NUHEALTH SYSTEM BOARD OF DIRECTORS APPROVES A $567M BUDGET FOR 2011
FOR IMMEDIATE RELEASE
September 27, 2010
PRESS CONTACT:
Shelley Lotenberg
shelley@numc.edu
516-572-6055
NUHEALTH SYSTEM BOARD OF DIRECTORS APPROVES A $567M BUDGET FOR 2011
ACHIEVABLE, REALISTIC $567M BUDGET FOR 2011
BUDGET RE-INVESTS IN KEY CLINICAL AREAS, BUILDS ON HARD-EARNED REIMBURSEMENT IMPROVEMENTS, INCLUDES ACHIEVABLE GAP CLOSING INITIATIVES, AND RELIES ON RESPONSIBLE PERFORMANCE ASSUMPTIONS —
East Meadow, NY — At its September 27, 2010 meeting, the NuHealth System (also known as Nassau Health Care Corporation) board of directors approved a $567 million budget for 2011. The budget funds the operations of the Nassau University Medical Center (NUMC), the A. Holly Patterson Extended Care Facility (AHP), and the four family health centers located throughout Nassau County.
“The adoption of an achievable $567 million budget for 2011 is another sign that the NuHealth System continues to solidify the NuHealth’s foundation and position our health care system to prosper in the future,” said Gianelli. “We produced our first ever operating surplus of $804,000 for year ending 2009, achieved through an extensive list of revenue cycle initiatives, supply chain initiatives, staffing efficiencies, IT upgrades, faculty practice plan realignment and various program enhancements.”
NuHealth’s 2010 operating budget called for an operating deficit of approximately $8.5 million and management’s current projection is an operating deficit of approximately $8.9 million. The 2011 operating budget is expected to produce similar results to 2010 in spite of continued pension increases of approximately $8 million for a total of $33 million and health insurance premium increases of approximately $5 million.
According to Gary Bie, NuHealth’s executive vice president of finance and CFO, while NuHealth has had many financial successes during the year, some of the more notable accomplishments in 2010 were:
NuHealth has made tremendous strides during 2010 in improving its operations in both the inpatient and ambulatory arenas. For example, a hospitalist program commenced July 1, 2010, is having a significant positive impact in average daily census, length of stay, discharge volumes, medical record documentation and coding, and Part B physician billing improvements. NuHealth also secured a full-time neurosurgeon during 2010, whose inpatient and ambulatory cases are extremely profitable for NuHealth. NuHealth entered into an arrangement with North American Partners in Anesthesia (NAPA, an independent, Long Island based, 300+ physician group). This arrangement has been very successful, has improved efficiencies in the operating rooms and has improved reimbursement significantly. A new arrangement with Long Island Plastic Surgery (LIPS, an independent, Long Island based plastic surgery group) was executed resulting in improved volume in plastic surgery, both inpatient and ambulatory, including: hyperbaric wound care and burn volume. Cardiology has been completely restructured through an arrangement with the North Shore-LIJ Health System and has shown continued growth in the latter part of 2010.
On the ambulatory side, NuHealth received Federally Qualified Health Center “look alike” status in June of 2010 for its four Family Health Centers in Hempstead, Roosevelt, Elmont and Westbury. This federal designation has significant reimbursement improvement for its Medicaid and Medicare population. Additionally, it is a significant asset NuHealth is using to attract community physicians with robust private practices. Finally, NuHealth replaced its Hempstead and Freeport locations with expanded state-of-the-art facilities to accommodate enhanced patient experience, quality and volume.
Revenue cycle improvements are an ongoing initiative and NuHealth has made improvements in its charge master inclusiveness and denial management. Similarly, information technology enhancements are an ongoing and continuous process and NuHealth has made tremendous strides in 2010, in automating its ambulatory and emergency room department medical record and financing system through a contract it entered into with Allscripts/Eclipsys. This automation complements the Eclipsys and Siemens products on the inpatient side and prepares NuHealth for Medicare’s meaningful use definition and qualifies NuHealth for enhanced reimbursement for both Medicare and Medicaid in 2011.
Consistent with NuHealth’s 2007 updated Strategic Plan, NuHealth is on course to:
With regard to A. Holly Patterson Extended Care Facility (AHP), Certificate of Need (CON) approval was received in 2008. Management has been working on financing vehicles to fund the $105 million replacement project and expects to receive Housing and Urban Development (HUD) ninety percent financing by the end of 2010. The remaining ten percent has been allocated and internally restricted from the tobacco proceeds secured in the 2007 Successor Agreement with Nassau County.
Expand its Comprehensive Level I trauma Emergency Room with state-of-the-art technology – $33 million. Phase one will be completed in January 2011.
The $567 million budget for the NuHealth System includes a total number of 3,673 employees, including 2,973 at the NUMC, 597 at the AHP and 103 at the various Family Health Centers. The 2011 budget for NUMC is $464 million, for AHP it is $63 million, and the budget for the Family Health Centers is $16.7 million. In addition, the 2011 budget includes $14 million for the Faculty Practice Plan and $9.4 million for the Captive Malpractice Insurance Fund. The budget includes pension expenses of $33 million or 14.3% of payroll, while health insurance premiums have been budgeted to increase by an additional 12% in 2011, or $5 million.
The key operating indicators such as discharges, average daily census, and average length of stay and full time equivalents (FTEs) have been conservatively incorporated in the 2011 budget utilizing the most recent 2010 trends. The System’s bad debt expense has been lowered due to improvements to the revenue cycle and an associated reduction in self-pay volume:
Discharges: NUMC’s projected volumes are based on 2010 actual levels (23,299). Discharges in the 2011 budget are predicated on 2010 actual discharges, with an addition of 903, which are directly related to NuHealth’s voluntary physician initiative, renal dialysis expansion and major modernization plan. The 903 discharges relates to inpatient growth from the expansion of the renal dialysis unit from 13 to 29 chairs (154 discharges), implementation of the Hospitalist Program (462 discharges) and changes to the neurosurgery, plastics and cardiology programs (287 discharges). The growth will be realized effective 1/1/11.
Census: The average daily census, currently at 410 through August of 2010, is projected at 424 in the 2011 budget. The inpatient growth from expansion of renal dialysis unit, implementation of hospital program, and change to neurosurgery, plastics and cardiology program account for increase.
Average length of stay: Length of stay is consistent at 4.5 days in adults and pediatrics.
Bad Debt Expense: The revenue cycle at NUMC continues to improve and bad debt as a percentage of patient revenue is 11.06%. NUMC’s bad debt expense was $70 million in 2000, $51 million in 2001, $42 million in 2009, and $38 million in 2010, and is anticipated to be $37 million in 2011.
Mr. Gianelli concluded by saying: “The 2011 budget re-invests in important clinical departments, builds on enhanced Disproportionate Share/IGT reimbursements, includes achievable gap-closing initiatives, and relies on reasonable performance assumptions. Management is continually reviewing areas of possible expense reduction and revenue enhancement. The budget for 2011 puts the System, in the near term, on reliable fiscal footing, while giving us the breathing room necessary to continue to implement the Updated Strategic Plan, the Community Health Center Reform Plan, and the $240 Million Modernization Program.”
ABOUT NUHEALTH
NuHealth is a Long Island health care organization delivering essential medical care and disease and lifestyle management to everyone at every stage of life. Also known as Nassau Health Care Corporation, NuHealth is a public benefit corporation managing the operations of Nassau Medical Center, A. Holly Patterson Extended Care and a network of Family Health Centers that bring primary and specialty care out into the community. By emphasizing wellness, cultural sensitivity and collaborative efforts with the North Shore-LIJ Health System, NuHealth is working to make good care more affordable and easier to access.
For more information about NuHealth or its Centers of Care, visit www.nuhealth.net.