Department of Pathology Benchmarking

Marty LawlorFriday, November 8, 2013

Financial Metrics• Questions vs. Answers• Reviewing financial data rarely gives us the

answers we are looking for.• It will direct us to the questions we need to

ask about changes in our operations.

HOSPITAL METRICSHOSPITAL METRICS

Hospital Consolidated FY13 June YTD Financials

HHCMed

School Shared

Services MHC EliminationsUMHS

Consolidated

Total Revenues $1,140.6 $581.3 $57.7 $3.9 ($141.3) $1,642.2

Operating ExpensesPayroll $605.1 $450.6 $43.6 $1.8 1,101.1 Depreciation $100.5 $20.9 $0.1 $0.1 121.5 Other Operating 470.3 231.7 16.9 3.4 (141.3) 580.9

Total Expenses $1,175.9 $703.1 $60.6 $5.2 ($141.3) $1,803.5

Operating Margin (35.3) (121.8) (2.9) (1.3) - (161.4) Margin % -3.1% -21.0% -5.1% -33.9% -9.8%

Non Operating ItemsInvestment Income 23.6 32.6 1.4 1.3 58.8 Interest Expense - net (19.1) (1.7) - - (20.8) Other Non Operating (0.1) 5.4 1.5 - 6.8

Pre Transfers / Support Margin ($31.0) ($85.5) ($0.0) ($0.1) $0.0 ($116.6)Margin % -2.7% -14.7% 0.0% -7.1%

UMHS Support (35.0) 31.7 0.4 2.9 0.0 Equity Transfers - Net Campus (2.2) (0.8) 0.4 (2.6) (5.1)

Total Margin ($68.2) ($54.6) $0.8 $0.2 ($121.7)Margin % -6.0% -9.4% 0.8% 4.1% -7.4%

Total Cash Flow Margin $32.4 ($30.5) $0.9 $0.3 $3.1Margin % 2.8% -5.2% 1.6% 7.4% 0.2%

Hospital Financial Performance FY13 December YTD by Entity

ConsolidatedHC

Hospital Pathology Consolidated Statement

2009 2010 2011 2012 2013

Total Revenues $408,425,495 $450,633,835 $483,619,311 $516,458,041 $538,957,092

Operating ExpensesSalaries and Wages 25,216,405 25,682,040 26,514,257 27,336,528 27,784,252Staff Benefits 8,606,740 8,850,218 8,897,603 9,301,836 9,650,807Supplies 40,216,036 44,221,092 45,060,569 44,960,226 47,935,758Other Operating Expenses 6,515,048 6,623,997 9,079,325 9,231,571 9,426,689Depreciation 1,383,618 1,328,069 1,386,025 1,982,567 2,076,153Total Expenses $81,937,847 $86,705,415 $90,937,779 $92,812,729 $96,873,658

Total FTEs 497 495 511 517 518

Total Billed Tests 5,068,964 5,282,854 5,525,297 5,651,624 5,409,869

MetricsSalaries Metric $4.97 $4.86 $4.80 $4.84 $5.14 Payroll Metric $6.67 $6.54 $6.41 $6.48 $6.92 Supplies Metric $7.93 $8.37 $8.16 $7.96 $8.86 Total Expense Metric $16.16 $16.41 $16.46 $16.42 $17.91 Test per FTE 10,208 10,671 10,820 10,940 10,438

Hospital Pathology Consolidated Statement Individual Lab

FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Total Revenues $38,410,553 $39,938,768 $42,320,721 $44,132,722 $47,776,389

Operating ExpensesSalaries and Wages 2,784,878 2,869,590 2,873,765 2,999,584 3,036,227Staff Benefits 887,767 916,721 929,174 967,041 992,029Supplies 3,535,251 3,803,599 3,523,451 3,617,556 3,711,770Other Operating Expenses 32,853 45,305 41,329 39,182 14,774Depreciation 38,627 36,025 27,255 24,249 26,637Total Expenses $7,279,376 $7,671,240 $7,394,973 $7,647,612 $7,781,438

Total FTEs 50 51 51 52 53

Total Billed Tests 381,201 377,527 393,114 409,672 424,473

MetricsSalaries Metric $7.31 $7.60 $7.31 $7.32 $7.15 Payroll Metric $9.63 $10.03 $9.67 $9.68 $9.49 Supplies Metric $9.27 $10.08 $8.96 $8.83 $8.74 Total Expense Metric $19.10 $20.32 $18.81 $18.67 $18.33 Test per FTE 7,657 7,409 7,779 7,829 8,083

Managing a Managing a PracticePractice

Sources of Departmental Revenue• Clinical Revenue Margin – Currently 36%• Extramural Funding – Direct & Indirect Costs• Educational Transfers• Part A Transfers• Clinical Ph.D. Transfer• Professional Component Billing• Additional Contractual Agreements

• Part A• Role as a lab director• Services provided to the facility or for the benefit of patients in

general (autopsies)

• Part B• Services provided to individual patients• Surgical pathology• Transfusion medicine• Interpretive services

Faculty Provide BothPart A and Part B Services

• Clarified Part A and Part B services and payments• Eliminated professional component billing on routine

laboratory tests for Medicare inpatients (other payors have adopted this policy)

• Defined reasonable compensation equivalent (RCE)• Part A Transfer is Payment for Professional

Services

Tax Equity and Fiscal ResponsibilityAct of 1982 (TEFRA)

• Autopsies• Medical Administration• Supervisory and Consulting Activities• Medical Education

Part A Services

• Assure accuracy of test results• Interact with medical staff • Establish parameters for performance of tests• Recommend additional diagnostic/therapeutic

tests• Advise lab personnel regarding aberrant

results

Clinical Laboratory Improvements of 1988Codified the Role of Lab Director

• Select, evaluate and validate test methodologies• Direct performance and evaluation of quality

control and quality assurance procedures• Evaluate clinical data; establish process for

review of tests prior to issuance of patient reports

• Assure compliance with accrediting agencies

Clinical Laboratory Improvements of 1988Codified the Role of Lab Director

RVU Report

FACULTYFYTD 2014 Charges

FYTD 2014 Charge Units

FYTD 2014 Work RVU

FYTD 2014 RVU

PaymentsFYTD 2013 Charges

FYTD 2013 Charge Units

FYTD 2013 Work RVU

FYTD 2013 RVU

PaymentsVariance Charges

Variance Charge Units

Variance Work RVU

Variance RVU Payments

Faculty A $439,211 1,930 1,645 $89,008 $470,096 2,088 1,933 $105,777 ($30,885) (158) (288) ($16,769)Faculty B $284,696 1,527 1,378 $119,740 $239,550 1,360 1,092 $108,113 $45,146 167 286 $11,627Faculty C $261,492 1,582 1,212 $65,626 $142,317 992 710 $38,841 $119,175 590 502 $26,785Faculty D $82,054 4,526 969 $52,443 $165,749 730 724 $39,627 ($83,695) 3,796 245 $12,816Faculty E $59,029 216 322 $27,888 $59,878 220 316 $31,336 ($849) (4) 6 ($3,448)Faculty F $161,032 671 752 $65,241 $107,980 431 514 $50,879 $53,052 240 238 $14,362Faculty G $39,490 489 369 $31,117 $51,458 788 330 $32,729 ($11,968) (299) 39 ($1,612)Faculty H $589,397 2,691 2,410 $130,470 $535,334 2,536 2,312 $126,530 $54,063 155 98 $3,940Faculty I $20,767 84 129 $6,971 $293,812 1,344 1,226 $67,068 ($273,045) (1,260) (1,097) ($60,097)Faculty J $557,797 2,398 2,189 $118,487 $481,490 2,186 2,016 $110,294 $76,307 212 173 $8,193Faculty K $342,830 1,445 1,384 $120,042 $198,589 847 838 $83,052 $144,241 598 546 $36,990Faculty L $283,815 1,187 1,161 $62,789 $87,001 283 361 $19,773 $196,814 904 800 $43,016Faculty M $136,392 901 641 $55,764 $75,028 533 335 $33,206 $61,364 368 306 $22,558Faculty N $306,391 1,411 1,154 $62,466 $301,052 1,395 1,219 $66,721 $5,339 16 (65) ($4,255)Faculty O $526,253 2,214 2,202 $119,170 $431,556 1,890 1,923 $105,211 $94,697 324 279 $13,959Faculty P $1,033,392 4,655 4,063 $219,940 $694,523 3,251 2,967 $162,331 $338,869 1,404 1,096 $57,609Faculty Q $513,077 2,230 1,974 $106,878 $419,682 1,898 1,720 $94,114 $93,395 332 254 $12,764

Jul-13 Aug-13 Sep-13 FYTD Prior FYTD % Var to Favorable/

Prior FYTD Unfavorable Total Charges FY 13 Fee increasePathology 4,733,591 5,027,161 4,869,826 14,630,578 12,664,124 15.5% F 3.5%Pathology-Clinical 156,030 145,270 330,801 632,101 864,541 -26.9% U

14,211,977$ 15,174,454$ 14,625,642$ 44,012,073$ 39,762,199$ 10.7% F

Net Payments Pathology 1,244,103 1,678,117 1,240,968 4,163,188 3,680,388 13.1% F Pathology-Clinical 109,665 76,499 56,532 242,696 239,380 1.4% F

Total 3,860,240$ 4,572,584$ 4,037,089$ 12,469,913$ 11,576,154$ 7.7% F

Net Collection Rate Pathology 97.3% 97.2% 97.2% 97.2% 97.7% -0.5% U

Work RVU Pathology 20,281 22,340 22,128 64,749 57,292 13.0% F

Net Collections/RVU Pathology 61.34$ 75.12$ 56.08$ 64.30$ 64.24$ 0.1% F

Days of Rev in A/R

Pathology50.0 50.0 50.0 50.0 54.0

-7.4% UPrior FYTD does not include legacy

% of A/R over 90 days

Pathology 35.5% 36.0% 34.4% 34.4% 25.3% 36.0% U caid pend, self pay, molecular

Charges w ithin 15 days Pathology 83.7% 84.5% 82.0% 82.0% 84.6% -3.1% U

Credits as % of Debits (Ins Only) Pathology 3.2% 3.3% 2.7% 2.7% 1.8% 50.0% U

Collections

PART A REPORTING

Clinical Incentive Payment CalculationsThe Pathology Incentive program is divided into four major categories: Extramural Consults, Outreach Part B Billings, Outreach Part A Payment and Department margin. Incentives are provided twice a year (July – December; January – June). Limits to total compensation are imposed by the Medical School. The current salary limit is 25% or $60,000 per year, which ever is higher, of base, academic, clinical supplement A and administrative differential (basically total compensation received less the incentive payments).

• Extramural Consults• Outreach Part B Billings• Outreach Part A Payment• Department Margin

RESEARCHRESEARCH

FINANCIAL SUMMARY FOR FACULTY XCURRENT FUNDING:

PROJECT GRANT NUMBER/GRANT #/SOURCE OF FUNDING PI EFFORT *

END DATE OF GRANT

CURRENT BUDGET

ACTUAL SALARIES &

BENEFITSLABORATORY

SUPPLIESOTHER

EXPENSESTOTAL DIRECT

TOTAL INDIRECT

TOTAL COSTS

ENCUMBERED EXPENSES

REMAINING BALANCE

A 0.0% N/A $4,701 $1,399 $1,523 $0 $2,922 $0 $2,922 $0 $1,778B 1.0% 04/30/14 $453,330 $129,963 $132,102 $0 $262,065 $128,466 $390,530 $76,618 ($13,818)C 30.0% 06/30/14 $109,894 $61,149 $0 ($101) $61,048 $3,052 $64,101 $46,773 ($979)TOTAL 31.0% $567,924 $192,511 $133,625 ($101) $326,035 $131,518 $457,554 $123,390 ($13,019)* Effort not listed above is funded from departmental sources

CURRENT EMPLOYEES:

EMPLOYEE NAMEPOSITION

TITLEANNUAL SALARY

POSITION END DATE * P/G A P/G B

Employee X Asst Prof $138,003 N/A 1% 30%

Employee B GSRA $26,500 N/A 90%

Employee C Res Fellow $39,756 N/A 100%

Employee D Res Tech $35,665 N/A 45%

Employee E GSRA $28,500 80%

Employee F GSRA $26,500 N/A 90%

Employee G Res Tech $0 N/A

TOTAL $294,924 0% 30% 0% 0% 0% 0% 0% 0%* Positions for graduate students and research fellows have known end dates. All other instructional and non-instructional appointments have open ended appointments.

RECENT PENDING GRANT AND CONTRACT APPLICATIONS

FUNDING AGENCY BEGIN DATE END DATEPI EFFORT

REQUESTEDDIRECT COSTS

INDIRECT COSTS

TOTAL COSTS DRDA # Status P/G

NONETOTAL 0% -$ -$ -$

CURRENTLY ASSIGNED LABORATORY AND OFFICE SPACE

BUILDING/ROOM NUMBERTYPE OF SPACE

OCCUPIED SQUARE FEET

Building 1, Room X Office 108Building 1, Room Y Wet Lab 697 Grants Only:

Building 1, Room Z Lab Service 467 Direct Cost/ft2 $254.08Indirect Cost/ft2 $103.42

TOTAL 1,272

FINANCIAL SUMMARY FOR FACULTY YCURRENT FUNDING:

PROJECT GRANT NUMBER/GRANT #/SOURCE OF FUNDING PI EFFORT *

END DATE OF GRANT

CURRENT BUDGET

ACTUAL SALARIES &

BENEFITSLABORATORY

SUPPLIESOTHER

EXPENSESTOTAL DIRECT

TOTAL INDIRECT

TOTAL COSTS

ENCUMBERED EXPENSES

REMAINING BALANCE

A 20.0% 01/31/14 $48,813 $24,667 $0 $0 $24,667 $13,443 $38,110 $6,105 $4,598B 30.0% 07/31/13 $100,209 $29,216 $17,418 $0 $46,633 $25,882 $72,515 $36,130 ($8,436)C 30.0% 08/31/13 $331,728 $43,848 $6,379 $0 $50,226 $27,876 $78,102 $195,080 $58,546

TOTAL 80.0% $480,750 $97,730 $23,796 $0 $121,527 $67,201 $188,728 $237,314 $54,708

* Effort not listed above is funded from departmental sources** Dr. Y will receive an additional $109,375 in direct costs for the final year of this project; 07/01/09 - 06/30/10.

CURRENT EMPLOYEES:

EMPLOYEE NAMEPOSITION

TITLEANNUAL SALARY

POSITION END DATE * P/G A P/G B P/G C

Employee Y ASST PROF $98,539 OPEN 20.0% 40.0%

Employee A Research Fellow

$28,000 85.0%

Employee B Research Investigator

$50,000 80.0%

TOTAL $176,539

* Positions for graduate students and research fellows have known end dates. All other instructional and non-instructional appointments have open ended appointments.

RECENT PENDING GRANT AND CONTRACT APPLICATIONS

FUNDING AGENCY BEGIN DATE END DATEPI EFFORT

REQUESTEDDIRECT COSTS

INDIRECT COSTS

TOTAL COSTS DRDA # Status P/G

NIH 10/01/13 09/30/16 30% $ 750,000 $ 405,150 $ 1,155,150 A Pending N/ANIH 10/01/13 09/30/18 20% $ 1,250,000 $ 671,550 $ 1,921,550 B Pending N/AADA 07/01/13 06/30/16 0% $ 300,000 $ 45,000 $ 345,000 C Pending N/ANIH 07/01/13 06/30/18 0% 1,150,000$ 616,050$ 1,766,050$ D Pending N/AAHA 01/01/13 12/31/14 30% 102,040$ -$ 102,040$ E Pending N/AAHA 07/01/12 06/30/14 0% 102,400$ -$ 102,400$ F Turndown N/ANIH 01/01/13 12/31/13 40% 280,000$ 28,000$ 308,000$ G Turndown N/ANIH 04/01/13 03/31/18 50% 1,150,000$ 613,275$ 1,763,275$ H Pending N/ANIH 04/01/13 03/31/15 40% 275,000$ 152,625$ 427,625$ I Pending N/ANIH 04/01/13 03/31/18 30% 1,150,000$ 613,275$ 1,763,275$ J Turndown N/ANIH 09/01/12 08/31/17 20% 1,150,000$ 616,050$ 1,766,050$ K Awarded N/A

TOTAL 20% $3,184,440 $1,360,600 $4,545,040

CURRENTLY ASSIGNED LABORATORY AND OFFICE SPACE

BUILDING/ROOM NUMBERTYPE OF SPACE

OCCUPIED SQUARE FEET

Building 2, Room X Office 105 Grants Only:

Building 2, Room Y Lab Service 144 Direct Cost/ft2 $155.21

Building 2, Room Z Wet Lab 534 Indirect Cost/ft2 $85.82

TOTAL 783

Research Incentive

NATIONAL BENCHMARKING ISSUES

• Phlebotomy – Is it housed in Pathology or Nursing?

• Pathology Informatics – Departmental or centralized?

• Send-outs – Are these shown as supplies?• Complexity of Test Menu

Case Studies• Why are the total supplies and supply metrics

for Molecular Diagnostics up?• Why are FTE’s up across the board in FY14?• Why are FTE’s up in Molecular Diagnostics?• Why is there an increase in FTE’s in the HLA

Lab?

Questions