UNIVERSITY OF VIRGINIA
BOARD OF VISITORS
MEETING OF THE
MEDICAL CENTER
OPERATING BOARD
May 7, 2007
UNIVERSITY OF VIRGINIA
MEDICAL CENTER OPERATING BOARD
Monday, May 7, 2007
4:30 – 7:00 p.m.
Medical Center Board Room
Committee Members:
E. Darracott Vaughan, Jr., M.D., Chair
Thomas F. Farrell, II
Randl L. Shure
W. Heywood Fralin
Edward J. Stemmler, M.D.
Sam D. Graham, Jr., M.D.
Jane H. Woods
Randy J. Koporc
Vincent J. Mastracco, Jr.
Lewis F. Payne
Ex Officio Members:
Arthur Garson, Jr., M.D.
John B. Hanks, M.D.
R. Edward Howell
Leonard W. Sandridge
AGENDA
PAGE
I.
ACTION ITEMS
A.
Fiscal Year 2008 Medical Center Operating and
Capital Budgets (Mr. Howell to introduce Mr.
Larry Fitzgerald; Mr. Fitzgerald to report)
B.
II.
7
REPORTS BY THE VICE PRESIDENT AND CHIEF EXECUTIVE
OFFICER OF THE MEDICAL CENTER (Mr. Howell)
A.
B.
C.
D.
E.
III.
Schematic Design for the University Hospital
Expansion (Mr. Howell to introduce Mr. David J.
Neuman; Mr. Neuman to report)
1
Update on Concept, Site and Design Guidelines for
Lee Street Entry and Connective Elements for the
University of Virginia Medical Center (Mr.
Neuman)
Vice-President’s Remarks
Finance, Write-offs, and Operations (Mr. Howell
to introduce Ms. Margaret M. Van Bree; Mr.
Fitzgerald to report on Finance and Write-offs;
Ms. Van Bree to report on Operations)
Capital Projects
Health System Development
REPORT BY THE PRESIDENT OF THE CLINICAL STAFF OF THE
MEDICAL CENTER (Dr. Hanks)
11
16
17
30
33
36
IV. 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 2.2-3711(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, market and resource
considerations and efforts regarding the Medical
Center, including capacity planning and a potential
strategic joint venture or other competitive effort
regarding long term patient care, and linkage to the
long-range strategic goals of the Medical Center and
Health System Decade Plan and the mission of patient
care, education, and research, all where public
discussion would adversely affect the Medical Center’s
bargaining position;
-
Confidential information and data related to the
adequacy and quality of professional services, patient
safety in clinical care, and patient grievances 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
reimbursement regulations, licensure and accreditation
standards, which will also 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), and (23) 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:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.A. Fiscal Year 2008 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 approval
from the Medical Center Operating Board.
DISCUSSION: The Medical Center’s 2007-2008 fiscal plan has
been developed to include aspects of the Decade Plan developed
by the Medical Center and School of Medicine while considering
the challenge of providing patient care, teaching, and
research services in an increasingly changing health care
industry. The cost associated with providing quality patient
care will continue to have upward pressure because of
increases in medical supply, pharmaceutical, and medical
device expenses as well as a shortage of healthcare workers.
In addition, in Fiscal Year 2008, 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 continues
to be highly participatory and clinically focused. Patient
care service 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 admissions, length
of stay, standard for the number of employees, and inflation.
It continues with a budget forum which includes most Medical
Center managers and ends with each operating unit providing a
cumulative operating and capital budget that contains service
demand forecasts, required full-time equivalent personnel, and
non-labor expenses.
The Medical Center continues to modernize and integrate
information technology services through the Integrated Health
Information Management System (IHIMS) project. The capital
budget for Information Services is $11.1 million.
1
Previous increases in capital investment for the hospital
expansion and all other capital activity will result in
additional depreciation expense of $8.1 million for Fiscal
Year 2008. The budget maintains operating room capacity at 24
rooms which will grow to 26 rooms by the end of Fiscal Year
2008. The Medical Center’s 2007-2008 fiscal plan accounts for
these additional expenses while preserving its goal of
providing high quality and cost effective health care,
education, and research services to patients and their
families, students, employers, state and federal governments,
referring physicians, referring agencies, and affiliated
networks.
BUDGET AND OPERATING ASSUMPTIONS
Market conditions: For Fiscal Year 2008 admissions are budgeted
at the same number as the 2007 budgeted level, but are
projected to grow 2.1 percent from Fiscal Year 2007 projected
levels. The growth will result from enhanced operating room
capacity and additional bed capacity consisting of seven ICU
beds and nine acute care beds. Further, a full year impact
from the recently opened short stay twenty bed unit will be
realized. Outpatient service demand is projected to grow 4.0
percent from Fiscal Year 2007 projected levels. The following
table includes historical and projected patient volumes:
Discharges
Adjusted Discharges
Average Length of Stay
Patient Days
Clinic & ER Visits
Budget
2006-2007
30,405
52,122
5.8
176,349
678,673
Projected
2006-2007
29,777
50,051
5.7
171,239
683,184
Budget
2007-2008
30,405
51,412
5.8
176,349
710,511
Revenues: The Medical Center’s Fiscal Year 2008 budgeted
payer mix remains consistent with that of 2007. One of the
Medical Center’s largest challenges is the unwillingness of
payers, especially government payers, to increase their
payments commensurate with the increases in medical delivery
costs. Growth in revenues may also result from the impact of
the new operating rooms, added beds, and emerging new
diagnostic and testing procedures.
2
Rate changes: The Medical Center proposes a rate increase of
8 percent to 9.9 percent, which is commensurate with rate
increases we believe will generally be implemented in the
hospital industry.
Expenses: Expenses from operations are projected to increase
by $72.1 million. Expenses per case mix index (CMI) weighted
adjusted discharge and acuity are projected to increase 5.1
percent from $9,334 to $9,806. We anticipate that expense per
CMI 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.
Staffing: The Medical Center’s Fiscal Year 2008 budget
includes 6,235 full time equivalent employees, an increase of
99 over staffing at the current Fiscal Year projections of
6,136. On an all payor CMI weighted adjusted discharges basis,
full time equivalent employees will drop from 24.4 in Fiscal
Year 2007 to 24.0 in Fiscal Year 2008, reflecting fewer
employees required to treat the volume growth.
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:
•
•
•
•
•
•
Salary adjustments for employees and residents, employee
market adjustments, and internal alignment adjustments.
The impact of increasing surgical case volume.
Medical supply and drug cost management.
Expansion of bed capacity.
Contract discussions with Anthem.
Increased investment in Graduate Medical Education.
The major risk factors that impact the ability to
accomplish the fiscal plan include:
•
Nationwide shortage in healthcare workers that could
negatively impact our ability to staff expanded capacity
3
•
•
•
•
•
especially when we consider that our biggest need is for
operating room personnel, which are some of the more
difficult skills to recruit.
Maintaining an adequate number of physicians in areas
experiencing a national shortage.
New CMS and other regulatory reimbursement changes.
Advancements in medical technology that could alter
expenses and/or revenues very quickly.
Inflation for medical devices and pharmaceutical goods
that could exceed the budget assumptions.
Proposed rule changes by Federal regulators in areas such
as medical records, billing, coding and contractual
agreements.
A summary of historical and projected financial operating
results are provided as follows:
Actual
2005-2006
Total operating revenue $840,980,864
Operating expense
802,876,323
Operating income
38,104,541
Non-operating gain/(loss) 25,818,882
Total margin
$63,923,423
Operating income percent
4.5%
Projected
2006-2007
Budgeted
2007-2008
$901,000,000
857,887,114
43,112,886
47,007,803
$90,120,689
4.8%
$971,564,018
930,001,616
41,562,402
24,689,254
$66,251,656
4.3%
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 from
space requirements, technological advances and aging of
existing equipment. Subject to funds availability, Medical
Center management recommends $73.9 million, which includes
$7.4 million for contingencies, be authorized for capital
requirements.
4
ACTION REQUIRED: Approval by the Medical Center Operating
Board, to be forwarded to the Finance Committee for further
consideration. The Finance Committee will make the final
recommendation to the full Board of Visitors.
RECOMMENDATION REGARDING FISCAL YEAR 2008 MEDICAL CENTER
OPERATING AND CAPITAL BUDGETS
WHEREAS, the Medical Center Operating Board has reviewed
the Fiscal Year 2008 Medical Center operating and capital
budgets;
RESOLVED that the Medical Center Operating Board approves
and recommends to the Finance Committee and to the Board of
Visitors approval of the Fiscal Year 2008 Medical Center
Operating and Capital Budgets.
5
Schedule A
University of Virginia - Medical Center
Projected Fiscal Plan
2007-2008
2005-2006
Actual
Revenues
Total Gross Charges
$
2006-2007
Forecast
1,669,370,724 $
2007-2008
Budget
1,847,109,110 $
2,070,926,090
Less Deductions:
Indigent Care Deduction
Contractual Deduction
Total Deductions
93,576,679
756,293,006
849,869,685
109,404,382
858,750,238
968,154,620
129,088,682
991,643,978
1,120,732,660
Net Patient Revenue
819,501,039
878,954,490
950,193,430
21,479,825
22,045,510
21,370,588
840,980,864
901,000,000
971,564,018
Expenses
Expenses from Operations
Operating Expenses
Depreciation and Amortization
Interest Expense
Bad Debt
719,916,101
45,962,412
4,712,274
32,285,536
771,732,643
46,673,580
5,961,650
33,519,240
829,131,544
54,812,574
9,096,003
36,961,495
Total Expenses from Operations
802,876,323
857,887,114
930,001,616
38,104,541
43,112,886
41,562,402
Miscellaneous Revenue
Total Revenue
Operating Income
Other Gains and Losses
Investment Income
Net gain from Affiliates
Loss on Fixed Assets
Other
Total Other Gains and Losses
Revenues and Gains in Excess of Expenses
27,763,148
1,196,837
(1,892,656)
(1,248,447)
25,818,882
$
Statistics
Admissions or Discharges
Patient Days of Care
Clinic and Emergency Room Visits (Excluding Acquired
Practices)
Average Length of Stay
6
63,923,423
44,579,035
699,002
(479,986)
2,209,752
47,007,803
$
90,120,689
29,283,906
750,000
(800,000)
(4,544,652)
24,689,254
$
66,251,656
29,453
170,140
29,777
171,239
30,405
176,349
662,425
683,184
710,511
5.8
5.7
5.8
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
I.B. Schematic Design for the University
Hospital Bed Expansion Project
$62,178,000 Bonds
$18,000,000 Hospital Operating Revenue
$80,178,000
BACKGROUND: There is a critical shortage of acute critical
care patient beds in the University Hospital. This trend is
expected to continue. With the expansion of clinical programs
there is expected to be an even greater demand for patient
beds in the Hospital. This project, which involves infilling
and expanding the existing outdoor terrace, allows the
opportunity to create 72 acuity adjustable (i.e., intensive
care unit capable), single patient rooms within University
Hospital, while upgrading the infrastructure to handle future
demands placed on the facility by changes in technology and
health care practice. Construction of the Hospital Bed
Expansion will allow for the addition of patient beds without
taking scarce real estate adjacent to the University Hospital.
By expanding within the existing footprint, the need for
redundant support services will be eliminated. Further, the
Bed Expansion will provide the best opportunity to add acute
care beds in an efficient, economic, and timely manner.
The Concept, Site and Design Guidelines were approved on
September 16, 2005. The selection of the SmithGroup of
Washington, D.C. as project architect was approved on December
15, 2005.
DISCUSSION: The design team, in conjunction with the
Architect for the University, as well as the professional
staff from Health System and Facilities Management, has
developed the schematic design, which Mr. Neuman will review
with the Committee.
ACTION REQUIRED: Endorsement by the Medical Center Operating
Board. Approval to occur at a future Buildings and Grounds
Committee meeting.
7
ENDORSEMENT OF SCHEMATIC DESIGN FOR HOSPITAL BED EXPANSION
RESOLVED, the Medical Center Operating Board endorses and
recommends to the Building and Grounds Committee for approval
for further development and approval the schematic design
dated May 7, 2007 and prepared by the SmithGroup of
Washington, D.C., for the Hospital Bed Expansion Project.
8
Hospital Bed Expansion Approved Project Design Guidelines:
Site Planning
•
The Hospital Bed Expansion will be constructed within the existing footprint
of the University Hospital.
Circulation and Parking
•
Circulation will not change as a result of the Hospital Bed Expansion. There
will be a modest impact on parking facilities within the Health System from
this project because of the increased bed count and associated staff and
visitors. It is anticipated that the new North Parking Garage on West Main
Street will absorb this increase.
Architecture
•
The exterior architectural changes to the University Hospital will be limited to
the north facade of the fifth through eighth floors of the east and central
towers. The penthouses on all three towers will be expanded northward.**
•
Materials and detailing of the new north façade will be sympathetic and
proportional to the proposed Clinical Cancer Center project, as well as
contextual with the other major hospital projects. It is anticipated that the
exterior façade will be designed in metal and glass in order to accommodate
these objectives.
•
No changes to the existing landscaping are anticipated as a result of this
project.
Landscape
Review and Compliance
•
The Office of the Architect for the University is responsible for the review
and approval of project compliance with these guidelines.
** Note: The project now encompasses the third through eighth floors of the central tower
only. Only the penthouse of the central tower will be expanded northward.
9
UVA Hospital: Existing View from Lee Street.
UVA Hospital with Expansion and Emily Couric Clinical Cancer Center
10
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.A. Update on Concept, Site and Design
Guidelines for Lee Street Entry and
Connective Elements for the University of
Virginia Medical Center
ACTION REQUIRED: None; endorsement of the project will occur
at a future Medical Center Operating Board meeting and
approval of the concept guidelines will occur at a future
Buildings and Grounds Committee meeting.
BACKGROUND:
This project includes the renovation and
upgrade of the main entry area, lobby and related areas of the
University Hospital, as well as the development of new abovegrade pedestrian connectors between the University Hospital
and the East Parking Structure and from there to the new North
Parking Structure on the other side of the CSX railroad
tracks. In addition, a new vertical circulation structure
with both stairs and elevators will be built on the west side
of the East Parking Structure, to allow for more efficient
movements at all levels among the connectors and various
adjacent facilities.
The design vocabulary of all of these connective elements
and the site landscape will be consistent with the 2005-2006
Health System Area Plan and the new Emily Couric Clinical
Cancer Center. The project is expected to be phased over a 23 year period.
DISCUSSION: The Office of the Architect, in consultation with
the Health System, has prepared the concept, site and design
guidelines. Mr. Neuman will review the guidelines with the
Committee.
11
Lee Street Entry and Connective Elements
Concept and Design Guidelines
A) Proposed Project Concept
This project includes the renovation of the main entry area, lobby and related canopy of
the University Hospital, as well as the development of new above-grade pedestrian
connectors between the University Hospital and the East Parking Structure and from
there to the new North Parking Structure on the other side of the CSX railroad tracks. In
addition, a new vertical circulation element with both stairs and elevators will be placed
on the west side of the East Parking Structure to allow for more efficient movements at
all levels among the various adjacent facilities.
The design vocabulary of all of these connective elements and the site landscape will be
consistent with the 2005-2006 Health System Area Plan and the new Emily Couric
Clinical Cancer Center.
The project will be phased over a 2-3 year period.
B) Siting Criteria
The University of Virginia general siting criteria for all new facilities include the
following components. Those highlighted are the most pertinent in determining the siting
recommendation for the Lee Street Entry and Connective Elements Project.
•
•
•
•
•
•
•
•
•
•
•
Conforms to overall land use plan and district/area plans.
Reinforces functional relationships with the other components of the same
department or program, and is compatible with other neighboring uses.
Satisfies access requirements – pedestrian, bicycle, vehicular and service.
Maximizes infill opportunities to utilize land resources and existing
infrastructure.
Minimizes site development costs, including extension of utilities, access, loss or
parking, mass grading, etc.
Minimizes opportunity cost: i.e., value of this use and size versus alternatives.
Provides a size that is adequate, but not excessive, for initial program, future
expansion, and ancillary uses.
Allows for incorporating sustainability principles in terms of solar orientation,
reuse of historic structures, storm water management, etc.
Avoids unnecessary environmental impacts, including significant tree removal or
filling of existing stream valleys.
Allows site visibility and aesthetic character as appropriate for the intended
use and for the neighborhood.
Minimizes time for implementation of project.
12
UVA Health System – View of Lee Street
13
C) Proposed Site
Lee Street is the main entry area to the University Hospital, Primary Care Center and the
future Emily Couric Clinical Cancer Center. The connective elements and new landscape
construction also provide an opportunity to coordinate design characteristics on the north
façade of the University Hospital with the façade of the Emily Couric Clinical Cancer
Center to be located directly across on Lee Street.
Future Emily Couric
Clinical Cancer Center
Future North
Parking Structure
Lee Street
UVA Health System: Aerial View
D) Design Guidelines
Site Planning
• Enhance the patient and visitor experience in terms of wayfinding and aesthetics
of place
• Develop an entry plaza that unifies the character of the arrival points for the
University Hospital, the Emily Couric Clinical Cancer Center, and the East
Parking Structure.
Circulation
• Circulation will not change significantly as a result of the Lee Street Entry
improvements. There will be a change on vehicular lane configurations to allow
for better patient drop-off and safer pedestrian activities.
14
Architecture
• The exterior architectural changes to the University Hospital will be limited to the
north façade of the first and second floors of the main entry area and its canopy.
• Materials and detailing of the new north façade will be sympathetic and
proportional to the proposed Clinical Cancer Center and the Hospital Bed
Expansion projects, as well as contextual with the other major hospital projects.
It is anticipated that the exterior facades will be designed in metal and glass in
order to accommodate these objectives.
Landscape
• Landscape and hardscape shall be consistent with the approved design of the
Couric Clinical Cancer Center.
• Green-screen devices will be used to provide necessary solar shading, as well as
to diminish the overall harshness of the setting.
Review and Compliance
• The Office of the Architect for the University is responsible for the review and
approval of project compliance with these guidelines.
Health System Area Plan 2005-2006
15
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.B. Vice President’s Remarks
ACTION REQUIRED:
None
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.
16
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.C. 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.
DISCUSSION:
FINANCE REPORT
The first eight months of Fiscal Year 2007 ended with an
operating margin of 4.8 percent, which was above the goal of
4.7 percent. Total operating revenue and total operating
expenses were below budget but above the prior year.
Inpatient admissions were 1.1 percent below budget but
2.3 percent above prior year. At the end of February the
Medical Center had 579 staffed beds in operation.
Patient days were 1.9 percent below budget, and the
average length of stay was 5.7 days, compared to the 5.8 day
budgeted length of stay. The case mix index for all acute
inpatients was 1.84, which was above both budget and prior
year. A lower than expected length of stay combined with a
higher than expected case mix index indicates that the Medical
Center continues to manage length of stay well.
Inpatient services which experienced the most significant
increases in admissions over the prior year through February
include neurosurgery, gynecology, orthopaedics and psychiatry.
Admissions to the neurology and the thoracic cardiovascular
surgery services declined from last year.
17
Net patient service revenue through February 2007 was 0.4
percent below budget and 7.1 percent above prior year.
Total operating expenses for the first eight months of
Fiscal Year 2007 were 0.1 percent below the $572.8 million
budget and 7.0 percent above prior year expenses. Salaries and
wages were below budget but above prior year expenses. Medical
supplies were above both the budget and prior year. Purchased
services were above budget and prior year, largely due to the
continued utilization of agency contracted labor.
Non-operating gains of $58.9 million include a $25
million appropriation from the state for construction of the
Emily Couric Clinical Cancer Center. The accounting for the
appropriation is reflected in the financial statements by
increased net income, other assets, and debt service coverage.
Full time equivalent employees including contract labor
were 51 above budget and 124 greater than the prior year.
FTEs and salary and wage cost per FTE were:
FY 2006
FTEs-Payroll
Annualized
Salary and Wage
Cost per FTE
Contract Labor
FTEs
Total FTEs
5,732
FY 2007
2007 Budget
5,851
5,844
$48,764
$50,785
$50,947
280
285
6,012
6,136
241
6,085
OTHER FINANCIAL ISSUES
The Medical Center and the Health Services Foundation
have continued to meet with Anthem to negotiate new provider
contracts. The existing contracts expire December 31, 2009.
Our negotiation objectives are as follows:
•
•
•
Appropriate payment rates for the University of
Virginia Medical Center and Faculty
Administrative simplification
Unobstructed access to the University of Virginia
Medical Center and its Faculty
18
•
A minimum of a 3 year term
The negotiations are proceeding slowly but in a positive
manner.
The Health Services Foundation recently concluded a
successful negotiation with Southern Health for improved
payment rates. The Medical Center is in the final stages of
concluding a negotiation with Southern Health for an increase
in rates of approximately 5 percent effective June 1st. This
is an increase that is not required by the Southern Health
provider agreement. During the negotiation Southern Health
invoked a provision in the provider contract to have an
outside party issue a report comparing Southern Health payment
levels to Anthem payment levels. Although the outside party
was retained and paid by Southern Health, the report was
favorable to the Medical Center. The June increase in rates
will bring the payment rates to an appropriate level, which is
the conclusion of over seven years of work.
The Virginia Department of Medical Assistance Services
has concluded the on-site audit of the Medicaid and Indigent
Care Cost Reports for the Medical Center and the Health
Services Foundation. This was the first time that physician
cost had been subjected to an audit. At the conclusion of
their on-site work the auditors did not report any material
adverse findings. However, the final closing conference has
not occurred, and this audit remains as a significant open
item.
WRITE-OFF OF BAD DEBTS AND INDIGENT CARE
Indigent care charges totaling $99.0 million for the
period July 1, 2006 through February 28, 2007 have been
written off. Recoveries during this period totaled $29.1
million.
Bad debt charges totaling $27.5 million in the first
eight months of Fiscal Year 2007 have been written off. During
this same period $12.0 million was recovered through suits,
collection agencies, and Virginia refund set-off.
19
OPERATIONS REPORT
The University of Virginia Medical Center recently
completed two successful surveys conducted by the Joint
Commission on Accreditation of Healthcare Organizations.
The Stroke Center was granted a Disease-Specific Care
Certification effective March 20, 2007 following a survey
conducted the previous day. On April 4, 2007 the Joint
Commission conducted an unannounced random survey of the
Medical Center under its new system for conducting a survey
within a specified time following the last full accreditation
survey. Approximately 5% of hospitals receive an unannounced
random survey. At the conclusion of the one-day survey, the
Joint Commission advised that the Medical Center remains fully
accredited. Opportunities for improvement were identified and
are being addressed.
The American College of Surgeons/Commission on Cancer has
granted the Cancer Program full approval for three years with
commendation in four areas: staging of tumors by the managing
physician, clinical trial accrual, prevention and early
detection, and cancer-related improvements. The formal
notification from the American College of Surgeons/Commission
on Cancer followed a successful evaluation process in
September 2006.
Three of the Medical Center's intensive care units have
been recognized for excellent staff communication, high
patient satisfaction, and low turnover rates. The Surgical
Trauma Burn ICU, Medical ICU and Thoracic-Cardiovascular
Postoperative ICU are three of just 78 critical care units
across the country to receive the Beacon Award for Critical
Care Excellence from the American Association of Critical Care
Nurses (AACN). The award is given to units that guide and
inspire staff, patients and their families. The Beacon award
application addresses factors that influence staff and patient
satisfaction as well as patient outcomes, including
educational opportunities available for nurses, nursing
research, and patient infection rates. The AACN also looks
carefully at a unit's recruitment and retention rates. None of
the three Beacon units have open positions, and when vacancies
occur, new employees are often recruited by existing staff.
The Medical Center’s Supply Chain Management staff
presented the winning poster at the University Hospital
Consortium Performance Excellence Forum. Entitled “An AMC’s
20
Enhancement to Automated Procurement: Leveraging Supply Chain
I.T. through Multidisciplinary Collaboration”, the poster will
be featured on the UHC web site. In recognition of the work
that went into the winning poster, the University Hospital
Consortium awarded Supply Chain Management staff one travel
scholarship to be used to attend a Consortium meeting in the
coming year.
Morehead Opinion Survey and Consulting has been retained
to administer an employee engagement survey for the Medical
Center from May 21 through June 8, 2007. The survey will ask
employees to respond to a range of questions including workpersonal life balance, compensation and benefits, employee
involvement in decision-making, and opportunities for growth
and development within the Medical Center. Morehead has
extensive experience with academic medical centers and magnet
nursing organizations. Results of the survey will be shared
with managers and employees during July and August; action
plans will then be developed to address areas of concern.
The grand opening celebration for the new short stay unit
took place on March 23rd, and the unit began admitting
patients on April 2nd. The short stay unit has 20 private
room beds and provides acute care service twenty-four hours a
day, seven days a week. Patients who need time for recovery
after surgery or a procedure, or require observation for other
reasons, will be accommodated on the unit. The short stay
unit is primarily an adult unit but pediatric patients who are
at least 13 years of age and who meet specific criteria can be
placed on the unit.
The Medical Center, in cooperation with Morrison
Management, launched the Signals for Health™ program on March
5th in the Wahoo West Cafeteria. The program is designed to
encourage the purchase of healthy foods by providing consumers
with easy-to-understand nutritional information. Based on
calories, total and saturated fat, and sodium content food
items are identified by colors similar to traffic signals that
tell consumers which foods are healthiest (green), which
should be eaten in moderation (yellow), and which should be
eaten occasionally (red). Nutritional information and the
corresponding color are posted by all food items. The visual
appearance of the food also reflects its assigned color with
food being served in green, yellow and red containers. Other
signage in Wahoo West includes table top cards, buttons, and
monthly newsletters designed to increase awareness of the
program. Mayor of Charlottesville, David Brown, who attended
21
the grand opening of the program along with the Superintendent
of Schools, Rosa Atkins, indicated that the city will closely
follow the six-month pilot program to see how the Medical
Center’s experience could be applied in the community.
The March 1st employee forum featured a presentation on
Facilities and Health System Development. The employee forums
provide an opportunity for leadership to update employees on
operational and strategic issues while giving employees the
opportunity to share their perspectives on each topic. The
next employee forum will be held on May 2nd, and will feature
Marketing Branding Initiatives as the topic.
The University’s 2007 Service and Outstanding Contributor
awards ceremonies will take place in May and early June.
Employees who have attained 10, 15 and 20 years of service
will be honored at a ceremony and reception on Tuesday, May
22nd in Cabell Hall. Employees who have attained 25 or more
years of service will be honored on Tuesday, June 12th at a
banquet at the Omni Hotel. The Outstanding Contributors will
also be honored at this program. The Outstanding Contributor
award is the highest honor bestowed on University employees,
and five Medical Center employees will be among the ten
winners announced the week of May 7th.
22
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
Feb-05
Feb-06
Budget/Target
Feb-07
Feb-07
$506.7
$547.4
$586.2
$588.8
12.6
14.7
14.7
12.5
$519.3
$562.1
$600.9
$601.3
461.3
500.8
536.9
534.5
27.2
30.6
31.1
33.8
3.2
3.2
4.0
4.5
Total operating expenses
$491.7
$534.6
$572.0
$572.8
Operating income (loss)
$27.6
$27.5
$28.9
$28.5
Non-operating income (loss)
$17.7
$20.1
$58.9
Net income (loss)
$45.3
$47.6
$87.8
Principal payment
$5.9
$5.5
$4.4
23
$10.8
$39.3
$5.3
University of Virginia Medical Center
Balance Sheet
(Dollars in Millions)
Most Recent Three Fiscal Years
Description
Feb-05
Feb-06
Feb-07
Assets
Operating cash and investments
$99.4
$111.1
$209.6
Patient accounts receivables
137.5
78.6
62.8
Property, plant and equipment
314.4
344.8
368.2
Depreciation reserve and other investments
224.4
257.8
268.0
Endowment Funds
111.0
123.6
135.8
66.0
77.2
122.5
$952.7
$993.1
$1,166.9
Current portion long-term debt
$10.4
$11.5
$12.6
Accounts payable & other liab
83.0
60.3
86.6
129.2
158.4
163.3
79.8
46.8
84.3
$302.4
$277.0
$346.8
$650.3
$716.1
$820.1
$952.7
$993.1
$1,166.9
Other assets
Total Assets
Liabilities
Long-term debt
Accrued leave and other LT liab
Total Liabilities
Fund Balance
Total Liabilities & Fund Balance
24
University of Virginia Medical Center
Financial Ratios
Most Recent Three Fiscal Years
Description
Feb-05
Feb-06
Budget/Target
Feb-07
Feb-07
Operating margin (%)
5.3%
4.9%
4.8%
4.7%
Total margin (%)
8.4%
8.2%
13.3%
6.4%
Current ratio (x)
2.5
2.6
2.7
2.0
165.6
164.5
209.7
190.0
Gross accounts receivable (days)
51.1
44.6
46.8
60.0
Average payment period (days)
48.9
34.6
44.6
60.4
8.3
9.4
14.6
7.9
19.3%
21.1%
19.3%
20.0%
6.2%
6.3%
6.1%
6.7%
Days cash on hand (days)
Annual debt service coverage (x)
Debt-to-capitalization (%)
Capital expense (%)
25
University of Virginia Medical Center
Operating Statistics
Most Recent Three Fiscal Years
Description
Acute Admissions
Feb-05
Feb-06
Feb-07
Budget/Target
Feb-07
19,120
19,373
19,824
20,045
111,152
112,506
114,003
116,261
5,214
4,896
4,218
5,100
5.81
5.80
5.70
5.80
388,869
394,907
416,043
411,463
37,552
38,632
38,789
38,499
1.93
1.97
1.96
1.96
Net Revenue by Payor
Medicare (%)
Medicaid (%)
Commercial Insurance (%)
Anthem (%)
Southern Health (%)
Other (%)
Total
35.5%
14.3%
18.4%
18.2%
5.5%
8.1%
100.0%
37.3%
11.3%
17.7%
17.2%
5.9%
10.6%
100.0%
36.4%
10.9%
19.4%
18.4%
5.2%
9.7%
100.0%
36.6%
14.9%
15.8%
20.7%
5.5%
6.5%
100%
FTE's (including contract labor)
5,933
6,012
6,136
Patient days
SS/PP Patients
Average length of stay
Clinic visits
ER visits
Medicare case mix index
26
6,085
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 - February 2007
OPERATING STATISTICAL MEASURES - February 2007
ADMISSIONS and CASE MIX - Year to Date
FY 06
OTHER INSTITUTIONAL MEASURES - Year to Date
FY 07
% Change
ADMISSIONS:
Surgical
Medical
Transplant
Obstetrics
Pediatrics
Psychiatric
Subtotal Acute
7,664
7,720
157
1,326
1,568
938
19,373
7,832
7,836
159
1,384
1,592
1,021
19,824
2.2%
1.5%
1.3%
4.4%
1.5%
8.8%
2.3%
Short Stay
Total Admissions
4,896
24,269
4,218
24,042
(13.8%)
(0.9%)
CASE MIX INDEX:
All Acute Inpatients
Medicare Inpatients
1.83
1.97
1.84
1.96
0.5%
(0.5%)
FY 06
FY 07
% Change
ACUTE INPATIENTS:
Inpatient Days
Average Length of Stay
Average Daily Census
Births
112,506
5.80
463
1,156
114,003
5.70
469
1,206
1.3%
1.7%
1.3%
4.3%
OUTPATIENTS:
Clinic Visits
Average Daily Visits
Emergency Room Visits
394,907
2,612
38,632
416,043
2,732
38,789
5.4%
4.6%
0.4%
12,005
4,810
16,815
12,122
4,990
17,112
1.0%
3.7%
1.8%
SURGICAL CASES
Main Operating Room (IP and OP)
UVA Outpatient Surgery Center
Total
OPERATING FINANCIAL MEASURES - February 2007
27
REVENUES and EXPENSES - Year to Date
FY 06
FY 07
OTHER INSTITUTIONAL MEASURES - Year to Date
% Change
NET REVENUES:
Paying Patient Revenue
Appropriations
Net Patient Service Revenu
Other Operating Revenue
Total
509,649,877
37,802,663
547,452,540
14,657,919
562,110,459
545,054,519
41,129,868
586,184,387
14,676,874
600,861,261
EXPENSES:
Salaries and Wages
Supplies and Contracts
Purchased Services
Bad Debts
Depreciation
Interest Expense
Total
Operating Margin
Operating Margin %
Non-Operating Revenue
234,833,093
160,988,483
82,255,268
22,705,487
30,649,894
3,152,483
534,584,708
27,525,752
4.9%
20,113,271
249,378,965
176,771,900
88,475,553
22,315,549
31,073,096
3,968,989
571,984,052
28,877,208
4.8%
58,946,890
6.2%
9.8%
7.6%
(1.7%)
1.4%
25.9%
7.0%
4.9%
(2.0%)
193.1%
47,639,022
87,824,098
84.4%
Net Income
6.9%
8.8%
7.1%
0.1%
6.9%
FY 06
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 & OP-Adj Discharge
Cost per CMI & OP-Adj Day
Cost per Outpatient Visit
Total F.T.E.'s (including Contract Labor)
F.T.E.'s Per Adjusted Occupied Bed
190,239,758
57,482,517
90,329,669
87,592,406
30,109,890
53,895,637
509,649,877
49.76%
44.6
7,899
1,360
72.43
6,012
7.65
FY 07
198,277,543
59,443,633
105,537,359
100,260,963
28,327,615
53,207,407
545,054,519
47.63%
46.8
8,416
1,464
72.77
6,136
7.78
% Change
4.2%
3.4%
16.8%
14.5%
(5.9%)
(1.3%)
6.9%
(4.3%)
4.9%
6.6%
7.6%
0.5%
2.1%
1.7%
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 - February 28, 2007
Assumptions - Operating Statistical Measures
Admissions and Case Mix Assumptions
Admissions include all admissions except normal newborns
Pediatric surgery cases are included in Pediatrics admissions
Obstetrics surgery cases are included in Obstetrics admissions
Transplant surgery cases are included in Transplant admissions
Transplants include all solid organ transplants, bone marrow transplants and islet transplants
All other surgery cases are counted as Surgical admissions
Surgical cases are defined by DRG
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
28
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
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 & OP-Adj Discharge and Day uses Medicare CMI to adjust, and excludes bad debt
Costs for Cost per Outpatient Visit come from clinic income statement, and exclude bad debt
OP visits used in calculation of Cost per Outpatient Visit are provider based clinic visits only
MEDICAL CENTER
ACCOUNTS COMMITTEE REPORT
(Includes All Business Units)
(Dollars in Thousands)
INDIGENT CARE (IC)
Net Charge Write-Off
Percentage of Net Write-Offs to Revenue
Year to Date
February
2006-07
72,836
5.92%
Annual Activity
2005-06
2004-05
93,577
80,155
5.61%
5.60%
Total Reimbursable Indigent Care Cost
30,623
40,901
37,985
State and Federal Funding
30,623
40,901
37,985
Total Indigent Care Cost Funding As a Percent
of Total Indigent Care Cost
100%
Unfunded Indigent Cost
-
100%
100%
-
-
Annual Activity
BAD DEBT
Net Charge Write-Offs
Percentage of Net Write-Offs to Revenue
February
2006-07
22,316
1.81%
2005-06
32,286
1.93%
2004-05
27,389
1.91%
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 at the time an individual account is written off.
29
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.C.
ACTION REQUIRED:
None
Capital Projects
BACKGROUND: The Medical Center is constantly improving and
renovating its facilities. We will provide a status report of
these capital projects at each Medical Center Operating Board
meeting.
DISCUSSION: The current Medical Center capital projects
report is set forth in the following table.
30
The University of Virginia Medical Center
Capital Projects Report
May 2007
Scope
Funding
Source
BOV
Approval
Date
Projected
Completion
Date
$16.75 M
(total building
budget)
Bonds
Jan 2003
2009
$74 M
(including
added floor)
General Fund
Appropriation(@
$25 M) , Bonds
and Outside
Fundraising
April 2004
2010
Budget
1. Pre-Construction
Clinical Office Building:
Fontaine Avenue – Planning and
design for Spine Center, Sports
Medicine Clinic and Imaging
Emily Couric Clinical Cancer
Center :
Construction documents underway
for consolidated and
comprehensive Cancer Center on
site of present West Parking Deck.
An additional floor (shell space)
will be added for future use.
New Children’s Hospital:
May 2007
(B&G
Committee)
$48 M
Facility space programming
complete. Currently awaiting
completion of fundraising efforts
before proceeding with detailed
design work
University Hospital Additional
Beds:
Planning underway to increase
inpatient bed capacity in University
Hospital
July 2006
(B&G
Committee)
$80.178 M
Bonds and
Outside
Fundraising
TBD
TBD
Bonds @
$62.178 M
May 2007
August
2011
Operating
Revenue @ 18M
31
The University of Virginia Medical Center
Capital Projects Report
May 2007
BOV
Approval
Date
Projected
Completion
Date
Budget
Funding
Source
$3.0 M
($3.4 M
revised)
Medical Center
Annual Capital
Budget
N/A
1st phase is
complete; 2nd
phase target is
Fall 2007
Hospital Expansion Project:
$58.0 M
Mar 1999
Fall 2006
Horizontal expansion of University
Hospital and renovation of entire
second floor to accommodate
complete rebuilding and expansion
of Perioperative Services and
Heart Center. Additional
renovations and expansion for
Interventional Radiology and
Clinical Laboratory. Scope
change (3/03) to include additional
floor for Heart Center faculty
offices. 14 new ORs completed;
relocated Central Sterile Supply
(CSS); 5 renovated ORs
completed in February 2007
($62.7 M
revised)
Bonds @ $54 M
($58.7 M rev) +
Operating
Revenues @ $4 M
Scope
2. Under Construction
Primary Care Center :
1st Floor renovations (2 phases) to
create new central registration
hub, improve phlebotomy, improve
patient care services at main
entrance, and relocate Medical
Center Executive Offices
(Revised Summer
2007)
Program
Revisions to OR
Complement and
Heart Center
Under Review
3. Construction Complete
Short Stay Unit :
Construction underway for a 20bed unit to improve bed capacity in
University Hospital
$5.0M
Medical Center
Annual Capital
Budget and
Outside
Fundraising
($5.5M
revised
including
equip & furn)
32
N/A
Occupied in
March 2007
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
II.D. Health System Development
ACTION REQUIRED:
None
BACKGROUND: Health System Development will provide reports of
recent activity to the Medical Center Operating Board from
time to time.
DISCUSSION:
SIGNIFICANT GIFTS
Philip Morris USA pledged $20 million to the School of
Medicine as part of a $25 million gift to the University. The
funds from this gift will support research into smoking
cessation programs, addiction studies and other initiatives.
A bequest valued between $4-6 million has been received
to establish a $2 million professorship in Family Medicine
with the balance going for the unrestricted use of the School
of Medicine.
A major Cancer Center donor has agreed to provide a $2
million guarantee toward future fundraising to enable the
inclusion of a new 5th floor to the Emily Couric Clinical
Cancer Center.
The Harrison Family Foundation committed $1.3 million to
the Memory Disorders Program in Neurology.
Other gifts and pledges received include:
•
•
•
•
A charitable remainder trust of $500,000 to benefit
the University of Virginia Children’s Hospital;
A $250,000 gift to the Integrative Medicine Program;
A $250,000 donation to benefit research in ALS;
An anonymous donation of $125,000 from a local
foundation to support programming in the UVa Teen
Health Center;
33
•
•
•
A $100,000 pledge for an endowment to support a
patient care education fund;
A $50,000 pledge to the Frederic Berry Chair in
Anesthesiology; and
Two gifts of $25,000 each, to support the Emily Couric
Clinical Cancer Center.
OTHER DEVELOPMENT INITIATIVES
The 10th Annual Cancer Center Benefit Dinner was given by
Hamilton’s Restaurant and brought together nearly 70 community
members to benefit the Patients and Friends Research Fund.
Proceeds, which will support the lung cancer research program
of Dr. David Jones, were matched by an anonymous donor,
bringing the total raised by the event to more than $126,000.
The Health System Development Communications team worked
with the Children’s Hospital development team to mail a winter
solicitation letter to 8,800 lapsed donors. The letter, aimed
at raising unrestricted funds, was signed by a current donor
who is the mother of a child being successfully treated for
cancer at the Medical Center.
Two recent local events raised money for the Children’s
Hospital. In February, the Dance Marathon raised $74,300, and
in late March a Barn Party for Jeffrey’s Gifts raised an
additional $30,000 in funds for hospital programs.
The 2nd Annual Volunteer Forum was held at the Farmington
Country Club on March 30, and included several faculty
speakers as well as volunteer testimonials. Over 100
participants enjoyed lunch and a program designed to bring
together volunteers from all boards serving the Health System.
Several communications materials were created or updated
to inform prospects and donors of potential giving
opportunities, including a Breast Center flyer, an Emily
Couric Clinical Cancer Center booklet, and a Children’s
Hospital Fact Sheet.
Between July 1, 2006 and March 31, 2007, Health System
development staff made 975 face-to-face visits with donors and
prospects.
34
CAMPAIGN PROGRESS THROUGH FEBRUARY 28, 2007
Through the end of February, the Health System campaign
total is $312,297,821. This represents 62.45% of the campaign
total, with 39.54% of the campaign period elapsed. The
following table shows the Fiscal Year 2006 totals for new
commitments, including new gifts and new pledges.
FY ‘07
FY ‘06
Total new commitments
(excluding payments on
previously booked pledges)
$99,798,575 $33,619,717
New gifts
$17,816,753 $17,642,860
New pledges
$81,981,822 $15,976,857
35
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
May 7, 2007
COMMITTEE:
Medical Center Operating Board
AGENDA ITEM:
III. Report by the President of the
Clinical Staff
ACTION REQUIRED:
None
DISCUSSION: The President of the Clinical Staff of the
Medical Center will inform the Medical Center Operating Board
of recent events regarding the Clinical Staff which do not
require formal action, but of which the Medical Center
Operating Board should be made aware.
36