CFO Leadership December 2016

If you drop an Oreo on the floor, can you still safely eat two thirds of it? Random Thoughts

Three most difficult positions to fill in a CHC? Random Thoughts

Chief Financial Officer Chief Information Officer Human Resources Random Thoughts

Chief Financial Officer Who needs a CFO? HRSA Program Requirement # 9 Key Management Staff Chief Financial Officer

Chief Financial Officer What is the difference between a CFO and a Controller? Chief Financial Officer

Chief Financial Officer A controller says NO, NO, and Heck NO! A CFO says Yes, lets see if we can make it happen! Chief Financial Officer

Chief Financial Officer What knowledge, qualities & abilities do I want in a CFO? Honesty – Everyone must be able to trust the CFO. Good understanding of accounting & finance. (most important is experience) Great understanding of reimbursement (Medicaid & Medicare). Great understanding of CHC operations & providers (Revenue Cycle) Creativity (think outside the box circle). Ability to communicate both in writing and verbally. Ability to manage staff (be a good teacher). Good understanding of politics (internal & external). Chief Financial Officer

Case Study – Federal 330 Grant less than $5 million Go Big or Go Home Case Study – Federal 330 Grant less than $5 million

Current Ratio

Days Cash on Hand

Perspective Materiality Words have meaning

Perspective Health Center Name State Total Cost Total Patients Total Cost Per Patient ALTA MED HEALTH SERVICES CORPORATION CA $ 418,773,300 188,122 $ 2,226 SUNSET PARK HEALTH COUNCIL NY $ 198,310,800 123,769 $ 1,602 YAKIMA VALLEY FARMWORKERS CLINIC WA $ 147,636,400 131,624 $ 1,122 HUDSON RIVER HEALTH CARE $ 138,100,900 152,280 $ 907 SEA-MAR COMMUNITY HEALTH CENTER $ 137,816,100 183,680 $ 750 MULTNOMAH COUNTY OR $ 131,857,800 71,174 $ 1,853 EAST BOSTON NEIGHBORHOOD HEALTH CENTER MA $ 127,700,000 66,960 $ 1,907 FAMILY HEALTH CENTERS OF SAN DIEGO $ 124,706,300 134,788 $ 925 DENVER HEALTH & HOSPITAL AUTHORITY CO $ 122,933,700 147,769 $ 832 ACCESS COMMUNITY HEALTH NETWORK IL $ 115,339,600 180,981 $ 637 Perspective

Perspective Health Center Name State Total Cost Total Patients Total Cost Per Patient BORREGO COMMUNITY HEALTH FOUNDATION CA $ 111,573,700 119,180 $ 936 EL RIO SANTA CRUZ NEIGHBORHOOD HEALTH CENTER AZ $ 111,562,300 92,157 $ 1,211 THE INSTITUTE FOR FAMILY HEALTH NY $ 108,420,300 98,478 $ 1,101 SAN YSIDRO Health Centers $ 104,627,600 89,662 $ 1,167 UNITY HEALTH CARE DC $ 103,504,200 106,469 $ 972 LEGACY COMMUNITY HEALTH SERVICES TX $ 96,940,060 78,468 $ 1,235 CLINICA SIERRA VISTA $ 96,191,850 149,826 $ 642 FAMILY HEALTHCARE NETWORK $ 95,533,260 131,142 $ 728 FAMILY HEALTH CENTER OF MARSHFIELD WI $ 94,659,490 83,258 $ 1,137 LA CLINICA DE LA RAZA INC. $ 93,918,680 90,569 $ 1,037 Perspective

Minnesota CHC’s Health Center Name Total Cost Total Cost Per Patient Total Patients 1 HENNEPIN COUNTY, DEPARTMENT OF PRIMARY CARE 32,152,240 1,270 25,323 2 WEST SIDE COMMUNITY HEALTH SERVICES 27,383,440 768 35,676 3 UNIVERSITY OF MINNESOTA 15,776,620 1,490 10,589 4 UNITED FAMILY PRACTICE HEALTH CENTER, INC. 13,993,810 960 14,579 5 COOK AREA HEALTH SERVICES, INC. 10,078,800 830 12,142 6 OPEN CITIES HEALTH CENTER 7,468,384 813 9,181 7 LAKE SUPERIOR COMMUNITY HEALTH CENTER 7,241,458 641 11,297 8 CEDAR RIVERSIDE PEOPLES CENTER 6,947,636 779 8,923 9 INDIAN HEALTH BOARD OF MINNEAPOLIS, INC. 6,889,315 1,453 4,743 10 OPEN DOOR HEALTH CENTER 6,097,922 793 7,685 Minnesota CHC’s

Minnesota CHC’s Health Center Name Total Cost Total Cost Per Patient Total Patients 11 NEIGHBORHOOD HEALTHSOURCE 5,312,510 698 7,616 12 SAWTOOTH MOUNTAIN CLINIC 5,294,843 1,107 4,784 13 SOUTHSIDE COMMUNITY HEALTH SERVICES 5,145,119 566 9,090 14 COMMUNITY HEALTH SERVICES 4,273,591 1,351 3,164 15 NATIVE AMERICAN COMMUNITY CLINIC 4,261,956 945 4,511 16 HENNEPIN CO COMMUNITY HEALTH DEPARTMENT 3,056,222 716 4,268 17 UNIVERSAL MEDICAL SERVICES 2,139,939 524 4,085 Minnesota CHC’s

UDS 2015 Look-Alikes Program Grantees Community Health Centers 54 1,375 Total Patients 709,293 24,295,946 UDS 2015

UDS 2015 – National Data 2012 2013 2014 2015 Cost Data:   2012 2013 2014 2015 Cost Data: Health Center Grant Expenditures $2,331,290,193 $2,531,170,359 $3,209,598,399 $3,701,019,751 Total Cost $14,490,666,198 $15,662,859,760 $17,443,687,411 $20,088,900,118 Total Cost Per Patient $686.68 $720.89 $762.62 $826.84 Total Patients 21,102,391 21,726,965 22,873,243 24,295,946 UDS 2015 – National Data

UDS 2015 – Minnesota Data 2012 2013 2014 2015 Cost Data:   2012 2013 2014 2015 Cost Data: Health Center Grant Expenditures $20,658,825 $23,513,899 $26,214,765 $34,223,354 Total Cost $136,381,896 $145,397,290 $152,751,940 $161,373,854 Total Cost Per Patient $751.88 $832.78 $874.43 $929.73 Total Patients 181,389 174,593 174,688 173,571 UDS 2015 – Minnesota Data

National - Payor Mix % Payors 2012 2013 2014 2015 Uninsured 36.00% 34.80% 27.80% 24.50% Medicaid/CHIP 40.80% 41.50% 47.30% 49.40% Medicare 8.00% 8.40% 8.60% 8.90% Other Third Party 15.20% 15.30% 16.30% 17.20% National - Payor Mix %

Minnesota Payor Mix % Payors 2012 2013 2014 2015 Uninsured 37.10% 37.70% 29.90% 29.10% Medicaid/CHIP 40.70% 38.90% 46.60% 47.20% Medicare 7.80% 7.90% 8.60% 9.20% Other Third Party 14.40% 15.50% 14.90% 14.50% Minnesota Payor Mix %

Observations - % change 2012 - 2015 Cost Data MN National Health Center Grant Expenditures 166% 159% Total Cost 118% 139% Total Cost Per Patient 124% 120% Total Patients 95.7% 115.1% Observations - % change 2012 - 2015

Not Good! UDS Data 2012 2013 2014 2015 MN Total Patients 181,389   MN Total Patients 181,389 174,593 174,688 173,571 Not Good!

OFH 2015 UDS Data Financial Cost/Viability 2010 2011 2012 2013 2014 Total Cost per Patient California 676.65 705.49 757.29 804.16 841.51 949.96 National 629.67 653.88 686.68 720.89 762.62 862.54 OMNI 469.86 475.4 494.78 509.55 539.84 587.32 Medical Cost per Medical Visit 137.26 144.47 155.53 163.65 171.42 188.69 138.65 143.71 150.38 158.07 165.19 176.64 129.06 124.99 128.07 139.29 158.63 176.93 OFH 2015 UDS Data

Federal Grant $ per Patient Health Center Name Health Center Grant Expenditures Grant $ per Patient WEST SIDE COMMUNITY HEALTH SERVICES $6,279,156 176 COMMUNITY HEALTH SERVICES $3,028,870 957 COOK AREA HEALTH SERVICES $2,942,797 242 OPEN CITIES HEALTH CENTER $2,449,896 267 OPEN DOOR HEALTH CENTER $2,240,176 291 HENNEPIN COUNTY, DEPARTMENT OF PRIMARY CARE $1,689,353 67 SOUTHSIDE COMMUNITY HEALTH SERVICES $1,578,135 174 UNIVERSITY OF MINNESOTA $1,318,103 124 Average $30,914,053 178 Federal Grant $ per Patient

Federal Grant $ per Patient Health Center Name Health Center Grant Expenditures Grant $ per Patient SAWTOOTH MOUNTAIN CLINIC $1,306,809 273 CEDAR RIVERSIDE PEOPLES CENTER $1,287,707 144 HENNEPIN CO COMMUNITY HEALTH DEPARTMENT $1,248,263 292 LAKE SUPERIOR COMMUNITY HEALTH CENTER $1,240,144 110 NEIGHBORHOOD HEALTHSOURCE $1,151,185 151 UNITED FAMILY PRACTICE HEALTH CENTER $1,135,217 78 NATIVE AMERICAN COMMUNITY CLINIC $1,082,348 240 INDIAN HEALTH BOARD OF MINNEAPOLIS $935,894 197 Average $30,914,053 178 Federal Grant $ per Patient

Federal Grant $ per Patient - OFH 2011 2012 2013 2014 2015 2016 Federal 330 Grant 3,724,399 4,180,778 4,383,465 6,264,569 7,210,423 9,510,445 Users 64,619 63,336 63,076 71,675 81,752 95,722 Patient Visits 216,119 215,383 216,750 229,265 274,531 321,005 Grant $ per User 57.64 66.01 69.49 87.40 88.20 99.35 Grant $ per Visit 17.23 19.41 20.22 27.32 26.26 29.63 Federal Grant $ per Patient - OFH

OFH Grant $ Graph

Financial Dashboard Financial Information MUST BE: Easy to understand Accurate Timely Financial Dashboard

Cash is King Follow the Money Financial Dashboard

Best financial Indicators Patient Visits Net Patient Accounts Receivable Cash Best financial Indicators

OFH - Patient Visits

OFH – Net Days in A/R

OFH – Days Cash on Hand

Other Financial Indicators Current Ratio Operating Margin Provider Productivity (visits per hour) Debt Service Coverage Ratio Debt to Equity Other Financial Indicators

Omni Family Health 9/30/16 12 Months 7 Months Industry Average   12 Months 7 Months Industry Average Description 3/31/14 3/31/15 3/31/16 10/31/16 Current Ratio 4.21 3.44 2.94 3.88 1.0 - 2.0 Days Cash on Hand 127 142 166 172 45 - 60 Net Days in Patient A/R 60.3 25.2 24.2 23.6 30 - 45 Average Payment Period (Days) 44.1 44.7 39.4 34.9 25 - 40 Debt Service Coverage 4.68 7.87 17.7 14.1 1.5 Long-Term Debt to Net Assets Ratio 41.70% 34.80% 28.00% 23.70% < 50% Omni Family Health 9/30/16

Remember the Five Deadly Sins Board & Management not on the same page. Obsolete business model (centered on adult medicine). Low provider productivity. Unfunded grant obligations. (less availability to grants) Poor patient revenue cycle management. (Cash is “King”) Remember the Five Deadly Sins

Questions?