SARASOTA COUNTY PUBLIC HOSPITAL DISTRICT

Transcription

1 Financial Statements December 31, 2017 and 2016 `

2 Management s Discussion and Analysis December 31, 2017 and 2016 For the three months ended December 31, 2017, Sarasota County Public Hospital District (the District ) operating margin was 7.3% compared to 6.5% for the three months ended December 31, The District s unrestricted cash and investments position, including Board designated investments, was $906.4 million as of December 31, Days cash on hand was 462 days. Revenues: The District continues to experience growth in inpatient census, as well as outpatient volumes. Hospital admissions for the three months ended December 31, 2017 were up by 7.5% compared to last year. The inpatient average daily census was 457 compared to 421 last year, and average inpatient length of stay was higher at 4.70 days compared to last year s 4.66 days. This slight increase in length of stay has resulted from greater patient acuity, partially offset through increased efficiency and the streamlining of many aspects of patient care delivery, an organizational priority which serves to improve the patient experience as well. Outpatient hospital registrations (excluding emergency care center visits) were higher by 5.4% compared to last year, while emergency care center visits were 0.1% lower. The proportion of Medicare gross revenue as a percentage of total gross revenue increased by 2.3% and the Managed Care/Commercial proportion decreased by 2.0%; the proportions of other payor categories are relatively stable. Total operating revenues increased by $15,778,000 or 8.6% compared to last year. Expenses: Salaries, wages and fringe benefits increased by $10,289,000 or 10.8% compared to last year. This reflected an increase from 53.6% of net patient service revenue last year to 54.7% this year. Salaries and wages increased by $8,336,000 or 10.4%. Fringe benefits increased by $1,953,000 or 12.5% primarily due to increased health plan costs and Social Security and Medicare employment taxes, partially offset by decreased retirement and workers compensation costs. Supplies increased by $3,113,000 or 7.8% compared to last year, primarily related to increased general, orthopedic, and cardiac surgical volume involving various implants, pharmaceuticals and medical supplies. Purchased services decreased by $910,000 or 3.8% compared to last year, primarily due to a decrease in temporary personnel costs, consulting, and rent expenses. These decreases were partially offset by higher repairs and maintenance, utilities, insurance, and marketing costs. Professional fees increased by $809,000 or 14.4% compared to last year, primarily related to legal fees, physician on-call services for the trauma program, and physician fees for the new graduate medical education program. Depreciation expense increased by $758,000 or 6.8% compared to last year. Depreciation on recent additions more than offset the cessation of depreciation on assets that became fully depreciated. 1

3 Management s Discussion and Analysis December 31, 2017 and 2016 Total operating expenses increased by $13,908,000 or 7.8% compared to last year, which is reflective of higher patient volumes. Nonoperating items: For the three months ended December 31, nonoperating items increased by $20,473,000 in comparison to the same period last year. This increase was primarily driven by the impact of increases in market interest rates during the quarter ended December 31, The market interest rate increases generated $2,544,000 of unrealized losses in the District s $833 million fixed income investment portfolio this year and also increased the value of the District s ineffective interest rate swap agreements by $104,000. Investment income increased by $196,000 or 5.4% due to increased interest income on higher invested balances, partially offset by a decrease in realized gains. The District s investment policy requires purchases of fixed income securities rated A or higher, and excludes equity investments from the portfolio. Approximately $245 million of the $833 million of fixed income securities have an average maturity of 261 days and a duration of 215 days, while the remaining $588 million have an average maturity of 4.81 years and a duration of 4.09 years. The change in value of the District s ineffective interest rate swap contracts has been favorable during the first three months this fiscal year. None of the swap contracts require collateral posting by the District, however, collateral postings are required of the counterparties when they are out-of-themoney at certain levels. The District holds termination rights on all of the swap contracts. 2

4 Balance Sheets December 31, 2017 and 2016 Assets Current assets: Cash and cash equivalents $ 73,834,196 59,971,024 Patient accounts receivable, less allowance for uncollectible accounts of $142,293,802 in 2017 and $109,436,213 in ,743,754 65,557,317 Inventories of supplies 14,115,948 11,698,922 Prepaid expenses and other assets 23,068,554 21,929,660 Due from related organizations 1,125,306 1,113,854 Total current assets 187,887, ,270,777 Noncurrent assets: Restricted investments 7,614,294 6,884,865 Board designated investments 832,609, ,820,436 Capital assets, net 591,202, ,054,226 Other assets 33,515,873 29,800,163 Interest rate swaps 24,968,066 24,152,067 Total noncurrent assets 1,489,910,499 1,391,711,757 Total assets 1,677,798,257 1,551,982,534 Deferred Outflows of Resources Deferred outflows related to pensions 14,750,477 26,764,783 Deferred amounts on debt refundings 30,020,639 31,832,394 Deferred effective interest rate swap outflows 3,230,616 3,747,351 Total deferred outflows of resources 48,001,732 62,344,528 Total assets and deferred outflows of resources $ 1,725,799,989 1,614,327,062 Liabilities Current liabilities: Accounts payable $ 30,246,285 31,899,350 Employee compensation and benefits payable 49,762,762 44,722,248 Other accrued expenses 52,508,468 50,339,193 Estimated third-party settlements 22,928,410 19,995,395 Due to related organizations 1, Current portion of State of Florida medical assistance assessment 8,685,991 8,063,161 Current portion of long-term debt 11,770,000 11,345,000 Total current liabilities 175,903, ,364,564 Noncurrent liabilities: Long-term debt, less current portion 368,756, ,473,478 Long-term companion debt, less current portion 21,815,983 22,761,222 Net pension liability 18,293,541 31,620,901 State of Florida medical assistance assessment, less current portion 4,890,494 4,454,710 Other long-term liabilities 32,954,960 28,775,612 Interest rate swaps 18,211,000 24,744,296 Total noncurrent liabilities 464,922, ,830,219 Total liabilities 640,825, ,194,783 Deferred Inflows of Resources Deferred inflows related to pensions 3,421,645 1,844,767 Deferred effective interest rate swap inflows 30,924,141 24,954,476 Total deferred inflows of resources 34,345,786 26,799,243 Net Position Net investment in capital assets 245,264, ,757,699 Restricted for specific purposes 2,462,516 1,740,821 Unrestricted 802,901, ,834,516 Total net position 1,050,628, ,333,036 Total liabilities, deferred inflows of resources and net position $ 1,725,799,989 1,614,327,062 3

5 Statements of Revenues, Expenses and Changes in Net Position Three months ended December 31, 2017 and Operating revenues: Net patient service revenue, net of provision for bad debts of $45,584,023 in 2017 and $42,726,172 in 2016 $ 193,672, ,427,811 Other revenue 4,611,104 4,077,851 Total operating revenues 198,283, ,505,662 Operating expenses: Salaries, wages and fringe benefits 105,874,397 95,585,480 Supplies 43,137,229 40,024,024 Purchased services 23,156,550 24,066,247 Professional fees 6,429,501 5,620,854 State of Florida medical assistance assessment 2,325,431 2,475,784 Depreciation 11,851,670 11,094,093 Total operating expenses 192,774, ,866,482 Operating income 5,509,040 3,639,180 Nonoperating items: Ad valorem tax 13,512,717 12,607,748 Interest expense (3,834,871) (3,640,584) Interest rate swap receipts, net 196,160 15,209 Investment income 3,801,449 3,605,473 Unrealized loss on investments, net (2,544,383) (19,094,451) Change in fair value of ineffective interest rate swaps 104,281 (3,440,796) Other nonoperating (expense) income (806) 709,295 Total nonoperating items 11,234,547 (9,238,106) Excess (Deficit) of revenues over expenses 16,743,587 (5,598,926) Other changes in net position: Contributions restricted for capital purposes 109,881 18,000 Increase (Decrease) in net position 16,853,468 (5,580,926) Net position, beginning of year 1,033,775, ,913,962 Net position, end of period $ 1,050,628, ,333,036 4

6 Statements of Cash Flows Three months ended Decmber 31, 2017 and Cash flows from operating activities: Received from patient care services $ 196,329, ,409,725 Received from nonpatient sources 9,016,515 5,227,101 Payments to employees (109,441,382) (96,941,679) Payments to suppliers (78,365,273) (70,032,124) Net cash provided by operating activities 17,539,296 20,663,023 Cash flows from noncapital financing activities: Ad valorem taxes 44,139,487 41,595,766 Net cash provided by noncapital financing activities 44,139,487 41,595,766 Cash flows from capital and related financing activities: Proceeds from donations restricted for capital purposes - 18,000 Interest rate swap payments received (paid), net 1,001, ,245 Purchases of capital assets (11,100,055) (16,067,863) Interest payments (5,336,094) (5,286,710) Net cash used in capital and related financing activities (15,434,902) (20,382,328) Cash flows from investing activities: Investment income received 3,424,181 3,086,087 Purchase of investments (81,428,359) (76,086,687) Proceeds from sales and maturities of investments 78,047,792 73,034,221 Net cash provided in investing activities 43,614 33,621 Increase in cash and cash equivalents 46,287,495 41,910,082 Cash and cash equivalents, beginning of year 29,289,811 18,737,793 Cash and cash equivalents, end of period $ 75,577,306 60,647,875 Reconciliation of cash and cash equivalents to the balance sheets: Cash and cash equivalents in current assets $ 73,834,196 59,971,024 Cash and cash equivalents in restricted investments 1,743, ,851 Total cash and cash equivalents $ 75,577,306 60,647,875 Reconciliation of operating income to net cash provided by operating activities: Operating income $ 5,509,040 3,639,180 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation 11,851,670 11,094,093 Provision for bad debts 45,584,023 42,726,172 Changes in: Patient accounts receivable (43,549,309) (39,021,082) Other current assets and noncurrent assets 10,163,546 11,801,057 Current liabilities and other liabilities (12,019,674) (9,576,397) Net cash provided by operating activities $ 17,539,296 20,663,023 Noncash capital and related financing activities: Accrued purchases of capital assets $ 5,460,184 7,634,959 Unrealized losses on investments, net (2,544,383) (19,094,451) Change in equity investment (806) 709,295 5

7 SARASOTA MEMORIAL HOSPITAL Utilization Statistics Three months ended December 31, 2017 and Licensed beds Beds in service Average daily census (Note 1) Patient days (Note 1) 42,015 38,686 Adjusted patient days 69,447 64,063 Admissions (Note 1) 8,934 8,309 Observation cases (Note 2) 1,882 2,076 Adjusted admissions 14,767 13,759 Average length of stay (Note 1) Medicare case mix index Outpatient registrations (excluding Emergency Care Center visits) 117, ,510 Emergency Care Center visits 30,840 30,871 Gross revenue percentage by payor class: Medicare 58.5% 56.2% Managed care and commercial 25.8% 27.8% Self-pay and other 6.5% 6.9% Medicaid 9.2% 9.1% 100.0% 100.0% Note 1: Excluding Observation patients Note 2: Excludes conversions to inpatient status 6

8 Selected Ratios Three months ended December 31, 2017 and Operating Margin (Note 1) 7.3% 6.5% Total EBIDA % (Note 2) 16.1% 15.9% Operating cash flow margin 14.6% 14.0% Days cash on hand Maximum debt service coverage ratio (Note 3) Maximum debt service coverage ratio - Obligated group (Note 3) Cash to debt 237% 205% Note 1: Operating margin is computed consistent with the method used by the rating agencies. Note 2: EBIDA - Earnings Before Interest, Depreciation and Amortization (before unrealized gains and losses) Note 3: Income available for debt service is calculated using the most recent twelve month period. The obligated group excludes blended component units of the District. 7