Transcript Roswell Park Cancer Institute Corporation Section 203 Budget Filing Fiscal Year 2013 – 2014 - PROPOSED.

Roswell Park Cancer Institute Corporation
Section 203 Budget Filing
Fiscal Year 2013 – 2014 - PROPOSED
203.6 a
Public Authority Relationship with Unit of Government
Roswell Park Cancer Institute
The Institute was founded in 1898 and became a State Institute in 1911. In 1971, it was one of the first three institutions certified as a
comprehensive cancer center by the National Cancer Institute. As such, it is committed to combat cancer through basic research, clinical
research and treatment, and professional and public education. Presently, there are 41 such centers designated in the United States.
The Institute is a 133 licensed bed facility and an ambulatory care center containing 15 multidisciplinary care centers with a staff of over
3,200 members, including clinical staff physicians, residents, fellows, and research staff. The primary physical plant covers several city
blocks in downtown Buffalo.
The operation of the Institute transferred from the New York State Department of Health to the RPCI Corporation on January 1, 1999. In
order to meet the demands of the changing health care marketplace and to promote the strengths and capabilities of the Institute, Chapter
5 of the Laws of 1997 added a new Title 4 to Article 10-c of the Public Authorities Law authorizing the RPCI Corporation. This legislative
authorization was intended to change the Institute’s governance structure to afford it market and managerial flexibility. Among the special
powers granted by the legislation to the Corporation were the powers to contract with the State to operate, manage, superintend and
control the Institute, and to establish, collect, and adjust fees, rental and other charges in connection with the operation of the Institute.
Pursuant to subdivision 2 of Section 403 of the Public Health Law, added by such chapter, the Department, acting on behalf of the State,
entered into an Operating Agreement with RPCI Corporation pursuant to which operating responsibility for the Institute was transferred to
RPCI Corporation effective January 1, 1999, and giving RPCI Corporation substantial independence in operating the Institute, including
the power to establish operating budgets, to establish and implement strategic business plans, to create subsidiary and affiliated entities,
to enter into affiliations and alliances with other health care providers and to establish, collect and adjust fees, rentals and other charges in
connection with the operation of the Institute.
Revenues generated by the Corporation as a result of operating the Institute are considered to be revenues of the State for the purpose of
its bond payment, and are required to be deposited into the Roswell Park Cancer Institute Debt Service Account of the Health Income
Fund for payment of debt service on the Bonds. The Department retains responsibility for paying debt service on the Bonds. After
allowing for accumulation of a debt service reserve for the Institute, the remaining revenues are transferred to the Roswell Park Cancer
Institute Income Account of the Health Income Fund. After allowing for a balance for refunds these revenues are, in turn, transferred to
RPCI Corporation.
RPCI Corporation’s responsibility is to ensure the fiscal and programmatic integrity of the facility. To achieve this objective, the
Corporation has updated the strategic plan for the Institute which includes major programmatic and scientific, as well as, fiscal goals.
Some of the key goals include the recruitment of top-tier clinical and scientific talent; developing a methodology to monitor the
effectiveness of programs and faculty; enhancing financial viability through revenue and expense controls; building a strong and profitable
biotechnology transfer program in collaboration with peer facilities; emphasis on clinical and translation research, as well as developing
and implementing new clinical trials and establishing a cancer disease management and clinical outcomes program.
The Institute is a formally designated unit of the Graduate School of the University of New York at Buffalo and has numerous affiliation
agreements with other educational institutions and hospitals. Training provided by the Institute under these agreements includes medical,
nursing and medical research.
ROSWELL PARK CANCER INSTITUTE CORPORATION
Cash Flow Projections
203.5 h
Budget
2013
Net Income before Other Changes in Net Assets (Modified Accr Basis)
$
Funds due from NYS for Clev Biolabs
Funds due from NYS/RPA for BLSC project
Working Capital/Other Changes of AWUIL
Funding of Academic Development
$
$
$
$
Annual Unrestricted Cash Impact
Projected
2013
(25.2) $
3.1
(2.0)
($24.1)
$
$
$
$
Budgeted
2014
15.6
$
3.2
3.0
1.8
(12.4)
(2.7)
$
$
$
$
8.0
(1.8)
$5.3
* 2013 Budget does not include 25 Million of HEAL NY Monies, the status of this money was undetermined at the time of filing (Final
New York State Budget had not been Approved). Projected 2013 includes the anticipated 25 Million of HEAL New York State Money
as it was subsequently approved as part of the Final New York State Budget
$9.4
203.6 b
The RPCIC Budget Process Timeline
Submit
“Condensed
Revenues,
Expenditures &
Changes in
Current Net
Assets”
to ABO
Volumes, Grants
+ Inflation
Aug
Sept
Oct
Requests received for:
- New Initiatives
- Operating Infrastructure
- Capital spending
Nov
Board
approves
Budget
Update December
ABO Submission
Dec
Input completed for:
-Operating Budgets
- New Initiatives
- Capital spending
Jan
Feb
Mar
CEO
approves
Proposed Budget/
Budget Posting
per ABO
Guidelines
Apr
Submit
Section 203
materials to
the state
203.6 b
Capital Allocations will be completed using the
Following Team structure
Facilities
Committee
IT Committee
Clinical
Committee
Chief Institute
Operations Officer
General Counsel
Executive Vice
President
Chief Clinical
Operations Officer
VP for Facilities
Management
Vice President
Information
Technology
Medical Director
Scientific &
Prevention
Committee
Administrative
Executive Vice
President
V.P. of Finance and
C.F.O.
Budget Assumptions
Revenue assumptions:
Base Volumes:
IP Admits +7.7%
OP Visits +4.4%
Rate Assumptions:
Payor increases per contracts
Governmental payor increases per regulations
Other:
Includes Estimated $1.5M for sequestration
Sources of Revenues: include Private and Governmental Contracts,
Grants and Donations, and Funding from New York State
Staffing:
At current levels, plus:
- new staff for increase in visits and admissions
- New Initiatives and Strategic research initiatives
Future Collective Bargaining Costs:
Bargaining Units Step Increases included at an average of 2%
Inflation:
>
>
>
>
>
>
>
Salaries: Steps factored in per CBA above - no COLA included
Fringe benefit - increase consistent with salaries
Pharmacy (inflation and new drugs) 7%
Medical Supplies 3%
Other Supplies 2%
Blood products 2%
Contractual Services 2%
Programmatic Goals
- Continue Implementation of Strategic Research Initiatives
- Continue Strategic recruiting efforts
- Evaluate collaborative opportunities
- ICD10 Implementation Costs of 1.6M (FY14)
203.6 c
Challenges and Obstacles – External Forces
External forces that challenge our ability to successfully implement
Roswell’s vision for the future:

Current Economic Climate

Outcome of final 2014 NYS Budget

NYS support requested and timing of when funds are received
•
Impact of State deficits

Recruitment - Increasing costs and competition

NIH Funding
•
Decreases in overall funding while competition for funds increases
•
Decline in American Recovery and Reinvestment Act (ARRA) funding

Managed Care
•
Increasing role of National players for commercial and Medicare Advantage plans
•
Increasing premium trends are moderating, causing payors to negotiate more aggressively to
keep medical expenses at current or moderately higher costs
•
Implementation of Insurance Exchanges are leading payors to seek minimal increases on small
group and Insurance Exchange product offerings to be filed in Spring 2013 for CY 2014

Federal Deficit impairs Medicare program spending

Physical capacity to meet demand for clinical services

Ability to invest in accordance with RPCI Strategic Plan

Unknown Impacts of Healthcare Reform
203.6 d
203.6 e
Roswell Park Cancer Institute Corporation (PBC)
203.6 g
Income Statement - Modified Accrual Basis
In thousands
FY 12
Actual
FY 13
Budget
FY 13
Projected
FY 14
Budgeted
OPERATING REVENUES:
Grants & contracts
Patient service revenue, net
NYS contributions
Other revenue
TOTAL OPERATING REVENUES
2,075
370,172
77,600
9,599
459,446
2,458
399,900
77,600
8,856
488,814
1,561
416,474
102,600
8,674
529,309
1,793
437,497
102,600
8,885
550,775
OPERATING EXPENSES:
Salaries
Fringe Benefits
Pharmacy and Supplies
Utilities
Purchased services and other
GASB 45 impact
178,689
55,509
107,953
7,527
55,131
4,657
195,039
66,578
116,284
9,540
67,917
5,115
188,888
62,464
121,862
7,000
69,212
5,141
201,691
67,851
130,652
8,053
73,742
6,010
409,466
460,473
454,567
488,000
49,979
28,341
74,742
62,776
Capital Asset Outlay
Interest/Principal Payment
15,304
21,472
41,435
20,706
40,948
20,832
52,319
20,945
EXCESS (DEFICIENCY) REVENUE OVER EXPENSES
BEFORE NON OPERATING AND CONTRIBUTIONS
Other NonOperating Revenue
13,203
(33,800)
12,962
(10,488)
EXCESS (DEFICIENCY) REVENUE OVER EXPENSES
BEFORE CONTRIBUTIONS FOR CAPITAL
Contributions for Capital projects
EXCESS (DEFICIENCY) OF REVENUES AND CAPITAL
CONTRIBUTIONS OVER EXPENDITURES
13,740
TOTAL OPERATING EXPENSES,
EXCLUDING CAPITAL AND INTEREST
EXCESS (DEFICIENCY) REVENUE OVER EXPENSES
BEFORE OTHER CHANGES IN NET ASSETS
537
1,058
14,797
1,251
(32,549)
7,380
(25,169)
2,599
15,561
1,013
(9,475)
0
12,710
15,561
3,235
203.5 d
Roswell Park Cancer Institute Corporation (PBC)
Projected Operating Revenues - Grants and Contracts and Other
In thousands
FY 13
Projected
Other Operating Revenues:
Cafeteria
Parking Ramp / Surface
Aids/Prison Hotline Revenue
Rebates
Other Third Party Revenue - Outreach
Shared Services Reimbursements
Rental Income
CPP Physician Salary Support
Other
Total Other Operating Revenues
1,687
2,072
270
1,110
557
934
126
472
1,446
8,673
FY 14
Budget
1,685
2,197
270
835
873
1,281
119
984
640
8,885
FY 15
Budget
1,702
2,219
273
843
882
1,294
120
1,004
647
8,983
FY 16
Budget
1,719
2,241
275
852
891
1,307
121
1,024
653
9,083
FY 17
Budget
1,736
2,264
278
860
900
1,320
122
1,045
660
9,184
Roswell Park Cancer Institute Corporation (PBC)
203.5 d
Projected Operating Revenues - Net Patient Service Revenues
Dollars In Thousands
FY 13
Projected
FY 14
Budget
FY 15
Budget
FY 16
Budget
FY 17
Budget
Volume Statistics
Admits
Days
ALOS
Visits
5,488
38,431
6.76
207,596
5,909
39,493
6.68
216,829
6,034
40,284
6.68
221,985
6,156
41,064
6.67
227,230
6,281
41,855
6.66
232,611
Direct Patient Service Revenue
RPCI IP Revenue
RPCI OP Revenue
Other
RPCI Total
169,161
192,001
0
361,162
177,704
208,805
(3,712)
382,797
185,186
219,012
(2,260)
401,938
192,944
232,592
(1,590)
423,946
201,088
243,951
(554)
444,485
17,363
26,387
0
43,750
18,783
28,347
(37)
47,093
19,655
29,803
680
50,138
20,555
31,320
741
52,616
21,500
32,926
808
55,234
CPP IP Revenue
CPP OP Revenue
Other
CPP Total
Total Direct Patient Service Revenue
404,912
429,890
452,076
476,562
499,719
Other RPCI Patient Service Revenue
Other CPP Patient Service Revenue
Total Other Patient Service Revenue
13,648
2,416
16,064
12,045
3,004
15,049
4,138
2,757
6,895
4,072
1,571
5,643
3,996
1,418
5,414
420,976
444,939
458,971
482,205
505,133
4,718
1,054
5,772
4,995
1,121
6,116
5,242
1,180
6,422
5,519
1,237
6,756
5,772
1,298
7,070
415,204
438,823
452,549
475,449
498,063
1,561
1,793
1,793
1,793
1,793
416,765
440,616
454,342
477,242
499,856
Total Net Patient Service Revenue
RPCI Provision for Bad Debts
CPP Provision for Bad Debts
Total Provision for Bad Debts
Total Net Patient Service Revenue
Net of Provision for Bad Debt
Grants and Contracts
Total Charges for Services
203.5 e
Roswell Park Cancer Institute Corporation (PBC)
203.5 f
Detail of Salaries and Fringe and Non Personnel Service Operating Expense
in Thousands
FY 13
Projected
Salaries
Salaries and Wage Costs
Furlough Expense/Payments
Overtime Pays
Premium Payments
TOTAL Personnel Service Expense
Fringe
NYS Retirement Expense
TIAA CREF
Health Insurance: Active
Health Insurance:GASB Payments
Other Fringe
TOTAL Fringe Expense
185,947
(1,950)
3,002
1,890
188,888
20,768
5,008
17,690
5,141
18,997
67,605
FY 14
Budget
FY 15
Budget
FY 16
Budget
FY 17
Budget
197,802
0
1,880
2,010
201,691
206,738
300
1,955
2,090
211,083
216,067
1,908
2,034
2,174
222,182
226,110
879
2,135
2,282
231,406
24,053
2,726
21,972
6,010
19,099
73,861
25,231
2,859
23,048
6,896
20,035
78,069
26,565
3,010
24,266
7,892
21,094
82,828
27,853
3,156
25,443
9,048
22,117
87,617
87,485
36,326
6,842
8,053
56,705
5,295
11,742
212,448
92,503
38,279
6,974
8,254
59,573
5,560
7,653
218,796
101,051
40,380
7,183
8,750
60,897
5,754
6,489
230,505
110,432
42,554
7,398
8,903
62,901
5,956
5,313
243,456
Note: The fringe expense includes the cash payment for retiree's
health insurance, but does not include the GASB 45 accrual
Non Personnel Service Operating Expense
Pharmaceuticals
Medical Supplies and Blood Products
Other Supplies
Utilities
Contracted Services
Malpractice
Other Non Personnel Service Operating Expense
TOTAL Non Personnel Service Expense
81,607
33,191
7,063
7,000
57,863
4,682
6,668
198,074
203.6 f
Roswell Park Cancer Institute (PBC)
Reconciliation FY13 Budget to FY13 Projected
Modified Accrual Basis
1
2
3
4
5
6
7
9
10
11
12
in Million's
(25.2)
$
Excess (Deficiency) Revenues over Expenses (FY13 Budget)
25.0
$
Expected HEAL NY money to be received Post Budget Approval
1.5
$
Clinical Margin - favorable to Budget
2.5
$
Utilities
8.6
$
Expected Increase in Third Party Settlements
(3.6)
$
Additional Investments in IT costs
3.9
$
Timing of estimated spending on strategic investments/New Initiatives
1.7
$
Change in estimate for Fringe Rate
1.3
$
Non Operating Revenues
(0.2)
$
All Other
15.5
Projected Excess (Deficiency) Revenue over Expenses (FY13 Projected) $
203.6 h
Roswell Park Cancer Institute Corporation (PBC)
FY 2014 Budgeted # of FTE's and # of Employees
Functional Classification
Clinical / Clinical Research / Academic
Total #
Employees
Total #
Full Time
Total #
FTE's
1,719.0
1,449.0
1,550.4
Scientific / Academic
212.0
159.0
163.0
Administrative
282.0
243.0
247.8
Operations
272.0
231.0
239.3
2,485.0
2,082.0
2,200.6
Total All Functional Areas
Sources of Funding:
The Source of funding for the projected workforce is:
Patient Service Revenues - Government and Private Payors
Grants and Contracts
Donations
New York State Funding
203.6 i
Roswell Park Cancer Institute (PBC)
FY 2014 New Revenue Producing Activities
As part of the Institute’s long range strategic plan, investments are
being made in Clinical operations. These investments are critical to
meeting the projected demand for oncology services and increasing
revenue in RPCI’s clinical operations, which are used to support
research and teaching missions at the Institute.
Major Gap Closing Program Components:
Meaningful Use Revenue related to optimizing EMR system capacity use
Third Party Settlements and Other
Clinical margin Improvement
Deferral of Investments in SRI
Reduction in Estimated Pension Costs
Fringe Savings from Health Insurance
Increased Vacancy Factor and Other
$$ in Millions
0.9
8.3
6.1
4.5
1.0
1.1
3.3
203.6 j
Roswell Park Cancer Institute (PBC)
FY 2013 – FY2017 Material Non-Recurring Resource
•
The Institute is projecting non-recurring capital contribution revenues of
approximately $0.0 million, $10.2 million, $8.2 million, $6.0 million and $5.7 million
from philanthropic sources in fiscal years 2013 – 2017 respectively. These
contributions are expected to assist in funding the continued growth at Roswell
Park.
203.6 k
Roswell Park Cancer Institute (PBC)
FY 2014 – Material Shift in Resources Between Years
•
Capital projects can span multiple years. The entire project is
approved prior to initiation, and due to the magnitude of certain
projects there can be an approved balance to carry forward to
the next fiscal year. Carry over balances are determined and
approved after the start of the new fiscal year.
203.6 l
ROSWELL PARK CANCER INSTITUTE CORPORATION
Borrowed Debt Outstanding projected
in Millions
Borrowed Debt Outstanding
PBC revenues are
pledged to repayment
of the follow ing DASNY
indebtedness issued
through New York State
Department of Health
1
2
3
4
5
6
DASNY Debt issuance 12/4/03
DASNY Debt issuance 4/7/04
DASNY Debt issuance 4/7/04
DASNY Debt issuance 5/24/05
DASNY Debt issuance 7/13/2011
Capital lease obligations
Debt outstanding at March 31st year end
$
Proposed
Budget
Projection
Projection
Projection
FY 2014
FY2015
FY2016
FY2017
195.6 $
182.8 $
169.5
$
156.4
in 000's
Bonds
Scheduled Debt Service Payment
For the Year ending March 31
2013
2014
2015
2016-2020
2021-2026
*All debt is issued. There is currently no proposed debt.
Principal
$
$
$
$
$
$
11,702
12,249
12,858
72,219
110,538
219,566
Capital Leases
Interest
$
$
$
$
$
$
Principal
10,655
10,089
9,459
36,992
16,418
83,613 $
Interest
- $
-
203.6 l (cont’d)
ROSWELL PARK CANCER INSTITUTE CORPORATION
Purpose of Debt Issuances
PBC revenues are pledged to repayment of the following DASNY indebtedness issued through New York State
Department of Health:
1
On December 4, 2003, DASNY issued debt in the amount of $41,910,000 (RPCIC allocated 85%). Under the
terms of the issuance, interest ranges from 2.0% to 5.25% per annum with interest and principal payments due
through 2024. The bond proceeds were used solely to defease a portion of the outstanding 1994, 1995 and
1996 bond series.
2
On April 7, 2004, DASNY issued debt in the amount of $77,245,000 (RPCIC allocated 95.15%). Under the
terms of issuance interest ranges from 2.0% to 5.0% per annum with interest and principal payments due
through 2024. The bond proceeds were used solely to defease a portion of the outstanding 1994, 1995 and
1996 bond series.
3
On April 7, 2004, DASNY issued debt in the amount of $78,870,000 (RPCIC allocated 95.51%). Under the
terms of issuance interest ranges from 2.0% to 5.0% per annum with interest and principal payments due
through 2023. The bond proceeds were used solely to defease a portion of the outstanding 1994, 1995 and
1996 bond series.
4
On May 24, 2005, DASNY issued debt in the amount of $51,465,000 (RPCI allocated 95.51%). Under the
terms of issuance interest ranges from 3.0% to 5.25% per annum with interest and principal payments due
through 2026. The bond proceeds were used solely to defease a portion of the outstanding 1996 bond series.
5
On July 13, 2011, DASNY issued debt in the amount of $48,180,000 (RPCI allocated 74.85%). Under the terms
of issuance interest ranges from 2.0% to 5.0% per annum with interest and principal payments due through
2025. The bond proceeds were used solely to defease a portion of the outstanding 1998 bond series.
203.6 l (cont’d)
ROSWELL PARK CANCER INSTITUTE CORPORATION
Debt Service/Pledged Receivables
and Debt limited levels
Debt Service
Debt Service as a percentage of Pledged Revenues*
1
2
3
4
5
DASNY Debt
DASNY Debt
DASNY Debt
DASNY Debt
DASNY Debt
Total
issuance 12/4/03
issuance 4/7/04
issuance 4/7/04
issuance 5/24/05
issuance 7/13/11
$
$
$
$
$
$
FY 2014
3,194
10,173
3,338
2,500
3,133
22,338
Pledged
$
$
$
$
$
Debt Service
Percent of
Revenues
Pledged Revenues
405,000
0.8%
405,000
2.5%
405,000
0.8%
405,000
0.6%
405,000
0.8%
5.5%
*Pledged revenues are defined in accordance w ith RPCI bond documents
RPCI is authorized to incur additional indebtedness beyond its current levels. Should the amount of its requested
indebtedness exceed 15% of amounts transferred from the Health Income Fund to RPCI in the previous year, prior
written approval of the NYS Division of Budget is required. RPCI has not assumed that additional indebtedness of this
magnitude will occur in its FY2014 budget. NOTE: RPCI has secured a line of credit with M&T bank to cover
operational cash flow needs should NYS be late in paying its quarterly support payments to the Institute. Interest costs
related to accessing the line of credit have not been included in the FY 2014 budget as we are assuming NYS support
payments will occur in a timely manner.
203.6 m
FY 2014 Capital Budget Summary
In Thousands (000's)
Budget
2014
Projects funded with operating cash:
Total Facilities Capital
$
18,766
Strategic Initiatives, CPP & Other
$
4,100
Clinical, Scientific, and Administrative Equipment
$
8,798
Information Technology
$
8,063
$
39,727
Projects funded with support from outside sources
Construction grant
Genomics Pilot Program
Clinical Science Center
$
$
$
1,332
1,100
10,160
Total Capital expenditures
$
52,319
Subtotal
Note:
None of the projects is expected to have a material impact on the operating budget.
IT Projects include ongoing maintenance costs which are not material to the operating budget
CONDENSED BUDGETED REVENUES, EXPENDITURES AND
CHANGES IN CURRENT NET ASSETS
in Thousands
REVENUE & FUNDING SOURCES
Operating Revenues
Charges for Services
Rental & Financing income
Other Operating revenues
Last Year
(Actual)
FY 2012
Current Year
(Estimated)
FY 2013
Next Year
(Adopted)
FY 2014
Proposed
FY 2015
Proposed
FY 2016
Proposed
FY 2017
$
372,247 $
418,036 $
439,290 $
454,203 $
477,100 $
499,710
$
9,599 $
8,674 $
8,885 $
8,984 $
9,084 $
9,185
$
$
537 $
77,600 $
2,599 $
102,600 $
1,013 $
102,600 $
953 $
77,600 $
1,781 $
77,600 $
2,089
77,600
Proceeds from the issuance of debt
Total Revenues and Funding Sources
$
459,982 $
531,908 $
551,789 $
541,740 $
565,565 $
588,584
EXPENDITURES
Operating expenditures
Salaries and Wages
Other Employee Benefits
Professional Services and Contracts
Supplies and Materials
Other operating expenditures
$
$
$
$
$
178,689
60,167
53,291
107,953
9,367
188,888
67,605
64,531
121,862
11,682
201,691
73,861
68,447
130,652
13,348
211,083
78,069
67,226
137,756
13,814
222,182
82,828
67,386
148,615
14,504
$
$
$
$
$
231,406
87,617
68,214
160,383
14,859
Non-operating Revenues
Investment earnings
State subsidies/grants
Federal subsidies/grants
Municipal subsidies/grants
Public authority subsidies
Other Non-Operating Revenue*
Non-operating expenditures
Payment of principal on bonds and financing arrangements
$
Interest and other fiscal charges on debt
$
Subsidies to other public authorities
Capital asset outlay (including CSC)
$
Miscellaneous
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
11,898 $
9,574 $
11,701 $
9,131 $
12,248 $
8,697 $
12,858 $
8,193 $
13,279 $
7,685 $
13,055
7,138
15,304 $
40,948 $
52,319 $
46,285 $
40,049 $
39,163
Total Expenditures
$
446,243 $
516,347 $
561,264 $
575,284 $
596,528 $
621,835
CAPITAL CONTRIBUTIONS
$
1,058 $
- $
12,710 $
10,740 $
5,962 $
5,688
"Excess (deficiency) of revenues and capital
contributions over expenditures"
$
14,797 $
15,561 $
3,235 $
(22,804) $
(25,001) $
(27,563)