Wednesday, November 19, 2014
Followed the Purchasing and Facilities Subcommittee Meeting
Jackson Memorial Hospital West Wing Board Room
First Floor 1611 N. W. 12th Avenue
Miami, FL 33136
Fiscal Committee
Mojdeh L. Khaghan, Chairperson Joe Arriola, Vice Chairperson Irene Lipof Marcos J. Lapciuc Ralph G. Patino Darryl K. Sharpton Carlos Trujillo ____________________________________________________________________________________________________________
Members Present: Mojdeh L. Khaghan, Chairperson, Darryl K. Sharpton, Ralph G. Patino, and Marcos J.
Lapciuc
Member(s) Excused: Joe Arriola, Irene Lipof, and Carlos Trujillo
In addition to the Board of Trustees, the following staff members, University of Miami Miller School of Medicine (UMMSOM) Representative; and Assistant Miami-Dade County Attorneys were present: Carlos A. Migoya, Don S. Steigman, Isa Nunez, Matthew Pinzur, Peter Paige, M.D, Mark T. Knight, and Richard Klass; Michael Barron, M.D., UMMSOM Representative; and Jeffrey Poppel, and Laura Llorente, Assistant Miami-Dade County Attorneys
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1. Fiscal Committee Meeting Call to Order Mojdeh L. Khaghan, Chairperson at 11:29 a.m.
(a) Previous committee meeting minutes (October 17, 2014) Motion to approve the previous committee meeting minutes Mojdeh L. Khaghan, Chairperson
Darryl K. Sharpton moved approval; seconded by Ralph G. Patino, and carried without dissent.
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FISCAL COMMITTEE MEETING MINUTES – November 19, 2014
2. Reports
(a) Jackson Health System Combined Financial Statements – September 2014 and October 2014 (Preliminary) Mark T. Knight, Executive Vice President and Chief Financial Officer presented a summary of fiscal year 2014 financial results and fiscal year 2015 performance as of October 2014. Mr. Knight reminded everyone that KPMG, external auditors for Jackson Health System (JHS) have begun the 2014 fiscal year end field work. It is anticipated that a draft of the fiscal year 2014 audited financial statements will become available in January 2015, and
presenting the final audited results to the PHT Board of Trustees (PHT BOT) in February 2015.
Fiscal Year 2014 Financial Results
• Bottom line performance was $50.9 million versus a budget totaling $11.6 million.
• Net gain from operations was $31.4 million versus a budget totaling $11.6 million. It was pointed out in light of restoring the 5% employee contribution for health benefits, a decline in patient volumes, and increased utilization of premium pay net gain from operations was stronger than anticipated.
• Cash collections exceeded prior fiscal year approximately $40 million. Days cash-on-hand for the fiscal year ended approximately 41; and days in accounts receivable for the fiscal year end was approximately 29. Performance for both day’s cash-on-hand and accounts receivable exceeded “best practice” and far
exceeded performance over the last four fiscal years.
• It is anticipated that the external audit results will show no changes in the profit and loss statement. Fiscal Year 2015 Financial Performance (October 2014 – First Month Results)
• While experiencing increased patient volumes at Jackson South Community Hospital there is a continuing trend in lower patient volumes within the remaining JHS hospitals.
• For the month of October 2014 there was a budget totaling $200,000. The budget was exceeded by approximately $6 million. Out of the $6 million, $1.8 million was sales tax proceeds which exceeded what was projected and the remainder was due to higher than expected net revenue. Despite lower patient volumes JHS continue to experience higher net revenue and higher utilization by some of the funded categories.
• Continue to experience solid volumes in the Transplant Department and higher margin product lines which has attributed to keeping the net revenue higher than projected.
• For the first time in 18-months labor is on budget.
• Since August 1, 2014 JHS has on boarded approximately 800 positions which has attributed to a lower reliance on premium pay dollars.
• As anticipated, the migration of Medicaid has resulted in a slowdown of cash from managed care payors. Because some patients have migrated into a managed care environment it is very possible that JHS will experience some erosion in days in accounts receivable and slowdown in cash. The migration of the Medicaid process will continue to be closely monitored.
• Current month projection on cash collections is approximately $80 million which is approximately 5% lower than the original target.
Ms. Khaghan thanked Mr. Knight and the Management Team for exceptional financial results. Ms. Khaghan expressed concern regarding the continued decrease in patient volumes and hope that in a collaborative effort with the Strategy Team there will be a focus on reducing the length of stay and increasing patient volumes as the processes continue to move forward in fiscal year 2015.
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FISCAL COMMITTEE MEETING MINUTES – November 19, 2014
Mr. Patino congratulated Mr. Knight and the entire JHS family for exceptional financial results. Mr. Patino questioned what is being done from a marketing standpoint to increase patient volumes.
Matthew Pinzur, Associate Vice President, Communication and Outreach Division stated that working together with Richard Klass, Chief Strategy Officer and Laura Hunter, Senior Vice President, Business Development are assuring that business plans for every service line is developed including some of the new programs. Mr. Pinzur further stated that JHS is approximately 40-days away from launching its television campaign for Urology Services, and also targeting some of the transplant marketing in year 2015.
Mr. Patino questioned if there is a strategic plan to increase patient volumes.
With regards to increasing patient volumes, Don S. Steigman, Executive Vice President and Chief Operating Officer stated that there are some strategies to increase patient volumes through managed Medicare and managed care companies as well as increasing the Transplant service line.
Mr. Sharpton stated that the Strategy Team has very exciting strategies that are currently in the works and are being contemplated. He reminded everyone that it was discussed to schedule a strategic session on a tri-monthly basis. Mr. Sharpton requested that Mr. Migoya schedule a strategic session during the first part of the 2015 year.
(b) Jackson Health System General Obligation Bond Project Listing
For purposes of disclosure, Mr. Knight presented the Committee with a summary showing the projects scheduled as part of the General Obligation Bond (GOB) budget for fiscal year 2015. Mr. Knight stated that the proposed projects will be forwarded to the PHT BOT for approval prior to expenditure through the GOB.
Ms. Khaghan suggested that Isa Nunez, Vice President, Facilities Design and Construction and members of the Jackson Health System General Obligation Bond Citizen’s Advisory Committee develop timelines for each project and funding so that the PHT BOT can better track the process and funding for each project.
Ms. Khaghan questioned the status of hiring a Program Manager.
Kenneth Robertson, Director, Procurement Construction Services stated that selection process to hire a Program Manager is ongoing. The Committee will be kept informed as the selection process continues to move forward.
4. Adjournment Mojdeh L. Khaghan, Chairperson at 11:50 a.m.
Meeting Minutes Prepared by Ivenette Cobb-Black
Executive Assistant