Operating and Capital Budget Recommendation for 2003

1

• Operating and Capital Budget Recommendation for
  2003
• November 26, 2002

2
Highlights of Proposal

• Consistent with the Multi-Year Plan
• Consistent with Strategic Goals Updated
  Priorities

3
Highlights of Proposal

• We are Continuing to IMPROVE fiscal
  strength workforce service
  quality
• health of community
• relationships with partners

4
Fiscal Strength

• Billing Collection Improvement vs 2002 15.6
  Million
• Continuation of New UPL Funding 24.7
  Million

5
Fiscal Strength

• Measurable/Accountable Management Actions
  10.0 Million
• 28 Specific Plans to Improve Operations
• Marketing Strategies to Increase Usage in Areas
  With Capacity Higher Funded Mix (Rehab.,
  Dialysis Transplant) 1 Million

6
Fiscal Strength

• Innovations 5.8 Million
• New 1115 Waiver Program 1.6 Million
• Employee Suggestion Program 2.0 Million
• Physician Billing Improvements 1.7 Million

7
Fiscal Strength

• Expenses per Adjusted Discharge to Grow 3.4
• Better Than National Hospital Inflation of 5
• Bottom-Line is 5 Million
• 3.7 Million Better than Multi-Year Plan

8
Workforce

• Greatest Asset!
• Continue Workforce Enhancement Program
• Competitive Pay 5.5 Million
• Nursing Extension Campus 400,000
• Recruiting Activities 200,000
• Continue Living Wage Program

9
Service/Service Quality

• Regain Capacity Lost Due to Staff Shortages in
  2001
• Increase Outpatient Dialysis Service Hours
• Pharmacy
• Mail Order Service Expansion
• Increase Staff to Reduce Waiting

10
Service/Service Quality

• Increase Physician Services
• Improve Access
• Reduce Appointment Waiting Time
• Add 4 Primary Care Physicians
• Add 8 Specialists

11
Service/Service Quality

• Reduce Emergency Center Diversions by 50
• Staff 34 Additional Beds
• Improve Trauma Physician Coverage
• Overall Activity to Increase by 8

12
University Health System 2003 Activity
Projections and Forecast Years
2000 Actual
2001 Actual
2002 Year End
2003 Budget
2004P
2005P
2006P
21,900 511,648 34,791
20,902 (4.6) 520,355 1.7 33,202 (4.6)
21,632 3.5 542,436 4.2 35,166 5.9
23,263 7.5 587,450 8.3 37,979 8.0
23,868 2.6 658,058 12.0 38,966 2.6
24,189 1.3 715,837 8.8 40,131 3.0
24,513 1.3 771,982 7.8 41,581 3.6
Discharges Percentage Change Outpatient
Visits Percentage Change Adjusted
Discharges Percentage Change
13
Activity Continues To Increase
14
Health of Community

• 1.1 Million for Community Health Initiatives

15
Partnerships

• Center for Healthcare Services Collaboration
• Improve CHCS Medication Costs
• Secure State Funds for Medications Currently
  Unreimbursed
• Improve Service Organization/Continuity
• 1.8 Million to Satisfy States Match
  Requirement

16
Partnerships

• Military Trauma Centers
• Healthcare Summit Priority
• Working to Define New Operational and Financial
  Relationship

17
Partnerships

• UT Health Science Center
• More Collaboration to Align Goals Priorities
• Chief Medical Officer to Achieve Significant
  Service Financial Improvements
• Billing Improvements

18
Partnerships

• Other Educational Institutions
• UHS Foundation Scholarships
• Nursing Professionals
• Other Health Careers

19
Recommended Operating Budget
20
University Health System 2003 Budget with
Forecast 2004 - 2006 (Dollars in Millions)
2000 Actual
2001 Actual
2002 Year End
2003 Budget
2004P
2005P
2006P
400.4 434.2 (33.8) 18.0 (15.8)
464.3 484.9 (20.6) 14.7 (5.9)
579.2 559.3 19.9 10.3 30.2
605.6 610.1 (4.5) 9.5 5.0
620.5 633.5 (13.0) 8.7 (4.2)
650.3 668.1 (17.8) 8.1 (9.7)
676.7 702.3 (25.6) 7.3 (18.3)
Operating Revenue Operating Expense Operating
Margin Investment Income Net Gain/(Loss)
21
Financial Performance History
22
Net Revenue Increasing
23
Productivity Better Than Benchmark
24
Recommended Capital
25
Capital Requirements in 2003

• 29.2 Million Available for Capital Requirements
• 55 Replacement/Technology
• 17 Renovations
• 28 for IT
• Includes Funding for Physician Information System
• Plus CFHP Capital of 979,000

26
Recommendation
The Strategic Financial Planning Committee
Recommends Approval of the Proposed Operating and
Capital Budgets for Fiscal Year 2003.