HomeMy WebLinkAboutMINUTES - 02071984 - FC.2 f 2f.
TO,!. BOARD OF SUPERVISORS
FROM: Finance Committee Contra
Costa
DATE: February 6, 1984 County
SUBJECT: Review of Financial Reports on Health Services
Department Enterprise Funds
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
The Finance Committee met with Mr. R. Roberts, Arthur Young & Co. , D. L.
Bouchet, County Auditor-Controller, M. G. Wingett, County Administrator,
W. B. Walker, M.D. , Acting Health Services Director, and staff members to
review the findings and recommendations set forth in the January 31, 1984-
report
984report by Arthur Young & Co.
The format followed at the meeting was to seek further explanation and
documentation supporting the findings and recommendations included in the
report. Additional data and information was requested by the Finance
Committee and provided by the February 3, 1984 memorandum (copy attached)
by Mr. Roberts.
1. Revenue Shortage - It was indicated that the major financial problem
resulted from the inability to generate revenues--primarily Medicare
and Medi-Cal--in accordance with the actual receipts in fiscal year
1982-1983 and the projected increases for fiscal year 1983-1984. The
drop in these major revenue sources resulted from a number of adverse
factors including a decrease in utilization due to unexpected State
contracts with other community hospitals for Medi-Cal patients and a
reduction in length of stay largely emanating from regulatory efforts
of ,the State. It was indicated by Mr. Roberts that with an improved
financial and data collection system and alert management the trends
in decreased utilization could have signaled early intensive investi-
gation of this growing problem. The estimates of patient utilization
which resulted in revenues being overstated in these programs were
attributed to unanticipated State actions. Mr. Roberts stated that he
"can' t fault them on that number" in reference to the Medi-Cal patient
days projection and that "average length of stay has taken everyone by
surprise. " Also, it was indicated that the rates negotiated with the
State are not adequate to recover costs; this situation is partially
attributable to the reduction in estimated patient days of care which
increases unit costs . It is recommended that one of the priority
projects for Nu-Med be to accurately ascertain cost of services and to
attempt to reopen negotiations with the State to obtain a more
appropriate rate for County services .
Another factor which contributed to the overall revenue deficit is that
some MIA patients received services from other providers who were paid
by the county; consequently, the revenue from these services were not
earned by Enterprise Fund I. This policy stance was maintained by the
Health Services Department because it was assumed there was sufficient
MIA revenue to cover the cost involved.
CONTINUED ON ATTACHMENT: xx YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR XX RECOMMENDATION OF BOARD COMMITTEE
XX APPROVE OTHER
SIGNATURESupervisor T TorlaksonS) Supervisor S. W. McPeak p
ACTION OF BOARD ON February 7 , 1984 APPROVED AS RECOMMENDED _X OTHER X
The Board also requested information on the management team of County
personnel comprisingtheTask Force studying policies and procedures of
the HealthServicesthepartm non thee Tapp Force wes requ sted t� Vrovid?
reportsproblems note and tie reso u ion o
same , as well as to make recommendations relative to the sound management
VOTE OF SUPERVISORS Of said Department.
X UNANIMOUS (ABSENT "" > I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISORS ON THE DATE SHOWN.
CC: Acting Health Services Director ATTESTED %,_gJC
Auditor-Controller J.R. OLSSON, CO TY CLERK '
County Administrator AND EX OFFICIO CLERK OF THE BOARD
Director of Personnel 270
Employee Organizations
M382/7-83 BY , DEPUTY
2 .
The statement that the approved budget was unrealistic and unattainable
relates to the total context of revenues increasing while expenditures
were budgeted to decrease. It should have been anticipated that it
would take additional expenditures to generate increased revenue absent
some unusual circumstance.
It was indicated that revenues may be increased through the use of
improved eligibility determination, billing and collection procedures.
It is gratifying to note that Nu-Med will focus attention on these
areas to improve revenue generation. It is recommended that the steps
taken to achieve this objective and results attained be monitored very
closely by this Board with reports to be prepared no less than monthly.
2. Expenditure Reductions - Positive steps need to be taken to reduce the
excess expenditures over revenues. Continued attention must be devoted
to these efforts. The Beilenson hearings deter the expenditious imple-
mentation of cost reduction measures. Since salaries and benefits are
such a substantial component of total expenditures, measures must be
considered which. will .allow management the flexibility to rapidly
adjust staffing to changing workloads . Furthermore, the health
services fee policies of the County must be re-evaluated in the
context of a period of continuing limitations imposed by the Federal
and State governments. It is recommended that the Acting Health
Services Director and Nu-Med report to the Finance Committee on
March 26, 1984 and the Board of Supervisors on March 27, 1984.
3. The 1982-1983 Deficit - It was indicated that if the $3.4 million
deficit had been realized at an early date, additional funds could
have been appropriated to increase the General Fund subsidy thereby
alleviating that portion of the total deficit. It should be under-
stood, however, that this Board did not have General Fund monies in
this magnitude available for such purpose and would have had to cut
other public service programs--a plan which had no apparent support by
this Board. Also, any significant expenditure reductions for health
services would have had to focus largely in the mental health, drug
and alcohol programs; there was no desire expressed to cutback these
community programs. In summary, it would have been extremely difficult
for this Board to have increased the subsidy to the Health Services
Department to cover this deficit.
4. General Fund Subsidy - The amount of the 1983-1984 General Fund subsidy
was unrealistic in view of the lack of a clear budget plan for achieving
such a reduction. It should be kept in mind that a mental health cut
of $1.9 million proposed by management was not realized. It is
apparent that the County cannot make up State cuts from limited local
resources. The AB 8 matching requirement is a compelling factor in
determining the local assistance which must be provided for health
care. Although it is reasonable to expect to achieve some stabiliza�r
tion of the amount of the subsidy, an enlightened budget plan can only
be achieved if the budget is presented in a programmatic manner whereby
program budgdts and consequences of reduced funding levels are
presented for evaluation.
5 . Management - A review of the report indicates that there were many
extenuating, complicated issues which contributed to the current fiscal
situation. The continuous effort over the years to cut down on manaage-
ment and financial costs resulted in the inability to obtain an
experienced health services fiscal officer and to replace the antiquated
data processing systems at this facility. Although hospital management
should have picked up some of the early warning signs of the declining
revenues it does not appear that what has transpired can be described
as the result of gross mismanagement.
271
3.
6. Budgeting for Alcohol, Drug Abuse and Mental Health - The inclusion of
the budgets for these .programs in the Health Services Department only
clouds the total financial picture. In order to more clearly present
budgets on a program basis and to show local financial requirements,
it is recommended that the County Administrator, Nu-Med and the Acting
Health Services Director review the desirability of separating these
budgets and to report back on this proposed budget procedure to the
Board in time for preparation of the new budget for fiscal year
1984-1985 .
7. Change in Organization - The inability of county government to respond
in an expeditious manner to rapid changes in health care Services is
acknowledged and of real concern. The Board of Supervisors can maintain
control of hb.alth care policies through a number of alternative organi-
zation structures. It is recommended that the advantages and disadvant-
ages of all alternative organization arrangements for the governace of
the County Hospital--including the establishment of a non-profit
corporation to provide care through contracting with other facilities
and the closure of the County Hospital--be explored with a full report
to be prepared by the County Administrator, Health Services, and Nu-Med
for consideration by the Board of Supervisors as soon as possible.
B. Summary - It is recommended that the above suggested actions be approved
by the Board. Other Board members may have individual requests with
respect to other findings mentioned .in the report. The Finance
Committee did not include a discussion of each of the findings and
recommendations included in the report as many will be addressed in
the managerial contract with Nu-Med. It is requested that monthly
financial statements and progress reports on items discussed in this
report be filed with the Board. . The Finance Committee will consider
this subject further at its March 26, 1984 meeting.
Z"72
1
-/ CONTRA COSTA COUNTY
HEALTH SERVICES DEPARTMENT
To: Board of Supervisors Date: February 3, 1984
Finance Committee
From: Robert D. Roberts Subject: Health Services Department
Arthur Young & Company Information
The Health Services Department has asked Arthur Young to coordinate
the effort to accumulate the data requested by the Finance Committee.
The attached information was prepared frau the best sources avilable.
It was necessary, due to the time frame and system restraints; -to
estimate certain numbers. All estimates and assumptions have been
footnoted.
Every effort was made to provide the most accurate infonmmation
available and, where applicable, that the information agreed with
the January 31, 1984 financial camparisons. We will attend the Finance
Committee meeting on February 6, 1984 to discuss these numbers and our
report.
RDR:bgg
A-41 3/81 73
m
m
m
`n m
M
-n
z w N w 4.A V
-� R _
O t0
c+ v 00 OD O
fDt"
•• -i --1 c+ ul t0 Ln rt G) -<
O O O — A V m 'S
4.0 00 — n O pp
O O + > > c++ In to w
'S C r+ (D (D ? O O O co
r+ r+ C+ (D Q — — O C CD
o -0 X o o W a o 0 0 CI- •� ti W c c ic
c t+7 CA
O c+ Vf C C 0 U3 '3 µ µ ►+ R Ov H
O O O a '13 nm N O O l7 R O
'S C+ t+ C 'S n
m z ( (D O
D O 9 x
n d O (7 O W GO N (D (D
O O S R 1 '
n In (3 (TD c C7 w C* Oj
�.
= o c c `+ cLn co � -mss a x Gni
D m -h -s a -s - - - m a on
r+ Cl S m w (D C) (D H
-r A ON 7
03r = O -S N J (JD V 00 c+ 0 W W 0
3 0'•O < m A 0 N O N W w w w
7 m N r+ t0 — 00 C 00
(D n O (1 H N O N CL A x
Z Cr < (D -h r
UD
(n Q N O m O
M (D -h A H
r► r+ O m co 400.
m m N O -4 Crn
A
m W a 'T7
n -n v- o r _s c a 0-<m t< o to OD au w r a 0 0D
M v \ n .
-S .0 O gas► 4b.11 4^ �- +- - -
' fmf (OD t< `m+7 of W V d C+ r z r A W R (D OD N
c+ N n O m m -( 0 C) to a r
c+ m , C.. A i t t0 to -s CA m O O O d
f7 (ID 91 C: W N — -h -h N ;a [97
O Q N N w O w (D C 'Cvi b
C+ (T 3 � O A N a b� Y
(A 'T (D Ln O Ul ton H
m O O O CN m G7 [3r7•
a a r+
N z z
t= - - bt7 C7 '=J Exi H
or+ o p two w a -mss co
r0+ O s Cl) N N %0 a% •s w r
or E w - CD
CC+s -J w :3 \w •+n
o o �.n R c c
00 m r zt7
to v 0o 0 z
m a w ( c+ m Co
r► r+ Q ( ( c+ w
(D m co oD
n m A C 00
-h c+ Z406. x
- Wc+ 02 0 '3 't7
(D O
m
tp w coOD 0 4 co
:3 %0 OD a (D w
m N OD w w 0 \
mR R OD
Zn .+ to G (D
O 0% .+ 'f a
N N A (D
b W
'S
O
m
ts► C'f
Ol r+
W m -n
Q -<
A ( (
Ln rn 00
N m co
t0 7 A __.- •
C 2 7
•r �
m
ul
1�1 .
�i ................. --
OR
te
F�:i .•.'t?._ ... ...._,. . •i'i'i:;.^ •11•l':,. ..'y!=- --.. .
?':�' ..� .•• �'::':`, rii?512 r' 330'�tit :`'.;:'::
f'':T ! „!:;�= • •. .c•'•',fh:. 19 7?:•1 172W" 2 4'i'r
�!` r rt r. _ CG'��;,;i:r: C:t:7^ 1 111174""'
OT -f: ,.4, ... "r.:.�'r�E �:... ,._. •7 ----- _. .
i3 u
ALL C'i EH`?:'- �'. ..:':E-01E '33nnnn '69:;.'c
3341422' 70:.._ ''342 '00
is m: C� ;.1.�• 1 %9'�': 10J0/ 4: 1:2•�i 't' 1:'STATE -to99:
f`c F'UALIC SEA+ 'P E=1 I EF2
STATE F E -'E:'7Q'-_ 10 3 1511^_? '1511039 739700. 7397001 5593455
ENTERPRISE 0L1•
PURE COUNTY EL'SSiI''f TO 725_=1: 10176139 6248199 Q544756 .'33445
® ENTERPRISE FUNKS
® 1. INCLUDES REVENUE FROM OTHER COUNTY DEPARTMENTS. DOES NOT INCLUDE INTERFUND TPAN!MS
BETUEEN EF1 AN., EF2.
2, 83/84 COUNTY S"BS'II!Y DOES NOT 'INCLUDE Tf:MSFER OF $674118 TO PUBLIC 117-k"R
OR THE MIDITIONAL APPROPRIATION OF f24000000 AND S1i2 MOO OF COUNTY
SUBSIDY 10 EF1, AS THESE CHANCES OCCURED AFTER THE ADOPTION OF THE BUDGET.
® 3. STATE ABO FUNDS VERS SPLIT BETUEEN PUBLIC HEALRH AND THE ENTERPRISE FUNDS USINS
THE RATIO OF STATE DOLLARS TD ADS ALLOVABLE COUNTY DOLLARS FOR EACH FUND.
0
nw
? t
275
UNITS OF SERVICE BY GEOGRAPHICAL AREA
3.A.
Inpatient Admissions (Note 1) Total
(Medical and Mental health) Out of (includes
East Central West County newborns)
1981-82 1 ,989 2,907 1 ,817 327 7,040
1982-83 2, 184 3, 197 2,009 363 7,533
Outpatient Visits (Note 2)
Medical Care
1981-82 44 ,066 72, 184 45,397 161,647
1982-83 42,400 75, 158 45,609 163, 167
Mental Health (Note 3)
1981-82 .36,248 11 ,324 43,776 81,348
1982-83 22,090 13,802 27,451 63,343
UNITS OF SERVICE BY FINANCIAL CLASS (Note 4)
Inpatient Days Outpatient Visits
(includes newborns)
MIA's
1981-82 8,420 Note 6
1982-83 (Note 5) 5,412
Private Pay
1981-82 2,865 20,477
1982-83 4,955 23,682
Medi-Cal (Medical)
' 1981-82 (newborn 1, 195) 16,474 66,895
1982-83 (newborn 1,208) 10,842 53,511
Medicare (Medical)
1981-82 6,758 20,774
1982-831 5,442 20,240
Medi-Cal (Mental Health)
1981-82 7,372 41 ,331
1982-83 4,519 25,418
Medicare (Mental Health
1981-82 2,403 5,584
1982-83 2,286 5,238
Other
1981-82 5,088
1982-83 9,931.
TOTAL
1981-82 (newborn 2,044) 49,380
1982-83 (newborn 2, 180) 44,387
Average Length of Stay
1981-82 7.9
1982-83 6.4 276
DATA1 ,
NOTES TO SECTION 3
_Note 1: Admissions were obtained from HSU Reports, includes newborn admissions
of approximately 790 each year. This report is known to be inaccurate
but it is assumed to be consistent between years.
Note 2: Patient origin is unavailable for outpatient clinics. Geographical
distribution can be closely approximated by total visits to clinics
in each geographical area, as reported in this table.
Note 3: The large declines in East and Nest County are primarily attributable
to the contracting out of Methadone services in fiscal year 1982-83.
Note 4: Patient days include newborn days; Medi-Cal and Medicare regular
medical services were obtained from the cost reports and other
classifications were obtained from the HSU report.
Note 5: The County assumed responsibility for the MIA's, and added them to the
Health Plan, in November 1982. Because of the difficulties in
modifying CHAS to accommodate this change, 1982-83 units of service
are probably understated.
Note 6: MIA outpatient visits are not availablew prior to MIA assumption in
November, 1981 . For the period November, 1982 to June 1983, there were
20, 113 I;AGS(formerly MIA) visits.
DATA2
277
4. CURRENT FILLED POSITIONS
(Tables "A" and "B" effective June 30, 1983 and February 2, 1984
respectively. )
METHODOLOGY:
1 . Includes staff in all three types of permanent positions (full time,
permanent part time, permanent intermittent) and temporaries backing
vacant permanent positions (assumes all temporaries were backing
vacant permanent positions) .
2. Leave of absence "vacancies" were not counted as filled positions un-
less backfilled by permanent or temporaries (in which case the position
was counted as filled).
3. The February 2, 1984 effective date for Table "B" was chosen to
reflect the abolishment of several management positions effective
February 1, 1984.
278
DATA3
1 ,
'
CD y Z USw►i 1 .-3 ►� 1-' b r+
w
1 " H. rt F'• 1 r'+ OQ H. H
Nn CD �' 9� 7 rn n r+ w
Q °Q °r' rt 'v t-' H m' n
y ' ►s H 1 5 z (' � O
to n w y 1 O & F0 & 0
1
CD rt 1
I
~ 1 r+ w
1
°c r+ IL �.
1 to , I.J. 9 f.+• w
1 CD ,
X N• N r+
CD i E-.,. O
' 1 N N
1
� CD H .70
' W rt
(D O
1 r+
1 w
1 1 r+
1 1 Cii
1 ,
1 ,
M O
A 1 t., r +-+ 100 N /-+ N
N 1 W 00 t!1 O O% 00 A 1 tD V 00 O% ,A Ln V ►.j H
V i W W N N tD O, N ; A r V Ln 0% Ln O •0-.4 (7 C
I ' CI 1
' ' O Cr1 C
1 ,
U) �o E
' ' l
I 1
r 1 , W
1--A 1 Ul O O 00 O r
t b
1 ,
00
1 , W
' 1 H
' s1 1
H
1 ,
V 1 00 r r A 1 00
Ln 1 O+ Q• 'lD N N a W 1 tD O O W 00 N p% H
1 ,
1 ,
1 ,
,
� 1
� 1
� 1
1 ,
1 ,
00 • , I--•
00 W 1 N 1--A W Q�
V 1 J.- W VA N L" V 0%
1 ,
1
1 1
1 ,
1 ,
r a
1 V N 1--• N 0-0 til (71 W
N W J co
tD V 1 N ±
O 1 N �D O O O Opp 00 1 0-0 1.
A U 1-• O O f+
1 ,
/ ►� to () (D n N• "1 ::r' !D (1 rt C
1-4
to a ; M, C+ w rt to
� � � ; rwt fy � �•
,
(D ,
�
8 H• CCn r+
,
CO , mw
,
rt
w ,
1 , rt
1 ,
1 ,
M O
1 ,
1 r,
W t A F--+ 1 00 W 1-+ N
tl'1 1 00 W Ln 0o A 00 W 1 CN O� O� O A W .•� � ►�•�
N 1 1p Vi O� N O V to t W c� V
1 ,
1-4
1 ,
a
O� 1 00F-+ A 00
W , (D 00 V W to F-A N , W O 00 W Qt I." ttwn N (n
' d
t0
00
� ' C
' � H
Ln , 00 I--1 tJ� 1 0% W N
00 00 t, 00 N A N 00 O A O tD O L l H
1 ,
1 ,
,
I ,
1 ,
1 ,
1 1
1 ,
00 N N 1 LnF..1
A 00 N A O ►� F-� O , O, W O N W N c,
1 ,
1 ,
' ' K
1 ,
1
1 ,
1 ,
1 ,
V 1 O% 1--� 1--� 1--� N 1 O
t1� 1 OD O O O A tD A 1 V C, V V V la N
to 1 vi W N W N W N 1 O 10 10 0% N 00 ON
1 ,
280
Al: •�1