LEADING THE QUEST FOR HEALTH. Financial Report. Six Months Ended December 31,

Transcription

1 LEADING THE QUEST FOR HEALTH Financial Report Six Months Ended December 31,

2 CEDARS-SINAI HEALTH SYSTEM STATISTICS: FINANCIAL REPORT SIX MONTHS ENDED DECEMBER 31, 2013 FYE 06/30/14 Average occupied beds for the month of December 2013 were 621 or 41 (6.2%) less than the budgeted amount of 662 and 8.7% less than last year s 680 average occupied beds. Year-to-date average occupied beds totaled 642 or 5.6% less than last year s average occupied beds of 680. Average length of stay (patient days / admissions) for the month of December 2013 was 5.2 days which was 0.3 days (6.1%) more than the budgeted amount of days and were equal to last year s 5.2 days. Year-to-date average length of stay totaled 5.1 days which is 2.0% more than last year s average length of stay of 5.0 days. Admissions for the month of December 2013 were 3,729 or 451 (10.8%) less than the budgeted amount of 4,180 and 8.5% less than last year s 4,074 admissions. Year-to-date admissions totaled 23,078 or 8.5% less than last year s admissions of 25,229. Patient days for the month of December 2013 were 19,253 or 1,271 (6.2%) less than the budgeted amount of 20,524 and approximately 8.7% less than last year s 21,079 patient days. Year-to-date patient days total 118,203 which is 5.5% less than last year s patient days of 125,070. 1

3 BALANCE SHEET: Cash and unrestricted investments (including marketable securities and board designated assets) increased by $171 million to $1.50 billion at December 31, 2013 from $1.33 billion at June 30, The Medical Center s operating activities provided $219 million in cash and unrestricted investments while investing activities used $20 million and financing activities used $36 million. This net increase was also impacted by changes related to research and restricted activities. Net patient receivables increased by $7 million to $427 million at December 31, 2013 compared to the $420 million realized at June 30, This is primarily attributed to a general slowdown in cash collections in July and August, partially attributed to change in our Medicare payment processor and to the change in the Medi-Cal payment system. At December 31, 2013, the Medical Center s days in accounts receivable were 61.2 days which represents an increase from the 58.8 days reported at June 30, Prepaid expenses and other current assets totaled $71 million at December 31, 2013 which was $2 million less than the $73 million balance at June 30, The decrease in this balance was primarily attributed to the collection of amounts due under the hospital fee program offset by increases in prepaid information services maintenance contracts and by an increase in prepaid insurance. Net property, plant and equipment increased by $20 million to $1.75 billion at December 31, 2013 compared to $1.74 billion at June 30, This is attributed to capital expenditures totaling $95 million offset by depreciation of $75 million. Other assets totaled $134 million at December 31, 2013 compared to $147 million at June 30, The balance in this balance sheet category is primarily attributed to recording of goodwill related to several purchases over the past few years. This balance is also partially attributed to changes in accounting rules that required separate recognition of stop loss under our workers compensation and medical malpractice insurance policies, previously this was recognized as an offset to the recorded liability. 2

4 BALANCE SHEET (CONTINUED) Accounts payable and accrued liabilities totaled $192 million at December 31, 2013 which was $2 million less than the $194 million recognized at June 30, This decrease was primarily attributed to the payment of the hospital fee program that had been accrued at June 30, 2013 and to less capital accruals as construction is reduced at December 31, This was also impacted by a decrease in accrued interest payable. Accrued payroll and related expenses totaled $222 million at December 31, 2013 which was $4 million less than the $226 million seen at June 30, This decrease was attributed to a decrease in accrued bonuses payable as the bonuses were paid in November. This was partially offset by an increase in the accruals for amounts due under the defined contribution retirement plan and an increase in the number of days in payroll accruals because at December 31, 2013 there were 17 days in the accrual while at June 30, 2013 there were only 15 days accrued. Due to third-party payers was $35 million at December 31, 2013 which was $17 million more than the $18 million recognized at June 30, Generally the account balance in due to third-party payers is comprised of amounts payable to or due from the government under the Medicare program for various cost report years. These cost reports are settled several years after services have been provided. There have been no impacts of these prior period settlements in fiscal Thus the fiscal 2014 changes are related to an estimation of the current year settlement requirements. Long-term debt at $1.09 billion at December 31, 2013 decreased by $35 million as compared to the $1.12 billion realized at June 30, This decrease is attributed to scheduled debt repayments. Long-term accrued workers compensation and malpractice insurance claims totaled $95 million at December 31, 2013 which equaled the $95 million at June 30, This was driven as scheduled accruals equaled claim payments. Other long term liabilities totaled $27 million at December 31, 2013 which was $3 million less than the $30 million reported at June 30, Net assets have increased by $203 million to $2.80 billion at December 31, 2013 from $2.60 billion at June 30, This change is primarily attributed to operating results and to investment returns. 3

5 STATEMENT OF OPERATIONS: Net patient service revenues for the six months ended December 31, 2013 totaled $1.24 billion which was $15 million less than the budgeted total of $1.26 billion but exceeds the $1.16 billion realized last year. The net patient service revenues decrease was primarily due to admissions being 7.4% lower than budget and patient days being 3.4% lower than budget. Admissions decreased from the 24,916 budgeted admissions to 23,078 actual admissions while patient days were budgeted at 122,352 patient days yet came in at only 118,203 actual patient days. Other operating revenue for the six months ended December 31, 2013 was $125 million which was $3 million more than the budgeted total of $122 million and greater than the $115 million recognized during the same period in the prior year. The Medical Center experienced a $3 million increase from the current year budget related to other revenue. Expenses for the six months ended December 31, 2013 were $1.23 billion compared to a budgeted total of $1.25 billion and $1.18 billion last year. Included in expenses are salaries and related expenses totaling $675 million year to date, compared to a budgeted total of $683 million and $638 million last year. Labor costs, including agency personnel costs, were budgeted at $3.71 million per day which exceeded the $3.67 million actual amount incurred per day. Supplies and other expenses for the six months ended December 31, 2013 were $395 million which was $4 million less than the budgeted total of $399 million but was slightly more than the $391 million recognized last year. Other building and equipment costs for the six months ended December 31, 2013 were $66 million which was $3 million less than the budgeted total of $69 million and was $2 million less than the $68 million realized last year. Based on these results, operating income totaled $133 million for the six months ended December 31, 2013 which is $3 million more than the budget of $130 million. 4

6 STATEMENT OF CASH AND UNRESTRICTED INVESTMENTS FLOWS (EXCLUDING RESTRICTED FUNDS): Cash and unrestricted investments flows provided by operations for the six months ended December 31, 2013 totaled $219 million compared to the $236 million that had been budgeted to be provided by operations. Attributing to the $17 million decrease includes an increase in patient accounts receivable ($19 million), a decrease in accounts payable and other accrued liabilities ($13 million), a decrease in accrued payroll and related liabilities ($11 million) and a decrease in accrued workers compensation and malpractice claims ($3 million). These decreases in cash and unrestricted investments flows were partially offset by an increase in income from operations ($3 million), a decrease in inventories, prepaids and other current assets ($7 million), a decrease in other receivables ($3 million) and an increase in due from third-party payers ($16 million). Cash and unrestricted investments flows used in investing activities for the six months ended December 31, 2013 totaled $20 million, which represents a favorable variance of $76 million as compared to the $96 million budgeted to be used in investing activities. These favorable results were attributed to investment returns of $74 million as compared to an expected investment return of $15 million and a decrease in other assets ($21 million). This was partially offset by an increase in capital expenditures ($2 million) and an increase in amounts transferred to affiliates ($2 million). Cash and unrestricted investments flows used in financing activities for the six months ended December 31, 2013 were $36 million as compared to an expected expenditure of $47 million in the budgeted results. The $11 million variance is attributed to scheduled debt repayments and to the Medical Center s timing of payments of claims under the self-insured workers compensation and medical malpractice insurance policies. The net results of the operating, investing and financing activities for the six months ended December 31, 2013 is to increase the Medical Center s net cash and unrestricted investments by $163 million. Which represents an increase of $70 million as compared to the expected $93 million budgeted increase in cash and unrestricted investments. 5

7 FINANCIAL RATIOS: December 2013 June 2013 December 2012 Current Ratio Days in Patients Receivables Days in Current Liabilities Debt to Equity Debt Service Coverage Ratio¹ Return on Equity¹ 9.5% 14.0% 9.1% Return on Revenues¹ ² 10.7% 14.6% 8.5% 1. The debt service coverage return on equity and return on revenue ratios do not include net investment income. 2. Return on revenues includes bad debt as a revenue reduction before the calculation of the ratio. 6

8 AVERAGE OCCUPIED BEDS YEAR ENDED JUNE 30, Budget Variance 2013 July August September Quarter 1 October November December Quarter 2 January February March Quarter 3 April May June Quarter (2.1)% (3.4)% (5.3)% (3.6)% (3.0)% (0.2)% (6.2)% (3.2)% Y-T-D (3.5)% 680-7

9 July August September Quarter 1 October November December Quarter 2 January February March Quarter 3 April May June Quarter 4 AVERAGE LENGTH OF STAY YEAR ENDED JUNE 30, (Calculation = Patient Days / Admissions) Budget Variance 6.1% 2.0% 4.1% 4.1% 2.0% 8.2% 6.1% 4.1% Y-T-D % 5.0-8

10 ADMISSIONS YEAR ENDED JUNE 30, Budget Variance 2013 July August September Quarter 1 October November December Quarter 2 January February March Quarter 3 April May June Quarter 4 3,892 4,062 3,673 11,627 3,970 3,752 3,729 11,451 4,224 4,242 4,053 12,519 4,191 4,026 4,180 12,397 (7.9)% (4.2)% (9.4)% (7.1)% (5.3)% (6.8)% (10.8)% (7.6)% 4,162 4,440 4,004 12,606 4,340 4,209 4,074 12,623 Y-T-D 23,078 24,916 (7.4)% 25,229 9

11 PATIENT DAYS YEAR ENDED JUNE 30, Budget Variance 2013 July August September Quarter 1 October November December Quarter 2 January February March Quarter 3 April May June Quarter 4 20,294 20,125 18,825 59,244 19,979 19,727 19,253 58,959 20,742 20,834 19,903 61,479 20,580 19,769 20,524 60,873 (2.2)% (3.4)% (5.4)% (3.6)% (2.9)% (0.2)% (6.2)% (3.1)% 20,239 21,738 19,970 61,947 21,341 20,703 21,079 63,123 Y-T-D 118, ,352 (3.4)% 125,070-10

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15 STATEMENT OF REVENUE & EXPENSES SIX MONTHS ENDED DECEMBER 31, (In millions) Budget Patient Revenue -Inpatient - Routine Care -Inpatient - Ancillary Services -Outpatient Total Patient Revenue Deductions Net Patient Revenue Other Operating Revenue Total Revenue Expenses Income from Operations $ 1,128 2,567 2,000 5,695 4,454 1, ,366 1,233 $ 133 $ 1,227 2,582 1,837 5,646 4,390 1, ,378 1,248 $ 130 $ 1,173 2,412 1,613 5,198 4,035 1, ,278 1,179 $ 99 $ 1,081 2,185 1,372 4,638 3,585 1, ,172 1,118 $ 54 14

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