Hoboken University

Medical Center
2010 Budget Overview
Public Meeting, February
18th , 2010
HUMC Operating Expenses 2005-2010 in millions
(before interest and depreciation)
 How was it done?
• Staff (non-union as well as our two unions)
reduced labor costs by 10% by rolling
back salaries and other pay (on-call,
overtime)
• Physicians reduced expenses by
maintaining a 10% roll back from last year
and rolling back additional physician
contracts this year
• Reduced cost of the top two executives by
over $1 Million
• Received 10% concessions from several
vendors
• All executive staff gave up incentive
payments
 What did the employees
give up?
• Salary cuts of 7% for JNESO and non-union,
6% for 1199J
• Elimination of 401K contribution 3% (non-
union)
• Reduction in employer benefit contribution
for 1199J
• Reduction of on-call payments for nurses
• Increase of overtime threshold from 37.5
hours to 40 hours
• Elimination of benefit time counting towards
overtime
• Total: $6 Million annually
 How do HUMC expenses
compare in the State?


Full time equivalents (FTEs) per

Occupied Bed:
HUMC is 3rd best in the State out of 48

hospitals


Total Expenses per Admission

HUMC ranks 7th best in the State out

of 48 hospitals


Source 2009 NJHA Fast Report (June 2009)


 What are the challenges in
2010 ?
• Receiving fair rates from private
payers
• Improving revenue cycle process,
including but not limited to
decreasing denials
• Compensating for any additional cuts
in Charity Care
• Increasing our volume, especially
surgical volume
• Maintaining a high Case Mix Index
 Major Initiatives for 2010
• Implement a hospitalist program by
June
• Open the vascular lab by Fall 2010
• Seek program specific affiliation (s)
with quality partners in areas such
as cardiology, oncology, neurology
• Begin phase II of the OB renovation
• Rebuild trust in our community
•
DRAFT 2010 BUDGET
 FY09 FY10

            Actual   BUDGET VARIANCE  

Operating Revenues:  

Net Patient Service Revenue less Bad Debt $   97,864,115  $    100,791,261  $   (2,927,146) 3.0%

  Disproportionate Share Revenue - MA           8,479,491               9,270,610          (791,119) 9.3%

Total Patient Service Revenues     106,343,606         110,061,871        (3,718,265) 3.5%

Other Operating Revenues:

State Charity Care subsidy (UCC)      14,319,433           14,130,081           189,352  -1.3%

State Hospital Relief subsidy           598,377                        -             598,377  0.0%

State Mental Health subsidy           255,947               255,947                    -    0.0%

Graduate Medical Education (Mcare & Mcaid)            2,031,745             2,031,745                    -    0.0%

Grant Revenues        4,336,051             4,336,051                    -    0.0%

Stabilization Grant Revenues        1,000,000             6,000,000        (5,000,000) 500.0%

  Other              1,063,797               1,063,797                    -    0.0%

Total Other Operating Revenues      23,605,350           27,817,621        (4,212,271) 17.8%

  Total Operating Revenues        129,948,956           137,879,492        (7,930,536) 6.1%

Net Patient Service Revenue
(in millions)
Requisitioned Expenses:

Salaries - Employees & Physicians $   67,586,280           63,714,968  $   (3,871,312) -5.7%

Salaries - Residents        1,263,202             1,357,805             94,603  7.5%

Fringe Benefits      19,809,209           19,126,608          (682,601) -3.4%

Physician Pro Fees        7,474,628             7,478,843               4,215  0.1%

NonPhys Pro Fees & Purchased Srvs      15,743,246           14,587,378        (1,155,868) -7.3%

Supplies      16,495,089           16,923,197           428,108  2.6%

Rentals & Leases        3,430,515             3,352,924            (77,591) -2.3%

Utilities        2,523,445             2,721,032           197,587  7.8%

Insurance        1,875,316             1,923,827             48,511  2.6%

Repairs & Maint           990,012             1,076,959             86,947  8.8%

Other                 944,668               782,057          (162,611) -17.2%

  Total Manager Operating Expenses       138,135,610           133,045,598        (5,090,012) -3.7%

Manager/Contractor $ 138,135,610  $    133,045,598  $   (5,090,012) -3.7%

  HMHA - Direct Organization Costs             439,539                 450,000             10,461  2.4%

Total Operating Expenses     138,575,149         133,495,598        (5,079,551) -3.7%

  Income(Loss) From Operations Before Depreciation & Amortization
        (8,626,193)              4,383,894      (13,010,087) -150.8%

Debt Service Payment                   -                          -                      -            -   

  Depreciation & Amortization Expense         (5,377,335)             (5,377,044)                (291) 0.0%

  Income / (Loss) from Operations       (14,003,528)               (993,150)     (13,010,378) -92.9%

NonOperating Revenues (Expenses)

Interest Expense       (2,624,049)           (2,598,551)           (25,498) -1.0%

Interest Earnings - Bonds             36,832                 36,832                    -    0.0%

HUMC Foundation Donation            500,000                        -             500,000  0.0%

Fund Balance - Shortfall 2009                   -                          -                      -    0.0%

Sale of Rehab Beds                   -               1,200,000                    -    0.0%

   

  Revenues over Expenses    $  (16,090,745)   $       (2,354,869) $ (12,535,876) -85.4%

 January 2010 results
• Draft financials show $300 K of
income before interest and
depreciation
• January has only 1/3 of the labor
concessions, JNESO and 1199J
concessions started with pay-period
# 3 which falls in February
• Annualized payroll based on pay-
period # 3, including overtime and
benefit savings is exactly on target
 Board questions and material
provided
• Approximately 35 questions were asked
by board members last Friday
• Questions included lists of employees,
contracts, list of cell phones &
beepers, tuition re-imbursement,
catering expenses, travel expenses,
benefit expenses, overtime expenses
by department, list of software
vendors, IT costs, collections costs,
managed care contracts, residents
fees, food and housekeeping costs,