Alameda Health System Fis iscal 2021 Operating and Capital Budget - PowerPoint PPT Presentation

Alameda Health System Fis iscal 2021 Operating and Capital Budget Process and Tim imeline Delvecchio Finley, CEO Kim Miranda, CFO 1 March 12, 2020

Fiscal 2021 Budget Goals and Principles Focus on stabilization after SAPPHIRE implementation and STRATEGIC AND continued operational improvement. CY2019 actual will serve as LONG TERM FOCUS the baseline budget with selected strategic programs layered over baseline. Generate sufficient revenue to cover AHS operating cost and contribute to capital needs. Cash flow from operation is not SUSTAINABLE expected to be sufficient to pay prior years recoupments from supplemental programs. INCLUSIVE & Inclusive of all areas of AHS. Staff, physicians, Board and community stakeholders provided input to drive an accountable ACCOUNTABILITY and committed budget. Achieve balanced direction based on historical trends, ensuring BALANCED resources necessary to sustain highest quality care to meet community needs for the population of Alameda County. Leverage the GPO, benchmarking analytical tools (clinical and CONTINUOUS operational) and the new SAPPHIRE system to continue our IMPROVEMENT clinical, operational and revenue cycle improvement. 2

FY 2021 Budget Process 1 2 3 4 Dec- January Feb-March April - May June- July AHS ELT developed FY2021 AHS Staff and Leadership Budget Process, assumptions AHS staff to finalize TNM DRAFT Objectives and Goals retreat provides Board and draft proforma- presented dashboard draft FY21 updates on FY2021 baseline to Board at April Board retreat Budget Volume Statistics budget. for feedback. Board Approval process for (baseline) developed based Budget FY21 at June on calendar year 2019 with Budget Training to AHS Budget Oversight committee will Finance committee and at input from operation leaders. department leaders. address any outstanding Full Board June. questions and develop final With historical actual Budget targets distributed to draft of FY2021 Budget. FY21 Operational operational labor standard SBUs/departments. Plan/TNM dashboard for Process and benchmarking guideline, SBUs/Support services to approval (June/ July) Operational leaders will Budget process involved review final budget and targets. evaluate various data point to feedback from Dyad leaders Spread FY20 budget across set the FY2021 labor (Chairs, Admin.) AHS staff to develop operational SBU and 12 months. standard. plan detailed plans- SMART Budget Oversight reviews goals and TNM dashboard draft from Feb-March for all SBUs/Support services. FY2021 pro forma to be presented at Finance Budget update provided to Committee in May. Finance Committee in March FY2021 pro forma to be presented to full Board in May. 3

Budget 2021 Volume Overview Actual FY2019 Actual CY2019 Budget FY2021 %Variance GENERAL ACUTE PATIENT DAYS 80,669 78,093 81,003 3.7% GENERAL ACUTE DISCHARGES 14,905 15,146 15,751 4.0% SURGERIES 8,854 8,972 8,972 0.0% EMERGENCY VISITS 98,695 104,004 104,428 0.4% DELIVERIES 1,270 1,270 1,270 0.0% CLINIC VISITS 334,075 326,814 334,712 2.4% PES Visits 13,069 11,951 13,140 9.9% SNF PATIENT DAYS 101,894 101,390 102,601 1.2% SNF DISCHARGES 362 368 368 0.0% ACUTE REHAB PATIENT DAYS 8,348 8,474 8,476 0.0% ACTUE REHAB DISCHARGES 583 606 606 0.0% BEHAVIORAL HEALTH PATIENT DAYS 24,765 25,099 25,099 0.0% BEHAVIORAL HEALTH DISCHARGES 2,733 2,881 2,881 0.0% 4

Budget 2021 Volume Assumptions ▪ General Acute Care days budgeted for 3.7% increase from Calendar Year 2019 due to additional 15 beds re-open at SLH 3 rd Floor. ▪ Improve in through-put with a moderate increase in HGH ICU and Step-Down Units. ▪ HGH and SLH ED visits remain flat General Acute Care Key Ancillary Volume Trend 104,428 comparing to Calendar Year 2019. 10,000 105,000 104,004 104,000 AHD ED visit is budgeted with a 9,056 8,972 8,972 8,854 8,000 103,000 102,000 2.6% increase with improvement 101,968 6,000 101,000 in ED efficiency. 100,000 4,000 99,000 98,695 ▪ Delivery volume and Surgery 98,000 5 1,326 1,270 1,270 1,270 cases also budgeted flat in FY21. 2,000 97,000 96,000 - 95,000 Actual FY2019 Projected FY20 Actual CY2019 Budget FY2021 SURGERIES DELIVERIES EMERGENCY VISITS

Budget 2021 Volume Assumptions ▪ Acute Rehab Days remains flat; not anticipating any increase in patient days. ▪ 6-Bed Sub-Acute at FMT will be converted to SNF beds and additional 9-Beds will be added at FMT SNF in FY21. ▪ With additional nine SNF beds, anticipate SNF Days will 6 increase by 1.2%.

Budget 2021 Volume Assumptions ▪ Inpatient Behavior Health Days remain flat as patient volume has reached maximum capacity (99% Occupancy) ▪ PES Eq. Days is budgeted with 88% increase as a result of changing charges to capture all service hours provided. Visits are flat. 7

▪ Anticipate Ambulatory Clinic volume to rebound back to FY2019 Actual level after 8 SAPPHIRE implementation and improve in efficiency in Specialty Clinics.

Inflation Assumptions ALAMEDA HEALTH SYSTEM Revise: 01/27/20 Operating Budget 2021 2021 Operating Budget Inflation Rate Assumptions 2021 Budget 2021 Comments Expenses Labor Contract Labor (Registry) 0.0% Overall Salary Increases 3.5% Source: AHS HR & MOU Contracts Benefits (% of Total Salaries) Non Labor Contract Physician Services Medical Supplies 0.9% Source: Vizient Price Change Project (2nd Quarter, 2019) 53700 IV Irrigation Solutions 3.0% Source: Vizient Price Change Project (2nd Quarter, 2019) 53600 Oxigen Medical Gases 5.4% Source: Vizient Price Change Project (2nd Quarter, 2019) Other Supplies 1.8% Source: Vizient Price Change Project (2nd Quarter, 2019) 54300 FOOD-OTHER 1.5% Source: AHS Food Service Department 54500 CLEANING SUPPLIES 1.8% Source: Vizient Price Change Project (2nd Quarter, 2019) 55100 LAB REAGENTS 3.5% Source: AHS Clinical Lab 54600 OFFICE SUPPLIES 2.6% Source: Vizient Price Change Project (2nd Quarter, 2019) Drugs & Pharmaceuticals 4.0% Source: Vizient Pharmaceutical Consultant Utilities 57700 Utilities Electricity 7.0% Source: 57800 Utilities Gas 8.0% 9 57900 Utilities Water 5.0%

Governmental Supplemental Revenue Programs (In Thousands) Budget PROGRAMS Comments FY20 FY21 1 HPAC 33,196 34,800 Based on Tangerine estimate 2 County EMS 395 395 Same amount each year 3 County Trauma 5,266 5,266 Same amount each year 4 Measure A 117,699 117,699 Amount pending more recent analysis 5 AHD Parcel Tax 4,983 4,983 Amount pending updated information 74,917 66,490 Assume 5 year extension at lower amount. 6 Waiver GPP FY22&23 exact cash unknown 7 PRIME 19,688 - Program retires. Revenue rolls over to QIP New payment program for services provided to 8 Medi-Cal Managed 38,000 35,000 Medi-Cal Managed Care patients. Reserve $5m Care EPP IGT A obligation Assume PRIME fund rolls over, with target 57% 9 Medi-Cal Managed per Dr. Gupta 25,000 35,758 Care QIP Assume QIP is extended, with target 90% per Dr. Gupta. Reserve $5m IGT A obligation 10 Medi-Cal Managed 30,000 30,000 Assume same distribution as prior years. May Care Rate Range change based on enrollment 10

Budget PROGRAMS Comments FY20 FY21 11 Medi-Cal SNF Cost 9,000 9,000 Medi-Cal SNF supplemental Settlement 12 AB915 12,800 9,000 Hospital outpatient non-FQHC supplemental 13 Capital Transfer for (3,800) Included in above AB915 14 Hospital Fee 3,700 3,700 Direct grant portion only 3,600 3,600 Annual non-ACA amount. Hoping to resolve until 15 Physician SPA before 2023 16 MAA 4,000 4,000 Medi-Cal Administrative Activities 17 Prop 56 1,000 18 Subtotal 379,444 359,691 19 Contingent 20 AB85 Realignment - 46,000 Depending how other programs are doing. FY21 Pending contract with County 21 AB85 Realignment - Depending how other programs are doing. $46m 38,000 FY20 cash already received, with $8m reserved 22 AB85 Realignment - 15,000 To be finalized June 2020 FY18 23 Medi-Cal Managed 4,165 6,000 Pending CMS approval. Depending on timig of Care GME&IME approval, potential to move revenue to FY21 24 Medi-Cal Managed 15,000 Pending CMS approval FY17-FY19 Care GME&IME 25 Medi-Cal Managed 9,590 FY16-18 reserve Care Rate Range 26 Subtotal 57,165 76,590 11 34 Total 436,609 436,281

Budget 2021 Key Drivers CY2019 Actual EBIDA 33,438 Budget 2021 Key Drivers + Volume Growth (12,200) - CPI (28,653) - BHS one time Retro Payment (23,000) - Supplemental Revenue Adjustment 17,909 + Labor Standard Improvement + Payor Rate Increase 5,400 Sub-total (40,544) Above /Below Target (7,106) Pending Items: + BHS FY19 Retro & New Rate TBD - SAPPHIRE TBD +/- Manager Budget Review TBD + Program Pro-forma TBD 12 +/- Other Initiatives TBD