UNIVERSITY OF VIRGINIA
BOARD OF VISITORS
MEETING OF THE
MEDICAL CENTER
OPERATING BOARD
FOR THE UNIVERSITY OF
VIRGINIA MEDICAL CENTER
February 23, 2012
2/1/12
UNIVERSITY OF VIRGINIA
MEDICAL CENTER OPERATING BOARD
Thursday, February 23, 2012
8:00 – 11:15 a.m.
Medical Center Dining Conference Rooms
Committee Members:
Vincent J. Mastracco Jr., Chair
Helen E. Dragas
W. Heywood Fralin
Andrew K. Hodson, MB.Ch.B
Patrick D. Hogan
William P. Kanto Jr., M.D.
Constance R. Kincheloe
Mark J. Kington
Ex Officio
Teresa A.
Steven T.
Dorrie K.
Robert S.
Members:
Sullivan
DeKosky, M.D.
Fontaine
Gibson, M.D.
Randolph J. Koporc
Stephen P. Long, M.D.
Edward D. Miller, M.D.
Charles W. Moorman
Jonathan B. Overdevest
The Hon. Lewis F. Payne
E. Darracott Vaughan Jr., M.D.
R. Edward Howell
John D. Simon
Michael Strine
AGENDA
PAGE
I.
II.
CONSENT AGENDA
A.
Signatory Authority for Cord Blood Procurement
1
B.
2
Purchase of Land and Improvements Located at 1107
West Main Street, Charlottesville, Virginia from
the University of Virginia Foundation
REPORTS BY THE VICE PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF THE MEDICAL CENTER (Mr. Howell)
A.
Vice President’s Remarks
4
B.
Buchanan Endowment Impact Report (Mr. Howell)
5
C.
Operations, Finance, and Write-offs (Mr. Howell
to introduce Mr. Robert H. Cofield and Mr. Larry
L. Fitzgerald; Mr. Cofield to report on
Operations; Mr. Fitzgerald to report on Finance
and Write-offs)
10
D.
Capital Projects
24
E.
Health System Development
27
III.
EXECUTIVE SESSION
●
ACTION ITEMS - To consider proposed personnel
actions regarding the appointment, reappointment,
resignation, assignment, performance, and
credentialing of specific medical staff and health
care professionals, as provided for in Section 2.23711(A)(1) of the Code of Virginia. The meeting of
the Medical Center Operating Board is further
privileged under Section 8.01-581.17 of the Code of
Virginia.
●
Discussion of proprietary, business-related
information pertaining to the operations of the
Medical Center, where disclosure at this time would
adversely affect the competitive position of the
Medical Center, specifically:
– Strategic personnel, financial, and market and
resource considerations and efforts, including
strategic joint ventures and other growth
efforts, long range financial plan and fiscal
year 2013 budget assumptions, performance of
Culpeper Regional Hospital, and performance
measures and metrics;
– Confidential information and data related to the
adequacy and quality of professional services,
competency and qualifications for professional
staff privileges, and patient safety in clinical
care, for the purpose of improving patient care;
and
– Consultation with legal counsel regarding
compliance with relevant federal and state legal
requirements, licensure and accreditation
standards, and ongoing litigation and arbitration
matters; all of which will involve proprietary
business information and evaluation of the
performance of specific personnel.
The relevant exemptions to the Virginia Freedom of
Information Act authorizing the discussion and
consultation described above are provided for in Section
2.2-3711 (A) (1), (6), (7), (8) and (22) of the Code of
Virginia. The meeting of the Medical Center Operating
Board is further privileged under Section 8.01-581.17 of
the Code of Virginia.
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS CONSENT AGENDA
I.A. SIGNATORY AUTHORITY FOR CORD BLOOD PROCUREMENT: Approves
signatory authority for Medical Center procurement of cord blood
products, human leukocyte antigen (HLA) matching, and other
testing services required by the Cancer Center’s stem cell
transplantation service.
The Board of Visitors is required to approve the execution
of any contract where the amount per year is in excess of $5
million.
In accordance with Medical Center procurement policy, the
Medical Center is finalizing a prime vendor contract for cord
blood products, human leukocyte antigen (HLA) matching, and other
testing services required by the Cancer Center’s stem cell
transplantation service.
The proposed five-year contract would be effective July 1,
2012, with an estimated total value of $55.4 million over the
initial one-year term and four one-year renewal options at the
election of the Medical Center. The estimated value of this
contract exceeds $5,000,000 per contract year, thus exceeding
the signatory authority of the Executive Vice President and
Chief Operating Officer of the University.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and by the Board of Visitors
APPROVAL OF SIGNATORY AUTHORITY FOR MEDICAL CENTER PROCUREMENT
OF CORD BLOOD PRODUCTS AND SERVICES
WHEREAS, the Medical Center Operating Board finds it to be
in the best interest of the Medical Center to enter into a
contract for the procurement of cord blood services and
products;
RESOLVED, the Board of Visitors authorizes the Executive
Vice President and Chief Operating Officer of the University to
execute a multi-year contract for the procurement of cord blood
services and products, based on the recommendation of the Vice
President and Chief Executive Officer of the Medical Center in
accordance with Medical Center procurement policy.
1
I.B. PURCHASE OF LAND AND IMPROVEMENTS LOCATED AT 1107 WEST
MAIN STREET, CHARLOTTESVILLE, VIRGINIA FROM THE UNIVERSITY OF
VIRGINIA FOUNDATION: Approves the purchase of land and
improvements located at 1107 West Main Street from the
University of Virginia Foundation.
The property is a one-story masonry building containing
6,380 square feet originally built in 1958 as a Ben Franklin
retail store. The property abuts Stacey Hall which is occupied
by Health System administrative functions and is directly across
the street from the Battle Building site. The University of
Virginia Foundation (the “Foundation”) successfully reached
agreement with the owner of the property for its acquisition in
the summer of 2011.
It is in the best interest of the University to own the
property directly rather than continuing to lease it from the
Foundation. The University will pay the Foundation its direct
costs of originally acquiring and now disposing of the property
which total $840,000. The University will incur additional due
diligence and incidental expenses for the acquisition,
therefore, we recommend a purchase price not to exceed $870,000.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and by the Board of Visitors
APPROVAL TO PURCHASE 1107 WEST MAIN STREET, CHARLOTTESVILLE,
VIRGINIA
WHEREAS, the Board of Visitors finds it to be in the best
interest of the University of Virginia to purchase from the
University of Virginia Foundation (the “Foundation”) land and
improvements thereon located at 1107 West Main Street,
Charlottesville, Virginia (the “Property”) at a purchase price
not to exceed $870,000.00;
RESOLVED, the Board of Visitors approves the acquisition of
the Property; and
RESOLVED FURTHER, the Executive Vice President and Chief
Operating Officer is authorized, on behalf of the University, to
approve and execute purchase agreements and related documents,
to incur reasonable and customary expenses, and to take such
other actions as deemed necessary and appropriate to consummate
such property acquisition; and
2
RESOLVED FURTHER, all prior acts performed by the Executive
Vice President and Chief Operating Officer, and other officers
and agents of the University, in connection with such property
acquisition, are in all respects approved, ratified, and
confirmed.
3
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 23, 2012
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.A.
ACTION REQUIRED:
None
Vice President’s Remarks
DISCUSSION: The Vice President and Chief Executive Officer of
the Medical Center will inform the Medical Center Operating
Board of recent events that do not require formal action.
4
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 23, 2012
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.B.
ACTION REQUIRED:
None
Buchanan Endowment Impact Report
BACKGROUND: Since the inception of the Buchanan Endowment
Program in 2002, 24 programs have been approved to receive
funding from the interest earnings on the Ward Buchanan
Endowment at the University of Virginia Medical Center. In
order to receive funding, programs must demonstrate that an 11%
return on investment over a three-year period and a 7% net
operating margin in the third and final year of funding could be
achieved. Programs must be clinically differentiating and set
the University of Virginia Medical Center apart from other
academic medical centers and hospitals in the area. In
addition, up to 25% of Buchanan funding may be used for Clinical
Trials Research that is part of a differentiating clinical
program.
DISCUSSION: The following is a summary of the performance of
the 24 programs that have received Buchanan funding.
1. Surgical Minimum Approach with Robot Technology(SMART): This
was the first program that was approved to receive funding
from the Buchanan Endowment in FY 2003. $1,210,500 was
invested into this program initially. To date, this program
has brought in 1,286 patients, aggregate net revenues of
$15,502,162, a net income of $819,356 and a 5% net operating
margin. This program also received start-up funding from the
Paul Mellon Urologic Cancer Institute.
2. The Virginia Hand Center: This program was approved to
receive funding of $425,865 in FY 2003. To date, this
program has brought in 935 patients, aggregate net revenues
of $12,057,181, a net income of $1,560,294, and a 13% net
operating margin.
3. Virginia Childhood Obesity Center: This program was approved
to receive funding of $619,034 in FY 2003. Through FY 2005,
this program brought in 853 patients, aggregate net revenues
of $287,923, a net income of ($267,017), and a (93%) net
operating margin. This program was discontinued as it did
5
not meet the performance criteria established at the time of
approval.
4. Advancement of Clinical Trials for Improving Outcomes in
Neuro-Oncology (ACTION): This program was approved to
receive funding of $1,082,880 in FY 2003. Through FY 2006,
this program brought in 1,636 patients, aggregate net
revenues of $30,482,304, a net income of $3,269,233, and an
11% net operating margin. This program evolved into PROACTION, a program that received Buchanan funding in 2006 (See
Item 13).
5. Atrial Fibrillation Center: This program was approved to
receive funding of $657,672 in FY 2004. To date, this
program has brought in 2275 patients, aggregate net revenues
of $39,809,237, a net income of $1,250,392, and a 3% net
operating margin.
6. COPD: A Comprehensive Patient Centric Program: This program
was approved to receive funding of $870,042 in FY 2004.
Through FY 2007, this program brought in 2,625 patients,
aggregate net revenues of $2,799,381, a net income of
($1,137,025), and a (41%) net operating margin. This program
was discontinued as it did not meet the performance criteria
established at the time of approval.
7. Tomoblate: Whole Body Stereotactic Radiosurgery: This
program was approved to receive funding of $672,790 in FY
2004. To date, this program has brought in 285 patients,
aggregate net revenues of $6,850,344, a net income of
$1,437,613, and a 21% net operating margin.
8. Human Islet Cell Transplantation for Diabetes Mellitus: This
program was approved to receive funding of $1,226,415 in FY
2004. To date, this program has brought in 13 patients,
aggregate net revenues of $573,250, a net income of
($1,564,913), and a (252%) net operating margin. Even though
this program has not yet achieved the performance criteria
established at the time of approval, it complements the
Diabetic and Nephrology services provided at the Medical
Center, and we believe it will be successful in the long
term.
9. Neurological Sleep Program & Diagnostic Laboratory: This
program was approved to receive funding of $147,295 in FY
2005. To date, this program has brought in 301 patients,
aggregate net revenues of $341,073, a net income of
($65,792), and a (19%) net operating margin. However, in FY
2011, this program had an 11% operating margin.
10. Stroke Expansion Program: This program was approved to
receive funding of $365,287 in FY 2006. To date, this
program has reported $11,677 in operating expenses.
6
11. Pediatric Sleep Disorders Program: This program was approved
to receive funding of $285,375 in FY 2006. To date, this
program has brought in 1,973 patients, aggregate net revenues
of $1,777,155, a net income of $216,190, and a 12% net
operating margin.
12. Delivering Premium Vascular Care to the Community: This
program was approved to receive funding of $795,862 in FY
2006. To date, this program has brought in 4,431 patients,
aggregate net revenues of $11,505,717, a net income of
$333,825, and a 3% net operating margin.
13. Physician Scientist Recruitment Optimizing Advancement of
Clinical Trials for Improving Outcomes in Neuro-Oncology
(PRO-ACTION): As a continuation of the highly successful
ACTION program, this program was approved to receive funding
of $397,950 in FY 2006. To date, this program has brought in
5,904 patients, aggregate net revenues of $10,556,663, a net
income of $3,792,661, and a 36% net operating margin.
14. Female Pelvic Medicine: This program was approved to receive
funding of $524,812 in FY 2006. To date, this program has
brought in 7,777 patients, aggregate net revenues of
$7,761,064, a net income of ($732,369), and a (9%) net
operating margin. However, in FY 2011, this program had a
4.3% operating margin.
15. High Risk Breast and Ovarian Cancer: This program was
approved to receive funding of $1,130,170 in FY 2006. To
date, this program has brought in 8,594 patients, aggregate
net revenues of $10,227,459, a net income of ($19,521), and a
0% net operating margin. However, in the five years of this
program’s existence, it has reported a positive net operating
margin for three years.
16. Translational Research and Clinical Development in
Endovascular Neurosurgery (TRACE): This program was approved
to receive funding of $1,000,650 in FY 2007. To date, this
program has brought in 60 patients, aggregate net revenues of
$2,244,995, a net income of ($462,033), and a (21%) net
operating margin. However in FY 2011, this program had a 16%
operating margin.
17. Women’s Cardiometabolic Prevention Program: Practice Model
Innovations to Deliver Profitable, Effective Care: This
program was approved to receive funding of $1,218,892 in FY
2008. To date, this program has brought in 635 patients,
aggregate net revenues of $4,101,998, a net income of
($120,159), and a (3%) net operating margin.
18. University of Virginia Skull Base Institute: This program
was approved to receive funding of $1,521,306 in FY 2008. No
7
operational expenses have been reported to date with respect
to this program.
19. Stroke Telemedicine and Tele-education (STAT): This program
was approved to receive funding of $803,047 in FY 2009, and
is still operating within its initial three-year investment
period. To date, this program has brought in 11 patients,
aggregate net revenues of $95,598, a net income of
($431,426), and a (451%) net operating margin. In spite of
these losses, we believe that this program will be successful
in the long term.
20. UVA Children’s Hospital Heart Center Fetal Cardiology: This
program was approved to receive funding of $828,313 in FY
2009, and is still operating within its initial three-year
investment period. To date, this program has brought in 420
patients, aggregate net revenues of $16,794,768, a net income
of $1,394,442, and an 8% net operating margin.
21. Helical Tomotherapy Based STAT Stereotactic Body Radiation
Therapy (SBRT): This program was approved to receive funding
of $295,652 in FY 2009, and is still operating within its
initial three-year investment period. To date, this program
has brought in 129 patients, aggregate net revenues of
$626,437, a net income of ($67,165), and an (11%) net
operating margin. However, the operating margin of this
program has grown tenfold from (23%) at end of year one to
(2.3%) at end of year two.
22. Advanced Cardiac Valve Center: This program was approved to
receive funding of $1,105,654 in FY 2010. In FY 2011, this
program brought in 192 patients, aggregate net revenues of
$3,217,500, a net income of $416,898, and a 13% net operating
margin.
23. Fibroid Treatment Center: This program was recently approved
to receive funding of $207,586 in FY 2011.
24. Diabetic Retinopathy Screening: This program was recently
approved to receive funding of $487,532 in FY 2011.
SUMMARY: The programs funded through the Buchanan Endowment
have yielded 40,335 inpatients and outpatients, aggregate net
revenues of $177,614,207, and aggregate operating income of
$9,611,807, resulting in a 5.4% overall net operating margin.
The aggregate operating income across the programs that have
been operational for a minimum of five years represents a 9%
return on the investment in those programs. The aggregate
operating income of all Buchanan funded programs represents 3.5%
of the aggregate operating income of the entire Medical Center
since FY 2004. In the 13 clinical services involved in Buchanan
funded programs for inpatient care, the Medical Center’s market
8
share across the state of Virginia increased from 5% in 2004 to
6.6% in 2011. In addition, the Buchanan funded programs have a
correlation with more than 280 abstracts presented, 180 peerreviewed publications, 120 textbook chapter
compilations/editions, 50 grants received, and participation in
over 30 clinical trials.
9
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 23, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.C. Operations, Finance, and Write-offs,
Including Bundled Payment Demonstration
ACTION REQUIRED:
None
BACKGROUND: The Medical Center prepares a periodic financial
report, including write-offs of bad debt and indigent care, and
reviews it with the Executive Vice President and Chief Operating
Officer of the University before submitting the report to the
Medical Center Operating Board. In addition, the Medical Center
provides an update of significant operations of the Medical
Center occurring since the last Medical Center Operating Board
meeting.
FINANCE REPORT
After five months of operations in FY 2012, the operating
margin for all business units was 4.8%, which was below the
budget of 5.4%. The operating margin for the hospital without
other entities was 2.5% against a budget of 3.7%. The operating
margins for University of Virginia Imaging, Off-Campus Dialysis,
Outpatient Surgery Center, and Outreach were above budget for
the fiscal year to date through November, while the operating
margins for Community Medicine, Hematology Oncology Patient
Enterprises (HOPE), and the Transitional Care Hospital were
below budget.
During the first five months of the fiscal year, inpatient
discharges were 0.4% below budget and 1.7% above the prior year.
Average length of stay was 5.95 days, which was above the budget
of 5.80 days. The longer length of stay can be partially
explained by a Medical Center case mix index of 1.95, which was
above the budget of 1.90. Observation patients, outpatient
clinic visits, emergency room visits, and surgeries performed in
the main hospital operating rooms were above budget and above
the prior year.
Net patient service revenue for FY 2012 through November
was 2.9% below budget. The shortfall is the result of a
shortfall in state disproportionate share dollars and a decrease
in the number of in outlier patients. Total operating expenses
10
were 1.3% below the $459.6 million budget. Total labor expenses
(including salaries and wages, fringe benefits, and contract
labor) were 0.2% below budget and total supply cost was 0.5%
below budget. With the exception of bad debt and medical center
contracts expense, all other expense categories were below
budget.
Total paid employees, including contracted employees, were
148 below budget.
FY 2011
Employee FTEs
Salary, Wage and
Benefit Cost per
FTE
Contract Labor FTEs
Total FTEs
FY 2012
2012 Budget
6,048
6,386
6,580
$72,398
$73,972
$72,941
234
223
177
6,282
6,609
6,757
OTHER FINANCIAL ISSUES
The federal health care reform legislation established an
Innovation Center that is evaluating alternative payment
approaches such as bundled payment arrangements. We signed a
nonbinding letter of intent to participate in a bundled payment
program that will bundle Medical Center and physician payments
for knee and hip replacements. We submitted our letter of
intent to the Association of American Medical Colleges to
participate as a convener. Since the program is limited to knee
and hip replacements, it will not have a significant financial
impact. We are participating primarily because we want to be
part of the national dialogue on the subject of bundled
payments.
WRITE-OFF OF BAD DEBTS AND INDIGENT CARE
Indigent care charges totaling $102.6 million for the
period July 1, 2011 through November 30, 2011, have been written
off. Recoveries during this period totaled $25.8 million.
Bad debt charges totaling $20.5 million have been written
off during FY 2012. During this same period, $6.7 million was
11
recovered through suits, collection agencies, and Virginia
refund set-off.
OPERATIONS REPORT
Clinical Operations
Patient Progression Initiative
Implementation of numerous improvement processes and
communication tools to enhance patient flow through the Medical
Center has resulted in demonstrated positive outcomes.
Implementation of inpatient flow enhancements is well under way,
with specific focus on care coordination and daily
multidisciplinary rounds, implementation of a new case
management program on inpatient units and in the Emergency
Department, and initiation of patient placement enhancements
coordinated through the Bed/Transfer Center. Surgical flow
enhancements continue to be evaluated, with focus on
improvements to operating room scheduling practices and
processes to ensure completion of pre-assessment testing prior
to the day of surgery. Emergency Department flow enhancements
have also begun with implementation of nursing flow rounds to
help identify barriers to flow, changes to nursing and physician
schedules, and streamlining of the patient admit order process.
Positive outcomes have already been achieved, as demonstrated by
a reduction of the Medical Center’s average length of stay.
Clinical Ancillary Services
Endoscopy
Construction was initiated to relocate the Bronchoscopy
Laboratory from the first floor of University Hospital to the
second floor. This relocation will allow for the renovation of
the suite on the first floor to perform endoscopic retrograde
cholangiopancreatography, a procedure that combines upper
gastrointestinal endoscopy and x-ray to treat problems of the
bile and pancreatic ducts.
Medical Laboratories
The Molecular Diagnostics Laboratory upgraded an existing
genetic analyzer to enhance its efficiency and ease of use in
sequencing DNA. Currently, the analyzer is used for microbial
identifications, gene rearrangements for leukemia and lymphoma,
and DNA fragment analysis for Fragile X disorder. The upgrade
12
reduces turnaround times for microbial sequencing by at least 24
hours, enabling faster treatment of the patient using the most
appropriate antibiotic. The analyzer upgrade also provides the
technology needed to perform new molecular studies for patients
who undergo stem cell transplants.
Pharmacy Services
Pharmacy Services contracted with a pharmaceutical vendor
to serve as a beta site for testing a new barcode methodology
designed to enhance the quality and readability of medication
barcodes for all of our information technology systems from
receipt of medication to medication use.
Pharmacy Services began using pre-mixed syringe and bag
medications in the Operating Room to enhance safety, efficiency,
and overall medication storage. Installation of new dispensing
automation in the Outpatient Pharmacy was also initiated and is
scheduled to be completed in early March. The new automation
will reduce patient wait times for medication order fills.
Radiology Services
Radiology Department master renovations in University
Hospital continue to progress on schedule with minimal
operational disruption.
Two of three computed tomography scanners on the first
floor of University Hospital are being replaced with the most
current scanning platform to mirror what was recently installed
in the Emily Couric Clinical Cancer Center. The first
replacement scanner is anticipated to be ready for patient use
in March. One of three magnetic resonance imaging scanners on
the first floor of University Hospital is being replaced with a
wide bore 3.0 Tesla magnet and should be fully operational for
patient use in April.
Culpeper Regional Hospital
Culpeper Regional Hospital’s Finance Committee recently
endorsed a plan to replace the Hospital’s current 16-slice
computed tomography (CT) scanner with two new CT scanners – a
20-slice and 64-slice. The Hospital received approval from the
Virginia Department of Health in early 2011 to add an additional
scanner to the Hospital’s operations. The 64-slice scanner will
be used mainly for diagnostic purposes. The 20-slice scanner
will be used for the radiation therapy simulation process as
well as some diagnostic use.
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Human Resources
Human Resources Payroll Study
Human Resources has been exploring ways to better align
resources with the service needs of the Medical Center. As part
of this effort, Human Resources partnered with Mercer, a global
leader in human resources consulting, to conduct an assessment
of our payroll function, including a data gathering exercise
with Human Resources employees and key customers. This endeavor
will provide the Medical Center with one of the most significant
opportunities to help shape the future of our payroll process.
Staffing
In December 2011, the Medical Center implemented a
proactive recruitment and selection process designed to hire
employees with skills and attributes that align with the Medical
Center’s values and service culture. This new approach is
focused on streamlining the application and resume submission
process and asking all applicants to complete an assessment that
identifies service orientation and culture fit.
Recognition and Rewards
This year's annual holiday celebrations added new elements
of engagement and surprise for all employees. Enhancements to
this year's celebrations included raffle prizes and
entertainment at the University Hospital celebration as well as
at off-site locations. Senior Leaders delivered food to nightshift employees and also took raffle boxes to each unit in the
Hospital. Hot cocoa was delivered by Senior Leaders to
employees over the weekend, weekday afternoon, and nightshifts. For employees working Christmas Eve and Christmas Day,
boxes of holiday goodies and snacks were delivered by Senior
Leaders to each unit with appreciation for working the holidays
for our patients.
In January 2012, the Medical Center announced a merit pay
increase for staff. This year’s increase is 2% for those who
achieved a performance rating of “meet expectations” and 3% for
those who achieved a rating of “exceeds expectations”. This was
done in conjunction with implementation this past fall of a new
performance appraisal tool. The new tool focuses on reinforcing
our core values and behaviors in addition to technical skills
and abilities.
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Employee Engagement
In an effort to identify what is important to our
employees, the Medical Center committed to conducting regular
employee engagement surveys, knowing that an engaged workforce
results in better patient care and overall organizational
performance. In July 2011, over 80% of Medical Center employees
participated in a full census engagement survey that allowed the
Medical Center to identify opportunities to improve the work
environment and work life for employees. Beginning January 30
through February 12, 2012, the Medical Center will conduct a
“pulse” employee engagement survey. Unlike a census survey, a
pulse survey collects information from a sample of the total
employee population. The results are then used to draw
conclusions about the whole group. In order to achieve a
statistically significant sampling, 1,000 Medical Center
employees will be invited to take the pulse survey. These
individuals are selected randomly by the survey vendor.
Uteam Meetings
Ed Howell and Bo Cofield held Uteam sessions for employees
in January to discuss the new Health System strategic direction.
The meetings were held at the Medical Center and at off-site
locations. Invitations to these sessions were also extended to
employees of the School of Medicine, School of Nursing, and
University Physicians Group. These meetings were well received
by employees and included participation by Dean Steven DeKosky,
Dean Dorrie Fontaine, and Brad Haws.
Quality and Performance Improvement
Accreditations and Survey
Preparations for the Joint Commission survey continued with
all Medical Center managers and employees involved in actions to
assure continued readiness. A mock survey was conducted by an
external contractor to assess our physical environment and
measures to assure patient safety during construction. A
follow-up survey by the external contractor was also completed.
The survey included a review of corrective actions implemented
as a result of the initial survey visit and consultation. The
surveyor complimented the staff on actions taken and recommended
continued vigilance to meet accreditation requirements to
provide a safe environment for our patients, visitors, and
staff.
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Quality and Patient Safety Initiatives
The Medical Center completed a pay for performance,
Quality-In-Sights®: Hospital Incentive Program (Q-HIP®),
contract with Anthem Blue Cross and Blue Shield for the July 1,
2010 to June 30, 2011 period and received a score of 80.91 out
of a possible 100 points. The score will allow the Medical
Center to receive 90% of the possible financial incentive. The
Medical Center has participated in this program for eight
consecutive years.
Quality and Safety Grand Rounds in December focused on
escalation of patient care issues. The participants offered
ideas to improve communication among the health care team and
identified support when responses are delayed or insufficient.
Over 100 students, employees, and physicians attended the
program.
Supply Chain
Linen Services
The Medical Center signed a new three year linen services
agreement with Handcraft, Inc. of Richmond, Virginia, effective
January 1, 2012. Handcraft’s services replace the combined
services previously provided by Virginia Correctional
Enterprises (linen processor) and Standard Textile, Inc. (linen
supplier). The agreement with Handcraft provides a guaranteed
first year savings of $243,000 with a potential first year
savings of up to $346,000, pending changes to our internal linen
services practices.
Environment of Care
Patient & Guest Services
The annual University of Virginia Hospital Auxiliary
Holiday Vendor Sale was held in December, and generated over
$7,400 in proceeds, which will be used to fund scholarships at
the Malcolm Cole Child Care Center.
A group of eight volunteers visit the University of
Virginia Children’s Hospital every Tuesday evening to engage in
"Compassionate Clowning" with young patients at the Medical
Center. Compassionate clowning provides comfort, care and
emotional support to patients and families by creating an
environment that promotes healing and alleviates anxiety and
stress.
16
Arts Committee
The works of artist Sue Sencer were on display in the
University Hospital Lobby from November 4, 2011 to January 6,
2012, in an exhibition entitled “All Manner of Beings”. “For
the Love of Dogs”, an exhibition of paintings by Cabell Gorman
will be on display in the lobby from January 6 to March 2, 2012.
Safety
The third annual Employee Safety Fair was held in October.
There were displays on employee safety, needle safety, hand
hygiene, minimal lifting equipment, and the latest ergonomic
devices.
Awards and Recognition
The University of Virginia Health System consumers’ website
uvahealth.com received two eHealthcare Leadership Awards from
the publication eHealthcare Strategy and Trends. The site was
recognized with a silver award for Best Site Design and for Best
Doctor Directory.
Community Outreach
Commonwealth of Virginia Campaign
Medical Center and School of Medicine employees exhibited
their support for the community with a record year of
participation in the Commonwealth of Virginia Campaign. As of
December 31, 2011, 1,648 individual had contributed, a
participation rate in excess of 18%, pledging a total of
$416,887. The participation rate and total pledges for the
Medical Center and School of Medicine were the highest in the 12
year history of the Commonwealth of Virginia Campaign. The
Charlottesville Free Clinic ranked first in designated
contributions with almost $80,000, a record high from previous
years. Other popular recipients include the Thomas Jefferson
Area Food Bank, United Way, Blue Ridge Food Bank, Hospice of the
Piedmont, and numerous animal charities.
17
University of Virginia Medical Center
Income Statement
(Dollars in Millions)
Most Recent Three Fiscal Years
Description
Net patient revenue
Nov-10
Nov-11
Nov-12
Budget/Target
Nov-12
$408.4
$425.3
$459.6
$473.5
12.0
12.5
17.0
12.5
$420.4
$437.8
$476.6
$486.0
371.5
385.5
422.0
424.0
22.5
23.8
28.9
29.9
2.5
3.3
3.0
5.7
Total operating expenses
$396.5
$412.6
$453.9
$459.6
Operating income (loss)
$23.9
$25.2
$22.7
$26.4
Other revenue
Total operating revenue
Operating expenses
Depreciation
Interest expense
Non-operating income (loss)
$41.3
$36.7
($5.3)
$2.9
Net income (loss)
$65.2
$61.9
$17.4
$29.3
Principal payment
$7.2
$8.7
$8.8
$8.8
18
University of Virginia Medical Center
Balance Sheet
(Dollars in Millions)
Most Recent Three Fiscal Years
Description
Nov-10
Nov-11
Nov-12
Assets
Operating cash and investments
$79.3
$115.8
$58.2
51.4
97.5
125.9
Property, plant and equipment
499.8
610.9
686.1
Depreciation reserve and other investments
352.5
233.1
198.2
Endowment Funds
316.7
362.0
396.2
Other assets
155.1
183.2
228.9
$1,454.8
$1,602.5
$1,693.5
$16.2
$14.3
$17.7
77.2
94.0
90.3
Long-term debt
341.3
330.6
315.6
Accrued leave and other LT liab
115.3
149.2
138.3
$550.0
$588.1
$561.9
$904.8
$1,014.4
$1,131.6
$1,454.8
$1,602.5
$1,693.5
Patient accounts receivables
Total Assets
Liabilities
Current portion long-term debt
Accounts payable & other liab
Total Liabilities
Fund Balance
Total Liabilities & Fund Balance
19
University of Virginia Medical Center
Financial Ratios
Most Recent Three Fiscal Years
Description
Nov-10
Operating margin (%)
Nov-11
Nov-12
Budget/Target
Nov-12
5.7%
5.8%
4.8%
5.4%
14.1%
13.0%
3.7%
6.0%
1.4
2.0
1.7
2.4
177.7
177.6
144.0
190.0
Gross accounts receivable (days)
45.6
46.1
49.0
45.0
Annual debt service coverage (x)
9.3
7.4
4.2
5.2
36.7%
33.6%
30.0%
31.8%
6.3%
6.6%
7.0%
7.7%
Total margin (%)
Current ratio (x)
Days cash on hand (days)
Debt-to-capitalization (%)
Capital expense (%)
University of Virginia Medical Center
Operating Statistics
Most Recent Three Fiscal Years
Description
Nov-10
Nov-11
Nov-12
Budget/Target
Nov-12
Acute Discharges
11,330
11,571
11,766
11,808
Patient days
69,688
69,932
70,436
68,465
3,611
3,733
4,228
3,648
6.23
6.05
5.95
5.80
285,891
283,769
312,831
301,027
25,602
24,373
25,903
24,943
SS/PP Patients
Average length of stay
Clinic visits
ER visits
Medicare case mix index
Occupancy %
FTE's (including contract labor)
2.05
6,179
20
2.04
76.0%
6,282
2.10
72.1%
6,609
2.04
72.6%
6,757
University of Virginia Medical Center
SUMMARY OF OPERATING STATISTICS AND FINANCIAL PERFORMANCE MEASURES
Fiscal Year to Date with Comparative Figures for Prior Year to Date - November FY12
OPERATING STATISTICAL MEASURES - November FY12
DISCHARGES and CASE MIX - Year to Date
Actual
DISCHARGES:
Adult
Pediatrics
Psychiatric
Transitional Care
Subtotal Acute
Budget
OTHER INSTITUTIONAL MEASURES - Year to Date
% Variance
Prior Year
9,930
1,286
488
62
11,766
9,870
1,262
580
96
11,808
0.6%
1.9%
(15.9%)
(35.4%)
(0.4%)
9,722
1,217
618
14
11,571
4,228
3,648
15.9%
3,733
Total Discharges
15,994
15,456
3.5%
15,304
Adjusted Discharges
21,574
21,391
0.9%
20,608
Short Stay/Post Procedure
CASE MIX INDEX:
All Acute Inpatients
Medicare Inpatients
1.95
2.10
1.90
2.04
2.6%
3.0%
1.88
2.04
Actual
Budget
% Variance
Prior Year
ACUTE INPATIENTS:
Inpatient Days
Average Length of Stay
Average Daily Census
Births
70,436
5.95
460
687
68,465
5.80
447
696
2.9%
(2.6%)
2.9%
(1.3%)
69,932
6.05
457
704
OUTPATIENTS:
Clinic Visits
Average Daily Visits
Emergency Room Visits
312,831
3,131
25,903
301,027
2,999
24,943
3.9%
4.4%
3.8%
283,769
2,935
24,373
8,404
3,371
11,775
8,106
3,662
11,768
3.7%
(7.9%)
0.1%
7,881
3,501
11,382
SURGICAL CASES
Main Operating Room (IP and OP)
UVA Outpatient Surgery Center
Total
OPERATING FINANCIAL MEASURES - November FY12
21
REVENUES and EXPENSES - Year to Date
($s in thousands)
NET REVENUES:
Net Patient Service Revenue
Other Operating Revenue
Total
EXPENSES:
Salaries, Wages & Contract Labor
Supplies
Contracts & Purchased Services
Bad Debts
Depreciation
Interest Expense
Total
Operating Income
Operating Margin %
Non-Operating Revenue
Net Income
Actual
Budget
OTHER INSTITUTIONAL MEASURES - Year to Date
% Variance
Prior Year
459,625
16,960
476,585
473,534
12,520
$ 486,054
(2.9%)
35.5%
(1.9%) $
425,349
12,476
437,825
$ 205,313
103,340
100,016
15,352
29,872
5,724
$ 459,617
$ 26,437
5.4%
$
2,931
0.2%
0.5%
1.8%
(3.9%)
3.4%
47.7%
1.3% $
(13.9%) $
$
204,921
102,854
98,250
15,958
28,859
2,991
453,833
22,752
4.8%
(5,284)
(280.3%) $
190,882
91,247
88,573
14,798
23,847
3,318
412,665
25,160
5.7%
36,691
$
17,468
(40.5%) $
61,851
$
$
$
$
29,368
($s in thousands)
NET REVENUE BY PAYOR:
Medicare
Medicaid
Commercial Insurance
Anthem
Southern Health
Other
Total Paying Patient Revenue
OTHER:
Collection % of Gross Billings
Days of Revenue in Receivables (Gross)
Cost per CMI Adjusted Discharge
Total F.T.E.'s (including Contract Labor)
F.T.E.'s Per CMI Adjusted Discharge
Actual
$
$
$
145,387
46,355
95,638
81,239
12,640
78,366
459,625
Budget
$
$
35.62%
49.0
10,429 $
6,609
24.08
160,212
51,633
73,661
87,218
25,626
75,184
473,534
35.31%
45.0
10,950
6,757
25.48
% Variance
(9.3%) $
(10.2%)
29.8%
(6.9%)
(50.7%)
4.2%
(2.9%) $
0.9%
(8.9%)
4.8% $
2.2%
5.5%
Prior Year
143,909
46,379
66,166
78,343
23,019
67,534
425,349
35.96%
46.1
10,249
6,282
24.76
Assumptions - Operating Statistical Measures
Discharges and Case Mix Assumptions
Discharges include all admissions except normal newborns
Pediatric cases are those discharged from 7 West, 7 Central, NICU, PICU and KCRC
Psychiatric cases are those discharged from 5 East or Rucker 3
All other cases are reported as Adult
Short Stay Admissions include both short stay and post procedure patients
Case Mix Index for All Acute Inpatients is All Payor Case Mix Index from Stat Report
Other Institutional Measures Assumptions
Patient Days, ALOS and ADC figures include all patients except normal newborns
Surgical Cases are the number of patients/cases, regardless of the number of procedures performed on that patient
22
Assumptions - Operating Financial Measures
Revenues and Expenses Assumptions:
Medicaid out of state is included in Medicaid
Medicaid HMOs are included in Medicaid
Physician portion of DSH is included in Other
Non-recurring revenue is included
Other Institutional Measures Assumptions
Collection % of Gross Billings includes appropriations
Days of Revenue in Receivables (Gross) is the BOV definition
Cost per CMI Adjusted Discharge uses All Payor CMI to adjust, and excludes bad debt
MEDICAL CENTER
ACCOUNTS COMMITTEE REPORT
(Includes All Business Units)
(Dollars in Thousands)
Year to Date
November
2011-12
INDIGENT CARE (IC)
Net Charge Write-Off
84,604
Percentage of Net Write-Offs to Revenue
6.56%
Annual Activity
2010-11
2009-10
195,645
172,917
6.89%
6.60%
Total Reimbursable Indigent Care Cost
31,980
73,954
53,095
State and Federal Funding
30,675
70,936
52,053
Total Indigent Care Cost Funding As a Percent
of Total Indigent Care Cost
96%
Unfunded Indigent Cost
1,304.80
96%
98%
3,017.31
1,042.00
Annual Activity
November
2011-12
BAD DEBT
Net Charge Write-Offs
15,958
Percentage of Net Write-Offs to Revenue
1.24%
2010-11
25,838
0.91%
2009-10
30,948
1.18%
Note:
Provisions for bad debt write-offs and indigent care write-offs are recorded for financial statement purposes based on the overall
collectibility of the patient accounts receivable. These provisions differ from the actual write-offs of bad debts and indigent care
which occur when an individual account is written off.
23
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 23, 2012
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.D.
ACTION REQUIRED:
None
Capital Projects
BACKGROUND: The Medical Center is constantly improving and
renovating its facilities. A status report of these capital
projects will be provided at each Medical Center Operating Board
meeting.
DISCUSSION: The current Medical Center capital projects report
is set forth in the following table:
24
University of Virginia Medical Center
Capital Projects Report
February 2012
Scope
Budget
Funding Source
$117 M
Bonds and Outside
BOV
Projected
Approval
Completion
Date
Date
N/A
2014
Under Construction
Barry and Bill Battle Building:
Fundraising
The groundbreaking ceremony was
held on June 9, 2011. Site
excavation is complete. Installation of
the drilled pier foundation system is
nearing completion
University Hospital:
$7.6M
Bonds
Feb 2008
2011
$21.2 M
Bonds
Feb 2008
2013
Bonds and Health
Sept 2005
Add elevators. The new elevators are
in place. They are not in use
awaiting completion of the new
elevator lobbies as a part of the
Hospital Bed Expansion project.
University Hospital:
Renovate Radiology Department.
Phased construction underway
University Hospital Bed Expansion:
(52,000 GSF)
$80.2 M
System Operating
Project to increase inpatient bed
Revenue
capacity in University Hospital by
adding 72 private, ICU-level rooms.
Finishes and casework installation is
on-going.
25
June 2007
2012
*Health System Precinct:
$36.5M
Bonds & Other
June 2010
2013
BOV
Projected
Approval
Completion
Date
Date
Nov. 2010
2012
Realignment of Lee St. and
construction of new chiller plant.
Realignment necessary to create site
for subsequent construction of chiller
plant. New chiller plant to replace
capacity in North Chiller Plant that
has outlived useful life.
Scope
*University Hospital:
Budget
Funding Source
$6.7M
Bonds
Relocation of helipad to roof of
University Hospital. Helipad relocation
is required prior to construction of
East Chiller Plant.
* Project modifies original HEP project
26
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 23, 2012
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.E.
ACTION REQUIRED:
None
Health System Development
BACKGROUND: Health System Development will provide reports of
recent activity to the Medical Center Operating Board from time
to time.
DISCUSSION:
SIGNIFICANT GIFTS
September 1, 2011 – November 30, 2011
The School of Medicine received a $1.5 million estate gift
to establish a named scholarship fund. This scholarship will be
awarded with preference for students from the Virginia Peninsula
region.
The Harrison Foundation has pledged $500,000 in support of
Alzheimer’s research, adding to its prior support for the
movement disorders and memory disorders programs.
The 29th Annual Charlottesville Women’s Four-Miler, held on
September 3, 2011, attracted more than 3,500 participants and
raised $300,000 for the University of Virginia Breast Care
Program and breast cancer research.
A School of Medicine alumnus documented a $200,000 bequest
to be designated for unrestricted use in the School of Medicine.
A second School of Medicine alumnus documented a $200,000
bequest to be designated for unrestricted use in the School of
Medicine.
A School of Medicine faculty member donated an extensive
dermatological digital slide collection, appraised at $176,000,
to the Department of Dermatology.
A School of Medicine faculty member committed $105,263 in
support of the Chester Research Fund in the Department of
Neuroscience.
27
An anonymous donor documented a $200,000 bequest to the
Department of Surgery in support of esophageal cancer research.
More than $100,000 in corporate sponsorships has been
secured to date in support of the upcoming 2012 Children’s
Hospital Main Event to be held on February 4 at Keswick Hall.
Other gifts and pledges received include:





A $75,000 commitment to the School of Medicine Department of
Neurology for the Multiple Sclerosis Research Fund;
A $75,000 bequest to support initiatives in the School of
Medicine;
A $60,000 gift to the Human Immune Therapy Program in support
of Dr. Craig Slingluff’s melanoma research;
A $50,000 memorial gift to support the work and education of
pediatric nursing staff; and
A $50,000 gift to the Cancer Center in support of the Becky
Silver Fund, bringing the total amount raised to more than
$100,000.
OTHER DEVELOPMENT INITIATIVES
The second annual “Art with Heart” fundraising event to
support the Battle Building was held at the McGuffey Art Studio
throughout the month of October, with sales supporting
children’s health care.
Following the October Council of Foundations meeting, Dean
Fontaine hosted a Jeffersonian dinner at Pavilion IX focused on
contemplative sciences, an interdisciplinary initiative that
links humanistic and scientific inquiry across the University
with a focus on mind-body knowledge. Attendees included Council
of Foundations chair Jeff Walker, Tussi Kluge, and Health
Foundation chair George Hurt.
On November 4, friends of the Health System hosted the
first “Dance for Life” concert, raising more than $30,000 in
support of Dr. Amir Jazaeri’s ovarian cancer research.
The University of Virginia Children’s Hospital formed a
fundraising partnership with the MaDee Project to support
families of children with cancer in the Staunton/Charlottesville
area. A book chronicling MaDee Boxler’s experience battling
cancer has been published, with all proceeds going to name a
space in the Battle Building.
28
Health System Development staff met with John Nau to
strategize an approach to the Robert and Janice McNair
Foundation for support of pancreatic cancer research. The
conversation involved former University of Virginia women’s
basketball coach Debbie Ryan, a pancreatic cancer survivor who
is working with the Pancreatic Cancer Action Network (PANCAN) on
the passage of legislation that would increase funding for
pancreatic cancer research.
The 30th annual Boar’s Head Turkey Trot to support the
Children’s Hospital was held on Thanksgiving. Nearly 1,500
runners and walkers participated in the event, helping to raise
more than $40,000 for support of the Battle Building and to
secure a naming opportunity in the building in memory of Turkey
Trot and Boar’s Head Inn founder John Rogan.
On November 29, several Health System prospects and donors
joined Deans Dorrie Fontaine and Steven DeKosky, Medical Center
Chief Executive Officer Ed Howell, and other University
development leadership in the President’s Box to watch the
University of Virginia men’s basketball team play Michigan.
Guests included executives from Altria and CentraHealth, and
several Health Foundation board members and donors.
The ziMS Foundation 2011 Field of Dreams Gala, hosted by
Ryan Zimmerman and presented by ACAC’s Phil Wendel, raised
$76,000 in net proceeds for the University of Virginia Multiple
Sclerosis Program and prompted an additional $150,000 payment
from the Foundation, $100,000 more than the outstanding balance
of the existing pledge.
The 2012 University of Virginia Dance Marathon, a studentrun fundraising organization that raises funds annually for
Children’s Miracle Network hospitals, raised $65,000 in support
of pediatric hematology/oncology research.
Following a conference call with Dr. Peter Netland and
Health System Development staff, a School of Medicine alumnus
agreed to direct a mini-campaign to fellow alumni with a planned
goal of raising at least $100,000 in private funds for an
Ophthalmology training simulator.
The Health System Communications team produced fall issues
of Virginia Legacy, the School of Nursing and Nursing Alumni
Association magazine; Investing in Hope, a Cancer Center
publication; and Pulse, Philanthropy in Action at the University
of Virginia Health System. The team also created e-blasts,
electronic communications, an end-of-year Flash video, and a
29
variety of fundraising materials in support of the School of
Medicine, the School of Nursing, and the Medical Center.
To date in FY 12, Health System Development officers have
made 560 face-to-face visits with donors and prospects.
CAMPAIGN PROGRESS THROUGH 2011
Through the end of November, the Health System Campaign for
Health total is $579,451,318. This represents 116% of the
original $500 million campaign goal. The following table shows
the fiscal year 2012 totals, as of November 30, for new
commitments, including gifts and pledges, as compared with same
period in fiscal year 2011.
New Gifts
FY 12 (through
FY 11 (through
11/30/11)
11/30/10)
$19,073,482
$16,357,319
New Pledges
Total New Commitments (excludes
pledge payments on previously
booked pledges)
30
$905,625
$743,740
$19,979,107
$17,101,059