Finance Committee April 2019 1 February 2019 Financial

Finance Committee April 2019 1

February 2019 Financial Report AGENDA • February Highlights • Forecast – FY 19 • Forecast – 12 month rolling 2

February 2019 Financial Report Volume Highlights • • Inpatient activity continues to be strong. Outpatient under budget. • • • Clinic Visits 8. 7% < budget in FEB; 4. 8% < budget YTD; 1. 6% < PY. Acute days 10. 1% > budget in FEB; 5. 7% > budget YTD; 4. 1% > PY. ALOS > budget 5. 7% YTD. Post Acute days > budget 1. 2% in FEB; 0. 8% > budget YTD; 2. 3% > PY. ER visits 12. 2% < budget in FEB; 8. 1% < budget YTD; 2. 7% < PY. Physician w. RVU’s 4. 0% > budget in FEB; 5. 2% > budget YTD; 10. 7% > PY. 3

February 2019 Financial Report Highlights • NPSR under budget by $1. 9 million. YTD still looking at $27 -29 million annual shortfall. • • • Supplemental Revenue $0. 9 million above budget. Expenses over budget by $2. 2 million. Operating Income $3. 2 million under budget in FEB. EBIDA under budget by 3. 7% in FEB and 0. 5% under budget YTD. Net Income $5. 4 million over budget YTD due to long term portion of Pension Expense. 4

February 2019 Financial Report Revenue Highlights • • • Gross Patient Service Revenue < budget in FEB. • NPSR Collection % is 0. 3% less than PY – mainly due to charge increase of 2. 4% NPSR 3. 0% above prior year. Supplemental revenue > budget – mainly due to an adjustment in parcel tax revenue. 5

February 2019 Financial Report Expense Highlights • FTEs < budget by 205 FTEs or 4. 6% in FEB and YTD 208 FTEs under or 4. 7%. • Labor expense, excluding benefits, were at budget in FEB and $11 million > YTD • • FTE per Adj Occ Bed < budget in FEB, YTD, and prior year. • YTD Operating Expense 2. 2% < budget and 1. 2% > prior year. Worked Hours per APD < budget by 1. 7% in FEB and under budget YTD and PY 6

February 2019 Financial Report Balance Sheet and Line of Credit Below are the key Balance Sheet metrics and the forecast for the Line of Credit. NNB Forecast - Line of Credit Balance $200 000 $180 000 $160 000 $140 000 $120 000 $100 000 $80 000 $60 000 $40 000 $20 000 6. 30. 1 8 7. 31. 1 8 8. 31. 1 8 9. 30. 1 8 10. 3 1. 18 11. 3 0. 18 12. 3 1. 18 1. 31. 1 9 2. 28. 1 9 3. 31. 1 9 4. 30. 1 9 5. 31. 1 9 6. 30. 1 9 $0 YEAR END TARGET NNB per forecast 7

February 2019 Financial Report Reserves 8

February 2019 Financial Report Cash Collections 9

February 2019 Financial Report FY 19 Year End Forecast Assumptions • • • Original amounts based on FY 19 budget. Gross IP revenues increased 2% monthly based on increased days from ED virtual bed implementation. Gross Physician revenues increased by 6% monthly. NPSR Collection % adjusted for budget shortfall and virtual beds. Adj. to Waiver and Supplemental Revenues based on interim review. Salary savings applied at 2. 4% for normal vacancies, reduced OT, benchmarking and not filling overhead positions based on YTD. Benefits adjusted for salary change and lower Workers’ Comp. Purchased Services reduced additional $2 million from budget. Pharmaceuticals projected at budget next 6 months. Supplies and Repairs/Maintenance/Utilities expected to be at budget for next 4 months. Other/Admin and General reduced additional $1 million from budget. 10

February 2019 Financial Report FY 19 Year End Forecast 11

February 2019 Financial Report 12 Month Rolling Projection Assumptions • February 19 Actuals plus FY 19 projections. • Jul 18– Jan 19 actuals = start point for Jul 19 – Jan 20 • FY 20 Gross Patient Service Revenue and Contractuals increased 2% for 2. 2% NPSR increase. • OP and MD volume reductions of 2% in Sep and 10% in Oct for EPIC go-live • Supplemental Waiver Revenues decreased to 90% of amounts per Waiver, lower amounts for both GPP and Prime ($21 million < FY 19 budget). • Mcal GME projected at last estimate if approved ($10 mill < FY 19 budget). • Measure A increased at 2%, AHD tax at pre election level. • Capitation HPAC increased 1%. • Salaries increased 3. 5%. Includes $5 mil EPIC training in Aug and Sep plus additional Go-Live support of $4. 6 mill and $1. 2 mil in Oct and Nov • 84 EPIC system staff capitalized until Jan 2020 • Purchased service cost increased $140 K Jul/Aug and $375 K forward for EPIC expense. • Pharmaceuticals increased 4. 28%. • Supplies increased 3. 5%. • Outside Medical Services, Depreciation at budget amounts. 12 • Does not assume any budgetary cuts or changes in services.

February 2019 Financial Report 12 Month Rolling Projection 13