UNIVERSITY OF VIRGINIA
BOARD OF VISITORS
MEETING OF THE
MEDICAL CENTER
OPERATING BOARD
June 9, 2011
UNIVERSITY OF VIRGINIA
MEDICAL CENTER OPERATING BOARD
Thursday, June 9, 2011
8:30 – 11:15 a.m.
Medical Center Dining Conference Rooms
Committee Members:
Vincent J. Mastracco, Jr., Chair
Helen E. Dragas
Randy J. Koporc
Andrew K. Hodson, MB.Ch.B
The Hon. Lewis F. Payne
William P. Kanto Jr., M.D.
E. Darracott Vaughan Jr., M.D.
Constance R. Kincheloe
John O. Wynne
Ex Officio Members:
Teresa A. Sullivan
Steven T. DeKosky, M.D.
Dorrie K. Fontaine
Robert S. Gibson, M.D.
R. Edward Howell
Leonard W. Sandridge
AGENDA
PAGE
I.
II.
ACTION ITEMS
A.
Fiscal Year 2012 Medical Center Operating and
Capital Budgets (Mr. Fitzgerald)
1
B.
Hematology/Oncology Acquisition
8
C.
Nephrology Acquisition
10
D.
Medical Center Joint Venture for a Program of
All-Inclusive Care for the Elderly Joint Venture
12
E.
Virginia Blood Services Contract
14
F.
Consulting Services to Manage Implementation of
Patient Progression Improvement
15
REPORTS BY THE VICE PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF THE MEDICAL CENTER (Mr. Howell)
A.
Vice-President’s Remarks
17
B.
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)
18
C.
Capital Projects
35
D.
Annual Compliance Report
38
E.
Health System Development
41
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 regarding the
Medical Center, including potential strategic
joint ventures and other growth efforts, and
Medical Center 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
at the Medical Center; and
– Consultation with legal counsel regarding the
Medical Center’s compliance with relevant federal
and state legal requirements, licensure and
accreditation standards, and ongoing litigation;
all of which will involve proprietary business
information of the Medical Center and evaluation
of the performance of specific Medical Center
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 AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Finance
AGENDA ITEM:
I.A. Fiscal Year 2012 Medical Center
Operating and Capital Budget
BACKGROUND: The Medical Center’s operating and capital
budgets are consolidated with the University’s overall budget.
At its June meeting, the Board of Visitors acts on the
proposed budget based on a recommendation for endorsement from
the Medical Center Operating Board.
DISCUSSION: The Medical Center’s 2011-2012 fiscal plan has been
developed while considering the challenge of providing patient
care, teaching, and research services in an increasingly
changing health care industry. The costs associated with
providing quality patient care will continue to have upward
pressure due to increases in medical supply, pharmaceutical, and
medical device expenses, as well as a shortage of health care
workers. In addition, in Fiscal Year 2012 the Medical Center
expects to continue its growth in surgery and to care for
patients with high acuity illnesses.
The Medical Center budget development process is clinically
focused and highly participatory. Patient care services
management, support function management, and physicians have
significant roles in the budget development cycle. The budget
process begins with senior management developing basic budget
assumptions such as discharges, length of stay, standards for
the number of employees, and inflation. This information is
communicated to Medical Center managers and ends with each
operating unit providing a cumulative operating and capital
budget that contains service demand forecasts, required fulltime equivalent personnel, and non-labor expenses.
BUDGET AND OPERATING ASSUMPTIONS
Market conditions: For Fiscal Year 2012 discharges are budgeted
to grow 1.4 percent from Fiscal Year 2011 projected levels. The
growth will be facilitated by improved patient flow resulting
from bed expansion. Outpatient service demand is budgeted to
grow 4.2 percent from Fiscal Year 2011 projected levels, due in
part to the expected acquisition of the HOPE physician practice.
The budget recognizes main operating room capacity increasing
from 28 to 30 rooms for Fiscal Year 2012, as well as bed
1
capacity increasing to 597 inpatient beds by June 30, 2012.
Additionally, the Transitional Care Hospital has 40 beds that
will be fully operational by June 30, 2012. The following table
includes historical and projected patient volumes:
Budget
2010-2011
Discharges Medical Center
27,451
Discharges Transitional Care
Adjusted Discharges
49,122
Average length of Stay MC
6.00
ALOS Transitional Care
27.23
Patient Days at MC
164,571
Clinic and ER visits
750,028
Projected
2010-2011
27,628
41
49,414
5.94
26.74
165,761
746,937
Budget
2011-2012
28,004
276
51,102
5.61
29.00
157,047
778,081
Revenues: The Medical Center’s Fiscal Year 2012 budgeted payer
mix remains consistent with that of 2011. One of the Medical
Center’s largest challenges is the unwillingness of government
payers to increase their payments commensurate with the
increases in medical delivery costs. Growth in revenues will
result from the impact of increasing volume and negotiated
contracts with rate increases.
Rate changes: The Medical Center proposes an overall rate
increase of 7.0 percent to 9.9 percent, which is commensurate
with rate increases that will generally be implemented in the
hospital industry. The net revenue impact of this change is
estimated to be $7.8 million.
With regard to compensation, the pay-for-performance pool
has been established at $4 million, which includes the impact on
benefit costs and is based on a 2.5 percent salary adjustment
with a January 2012 implementation date. Other salary
adjustments, such as market adjustments and a redesign of the
compensation program scheduled for September 2011, total $6.3
million, including the impact on benefit costs.
Expenses: Expenses from operations are projected to increase by
$103.4 million from the Fiscal Year 2011 projection. Expenses
per case mix index weighted adjusted discharges are projected to
increase, going from $10,753 to $11,413. We anticipate that the
expense per case mix index weighted adjusted discharge included
in the budget will be approximately equal to the academic
medical center median expense as shown in the University Health
System Consortium Operational Data Base.
Previous increases in capital investment will result in
additional depreciation expense of $10.2 million for Fiscal Year
2
2012. Additionally, interest cost on capital investments is
increasing by $6.0 million for Fiscal Year 2012. The Medical
Center’s 2011-2012 fiscal plan accounts for these additional
expenses while preserving its goal of providing high quality and
cost effective health care, education, and research services.
Staffing: The Medical Center’s Fiscal Year 2012 budget has been
benchmarked with comparable academic medical centers. FTEs are
planned to be 6,769, an increase of 376 FTEs from the current
Fiscal Year projection of 6,393 FTEs. The Transitional Care
Hospital accounts for 63 of the additional FTEs, and the new
HOPE operations account for 58 additional FTEs. Significantly
impacting FTE growth is an addition of 42 FTEs to support the
implementation of the Epic electronic medical record system.
Increased staffing in inpatient care services and ambulatory
clinics account for an increase of 92 FTEs. The remainder of
the growth is primarily for program and facility expansion.
Operating Plan: The rapidly changing health care environment
will require continuous examination of budget assumptions.
Management will monitor budget versus actual performance on a
monthly basis and, where appropriate, make changes to
operations. Also, management will continue to identify and
implement process improvement strategies that will allow for
operational streamlining and cost efficiencies.
The major strategic initiatives that impact next year’s
fiscal plan include:








The continuation of the collaborative effort between the
Medical Center and the School of Medicine Faculty on
documentation of clinical care and its coding.
The continuation of the collaborative effort between the
Medical Center and the School of Medicine Faculty on supply
cost.
The continuation of our efforts to better engage our
employees and enhance patient satisfaction.
The impact of Culpeper Regional Hospital on volumes.
The impact on operations from the completion of
construction of the hospital bed expansion.
The impact on operations from the Transitional Care
Hospital and the Emily Couric Clinical Cancer Center.
Continued integration of information technology services
through the Electronic Medical Record project.
Accelerating patient progression in the Medical Center’s
inpatient units, operating rooms, and emergency department.
3

Integration of the HOPE physician practice into the
University of Virginia Health System.
The major risk factors that impact the ability to
accomplish the fiscal plan include:








Nationwide shortage in health care workers that could
negatively impact our ability to maintain appropriate
staffing.
Ability to maintain an adequate number of physicians in
areas experiencing a national shortage.
Advancements in medical technology that could alter
expenses and/or revenues very quickly.
The emerging impact of the Patient Protection and
Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010.
Inflation for medical devices and pharmaceutical goods that
could exceed the budget assumptions.
Enhanced scrutiny by Federal regulators as Virginia is
scheduled to be included in the Federal Recovery Audit
Contract Program.
The continued poor financial status of the Commonwealth of
Virginia and its potential impact on funding for Medicaid
and Indigent Care programs.
Economic pressures and uncertainty regarding cash flows
from investments and non-operating income.
A summary of historical and projected financial operating
results is provided as follows:
Actual
(Millions)
2009-2010
Total operating revenue
$1,039
Operating expense
960
Operating income
79
Non-operating gain/(loss)
34
Total margin
$113
Operating income percent
7.6%
Projected
2010-2011
$1,066
1,005
62
78
$140
5.8%
Budgeted
2011-2012
$1,166
1,108
58
7
$65
5.0%
Capital Plan: Funds available to meet capital requirements are
derived from operating cash flows, funded depreciation reserves,
philanthropy, and interest income. The Medical Center faces
many challenges regarding capital funding as continued pressures
on the operating margin affect cash flow, while demand for
capital has increased significantly due to space requirements,
technological advances and aging of existing equipment. Subject
to funds availability, Medical Center management recommends
4
$88.3 million, which includes $5.0 million for contingencies and
$8.0 million for Culpeper Regional Hospital investments, are
authorized for capital requirements.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and the Board of Visitors
APPROVAL OF THE 2011-2012 OPERATING AND CAPITAL BUDGETS AND
ANNUAL RENOVATION AND INFRASTRUCTURE PLAN FOR THE UNIVERSITY OF
VIRGINIA MEDICAL CENTER
RESOLVED, the 2011-2012 Operating and Capital Budget and
the Annual Renovation and Infrastructure Plan for the University
of Virginia Medical Center is approved, as recommended by the
President, the Chief Financial Officer, and the Medical Center
Operating Board.
5
Schedule A
University of Virginia - Medical Center
Projected Fiscal Plan
2011-2012
2009-2010
Actual
Revenues
Total Gross Charges
$
2010-2011
Forecast
2,619,222,866
$
2,855,266,820
2011-2012
Budget
$
3,216,218,452
Less Deductions:
Indigent Care Deduction
Contractual Deduction
Total Deductions
172,916,557
1,437,448,380
1,610,364,937
191,307,641
1,626,679,473
1,817,987,114
210,583,324
1,869,742,048
2,080,325,373
Net Patient Revenue
1,008,857,929
1,037,279,706
1,135,893,079
30,132,509
29,019,309
29,950,293
1,038,990,438
1,066,299,015
1,165,843,372
Expenses
Expenses from Operations
Operating Expenses
Depreciation and Amortization
Interest Expense
Bad Debt
866,872,833
54,528,061
7,307,357
30,947,700
903,200,573
61,776,195
7,771,517
31,995,160
985,557,078
71,939,033
13,770,749
36,858,835
Total Expenses from Operations
959,655,951
1,004,743,445
1,108,125,695
79,334,487
61,555,571
57,717,677
41,431,356
2,274,011
(705,865)
62,123,000
(71,432,061)
33,690,441
62,761,246
2,508,561
917,684
11,972,607
78,160,098
Miscellaneous Revenue
Total Revenue
Operating Income
Other Gains and Losses
Investment Income & Investment FMV
Net gain from Affiliates
Loss on Fixed Assets
State Appropriation
Other
Total Other Gains and Losses
Revenues and Gains in Excess of Expenses
$
Statistics
Discharges - Medical Center
Discharges - Transitional Care Hospital
Patient Days of Care - Medical Center
Patient Days of Care - Transitional Care Hospital
Clinic and Emergency Room Visits (Excluding Acquired
Practices)
Average Length of Stay - Medical Center
Average Length of Stay - Transitional Care Hospital
113,024,928
27,049
167,097
741,957
6.19
6
$
139,715,669
6,773,618
1,366,666
(800,000)
(287,639)
7,052,645
$
64,770,322
27,628
41
165,761
1,750
746,937
28,004
276
157,047
8,004
778,081
5.94
26.74
5.61
29.00
University of Virginia Medical Center
Operating Financial Plan
(dollars in thousands)
2011-12
Budget
Operating Revenues
Total Gross Charges
2010-11
Projected
2010-11
Original Budget
2009-10
Actual
$3,216,218
$2,855,267
$2,916,349
$2,619,223
Less Deductions:
Indigent Care Deduction
Contractual Deduction
Total Deductions
210,583
1,869,742
2,080,325
191,308
1,626,679
1,817,827
196,731
1,674,712
1,871,442
172,917
1,437,448
1,610,365
Net Patient Revenue
1,135,893
1,037,280
1,044,907
1,008,858
29,950
29,019
28,611
30,132
1,165,843
1,066,299
1,073,518
1,038,990
498,880
486,677
71,939
13,771
36, 859
471,490
431,710
61,776
7,772
31,995
460,492
449,061
63,760
7,057
40,256
440,885
425,988
54,528
7,307
30,948
1,108,126
1,004,743
1,020,627
959,656
57,718
5.0%
61,556
5.8%
52,891
4.9%
79,334
7.6%
6,774
1,367
(800)
0
(288)
7,053
62,761
2,509
918
0
11,973
78,160
14,633
1,450
(800)
0
(6,082)
9,201
41,431
2,274
(706)
62,123
(71,432)
33,690
64,770
139,716
62,092
113,025
71,939
(20,988)
115,721
61,776
(17,275)
184,217
63,760
(17,275)
108,578
54,528
(14,490)
153,063
88,345
70,507
81,179
53,345
$27,376
$113,710
$27,399
$99,718
Miscellaneous Revenue
Total Operating Revenues
Operating Expenses
Compensation and Benefits
Supplies, Utilities, and Other
Depreciation and Amortization
Interest Expense
Bad Debt
Total Operating Expenses
Operating Income
Operating Income Percent
Other Gains and Losses
Investment Income & Investment FMV
Net Gain from Affiliates
Loss on Fixed Assets
State Appropriation
Other
Total Other Gains and Losses
Revenues and Gains in Excess of Expenses
:
Add back Depreciation and Amortization
Less Principal Payments on Debt
Cash Available for Capital and Other
Capital Funded from Operations
Additions to Cash and Reserves
7
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.B.
Hematology/Oncology Acquisition
BACKGROUND: The Board of Visitors is required to approve the
execution of any contract where the amount per year is in excess
of $5 million.
DISCUSSION: At its February 2011 meeting, the Board of Visitors
authorized the Medical Center to acquire substantially all of
the assets of Hematology Oncology Patient Enterprises, P.C.
Since that time the deal has been restructured as a stock
acquisition from the six physician shareholders of the practice.
An approximate $3 million reserve against potential liabilities
of the practice will be established at the closing of the
transaction. Otherwise, the deal as now contemplated is the
same as presented to the Board in February, including the
purchase price which will be determined by an appraisal from
Ernst & Young.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and the Board of Visitors
APPROVAL TO ACQUIRE THE CAPITAL STOCK OF HEMATOLOGY ONCOLOGY
PATIENT ENTERPRISES, P.C.
WHEREAS, the Medical Center Operating Board and the Finance
Committee find it to be in the best interests of the University
of Virginia and its Medical Center for the Medical Center to
acquire the capital stock of Hematology Oncology Patient
Enterprises, P.C. from the individual shareholders of the
practice;
RESOLVED, the University, on behalf of the Medical Center,
is authorized to acquire the capital stock of Hematology
Oncology Patient Enterprises, P.C. from the individual
shareholders of the practice at a price to be determined by an
independent third party appraiser and on such terms to be
contained in a definitive agreement between the parties; and
8
RESOLVED, the resolution adopted by the Board of Visitors
at its February 2011 meeting authorizing the acquisition of
substantially all the assets of Hematology Oncology Patient
Enterprises, P.C. is superseded by this resolution; and
RESOLVED FURTHER, the Executive Vice President and Chief
Operating Officer of the University, in consultation with the
Vice President and Chief Executive Officer of the Medical
Center, and with the concurrence of the Chair of the Medical
Center Operating Board and the Chair of the Finance Committee,
is authorized to negotiate the terms of such acquisition,
including execution of the definitive agreement, contracts, and
all other documents necessary for the closing of the
transaction, on such terms as the Executive Vice President and
Chief Operating Officer of the University deems appropriate, and
to take such other action as the Executive Vice President and
Chief Operating Officer of the University deems necessary and
appropriate to consummate the foregoing.
9
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.C.
Nephrology Acquisition
BACKGROUND: The Medical Center desires to acquire certain
assets of the former Piedmont Nephrology practice.
DISCUSSION: On March 1, 2011, the University of Virginia Health
Services Foundation, on behalf of the Division of Nephrology,
purchased the Piedmont Nephrology practice from Dr. Connie
Christ. Dr. Christ’s practice was located in Charlottesville.
The practice had 1,400 active patients, including 35 dialysis
patients. The practice was purchased in order to expand the
University of Virginia Health System clinical enterprise in
Charlottesville. The practice will ensure the University of
Virginia dialysis system remains viable, as many of Dr. Christ’s
former patients will eventually require dialysis and will
further use the University of Virginia Health System for more
complex care issues.
In order to comply with provider based clinic rules, the
University of Virginia Medical Center is purchasing from the
Health Services Foundation the medical records of the former
Piedmont Nephrology practice, which are valued at $45,000.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and the Board of Visitors
APPROVAL TO ACQUIRE_NEPHROLOGY PRACTICE
WHEREAS, the Medical Center Operating Board and the Finance
Committee find it to be in the best interests of the University
of Virginia and its Medical Center for the Medical Center to
purchase from the University of Virginia Health Services
Foundation the medical records of the former Piedmont Nephrology
practice;
RESOLVED, the University, on behalf of the Medical Center,
is authorized to purchase from the University of Virginia Health
Services Foundation the medical records of the former Piedmont
Nephrology practice, at a price of $45,000; and
10
RESOLVED FURTHER, the Executive Vice President and Chief
Operating Officer of the University is authorized to execute any
and all other documents necessary for the acquisition of the
medical records.
11
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.D. Medical Center Joint Venture for a
Program of All-Inclusive Care for the
Elderly (PACE)
BACKGROUND: The University of Virginia
to establish a Program of All-Inclusive
(PACE) by entering into a joint venture
System and the Jefferson Area Board for
Medical Center desires
Care for the Elderly
with Riverside Health
Aging.
DISCUSSION: PACE provides comprehensive health services for
individuals age 55 and over who are categorized as “nursing home
eligible” by their state’s Medicaid program and who are dually
qualified for Medicare and Medicaid. The University of Virginia
Medical Center, Riverside Health System, and the Jefferson Area
Board for Aging will form a limited liability company for the
purpose of establishing a PACE Center in or around the
Charlottesville, Virginia area.
Riverside Health System operates two successful PACE
centers and will be the operating manager for the
Charlottesville center. The ownership of the new 501(c)(3)
corporation would be split among Riverside Health System (51%),
the University of Virginia Health System (24.5%), and the
Jefferson Area Board for Aging (24.5%). A total of $1,000,000
cash equity will be contributed to the project to establish the
ownership stakes. The University of Virginia Health System will
contribute $245,000. The PACE Center is expected to break even
during year three. The center is expected to have an operating
margin of 9.18 percent at the end of year six and a total
operating margin during the first six years of operations of
4.22 percent.
Program of All-Inclusive Care for the Elderly
Dollars in Millions
2012
2013
Revenue
4.14
Expenses
0.43
5.29
Net Operating Gains/Losses
(0.43) (1.15)
Operating Margin
-27.92%
Financial Pro Forma
2014
9.53
9.23
0.30
3.14%
2015
12.47
11.33
1.14
9.18%
2016
12.85
11.72
1.13
8.77%
2017
13.21
12.00
1.21
9.18%
TOTAL
52.20
50.00
2.20
4.22%
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and the Board of Visitors
12
APPROVAL TO ENTER INTO JOINT VENTURE FOR A PROGRAM OF ALLINCLUSIVE CARE FOR THE ELDERLY
WHEREAS, the Medical Center Operating Board and the Finance
Committee find it to be in the best interests of the University
of Virginia and its Medical Center for the Medical Center to
enter into a joint venture with Riverside Health System and the
Jefferson Area Board for Aging for the purpose of establishing a
Program of All-Inclusive Care for the Elderly in the
Charlottesville, Virginia area; and
WHEREAS, Section 23-77.3 of the Code of Virginia grants
authority to the Medical Center to enter into joint ventures;
RESOLVED, the University, on behalf of the Medical Center,
is authorized to enter into a joint venture with Riverside
Health System and the Jefferson Area Board for Aging for the
establishment of a Program of All Inclusive Care for the Elderly
in the Charlottesville area, provided the Medical Center’s
interest in such joint venture shall not exceed 25%; and
RESOLVED FURTHER, the Executive Vice President and Chief
Operating Officer of the University, in consultation with the
Vice President and Chief Executive Officer of the Medical
Center, and with the concurrence of the Chair of the Medical
Center Operating Board and the Chair of the Finance Committee,
is authorized to negotiate the terms of such joint venture,
including execution of contracts and all other documents
necessary for the establishment of such joint venture, on such
terms as the Executive Vice President and Chief Operating
Officer of the University deems appropriate, and to take such
other action as the Executive Vice President and Chief Operating
Officer of the University deems necessary and appropriate to
consummate the foregoing.
13
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.E. Approval of Signatory Authority for
Medical Center Procurement of Blood Services
and Products
BACKGROUND: The Board of Visitors is required to approve the
execution of any contract where the amount per year is in excess
of $5 million.
DISCUSSION: In accordance with Medical Center procurement
policy, the Medical Center is finalizing an extension contract
with its incumbent vendor for blood services and products,
effective July 1, 2011. In 2006 the Medical Center issued a
request for proposal, and the current vendor was the sole
respondent. At this time the incumbent is deemed the only
source practicably available for the required services and
products. They are in good standing with the Food and Drug
Administration, in compliance with all other regulatory
requirements, and have never experienced a product shortage in
the last five years. In addition, the Medical Center has
negotiated savings, efficiencies, and improved service
requirements for the contract extension.
The term of the contract is expected to be five years,
comprising an initial term of two years and three one-year
renewal options at the election of the Medical Center. The
total estimated value of the agreement will be in excess of $40
million, with the value in any single year exceeding $5 million,
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 the Board of Visitors
APPROVAL OF SIGNATORY AUTHORITY FOR MEDICAL CENTER PROCUREMENT
OF 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 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.
14
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.F. Approval of Signature Authority for
Medical Center Procurement of Professional
Consulting Services to Manage Implementation
of Recommended Patient Progression
Improvement Actions
BACKGROUND: The Board of Visitors is required to approve the
execution of any contract where the amount per year is in excess
of $5 million.
DISCUSSION: In February 2011, the University of Virginia
Medical Center engaged Huron Healthcare Consulting through a
request for proposal process to perform an assessment of the
operational effectiveness of the Medical Center’s current
systems, tools, and reports for managing patient throughput and
to provide a report of their findings and recommended actions.
Approximately 18 consultants conducted interviews with over 100
key physician and administrative leaders and observed workflow
processes in inpatient, surgical, and procedural services, and
in the emergency department. The cost of the engagement was
$300,000.
On March 15 the Medical Center received a written report
from Huron Healthcare which identified numerous high improvement
opportunities in our patient throughput processes as well as in
our communications and organizational culture. Their report
included a recommended action plan that identified redesigns of
key patient flow functions and programs that have major change
impact on the roles and competencies of our faculty, residents,
and staff as well as on our systems of care. Some of the key
recommended actions include a redesign of our Bed Center and
patient placement protocols to improve appropriate placement of
patients and address capacity concerns more efficiently;
implement standard operating room scheduling processes across
all surgical services to optimize utilization of Operating Room
resources; implement a structured method of communication to
support daily interdisciplinary care coordination and
involvement of patients and families to expedite discharges; and
establish a new centralized case management program to provide
complex patient transition planning and utilization management
to Clinical Staff, patients, and families. Implementation of
these recommended actions to reduce inefficiencies and enhance
patient flow have the potential to increase our capacity up to
15
six percent by achieving reductions in our average patient days
of 0.4 days, thus resulting in contribution margin improvements
between $15 million and $22 million annually.
The Medical Center desires to promptly commence work to
implement these recommendations. However, due to the complexity
involved in redesigning the various processes and roles across
many departments, services, and patient care settings, the
Medical Center does not have the internal resources to redesign
and manage implementation of these recommended solutions in a
timely fashion and desires to further engage Huron Healthcare
Consulting to provide this support.
Huron Healthcare is a leader in implementation of patient
flow processes redesign and offers best-practice knowledge and
experience in working within complex academic medical centers to
achieve desired outcomes. Huron anticipates that the
recommended actions can be implemented within 11 months. The
cost of the implementation engagement is estimated to be $7.9
million (plus expenses), fifty percent of which will be at risk
to Huron for performance outcomes. This amount includes a
credit of $300,000 for the fees paid for the initial assessment.
The Medical Center is requesting approval to move forward with
this engagement.
ACTION REQUIRED: Approval by the Medical Center Operating
Board, the Finance Committee, and the Board of Visitors
APPROVAL OF SIGNATORY AUTHORITY FOR MEDICAL CENTER PROCUREMENT
OF PROFESSIONAL CONSULTING SERVICES FOR PATIENT PROGRESSION
IMPLEMENTATION
RESOLVED, the Board of Visitors authorizes the Executive
Vice President and Chief Operating Officer of the University to
execute a contract for professional consulting services for the
Medical Center to manage the implementation of patient
progression improvement actions, based on the recommendation of
the Vice President and Chief Executive Officer of the Medical
Center in accordance with Medical Center procurement policy.
16
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
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.
17
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.B. Finance, Write-offs, and Operations
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 nine months of Fiscal Year 2011, the operating margin
for all business units was 5.7 percent, which was above the
budget of 3.8 percent. Total operating revenue was almost
exactly equal to budget, and total operating expenses were below
budget by 2.0 percent. The operating margin for the Medical
Center business unit was 3.9 percent against a budget of 1.9
percent. The Medical Center’s operating margin was budgeted to
decline substantially in the second quarter due to the
implementation of the Epic Electronic Medical Record in the
ambulatory clinics, but the negative impact on volumes and
margin was less than expected. The operating margins for UVA
Imaging, UVA Outpatient Surgery Center, Off-Campus Dialysis and
Outreach were above budget through March.
Through the first nine months of Fiscal Year 2011, most
volume indicators were above budget and the prior year,
including inpatient discharges, observation patients, inpatient
and outpatient surgeries, births, and outpatient clinic visits.
Patient days and emergency room visits were below budget, but
above the prior year. Average length of stay was 5.99 days,
which was below the budget of 6.10 days and was an improvement
of .21 days over the prior year. The case mix index was 1.89
compared to a budget of 1.90.
Inpatient discharges for Fiscal Year 2011 through March
were 0.6 percent above budget and 3.1 percent above prior year.
General Medicine volumes increased by 386 cases (16.0 percent)
from the prior year. Discharges from several surgical services
18
including General Surgery, Orthopedic Surgery, Transplant
Surgery, and Vascular Surgery increased from Fiscal Year 2010
and Neurology cases increased by 15.0 percent. Neurosurgery
discharges decreased by 254 cases (12.1 percent). Other
services which realized declining inpatient volumes include
Gastroenterology (10.3 percent) and Surgical Oncology (21.5
percent decrease).
Net patient service revenue for the first nine months of
Fiscal Year 2011 was almost exactly equal to budget. Total
operating expenses through March were 2.0 percent below the
$764.3 million budget. Total labor expenses (including salaries
and wages, fringe benefits, and contract labor) were 2.4 percent
above budget, in part due to the use of contract labor to
backfill for employees enrolled in Epic training. Total supply
cost was 3.9 percent below budget, and all other expense
categories, including purchased services, interest,
depreciation, and bad debt, were below budget.
Total paid employees, including contracted employees, were
83 above budget.
FY 2010
Employee FTEs
Salary, Wage and
Benefit Cost per
FTE
Contract Labor FTEs
Total FTEs
FY 2011
2011 Budget
6,020
6,122
6,129
$70,896
$72,881
$72,872
180
263
172
6,200
6,385
6,302
OTHER FINANCIAL ISSUES
The recently enacted Patient Protection and Affordable Care
Act and the Health Care and Education Affordability
Reconciliation Act of 2010 will significantly impact the
healthcare industry over the next decade, probably more than any
legislation since the repeal of cost based reimbursement in the
early 1980’s. The Medical Center, like all healthcare
organizations across America, is studying the impact this
legislation will have on our business and strategies over the
next decade. One aspect of the legislation is an emphasis on
innovative delivery systems such as the Accountable Care
19
Organization. On March 31, 2011, the Centers for Medicare and
Medicaid Services issued proposed new payment regulations
allowing physicians, hospitals, and other health care
professionals to form special networks to coordinate patient
care and share in any savings they generate for the government
by keeping Medicare patients healthy. The comment period on the
proposed regulations ends on June 6, after which the Centers for
Medicare and Medicaid Services will issue a final regulation.
It is likely that over the next two years the Medical Center
will have an opportunity to join an Accountable Care
Organization as a provider or possibly as an owner.
Mary Washington Hospital and the Medical Center recently
signed a definitive agreement to form a joint venture whereby
two University of Virginia cardiac surgeons will practice full
time at Mary Washington Hospital and the University of Virginia
will manage the cardiac surgery service line at the hospital.
This joint venture will enhance the quality of care for cardiac
surgery at Mary Washington Hospital and it will provide a
financial return for the Medical Center and expand our
relationship with Mary Washington Hospital. A cardiac surgeon
was jointly recruited by the University of Virginia and Mary
Washington Hospital; he performed 27 surgeries in March. We
expect to sign a second cardiac surgeon in the next few months.
WRITE-OFF OF BAD DEBTS AND INDIGENT CARE
Indigent care charges totaling $180.7 million for the
period July 1, 2010 through March 31, 2011, have been written
off. Recoveries during this period totaled $45.4 million.
Bad debt charges totaling $34.0 million have been written
off in the first nine months of Fiscal Year 2011. During this
same period, $13.4 million was recovered through suits,
collection agencies, and Virginia refund set-off.
20
OPERATIONS REPORT
Clinical Operations
OR and Procedural Services
Facility work continued in support of the installation of
two new Intraoperative MRI operating room suites.
The Medical
Center expects occupancy of the suites by August 2011, and plans
are under way to begin education and training on this new
technology.
Transanal Endoscopic Microsurgery was initiated as a new
procedure under the leadership of Dr. Tracey Hedrick, general
surgeon at the Medical Center. As an alternative to more
radical abdominal surgery, Transanal Endoscopic Microsurgery
offers a minimally invasive solution for the excision of certain
rectal polyps and early stage rectal tumors. The patient
benefits of this new procedure compared to radical abdominal
surgery are significant: no major surgery, no large incision, no
colostomy, less pain, faster recovery, and a shorter hospital
stay. Surgical volume is predicted to be 20 cases per year for
the next 3 years, of which 50% will be new volume.
Service Centers/Programs
The grand opening of the Emily Couric Clinical Cancer
Center was held on Saturday, February 26. A ceremony in the
morning, attended by the Couric family, was followed by a
Community Open House in the afternoon and a physicians’
reception in the evening. Over 1,000 people participated in the
events. On March 19, an event was held in the building for the
benefit of “Flourish”, the positive image boutique. The Cancer
Center officially opened its doors to the first patients on
April 4, 2011.
The Transplant Center, under the direction of Ken Brayman,
MD, met all of the requirements to formally launch the Kidney
Paired Exchange Program. Focused efforts have been initiated to
engage patients in the consent process, and it is anticipated
that in the next three months there will be enough patients
enrolled to initiate kidney match runs, with the first exchange
occurring in late summer 2011.
21
Clinical Ancillary Services
Medical Laboratories
The Cancer Center Laboratory moved to its new expanded
location on the first floor of the Emily Couric Clinical Cancer
Center. The laboratory is an extension of the Medical Center
Medical Laboratories and offers venipuncture services and
limited on-site clinical laboratory services, as well as fine
needle aspiration procurement and on-site assessment. All other
requested laboratory services are referred to the appropriate
Medical Laboratory.
The Medical Laboratories initiated planning of a new
cytotherapy laboratory to be located on the 8th floor of
University Hospital.
This laboratory will process and preserve
stem cell products from patients undergoing stem cell
transplantation.
It is anticipated that the lab will be
completed in late fall 2011. Efforts are underway to prepare
for accreditation status from the Foundation for the
Accreditation of Cellular Therapy for the laboratory and
cytotherapy services.
Radiology Services
Nuclear Medicine outpatient services relocated to the Emily
Couric Clinical Cancer Center on April 4, 2011. Renovation of
the vacated space in University Hospital East has been initiated
as part of the Radiology space master plan.
A Certificate of Public Need was issued for the
installation of a computed tomography scanner in the Emily
Couric Clinical Cancer Center. Installation is anticipated to
be completed by July 2011. This scanner will allow the Medical
Center to produce images with significantly reduced radiation
doses to patients.
Therapy Services
The Medical Center purchased the Keswick Sleep Institute
located in Charlottesville in April 2011. This will be a
satellite lab and adds four beds to the Medical Center’s current
Sleep Lab capacity of eight beds. The satellite lab will
operate five nights per week with plans to expand to seven
nights per week when warranted by demand for services.
22
Culpeper Regional Hospital
Culpeper Regional Hospital treated its first radiation
oncology patient on March 15, 2011. The official name of the
department is “Culpeper Regional Hospital Radiation Oncology
Service in Partnership with the University of Virginia Health
System” to highlight the Medical Center physicians and staff
delivering state-of-the-art radiation therapy at Culpeper. With
the opening of this new service line, Culpeper Regional Hospital
also added its second Graduate Medical Education rotation:
Radiation Oncology.
On March 1, 2011, the “University of Virginia Surgical
Services – Culpeper” clinic opened in Culpeper. The clinic is
located at Culpeper Regional Hospital with general surgical
services provided by two University of Virginia physicians, a
physician’s assistant and another physician currently under
contract with Culpeper Medical Associates.
EpicCare - The Electronic Medical Record
On March 5, 2011, the Medical Center went live with
EpicCare Inpatient, Radiant (radiology), Stork (labor and
delivery), ASAP (emergency department), Willow (pharmacy), and
Beacon (cancer). All required interfaces were tested and
functioning as required. Active patient orders, including
medications, were entered into the Epic system by teams of
pharmacists, nurses, and residents in the two days prior to golive. Over 650 nursing and ancillary Super Users were
identified and trained to provide go-live support. The go-live
was also supported by 133 Epic employees, as well as an
Application Manager and Application Coordinator for the six
inpatient applications.
Approximately 530 clinical faculty
received inpatient training, along with 978 residents and other
providers. Approximately 2,534 nursing and ancillary staff
attended training.
In general, the go-live went very well. Inpatient Nursing
and Ancillary staff members were well prepared and navigated
within the Epic system easily. Residents were also facile in
the use of the system. Several issues were experienced and
problems identified within the first few days of go-live. These
were primarily in system processes for accessing orders in
therapies and procedural areas, as well as issues with the
pharmacy database. Areas of concern were addressed immediately,
and long-term remediation is underway, including some system
rebuilds, process management for workflow consistency, and reeducation of faculty and staff regarding system tools. A
23
redesign of the end-user support model was also undertaken.
Ongoing assessments of safety, quality, and financial
performance have continued since go-live so that recognition of
potential negative impacts can be assessed and mitigated
quickly.
Focused efforts were also undertaken to enhance support for
users of EpicCare Ambulatory. These efforts included enhanced
educational support for faculty, residents, and staff; reidentification of Ambulatory Super Users; and Epic builders and
trainers rounding with physicians to better understand workflow
enhancements.
Human Resources
Uteam Sessions
The Uteam town hall sessions held in February 2011 were
well attended and a great success. A total of 611 Medical
Center employees attended these forums in McKim Hall and at
several offsite locations. Feedback regarding the content
presented by Ed Howell and Bobby Cofield was once again very
positive (90%). Overall 86% of the employees who attended said
they plan to attend future Uteam meetings.
Uteam Leadership Education Forum
The second Uteam Leadership Education Forum for Medical
Center Managers was held on April 26, 2011. The agenda focused
on accountability with nationally recognized author Linda
Galindo headlining the session.
These events will continue to
be held on a quarterly basis in 2011 and 2012.
Compensation
Several initiatives related to compensation are ongoing.
Planning for compensation redesign continued. Recommendations
were shared and feedback gathered at a Compensation Committee
meeting on March 10, 2011. The Medical Center announced the
results of an internal wage and hour review that resulted in
over $2.8 million of overtime being paid out to over 1,800
employees. A follow-up review with 363 former employees will be
completed by this spring. This review brought the Medical
Center into compliance with the Fair Labor Standards Act (FLSA).
Medical Center Payroll continues to work in conjunction with
University of Virginia Finance to recover employer FICA taxes
for Graduate Medical Education trainees employed during the
years 1995-2001. The estimate of the refund to the Medical
Center is approximately $11 million.
24
Quality and Performance Improvement
Accreditations and Survey
The Medical Center submitted the annual Periodic
Performance Review of accredited services to The Joint
Commission. The review is a self assessment designed to
identify gaps in compliance with standards, implement corrective
actions, and assure continuous survey readiness. The submission
of the Medical Center’s review was followed by a conference call
with a Joint Commission Standards Specialist. This is the first
year that the Medical Center has worked with a Joint Commission
Standards Specialist to discuss our evaluation and corrective
actions, including evaluation of the effectiveness of the plan.
The Standards Specialist accepted our plans for correction,
monitoring, and evaluation.
An inter-cycle disease specific accreditation review of
Ventricular Assisted Devices was conducted with the Joint
Commission. Data on the performance of the Ventricular Assist
Device program was submitted in advance of a phone conversation
with a Joint Commission representative. The review was
favorable, with the surveyor accepting our current measures and
offering support by suggesting additional and revised measures
to improve the overall performance of the program.
The Quality and Performance Improvement Department
coordinated the performance of sixteen tracers throughout the
Medical Center in preparation for the upcoming Joint Commission
Survey. The findings from these tracers continue to be shared
with Medical Center leadership, managers, and staff to ensure
continued compliance and readiness. A small reference book is
being prepared and will be distributed to all Medical Center
faculty, residents, and staff to use in preparation for the
survey.
Quality Initiatives and Performance
Work continues on the seventeen quality improvement
initiatives identified in the 2011 quality plan. These
organization-wide projects are designed to improve patient
outcomes and disseminate safety practices throughout the
clinical areas. Management of patients with sepsis (systemic
infection) is one of the quality projects. The standardized
approach to identification and early treatment of symptoms has
improved patient outcomes during the last quarter. The early
data on the other projects also demonstrated improvement. The
teams worked to put changes in place which will sustain the
outcomes over time. The mortality index for the quarter ending
25
December 31, 2010, was 0.98, an improvement from 1.04 reported
for the previous quarter.
Patient Safety
On February 22, 2011, the first Patient Safety Grand Rounds
was held. A case from the National Quality Forum emphasizing
the coordination of care and involvement of the patient’s family
was the basis for discussion. The participants were asked to
comment from their perspective at specific points in the case.
It was clearly evident how important accurate and timely
communication among team members is to the outcome. The case
was augmented by interviews with family and national leaders in
patient safety. The second Patient Safety Grand Rounds was held
on April 28. These grand rounds will continue every other month
and are open to staff, faculty, and students throughout the
Health System.
The Patient Safety Department conducted ten root cause
analyses in response to issues reported by faculty and staff.
Each root cause analysis involves clinical staff and other
personnel working in the area and is reported to the Patient
Safety Committee. The findings from these analyses are used to
improve systems in the Medical Center.
Technology Services
Clinical Engineering
Clinical Engineering completed the procurement,
coordination, and implementation of all clinical equipment in
the Emily Couric Clinical Cancer Center and the remodeled
radiology recovery and ultrasound units. Planning and budget
formulation has begun for the equipment necessary to outfit the
new stem cell laboratory and bone marrow inpatient unit, the
Barry and Bill Battle Building, the expanded Ophthalmology
Clinic, and the Hospital Bed Expansion. Coordination efforts
were also initiated for procurement of medical equipment
required for the Transitional Care Hospital expansion from 10 to
40 beds.
Environment of Care
Major Construction Projects
The grand opening of the Emily Couric Clinical Cancer
Center was held on February 26, and the first patients were seen
on April 4.
26
Completion of construction of the Hospital Bed Expansion is
scheduled for the last quarter of 2011.
A ground breaking ceremony for the Battle Building at UVA
Children's Hospital is scheduled for June 9, 2011. Site work
commenced on April 16, 2011.
Nutrition Services
March was National Nutrition Month. Events promoting
health and wellness were held during the month at various
locations throughout the Medical Center.
Patient & Guest Services
In April, Sally Lebeau of Patient and Guest Services
conducted a webinar for the American Hospital Association
entitled “Helping Limited English Proficient Patients Navigate
the Health Care System”
National Volunteer Week was held April 10-16, 2011. This
year the Medical Center celebrated the contributions of 981
Auxiliary Volunteers who gave 74,747 hours of service to support
patients, families and staff.
Arts Committee
The exhibit, “Aerial Views”, a collection of the artwork of
Etta Harmon Levin was on display in the University Hospital
Lobby from March 11 to May 6, 2011.
27
University of Virginia Medical Center
Income Statement
(Dollars in Millions)
Most Recent Three Fiscal Years
Description
Net patient revenue
Other revenue
Total operating revenue
Operating expenses
Depreciation
Interest expense
Mar-09
Mar-10
Mar-11
Budget/Target
Mar-11
$719.0
$738.4
$772.6
$772.7
20.2
20.6
21.9
21.5
$739.2
$759.0
$794.5
$794.2
666.8
674.9
698.3
711.2
39.1
40.4
45.2
47.2
5.9
5.1
5.8
5.9
Total operating expenses
$711.8
$720.4
$749.3
$764.3
Operating income (loss)
$27.4
$38.6
$45.2
$29.9
Non-operating income (loss)
($88.0)
$57.2
$58.7
$6.9
Net income (loss)
($60.6)
$95.8
$103.9
$36.8
Principal payment
$9.5
$10.9
$13.0
28
$10.5
University of Virginia Medical Center
Balance Sheet
(Dollars in Millions)
Most Recent Three Fiscal Years
Description
Mar-09
Mar-10
Mar-11
Assets
Operating cash and investments
$33.6
$97.2
$126.4
Patient accounts receivables
56.4
45.6
101.2
Property, plant and equipment
457.6
540.0
651.0
Depreciation reserve and other investments
344.7
322.5
210.3
Endowment Funds
232.0
328.0
378.2
Other assets
146.6
164.5
182.9
$1,270.9
$1,497.8
$1,650.0
Current portion long-term debt
$6.7
$9.6
$7.4
Accounts payable & other liab
94.6
94.2
95.7
Long-term debt
229.4
341.1
330.2
Accrued leave and other LT liab
118.5
117.5
160.2
$449.2
$562.4
$593.5
$821.7
$935.4
$1,056.5
$1,270.9
$1,497.8
$1,650.0
Total Assets
Liabilities
Total Liabilities
Fund Balance
Total Liabilities & Fund Balance
29
University of Virginia Medical Center
Financial Ratios
Most Recent Three Fiscal Years
Description
Operating margin (%)
Mar-09
Mar-10
Mar-11
Budget/Target
Mar-11
3.7%
5.1%
5.7%
3.8%
Total margin (%)
-9.3%
11.7%
12.2%
4.6%
Current ratio (x)
0.9
1.4
2.2
2.4
171.0
187.0
175.4
190.0
Gross accounts receivable (days)
49.1
44.5
45.3
45.0
Annual debt service coverage (x)
(1.0)
8.8
8.3
5.2
Debt-to-capitalization (%)
28.0%
36.0%
32.7%
31.8%
6.3%
6.3%
6.8%
6.9%
Days cash on hand (days)
Capital expense (%)
30
University of Virginia Medical Center
Operating Statistics
Most Recent Three Fiscal Years
Description
Acute Discharges
Patient days
SS/PP Patients
Average length of stay
Clinic visits
ER visits
Medicare case mix index
Occupancy %
FTE's (including contract labor)
Mar-09
Mar-10
Mar-11
Budget/Target
Mar-11
21,458
20,155
20,771
20,655
130,852
124,805
125,748
126,029
5,760
6,548
6,749
6,438
6.11
6.20
5.99
6.10
484,638
504,746
516,957
504,047
45,497
43,649
43,757
45,308
1.96
76.1%
6,377
31
2.06
76.0%
6,200
2.01
72.1%
6,385
2.04
72.6%
6,302
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 - March FY 2011
OPERATING STATISTICAL MEASURES - March FY 2011
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
17,494
2,151
1,095
31
20,771
17,215
2,515
822
103
20,655
1.6%
(14.5%)
33.2%
(69.9%)
0.6%
17,056
2,099
1,000
20,155
Short Stay/Post Procedure
6,749
6,438
4.8%
6,548
Total Discharges
Adjusted Discharges
27,520
37,095
27,093
36,500
1.6%
1.6%
26,703
35,976
CASE MIX INDEX:
All Acute Inpatients
Medicare Inpatients
1.89
2.01
1.90
2.04
(0.5%)
(1.6%)
1.89
2.06
Actual
Budget
% Variance
Prior Year
ACUTE INPATIENTS:
Inpatient Days
Average Length of Stay
Average Daily Census
Births
125,748
5.99
459
1,256
126,029
6.10
460
1,235
(0.2%)
1.8%
(0.2%)
1.7%
124,805
6.20
455
1,204
OUTPATIENTS:
Clinic Visits
Average Daily Visits
Emergency Room Visits
516,957
2,951
43,757
504,047
2,891
45,308
2.6%
2.1%
(3.4%)
504,746
2,914
43,649
14,310
6,321
20,631
14,114
6,214
20,328
1.4%
1.7%
1.5%
14,021
6,048
20,069
SURGICAL CASES
Main Operating Room (IP and OP)
UVA Outpatient Surgery Center
Total
OPERATING FINANCIAL MEASURES - March FY 2011
32
REVENUES and EXPENSES - Year to Date
($s in thousands)
NET REVENUES:
Net Patient Service Revenue
Other Operating Revenue
Total
Actual
Budget
772,558
21,957
$ 794,515
EXPENSES:
Salaries, Wages & Contract Labor
Supplies
Contracts & Purchased Services
Bad Debts
Depreciation
Interest Expense
Total
Operating Income
Operating Margin %
Non-Operating Revenue
353,483
164,428
158,167
22,239
45,185
5,820
$ 749,322
$ 45,193
5.7%
$ 58,673
$
Net Income
$ 103,866
OTHER INSTITUTIONAL MEASURES - Year to Date
% Variance
Prior Year
772,744
21,472
794,216
(0.0%)
2.3%
0.0% $
738,381
20,590
758,971
(2.4%)
3.9%
4.1%
25.7%
4.2%
1.8%
2.0% $
51.2% $
$
345,160
171,158
164,983
29,917
47,174
5,927
764,319
29,897
3.8%
6,943
745.1%
$
331,290
166,766
149,809
26,989
40,400
5,121
720,374
38,597
5.1%
57,176
$
36,840
181.9%
$
95,773
$
$
$
($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
$
$
$
255,236
93,656
133,145
144,243
36,694
109,584
772,558
Budget
$ 256,543
102,142
127,579
136,887
42,635
106,959
$ 772,744
36.28%
45.3
10,352 $
6,385
24.91
35.66%
45.0
10,590
6,302
24.90
% Variance
Prior Year
(0.5%)
(8.3%)
4.4%
5.4%
(13.9%)
2.5%
(0.0%)
1.7%
(0.7%)
2.2% $
(1.3%)
(0.0%)
245,135
97,600
121,906
130,800
40,739
102,202
738,381
37.81%
44.5
10,222
6,200
25.04
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 - March 31, 2011
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
33
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
March
2010-11
INDIGENT CARE (IC)
Net Charge Write-Off
Annual Activity
2009-10
2008-09
142,675
172,917
152,552
Percentage of Net Write-Offs to Revenue
6.70%
6.60%
6.49%
Total Reimbursable Indigent Care Cost
53,931
53,095
52,910
State and Federal Funding
51,731
52,053
52,751
96%
98%
100%
Total Indigent Care Cost Funding As a Percent
of Total Indigent Care Cost
Unfunded Indigent Cost
2,200.40
1,042.00
159.00
Annual Activity
March
2010-11
BAD DEBT
2009-10
2008-09
Net Charge Write-Offs
22,239
30,948
30,811
Percentage of Net Write-Offs to Revenue
1.04%
1.18%
1.31%
Note:
Provisions for bad debt write-offs and indigent care write-offs are recorded for financial statement purposes based
on the overall collectability of the patient accounts receivable. These provisions differ from the actual write-offs of
bad debt and indigent care which occur at the time an individual account is written off.
34
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.C. Capital Projects
ACTION REQUIRED:
None
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:
35
The University of Virginia Medical Center
Capital Projects Report
June 2011
Scope
Budget
Funding Source
$74 M
General Fund
(including
Appropriation ( @
added shelled
$25 M) , Bonds
floor)
and Outside
BOV
Projected
Approval
Completion
Date
Date
Oct 2004
2011
1. Construction Complete
Emily Couric Clinical Cancer Center
:
Building was occupied and clinical
operations began on April 4, 2011.
Fundraising
2. Under Construction
Barry and Bill Battle Building:
$117 M
Bonds and
July 2006
(B&G
Committee)
June 2007
N/A
2014
Feb 2008
2011
Outside
On April 18, 2010, the General
Fundraising
Contractor took possession of the
site. Construction barricades are in
place and site demolition is
underway. The Groundbreaking
Ceremony is scheduled for June 9,
2011.
University Hospital:
$7.6M
Bonds
Add elevators. Elevator lift equipment
is in place. Hoistway rails are
nearing completion.
36
University Hospital:
Renovate Radiology Department.
$21.2 M
Bonds
(52,000 GSF)
Phased construction under way
37
Feb 2008
2012
Scope
University Hospital Bed Expansion:
Funding Source
Budget
$80.2 M
Bonds and Health
System Operating
Project to increase inpatient bed
Revenue
capacity in University Hospital by
BOV
Projected
Approval
Completion
Date
Date
Sept 2005
June 2007
2011
adding 72 private, ICU-level rooms.
Framing and drywall operations are in
progress on the lower floors.
Finishes are being installed on the
upper floors.
*University Hospital:
Add two Operating Rooms and
$14.3 M
Bonds
Feb 2008
2011
Bonds
Feb 2008
2011
(2,330 GSF)
Magnetic Resonance Imaging Room
(with equipment). Interior fit-out is
complete. Magnet was delivered on
April 30, 2011. Equipment
installation is continuing.
*University Hospital:
Renovate Heart Center invasive
$15.6 M
(21,600 GSF)
procedure areas. Design complete for
several phases. Construction is
complete for the first phase with
occupancy in August 2010. Phase 2
was completed at the end of October
2010. To facilitate more efficient
patient flow, Phase 3 was broken into
3a and 3b. Phase 3a is scheduled
38
for completion on May 20, 2011 and
Phase 3b is delayed until December
2011 due to an equipment change.
* Project modifies original HEP project
39
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.D. Annual Compliance Report
ACTION REQUIRED:
None
BACKGROUND: The Corporate Compliance and Privacy Office
provides to the Medical Center Operating Board an annual report
on compliance and privacy issues affecting the Medical Center.
The Office prepares an annual project schedule to coincide with
potential risks of noncompliance with Federal or State law or
other regulations as identified by the Office, members of
Management, or in industry publications. The Office regularly
reports to the Corporate Compliance Steering Committee and to
the Audit and Compliance Subcommittee of the Board of Visitors
and seeks approval of its annual project plan, provides updates
on status of completed projects, and informs those groups of any
significant compliance or privacy risks.
DISCUSSION: The annual Corporate Compliance and Privacy project
schedule is developed after careful review of the annual Office
of Inspector General (OIG) Work Plan, which identifies potential
risk areas that may be applicable to the Medical Center. Input
is also sought from members of Medical Center Management for
potential risk areas identified in the OIG Work Plan. In
addition to auditing and monitoring, the Office can provide
guidance on regulatory issues, offer education on compliance and
privacy topics, and conduct documentation, hospital billing, and
privacy audits to assess the Medical Center’s compliance with
regulations, rules, laws, and policies and procedures.
The
project schedule is based upon the risk analysis of the
institution, regulatory publications or fraud alerts, Management
requests and feedback, and required follow-up to government
settlements or audit review action plans.
Scheduled projects typically focus on reviewing the
accuracy of the Medical Center’s claim submissions by assessing
whether documentation in the medical record supports the
services that were billed, whether medical necessity of the
services provided is justified, and that all services provided
were billed. The Office also completes special projects and
provides consultations and education. Scheduled projects
account for approximately fifty-four percent of the Office’s
40
scheduled work hours. Previously completed and ongoing projects
include reviews of inpatient Medicare severity diagnosis related
groups; outpatient department coding, billing, and
documentation; end stage renal disease dialysis; governmental
payers related to the Recovery Audit Contractor Program; and
privacy monitoring and auditing. Privacy auditing and
monitoring includes monthly walk-through site audits of
inpatient units, outpatient clinics, ancillary departments, and
procedure areas to assess the effectiveness of physical,
administrative, and technical safeguards for protected health
information. In conjunction with the site audits, electronic
medical record accesses are reviewed for five randomly selected
patients from each site. The purpose of this review is to
determine whether all accesses to patient information were for
work-related reasons or for other legally recognized purposes.
Additionally, the Office reviews electronic medical record
accesses for “targeted” patients. Such a review will occur, for
example, when a patient requests a review of accesses to their
record or when the Office determines that the record of a highprofile patient could invite unauthorized access. The Office
investigates all reported protected health information privacy
violations, completes a risk assessment to determine if a breach
occurred, and reports all breaches of protected health
information to the Department of Health and Human Services
annually or as required by law.
Special projects account for approximately seventeen
percent of the Office’s scheduled work hours and include billing
compliance and privacy inquiries from governmental or regulatory
agencies such as the Department of Justice, the Office of the
Inspector General, the Centers for Medicare and Medicaid
Services, and the Office of Civil Rights, or from new targeted
compliance reviews or privacy enforcement actions announced
through fraud alerts and other communication sources. Education
accounts for approximately seventeen percent of the Office’s
scheduled work hours. The Office prepares and delivers the
mandatory training programs for all new employees and the annual
retraining programs on corporate compliance and privacy; in
addition, the Office provides on-site departmental presentations
as requested. The Office offers consulting services to provide
guidance to management and staff when requested on topics such
as regulatory issues, clinical research, billing rules,
contractual issues, new ventures, policy and procedure
development, and the implementation of the electronic medical
record. The Office provides compliance and privacy guidance and
41
representation on several committees such as the Grievance
Committee, Ethics Committee, Health Information Management
Subcommittee, Laboratory Compliance Committee, Joint Commission
Steering Committee, and Operations Leadership Forum. Consulting
services account for approximately twelve percent of the
Offices’ scheduled work hours.
Protecting patient’s health information continues to be a
priority in healthcare. There has been, and will continue to
be, enforcement with monetary penalties for covered entities by
the Office of Civil Rights to properly protect personal health
information through the authority provided to the Office of
Civil Rights in the Health Information Technology for Economic
and Clinical Health (HITECH) Act. The two interim rules from
2009, breach notification and the enforcement rule, are fully in
effect until the final rule is issued; as opposed to the
proposed rule for the accounting of disclosures which is subject
to change. The final rule is anticipated later this year.
Connolly, the Recovery Audit Contractor assigned to
Virginia to audit Medicare payments, is expected to begin
activity in August of this year. We are currently in a “black
out” period of inactivity during the transition from our fiscal
intermediary, National Government Services, to the Medicare
Administrative Contractor, Palmetto.
Educating our workforce and developing trusting
relationships to enhance the culture of compliance continue to
be critical elements of the Medical Center’s compliance program.
42
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
June 9, 2011
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.E. Health System Development
ACTION REQUIRED:
None
BACKGROUND: Health System Development provides reports of
recent activity to the Medical Center Operating Board from time
to time.
DISCUSSION:
SIGNIFICANT GIFTS
December 1, 2010 – March 31, 2011
An anonymous donor documented a bequest valued at $3.2
million to benefit the Department of Orthopedics.
An anonymous donor made a $1 million commitment to be
divided between the new Battle Building at the UVA Children’s
Hospital and pediatric palliative care.
A School of Medicine alumnus and his wife made a $500,000
planned gift to name the Hematology-Oncology Clinic area in the
new Battle Building.
A realized bequest of $400,000 was received for
unrestricted use in the School of Medicine.
A grateful patient and her husband made a $300,000 gift to
the Hematology-Oncology Fellowship Program in honor of Dr.
Christiana Brenin.
After a review of 19 projects representing various
departments across the School of Medicine, Engineering and
Applied Sciences, Arts and Sciences, and Biomedical Engineering,
the Ivy Foundation committed $200,000 in support of four Ivy
Innovation Fund projects. Johnson & Johnson has provided an
additional $65,000 to fund two additional projects.
A School of Medicine alumnus made a gift of $105,000 in
support of a named endowed scholarship.
43
The spouse of a grateful patient made a $100,000 gift to be
divided between the Human Immune Therapy Program and the
Department of Otolaryngology.
Other gifts and pledges received include:





A $72,000 gift from the Claude Moore Charitable Foundation
in support of the Emergency Medicine Center for Education,
Research and Technology;
A $20,000 gift from an anonymous donor to Dr. David Jones’
lung cancer research program, with an additional $50,000
gift from the donor’s family through the Lawson W. and
Jeanne Hamilton Foundation for the same purpose;
A $52,000 commitment from Kohl’s Department Stores in
support of the Children’s Hospital Fitness Program;
A $50,000 gift from a several School of Nursing volunteer
leaders for the McLeod Hall Renovation challenge; and
A $50,000 gift in support of the Beirne Carter Foundation’s
2010 Carter Foundation Award.
OTHER DEVELOPMENT INITIATIVES
On Thanksgiving Day, more than 1,300 people participated in
the 27th Annual Boar’s Head Turkey Trot to benefit the UVA
Children’s Hospital.
In December 2010, an effort was launched to raise $100,000
for the Thomas M. Daniel Lectureship in Thoracic Surgery to
honor a recently retired faculty member.
More than 430 people attended the Children's Hospital Gala
“The Main Event” on February 6th, which featured a Cubaninspired evening of dinner, dancing, casino games, and a silent
auction at Keswick Hall. The event raised more than $134,000 to
support the Battle Building at UVA Children's Hospital. Main
Event volunteer committee members were thanked and honored with
a special luncheon after the event hosted by Mr. Howell.
On February 26, approximately 400 guests attended the
dedication of the Emily Couric Clinical Cancer Center. Speakers
at the event included President Teresa Sullivan, Mr. Howell,
Dean DeKosky, and Cancer Center Director Michael Weber. Emily
Couric’s sister, Katie Couric, and Dr. George Beller also made
remarks. Following the event, a “flash” video of highlights
from the dedication was sent to more than 21,000 Health System
donors, volunteers, and friends. The video may also be viewed
44
from the UVA Health Foundation website at:
www.uvahealthfoundation.org.
The Health System Development Communications Team created a
customized brochure, web page, and broadcast email to promote
the “buy a brick” giving campaign for the new Emily Couric
Clinical Cancer Center. For $250, donors may have a brick
inscribed with a name or brief message of their choosing. The
bricks will be placed in a prominent spot on the grounds of the
new Couric Center. More information is available at:
www.campaign.virginia.edu/cancercenterbrick.
On February 28, UVA students, local families, and
Children’s Hospital caregivers participated in the UVA Dance
Marathon, consisting of sixteen hours of dancing, familyfriendly games and activities, special presentations, and fundraising. This year's event involved 370 dance fundraisers and
brought in more than $50,000.
On March 2, President Teresa Sullivan hosted a lunch for
key Children’s Hospital volunteers and prospects. Mr. Howell
also attended the event, whose purpose was to continue to
cultivate interest in the Battle Building and Children’s
Hospital priorities.
On March 18, the School of Nursing Advisory board was
joined at its meeting by President Teresa Sullivan, who made a
brief presentation and answered questions about her vision for
the University and the School of Nursing.
The UVA Health Foundation trustees elected Teresa DiMarco
and Nancy Artis to serve three-year terms on the board beginning
in the fall of 2011. Current trustee Keith Woodard was reelected for a second three-year term as of the fall of 2011.
On March 23, the School of Nursing Alumni Association cosponsored a special lecture with the School of Medicine’s
Medical Center Hour. Nursing alumna Ann Anderson Kiessling
spoke about her scientific work in stem cell research and
fertility, especially for those affected with HIV disease, and
the impact of federal funding issues surrounding this work that
led her to become the director of an independent research
foundation. Kiessling’s lecture was also an opportunity for the
School of Nursing Alumni Association to present her with the
2010 Alumni Achievement Award. Kiessling is the first recipient
of the new award.
45
Development staff made 141 face-to-face visits with donors
and prospects in February, bringing the fiscal year total to
1,124.
CAMPAIGN PROGRESS THROUGH FEBRUARY 28, 2011
Through the end of February, the Health System campaign
total is $537,648,015. This represents 108% of the campaign
goal achieved with 90% of the campaign period elapsed. The
following table shows the Fiscal Year 2011 totals as of February
28, for new commitments including gifts and pledges, as compared
with this same time in FY 10.
FY 11 to Date
(7/1/10 - 2/28/11)
FY 11
New gifts
New pledges
Total new commitments
(excludes pledge payments on
previously booked pledges)
46
Compare FY 10
(through 2/28/10)
$27,067,834
$27,403,300
$1,619,648
$6,318,319
$28,687,482
$33,721,619