320
407,204,936
Academic Deficiency
(98,521,044)
(95,675,095)
(99,835,527)
(108,409,313)
(114,054,950)
(116,051,803)
(122,925,604)
(135,083,337)
74,102,850
23,425,603
97,528,453
74,231,213
21,091,611
95,322,824
73,748,844
23,520,176
97,269,020
73,238,772
27,487,278
100,726,050
76,161,417
25,730,691
101,892,108
77,383,993
26,392,000
103,775,993
79,997,055
29,397,091
109,394,146
83,196,937
31,881,530
115,078,467
Total State Support
Block Grant
Fringe Benefits
Total
Shortfall ( Academic GAP)
(992,591)
Hospital Support
JDH
1,122,070
Other Programs:
CMHC
0
Total Results from Operations
129,479
(352,271)
1,173,849
(2,566,507)
(7,683,263)
(12,162,842)
(12,275,810)
(13,531,458)
(20,004,870)
3,275,858
8,134,796
5,563,565
(8,508,205)
(5,793,000)
(5,907,000)
(568,476)
(135,141)
(44,928)
253,102
574,210
406,605
(274,409)
(6,873,686)
0
(20,784,015)
0
(19,324,458)
0
(25,911,870)
Notes:
Academic Gap is the difference between the costs associated with the research and education enterprise, including the costs of meeting state mandates,
and the revenues received for that purpose. Those revenues include tuition and fees, research grants and the state support.
JDH has been able to fill the Avademic Gap due to improved operating results. Since 2002, JDH has contributed $19.3 million to support academics.
In covering the Academic Gap, JDH has had to forego fully funding depreciation and taking advantage of capital reinvestment opportunties.
JDH can no longer fill the gap. Facility capacity will limit future volume increases; other challenges include Medicaid reimbursment levels and state fringe
benefit costs.
10
University of Connecticut Health Center
Unrestricted State Appropriation - Fiscal Years 2000-2009
Millions
From FY 2000 to FY 2007, the State Appropriation w ill have increased at a .8% average annual rate of increase in current dollars, w hen the
Medical Care Services CPI inflation factor averaged 5.3%, for an aggregate difference of $22.5 million. The Current Services Request for FY
2008 and 2009 w ould begin to close the "gap" and bring UCHC closer to the Medical Care Services CPI.
$120
2000 State Appropriation adjusted for CPI Medical Care Services Inflation
$ 107.6
State Appropriation in Current Dollars
$110
$ 103.4
Current Services Request
$100
$ 99.4
2000 State Appropriation adjusted for Grow th in CT State General Fund
$ 95.6
$ 103.2
$ 91.8
Governor's Recommended
$90
$ 87.6
$ 97.2
$ 93.5
$ 83.3
$ 91.5
$ 79.6
$ 76.0
$80
$ 81.5
$ 75.6
$ 75.3
$70
$ 84.4
$ 79.4
$ 77.6
$ 72.5
$80.6
$ 76.2
$ 74.1
$ 74.2
$ 73.7
$ 73.2
02
(A)
03
(A)
04
(A)
05
(A)
$ 72.5
$81.9
$ 76.9
$60
$50
00
(A) (B)
01
(A) (B)
06
(A)
07
(A) (C)
08 Request
(A) (C)
09 Request
(A) (C)
(A ) Oper ati ng budget excl udes f r i nge benef i ts r el ated to State A ppr opr i ati on.
(B ) E xcl udes one-ti me appr opr i ati ons f or 27th pay per i od ($ 2.6 mi l l i on) i n FY 00 and the Def i ci t A ppr opr i ati on of $ 12.5 mi l l i on i n FY 00 and $ 4.4 mi l l i on i n FY 01.
FY 01 i ncl udes a one-ti me $ 3.1 mi l l i on appr opr i ati on f or the Resear ch Str ategi c P l an
(C) For the M edi cal Ser vi ces CP I 4% was used f or FY 2007 - 2009
11
Why Can’t JDH Continue to Fill the Academic Gap?
John Dempsey Hospital (JDH) faces the same set of challenges
as the state’s other 29 acute care hospitals:
• Low Medicaid reimbursement
•22.3% of JDH inpatient days are paid by Medicaid
•One of top 5 hospitals in the State for inpatient Medicaid days
• Medicare cutbacks
• Uncompensated care
• Nursing and other health care professional shortages
• Surviving in an intensely competitive marketplace
12
Financial Challenges Unique to JDH
• A more complex delivery system due to the education and research
functions of an academic medical center.
• Using its profit margin to support the medical and dental schools
($19.3 million over the past 5 years) rather than reinvesting in capital
plant.
• Paying state fringe benefit rates. (In 2005, that rate was 38.7%, far
higher than the CHA member hospital average of 27.4%. The dollar
value of the difference between those rates was $8.1 million in 2005
alone. The ’07 state rate is 40.9%, estimated to cost $10.5 million
more than the average hospital rate.
• Underwriting certain unprofitable essential health services because
of its public mission. Examples:
• Department of Corrections inpatient services
• Higher percentage of inpatient psychiatry beds
• Department of Mental Retardation dental services
13
JOHN DEMPSEY HOSPITAL
Comparison of Fringe Benefit Cost to the CHA Member Hospital Average
4 5.0 0 %
38.72%
3 5.0 0 %
34.07%
27.39%
27.17%
2 5.0 0 %
15.0 0 %
Fiscal Year 2004
John Dempsey Hospital
Fiscal Year 2005
Connecticut Hospital Association
The dollar value of the difference between the state (JDH) fringe benefit rate and the hospital average fringe benefit rate was $8.1
million in FY 2005, the last year for which comparable data are available. (Note: the FY 2007 state fringe rate is 40.9%.)
14
Current JDH Financial Condition
• The hospital saw profits from 2002-2006 because of increases in patient volumes,
expense management and revenue enhancements. Financial stability is now stymied
by physical constraints; without new space, JDH cannot meet growing demand *.
• Following the one-time appropriation in 2000 to stabilize Health Center finances ($16.9
million and $3.1 million to support the Research Strategic Plan), UCHC has achieved
$74 million in cost reductions and revenue enhancements, including a $9 million FY 07
plan, which is on target.
• FY 07 year-to-date, the Health Center has experienced an additional $13.6 million
deficit, leaving it $12.0 million behind the budget plan. We are forecasting this loss to
be $20.8 million for the year. This shortfall is attributable to less than expected
hospital revenues as a result of changes in payor mix and inadequate payor
reimbursement levels, increasing utility costs and declining research revenues.
• This shortfall cannot be addressed by cuts; personnel reductions of this magnitude
will cause additional significant losses in revenue. As a result, we must ask you for
assistance in the current year, as well as an adjustment in State support going
forward.
• Hospital space is insufficient to maintain the financial and service status quo. A
replacement hospital, with expanded bed capacity, is a key element of a long-term
financial solution.
15
Slide #1
University of Connecticut Health Center
Employee Head Count* 2000-2006
4,931
4,751
4,558 4,669
4,493
4,322
4,239
5,000
4,500
4,000
3,693
3,567
3,493
3,500
3,256
3,171
3,023
2,863
3,000
Snapshot Dates
06/30/2000
06/30/2001
06/30/2002
06/30/2003
06/30/2004
06/30/2005
06/30/2006
Notes:
1) 143 Post Docs
moved from the Other
category into the Union
category for 2004.
2) The Other category
includes Confidentials,
Nurse Pros, Special
Payroll, and Post Docs
(from 2000-2003).
2,500
2,000
1,500
1,000
575 608
500
659
634 639
598 632
637
558
142 139 125 138
143 135 132
0
FACULTY
555
MANAGERIAL
417 461
555
415
OTHER
UNION
Total UCHC
16
JOHN DEMPSEY HOSPITAL
ADMISSIONS BY FISCAL YEAR
JOHN DEMPSEY HOSPITAL
AVERAGE DAILY CENSUS BY FISCAL YEAR
11000
4.15%
5.22%
10000
4.20%
14.13%
9000
9845
9826
10234
3.81%
10200
170
9407
162.1
165.0
158.3
160
152.8
150
8.59%
6.07%
167.0
166.7
8940
8580
8000
7000
4.66%
-0.19%
147.3
141.5
7518
140
136.2
6923
130
120
6000
FY
2000
FY 2000 FY 2001 FY 2002FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY2007
Projected Budget
JOHN DEMPSEY HOSPITAL
OUTPATIENT VISITS BY FISCAL YEAR
115000
FY
2002
FY
2004
FY
2006
Fy
2007
Budget
DENTAL CLINICS
PATIENT VISITS BY FISCAL YEAR
3 2 50 0 0
5.58%
5.93%
15.90%
270200
6.38%
255909
11.82%
95000
241582
2 50 0 0 0
20.38% 227099
21.63%
1750 0 0
105000
280000
6.06%
140588
-1.34%
203099
168720
5.53%
85000
8.64%
0.68%
76820
77340
81615
2.12%
3.94%
86625
6.86%
1.13%
92569
93611
-1.72%
5.87%
98000
92000
83343
75000
138711
65000
10 0 0 0 0
FY 2000FY 2001 FY 2002FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2007
Projected Budget
55000
FY 2000FY 2001FY 2002FY 2003FY 2004FY 2005FY 2006FY 2007FY 2007
ProjectedBudget
17
John Dempsey Hospital/Dental Clinics
EXPENSE PER ADJUSTED DISCHARGE BY
FISCAL YEAR
John Dempsey Hospital/Dental Clinics
TOTAL REVENUE PER ADJUSTED DISCHARGE BY
FISCAL YEAR
13000
-0.66%
13000
12000
11000
-1.97%
10,793
2.72%
11,087 -3.43%
10,708
2.93%
11,022
1.51%
11,188
5.50%
11,804
3.40%
12,206
12,055
-0.93%
12,092
-10.07%
10,977
5.04%
-3.98%
3.22%
11,575
-8.20%
11000
10,626
1.61%
10,797
1.64%
11,898
2.52%
-2.70%
11,869
11,577
11,327
10,974
10000
9000
FY
2000
FY
2001
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
FY
FY
2007 2007
YTD Budget
9000
FY
2000
FY
2001
FY
2002
FY
2003
FY
2004
FY
2005
FY
2006
FY
FY
2007 2007
YTD Budget
UConn Medical Group
VOLUME BY FISCAL YEAR (Unique Patient Visits)
John Dempsey Hospital
FTE's Per Adjusted Occupied Bed by Fiscal Year
5.4
5.29
5.2
600000
5.80% 7.48%
541,568
1
.33%
537,429
0.82%
23.79% -0.02% 1.78%
507,967
503,859
488,622 488,541 497,236
5.11
4.96
5
4.79
4 .8
4.69
4.66
500000
4.68
9.53%
4.56
4 .6
4.42
400000
4 .4
5.67% 394,706
360,360
4 .2
300000
4
3 .8
3 .6
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
YTD
FY 2007
Budget
18
200000
FY 2000 FY 2001 FY 2002FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2007
Projected Budget
University of Connecticut Health Center
John Dempsey Hospital
Comparative Data, Medicaid Inpatient Patient Days as a Percentage of Total Patient Days.
Hospital
John Dempsey Hospital
Saint Francis Hospital
Hartford Hospital
New Britain Hospital
Bristol Hospital
Charlotte Hungerford Hospital
Waterbury Hospital
St Mary's Hospital
Statewide Average
Total
Medicaid
Patient Days Patient Days
Percent
59,860
162,182
215,223
76,470
34,335
27,117
72,317
59,899
13,367
36,919
40,720
14,871
4,874
4,355
11,923
11,180
22.3%
22.8%
18.9%
19.4%
14.2%
16.1%
16.5%
18.7%
2,039,739
366,131
17.9%
Top 5 Hospitals in State
Connecticut Children's Medical Center
Yale New Haven Hospital
Bridgeport Hospital
St. Francis Hospital
John Dempsey Hospital
46.8%
28.3%
23.6%
22.8%
22.3%
Notes:
Source: CHIME Database Connecticut Hospital Association FY 2006.
Data reflects a fiscal year from October 1 through September 30.
The Legislative Program Review and Investigations Committee report "The Funding of Hospital Care" dated
December 18, 2006 identifies three hospitals statewide that qualify for the Medicaid DSH Adjustment (John Dempsey,
Yale New-Haven and Bridgeport). John Dempsey Hospital qualifies both as a Medicaid and Medicare
Disproportionate Share Hospital.
19