Transcript Document

Standard & Poor’s Update
August 2005
Agenda
 UCSF Overview
 Strategic Plan and FY 2006 Operations Workplan
 Financial Performance
 Long Range Development Plan
 Summary and Conclusions
 Appendix: University of California Support
2
UCSF Overview
3
UCSF Medical Center has a proven track record of healthcare excellence
 San Francisco's only university medical center.
 Two hospital locations with 574 available beds (650 licensed) including
513 at Moffitt/Long and 61 at Mt. Zion as of June 30, 2005
 37% percent of patients live in San Francisco; 63% percent come from
neighboring counties, throughout California, and around the world1
 Principal teaching site for UCSF Schools of Medicine, Dentistry, Pharmacy,
and Nursing as well as the UCSF Graduate Division
 FY 2005 included 167,822 patient days – an ADC of 460
Footnote: 1. http://www.ucsfhealth.org/common/annualReport2004.pdf.
4
UCSF Medical Center and UCSF Children’s Hospital are recognized
throughout the world as leaders in Healthcare
 UCSF continues to maintain an outstanding national and international
reputation1:
– nationally designated Comprehensive Cancer Center
– nationally designated Centers of Excellence in women’s health
– among the top five hospitals in the nation in the area of neurology and
neurosurgery
– one of the nation’s largest centers for kidney and liver transplants – performing
the third largest number of transplants in the US in 20032
– internationally recognized for treating the spine
 UCSF Children’s Hospital is a “hospital within a hospital” with more than
150 pediatric specialists practicing in more than 50 areas of medicine2
 In 2004, UCSF MC received the equivalent of a perfect score from the
Joint Commission on Accreditation of Healthcare Organization (JACHO).
Only 17 percent of hospitals received accreditations with full standards
compliance in 20032.
 UCSF Faculty leaders in Patient Safety (100,000 Lives Campaign)
Footnote: 1. http:/www.ucsfhealth.org/adult/about/index.html.
2.http://www.ucsfhealth.org/common/annualReport2004.pdf.
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UCSF Medical Center and UCSF Children’s Hospital have been named to U.S.
News & World Report’s honor roll
 UCSF Hospital is ranked in the top 10 hospitals in the country
 UCSF Children’s Hospital is ranked in the top 20 hospitals in the
country
 Several of UCSF’s programs were also rated among the top 15 in the
nation.
• Hormonal disorders
• Rheumatology
• Neurology and
Neurosurgery
• Kidney Disease
• Pediatrics
• Respiratory disorders
• Digestive Disorders
• Ophthalmology
• Ear, Nose and Throat
• Urology
• Psychiatry
• Gynecology
Footnote: 1. All rankings from US News and World Report July 18, 2005 issue; http://www.usnews.com/usnews/health/best-hospitals/honorroll.htm.
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UCSF is a leader a national leader in NIH funding and is making significant
investments in research facilities
 UCSF was the fourth largest recipient of National Institutes of Health (NIH)
research funds in 2004, receiving 977 research awards valued at $439
million1
 Development of the new research campus at Mission Bay is underway2:
– Genentech Hall, The California Institute for Quantitative Biomedical Research
(QB3) and The Arthur and Toni Rembe Rock Hall , a research facility for
Genetics, Development and Behavioral Sciences are completed and occupied
– The Campus Community Center, Housing Complex and two parking structures
will be completed in FY 2006
– Construction on The Helen Diller Family Cancer Research Building is slated to
begin in FY06.
– The Cardiovascular and Neurosciences research buildings are in the design
phase.
Footnote: 1. http://grants2.nih.gov/grants/award/trendsrnk04all1to500.htm.
2. http://pub.ucsf.edu/missionbay.
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UCSF is well positioned for the the future
 Strong execution of the current strategic plan
 Strong volume growth
 Strong financial performance
 Strong commitment to the future plan
Footnote: 1. http://grants2.nih.gov/grants/award/trendsrnk04all1to500.htm
2. http://pub.ucsf.edu/missionbay
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Strategic Plan and
FY 2006 Operations Workplan
9
Our strategic plan for has six main goals…
 Create Capacity for targeted, profitable growth
 Grow targeted services
 Plan for the development of a Mothers’ and Children’s Hospital
 Raise customer service/satisfaction to match recognized excellence of
clinical care and research
 Target initiatives to improve operating performance, monitoring and
management
 Launch enterprise-wide workforce development initiative
10
…the operations workplan for FY 2006 is tied to the Medical Center’s strategy
11
Financial Performance
12
Financial results significantly improved from 2003 to 2004
…and are even stronger in 2005
 FY 2005 income before other changes in net assets of $69.3 million, $13.8
million ahead of FY 2004
 Cash increased from $115.5 million at June 2004 to $144.2 million at June
2005. Days Cash on Hand increased from 44.2 to 51.3
 Net Days in AR increased slightly from 64.8 days at June 2004 to 66.6
days at June 2005
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The results over the past five years indicate sustained financial
improvement…
UCSF Medical Center
Net Income - Combined
FY 2000 through FY 20051
$80,000
$69,271
$55,477
$48,412
$50,000
$35,022
$23,409
$25,099
$21,842
thousands
$20,000
($16,850)
($10,000)
($10,000)
($14,871)
April-June 00
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
($25,000)
Budget
($40,000)
Actual
Annualized
($60,000)
($70,000)
Footnote: 1. FY 2005 financial performance is based on the unaudited financial statements while all previous periods are based on audited financial statements.
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…as Net Income has improved so too has cash
UCSF Medical Center
Cash Balance1
July 2002 – June 2005
$160,000
$140,000
Thousands
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
'Sep-02
'Dec-02
'M ar-03
'Jun-03
'Sep-03
'Dec-03
'M ar-04
'Jun-04
'Sep-04
'Dec-04
'M ar-05
'Jun-05
Footnote: 1. Includes restricted and unrestricted cash.
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This improved performance has resulted in stronger financial ratios
S&P
Ratios/Indicators
1,3
Net patient revenue
Operating margin
EBIDA margin
A
UCSF Medical Center
FY 2003
$ 198,145 $
2.0%
11.1%
FY 2004
FY 2005
953,897 $ 1,041,496 $ 1,123,762
5.2%
5.8%
6.3%
10.7%
10.6%
11.0%
MADSC2
Debt to capitalization
3.3
36.1%
8.1
34.1%
7.2
21.2%
7.9
20.2%
Days cash on hand
Cushion ratio
176.0
12.5
35.8
6.6
44.2
7.3
51.3
8.9
57.4
66.1
64.8
66.0
Days in A/R
Footnote: 1. Standard & Poor’s U.S. Not-For-Profit Health Care 2004 Median Ratios; publication date 10-Jun-2004.
2. MADSC is Maximum Annual Debt Service Coverage.
3. FY 2005 financial performance is based on the unaudited financial statements.
16
Volume in the Medical Center’s key Service Lines continue to grow…
Trended Service Data
Fiscal Years 2002 to 2005
MAJOR SERVICE & AGE GROUPING
Cases
2002
Cases
2003
Cases
2004
Cases
2005
Days
2002
Days
2003
Days
2004
Days
2005
Adult (18 and over) Medical/Surgical
Cardiovascular Services
Neurosciences
Cancer Services
Orthopedic Surgery
Kidney/Liver Transplant
Adult General Surgery
Medicine
Other Surgery
Sub Total Adult Medical/Surgical
3,134
2,685
2,394
1,361
1,285
1,730
4,422
342
17,355
3,166
2,863
2,534
1,366
1,572
1,822
4,645
331
18,301
3,176
2,992
2,552
1,501
1,623
1,959
4,597
424
18,824
3,289
3,140
2,570
1,589
1,719
2,554
4,879
478
20,218
16,007
14,559
17,910
7,757
11,454
11,324
21,094
1,517
101,620
17,656
16,797
20,131
7,292
9,417
12,392
23,130
1,386
108,201
18,906
19,146
20,633
7,856
10,443
11,948
24,611
1,895
115,438
19,172
19,847
19,061
9,637
11,555
13,527
26,242
2,390
121,431
2,256
657
2,602
1,284
6,797
2,198
681
2,686
1,284
6,848
2,116
596
2,785
1,222
6,719
2,084
536
2,929
1,182
6,731
8,097
15,212
17,649
7,637
48,596
7,762
14,152
18,409
8,088
48,411
7,342
12,340
18,969
7,944
46,596
7,330
11,778
19,270
8,013
46,391
24,152
25,149
25,543
26,949
150,216
156,612
162,034
167,822
Mother's and Children's (17 and under)
Obstetrics1
Neonatology
Pediatric Medicine
Pediatric Surgery
Sub Total Mother's & Children's
UCSF Grand Total
ADC
Annual percent increase
412
3.3%
429
4.1%
443
3.3%
460
3.8%
Footnote: 1. Excludes Well baby days
17
…resulting in a 15% increase in the Medical Center’s average daily census
UCSF Medical Center
Average Daily Census
FY 2001 through FY 2005
475
460
450
Average Daily Census
443
429
425
412
400
399
375
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
18
Net income continues to grow
UCSF Medical Center
Statements of Revenue, Expenses and Net Income
For the Years ended June 30, 2003, 2004 and 20051
(Dollars in thousands)
Hospital
2003
Net Patient Service Revenue
Other Revenue
Total Revenue
$ 803,512
31,550
835,062
Expenses
Depreciation
Interest
Total Expenses
Hospital Income
Clinical Practices
Net Patient Service Revenue
Other Revenue
Total Revenue
Expenses
Depreciation
Interest
Total Expenses
Clinical Practices Income
Net Income
$
2004
829,196
23,792
852,988
$ 898,796
25,013
923,809
719,424
49,277
8,101
776,802
58,260
740,719
48,885
8,027
797,631
55,357
795,495
50,823
6,575
852,893
70,916
191,303
5,202
196,505
212,300
6,233
218,533
224,966
4,584
229,550
205,961
392
206,353
(9,848)
217,962
451
218,413
120
230,584
611
231,195
(1,645)
48,412
$
2005
$
55,477
$
69,271
Footnote: 1. FY 2005 financial performance is based on the unaudited financial statements while all previous periods are based on audited financial statements.
19
The balance sheet has improved…
UCSF Medical Center
Statements of Net Assets
For the Years ended June 30, 2003, 2004 and 20051
(Dollars in thousands)
2003
2004
2005
86,708
174,262
1,642
14,411
7,748
284,771
$ 115,506
185,575
1,330
18,519
8,634
329,564
$ 144,248
203,246
4,604
17,699
10,543
380,340
358,594
15,759
659,124
385,900
11,048
726,512
415,640
11,295
807,275
Liabilities and Net Assets
Current Liabilities
Accounts Payable & Accrued Expenses
Other Current Liabilities
Current Portion of Long-term Debt
Total Current Liabilities
76,784
5,109
7,776
89,669
85,838
7,992
9,544
103,374
102,200
4,520
12,492
119,212
Long-Term Debt, net of current portion
Third Party Settlements and Loss Contingency
Note Payable to UC
Total Liabilities
110,522
55,303
61,042
316,536
117,776
59,650
280,800
121,812
78,970
319,994
342,588
445,712
487,281
$ 659,124
$ 726,512
$ 807,275
Assets
Current Assets
Cash
Accounts Receivable
Third Party Settlements
Inventories
Other Current Assets
Total Current Assets
Property, Plant and Equipment
Other Assets
Total Assets
Net Assets
Total Liabilities and Net Assets
$
Footnote: 1. FY 2005 financial performance is based on the unaudited financial statements while all previous periods are based on audited financial statements.
20
…as too has the cash balance
UCSF Medical Center
Statements of Cash Flows
For the Years ended June 30, 2003, 2004 and 20051
(Dollars in thousands)
2003
Sources of Cash:
Income
Depreciation
Donated Funds
Other
Long-Term Debt Proceeds
Total Sources of Cash
$
Uses of Cash:
Changes in Working Capital
Capital Expenditures
Health Systems Support
Long-Term Debt Principal Payments
Total Uses of Cash
Change in Cash
Cash Balance, beginning of period
Cash Balance, end of period
$
48,412
49,669
7,888
10,902
15,847
132,718
2004
2005
$ 55,477
49,336
8,300
9,114
18,084
140,311
$ 69,271
51,434
5,327
17,833
18,376
162,241
(31,049)
(46,826)
(10,291)
(8,144)
(96,310)
(2,290)
(78,466)
(21,695)
(9,062)
(111,513)
(6,196)
(82,882)
(33,029)
(11,392)
(133,499)
36,408
28,798
28,742
50,300
86,708
115,506
86,708
$ 115,506
$ 144,248
Footnote: 1. FY 2005 financial performance is based on the unaudited financial statements while all previous periods are based on audited financial statements.
21
Continued operational and financial success secures capital funding of the
current campuses
UCSF Medical Center
Estimated Capital Expenditure
For the Years ended June 30, 2006, 2007 and 2008
(Dollars in thousands)
2006
Capital Expenditures
Equipment
Clinical Information Systems
Construction
Bed Projects
Total Capital Expenditures
Funding Source
Equity
Philanthropy
Total Funding Source
$
$
$
$
2007
25,780
9,618
37,260
7,398
80,056
$
77,056
3,000
80,056
$
$
$
2008
26,000
4,000
27,094
27,784
84,878
$
81,878
3,000
84,878
$
$
$
31,000
4,000
41,493
12,507
89,000
86,000
3,000
89,000
22
Bed capacity will expand over the next three years
Bed Capacity & Census Projection
FY2001 – FY2009
725
Long 13
32 Med/Surg beds
675
Long 9
6 Med/Surg beds
MZ East Wing
13 Med/Surg beds
625
Moffitt 13 N&E
16 ICU beds
662
646
Moffitt 14 N&E1
16 ICU beds
618
597
575
MZ -- West Wing
15 Med/Surg beds
574
552
525
535
535
Close Moffitt 14 N&E1
20 beds
Long 1
10 Observation beds
525
508
506
475
485
460
465
443
425
429
412
399
375
2001
2002
Available Beds
2003
2004
Average Daily Census
2005
2006
Completed Projects
2007
2008
2009
Planned Projects
Footnote: 1. Moffitt 14 N & E currently has 20 med/surg beds. In FY2008, these beds will be taken offline and replaced and re-opened with 16 ICU beds.
2. All year ending periods are June 30th. Projection years start with FY2006
3. Increases in bed capacity between 2001 and 2005 have been accomplished through the opening of beds at Mt. Zion
23
Long Range Development Plan
24
Seismic requirements and capacity needs must be addressed…
 The Need:
– Seismic requirements (SB 1953)
• Repair Moffitt/Long by 2008
• Repair or replace Mount Zion by 2013 (OSHPD extension received).
– Increase capacity and improve functionality of hospitals
 The Process:
– Joint School of Medicine and Medical Center effort
– Objective: Highly functional hospital for patients and physicians
– Objective: Link hospital services to academic programs.
25
…however current configuration and construction costs are constraints to
UCSF’s growth
 Constraints:
– All land is encumbered:
• Parnassus: space ceiling, access; parking
• Mount Zion: small campus; limited research space
• Mission Bay: new land is expensive and carries obligations to Redevelopment Agency.
– Community opinion: keep Emergency Department (and related hospital) on
Parnassus Heights.
– Finances: all options are expensive.
– Timing/Phasing: all options must assure uninterrupted patient care – requires
“decant” of existing volume to new facilities.
26
UCSF’s long term development plan is a bold redesign of the Medical
Center’s facilities and delivery system
 Programmatic Options
•
Separate Cancer Hospital
•
Separate Women’s and Children’s Hospital
•
Separate specialty surgery hospital
 Facility Options (over the next decade):
•
Ambulatory Care Center at Mission Bay; new small hospital at Mission Bay;
new tower on Parnassus; maintain ambulatory care at Mount Zion.
•
Ambulatory Care Center at Mission Bay; new small hospital at Mount Zion;
new tower on Parnassus.
27
Summary and Conclusions
28
UCSF has the key “Building Blocks” for long term success
 Commitment to Mission, Vision, Values
 Tradition of Medical Excellence – focus on safety and quality
 World class faculty physicians
 Excellent Senior Management team
 Clear Strategic Plan and ability to execute Operations Workplan
 Shared goals for all staff
 Market and contracting strength
 Strong Relationship with top Medical School
 Strong UC and political support
29
Appendix – University of California Support
30
Regents’ Hospital Working Capital Program
•
In 1989, The Regents implemented internal hospital working capital facility
using Short Term Investment Pool (STIP):
•
Maximum total outstanding for hospitals - 15% of unrestricted STIP.
•
Maximum individual hospital outstanding - 60% of hospital gross accounts
receivable.
•
Can be drawn for any working capital purpose, including debt service.
31
UCSF Medical Center Available Cash from Hospital Working Capital
Program
•
Availability of UC Working Capital based on A/R as of June 2005:
60% X $ 258 Million Gross A/R:
= $154.7 Million
= 55 Days of Cash
•
Historical Debt Service Coverage, June 2005 = 7.1 X
•
Adjusted for Hospital Working Capital, June 2005 adjusted debt service
coverage = 15.7 X
32