GRADY MEMORIAL HOSPITAL CORPORATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the Period Ended July 31, 2016
The following pages contain information related to the Grady Memorial Hospital Corporation’s (GMHC) actual operating and financial performance for the period ended July 31, 2016 compared with the 2016 budget as well as the 2015 actual results (excluding Hughes Spalding Children’s Healthcare operations).
STATISTICAL HIGHLIGHTS – July 2016
· July YTD Adult Acute Discharges are up 3.5% from budget and 5.1% above 2015. The service lines with the greatest growth have been in the targeted strategic service lines of Neuro and Ortho.
· July YTD Surgeries are 2.0% below budget and 2.4% above prior year.
· Crestview resident days are 1.4% below budget and 2.2% above prior year.
· Primary care clinics visits are 5.5% below budget and 4.0% below prior year.
· ED visits are 3.7% above budget and 5.4% above prior year.
· Specialty hospital based clinic visits are up 3.6% from budget and up 5.8% from last year. The budget variance is largely driven by improved throughput in Urology, Med Subspecialty, ENT, GI and Psych.
· Live births and deliveries were 2.4% above budget and 4.0% over prior year to date.
· Observation case volume has stabilized and was over budget 0.4% and over prior year by 0.1%.
· YTD CMI of 1.70 was improved to budget of 1.68, and improved from prior year of 1.66.
FINANCIAL HIGHLIGHTS (Normalized)
Operating Excess/Shortfall:
Financial performance as of July 31, 2016 generated a surplus of $21.2 million representing a $2.6 million excess vs. budget driven by $22.3 million excess in revenue and ($17.6) million of additional expenses. Results were $1.9 million ahead of 2015 driven by $39.7 million of excess revenue reduced by ($36.7) million of higher spending. Key revenue and expense variances are summarized below.
($ in Millions) / July YTD 2016 Act / July YTD 2016 Bud / 2016 Act vs. Bud / July YTD 2015 Act / 2016 vs.2015 Var
Net Patient Revenues / $398.0M / $379.1M / $18.9M / $360.8M / $37.2M
n Payor Mix – Change in I/P payor mix and collections drove $8.0 million in revenues over budget and $23.5 million in revenues over prior year.
n Outpatient Volumes – OP volumes exceeded budget and an improvement in O/P collections resulting in $6.2 million in revenues over budget and $4.1 million over prior year.
n Medicaid Outliers – Outlier payments are $5.5 million under budget and $6.9 million under prior year.
n Governmental Payor CMI – Case mix is $1.6 million over budget and $3.1 million under prior year.
n Pharmacy, Crestview, EMS and Employed Physicians – Collections increased $19.1 million over 2015 collections.
($ in Millions) / July YTD 2016 Act / July YTD 2016 Bud / 2016 Act vs. Bud / July YTD 2015 Act / 2016 vs.2015 Var
Expenses / $518.6M / $500.9M / ($17.6M) / $481.9M / ($36.7M)
n Salary & Benefits – YTD expenses of $219.4 were ($2.0M) unfavorable to budget largely driven by volume.
n Contract Labor – expenses of $6.6M were ($3.5M) over budget due to extended searches to fill vacancies of permanent positions and flat vs. prior year.
n Professional Fees – expenses of $70.4M are ($2.8M) over budget and ($6.3M) over prior year driven by an increase in volume.
n Drugs & Supplies - expenses of $109.9M are ($12.6M) over budget and ($16.3M) over prior year, driven by increased volume and the usage of higher cost drugs and supplies driven by patient mix.
n Purchased Services – expenses of $37.7M are $0.4M under budget and ($1.9M) over prior year.
n Repairs & Maintenance - expenses of $14.4M are $1.3M under budget and ($1.6) over prior year.
n Depreciation and Amortization – expenses of $23.6M were $1.5M under budget.
Presentation of Financial Statements –
Grady Memorial Hospital’s internal financial statements reflect normal operating results vs. budgeted operating results. GAAP financial results through July 2016 YTD include ($1.6M) of unfavorable non-recurring events listed below:
o ($0.1M) Revenue - 2015 prior year adjustment
o $0.3M Revenue - 2014 unbudgeted cost report settlements.
o ($1.9M) Revenue - 2015 UPL reduction
o $8.9M Revenue and $8.8M Fulfillment Expense - Morehouse Medical Education Grant.
Total GAAP Financial Results including Normalizing Items generated $19.7 million in Net Excess.
Confidential Page 3 of 3 8/23/2016