HFMA Mid-Year Meeting Board Financial Reporting Thursday, May 23, 2019 Presented by Douglas Wismer, FHFMA, CFO Thayer County Health Services

Board Financial Packet Title Page Table of Contents Management Discussion and Analysis Key Ratios Key Statistics Financial Statements Exhibits: Key Activity Graphs Revenue Cycle KPI Graphs

Management Discussion and Analysis CFO Narrative to Board – explains monthly financial performance Introduction Excess of Revenue over Expenses: Monthly and Year-to-Date (YTD) margins – EBIDA/total margin Patient service revenue variances Deduction from revenue variances Other operating revenue variances Operating expense variances Patient days and average daily census (ADC) Other statistical variances FTE variances Liquidity Cash and investment variances Net patient accounts receivable variances Accounts payable variances Other asset/liability variances – i.e., building project, debt, etc.

Key Ratios Ratios: Content: Actual Budget Prior Year Liquidity – days cash on hand; gross and net days in patient AR Margin – operating, total and EBIDA margins Deductions – contractuals, administrative adjustments, bad debt, and charity care Operating expenses – compensation ratio, FTEs/AOB, costs/APD Debt –LTD to capitalization, debt service coverage Capital assets – average age of plant Payor mix – Medicare, Medicaid, Blue Cross, Commercial, WC, and Private Pay Content: Actual Budget Prior Year Variances – amount/% to budget and prior year CAH benchmarks – Nebraska and National (2017 Flex Monitoring Report) Highlighting ratios – met target (green); missed target (red)

Key Statistics Statistics: Content: Actual Budget Prior Year Admissions – acute/nursery/swing combined Patient days – acute/nursery/swing separated ADC – average daily census (excluding observation patients) Adjusted patient days Other Activity – ER, Imaging, Lab, Observation, OP, Pharmacy, Rehab, Specialty, Surgery Clinic visits – Hebron and satellite clinics FTEs – paid and contracted (CEO, CFO, CRNAs, ER MD weekend coverage) Content: Actual Budget Prior Year Variances – amount/% to budget and prior year Highlighting ratios – met target (green); missed target (red)

Financial Statements Statements of Net Position: Current month Budget Prior Year Year End Audited Statements of Revenues, Expenses, and Changes in Net Position: Variances – amount/% to budget and prior year Statements of Cash Flow: Budget – not budgeted in FY18; new budget for FY19 Variances – amount/% to budget (starting in FY19) and prior year Comparative Statements of Revenues, Expenses, and Changes in Net Position; Month to month comparison Year-to-date compared to budget (YTD and annual) and prior year (YTD and annual)

Exhibits Revenue Cycle KPI: Key Activity Graphs: Patient days and visits (ER, Home Care, Observation, FP Clinic) Ancillary departments (Lab, Meals, Ambulance, Surgeries, Specialty Clinic, Scripts) Imaging (X-rays, Ultrasounds, Nuclear Medicine, CT Scans, Mammograms, MRIs) Cardiopulmonary (Sleep Studies, Cardiac Rehab – including Stress Tests, EKGs) Rehab Therapies (OT, PT, ST) Graph current year, budget, and prior year by month Revenue Cycle KPI: Days in Accounts Receivable (Gross, Net, DNFB) Revenue (gross and net) and Collections Linear relationship for gross and net revenue FY16 to FY19 by month

Thayer County Health Services Financial Statement Packet For the Nine Months Ended March 31, 2019 and 2018 Presented to the Board of Trustees Wednesday, April 24, 2019

Thayer County Health Services Financial Statement Packet For the Nine Months Ended March 31, 2019 and 2018 Table of Contents Page Management's Discussion and Analysis 1 - 2 Key Ratios 3 Key Statistics 4 Financial Statements: - Statements of Net Position 5 - Statements of Revenue, Expenses and Change in Net Position 6 - 7 - Statements of Cash Flow 8 Exhibits: - Key Activity Graph (Patient Days and Visits) A - Key Activity Graph (Ancillary Departments) B - Key Activity Graph (Imaging) C - Key Activity Graph (Cardiopulmonary) D - Key Activity Graph (Therapies - PT, OT, ST) E - Days in Accounts Receivable (FY16 to FY19) F - Revenue and Collections (FY16 to FY19) G

Thayer County Health Services Key Ratios For the Nine Months Ended March 31, 2019 and 2018 March Ratio Description Year-to-Date CAH Benchmarks Actual Budget Prior Year Variance Nebraska National %   Days Cash on Hand-Total 54.8 64.3 46.2 (9.5) -14.8% 8.5 18.4% 160.5 78.2 Days In Patient AR - Gross (using 90 day average revenue) 55.4 45.0 75.1 10.4 23.0% (19.7) -26.3% 58.1 47.6 Days In Patient AR - Net (using 90 day average net revenue) 48.8 58.0 3.8 8.5% (9.2) -15.9% 51.2 50.8 Operating Margin 0.9% 0.3% Total Margin 1.4% 1.8% Total EBIDA Margin 9.7% 6.1% 15.8% 16.3% 20.9% -0.5% -3.1% -5.0% -24.2% Contractual adjustments as % of total patient service revenue 14.2% 17.0% -2.1% -12.8% -2.8% -16.5% NA 0.1% 1.1% 1.0% -1.0% -92.3% -0.9% -91.8% Administrative adjustments as % of total patient service revenue 1.6% 1.2% 0.5% 46.2% 0.4% 33.8% 5.4% 2.0% -1.9% 3.4% 168.4% 7.2% -386.5% Bad Debt as % of total patient service revenue 4.2% 2.6% 2.2% 108.5% 1.5% 58.9% 0.0% -98.4% Charity Care as % of total patient service revenue -0.4% -81.3% -0.2% -68.2% 21.3% 19.9% 20.0% 6.8% 1.3% 6.3% Total Deductions as % of total patient service revenue 20.1% 21.2% 0.2% -1.1% 25.3% 44.9% 50.3% 53.3% 51.6% -3.0% -5.6% -1.3% -2.5% Labor Compensation Ratio 51.4% 53.2% 52.4% -1.8% -3.4% 45.5% 6.5 7.0 0.0 (0.5) -7.0% FTE's per Adjusted Occupied Bed 6.7 6.3 5.8 0.3 5.0% 0.8 14.3% 6.9 5.5 $ 2,914 2,718 3,122 196 (208) -6.7% Total Cost/Adjusted Patient Day $ 3,039 2,700 2,620 339 12.5% 419 16.0% $ 160 128 161 32 25.1% (1) Supply Exp Per Adjusted Patient Day $ 157 126 127 31 24.6% 30 23.5% Long Term Debt to Capitalization 21.6% 22.6% 24.2% -4.4% -10.5% 26.4% 31.3% Debt Service Coverage 2.3 3.1 1.9 (0.8) -25.5% 0.4 19.2% 3.2 3.7 Average Age of Plant 5.6 (0.9) -14.2% -13.9% 9.1 11.0 Payor Mix 58.6% 55.0% 53.6% 3.6% 6.5% 9.3% Medicare 56.3% -2.3% 7.3% 8.0% -31.5% -37.5% Medicaid 7.5% 2.7% 0.7% 10.3% 19.3% 18.8% 19.0% Blue Cross 17.6% 17.8% -1.2% -6.4% 14.6% 14.0% 16.5% 0.6% 4.3% -11.5% Commercial 16.4% 15.3% 2.4% 17.1% 0.8% -83.3% -0.6% -75.0% Worker's Compensation -0.3% -25.0% -0.1% -10.0% 2.3% 3.7% 2.1% -1.4% -37.8% 9.5% Private Pay 2.8% -29.7% -7.1% 100.0% Total Target, budget amount, or benchmark not available Met target Missed target No budget amount available to calculate result or no distinction for meeting or missing budgeted payor mix

Thayer County Health Services Key Statistics For the Nine Months Ended March 31, 2019 and 2018 March Year-to-Date Variance Actual Budget Prior Year % Admissions: 29 32 (3) -9.4% Inpatient (Acute, Nursery, Swing) 245 285 277 (40) -14.0% (32) -11.6% Patient Days 53 64 96 (11) -17.2% (43) -44.8% Acute 503 578 583 (75) -13.0% (80) -13.7% - 5 1 (5) -100.0% (1) Nursery 42 45 -6.7% 10 31.3% 98 50 21 48 96.0% 77 366.7% Swing 487 450 436 37 8.2% 51 11.7% 151 119 118 26.9% 33 28.0% Total Patient Days 1,032 1,073 1,051 (41) -3.8% (19) -1.8% 4.9 3.8 1.0 1.1 Average Daily Census (excl obs) 3.9 (0.1) 624 666 572 (42) -6.3% 51.6 9.0% Adjusted Patient Days 5,261 6,002 5,922 (742) -12.4% (661) -11.2% Other Activity: 89 131 120 -32.1% (31) -25.8% Cardiopulmonary Visits (incl EKG, Rehab, Sleep, Stress) 791 1,179 1,167 (388) -32.9% (376) -32.2% 85 106 -11.5% (21) -19.8% ER Visits 817 862 874 (45) -5.2% (57) -6.5% 82 73 (82) (73) Home Care Visits 292 735 812 (443) -60.3% (520) -64.0% 445 435 -1.1% 2.3% Imaging Procedures (incl Echo/Vascular) 3,497 4,056 4,038 (559) -13.8% (541) -13.4% 3,128 3,579 4,096 (451) -12.6% (968) -23.6% Laboratory Tests 26,379 32,215 32,503 (5,836) -18.1% (6,124) -18.8% 27 24 36 3 12.5% (9) -25.0% Observation Days 157 211 198 (54) -25.6% -20.7% 1,528 1,399 1,409 129 9.2% 8.4% Outpatient Visits (excl ER/Specialty) 12,481 12,592 12,595 (111) -0.9% (114) 4,195 3,485 3,953 710 20.4% 242 6.1% Pharmacy Scripts - Clinics/Hospital 30,652 31,365 32,518 (713) -2.3% (1,866) -5.7% 1,142 1,820 2,367 (678) -37.3% (1,225) -51.8% Pharmacy Scripts - Retail 13,116 16,380 20,388 (3,264) -19.9% (7,272) -35.7% 1,364 935 1,094 429 45.9% 270 24.7% Rehab Services Visits (OT, PT, ST) 12,301 8,397 8,558 3,904 46.5% 3,743 43.7% 360 234 204 126 53.8% 156 76.5% Specialty Clinic Visits (incl Behavioral Health/Chemo) 2,826 2,100 1,920 726 34.6% 906 47.2% 11 29.7% 15 45.5% Surgeries & Scopes 404 330 279 74 22.4% 125 44.8% Clinic Visits: 16 39 17 (23) -58.4% -5.9% Bruning Clinic 144 347 325 (203) (181) -55.7% -97.0% Chester Clinic 49 190 (69) -58.5% (141) -74.2% 19 -55.0% (20) -51.3% Davenport Clinic 232 380 377 (148) -39.0% (145) -38.5% 40 55 62 (15) -27.8% (22) -35.5% Deshler Clinic 264 499 505 (235) -47.1% (241) -47.7% 1,097 1,267 1,277 (170) (180) -14.1% Hebron Clinic 9,878 11,405 11,415 (1,527) (1,537) -13.5% (36) Milligan Clinic 317 (317) 1,173 1,403 1,464 (230) -16.4% (291) Total Clinics 10,567 12,749 13,129 (2,182) -17.1% (2,562) -19.5% FTEs: 128.7 136.3 125.9 (7.6) -5.6% 2.8 2.2% Paid 124.1 122.1 (12.2) -9.0% 2.0 1.6% 2.7 2.9 0.0% (0.2) -6.9% Contracted 40.7% -2.6% 131.4 139.0 128.8 -5.5% 2.6 2.0% Total FTEs 127.9 126.0 (11.1) -8.0% 1.9 1.5%   Met target Missed target

Thayer County Health Services Statements of Net Position March 31, 2019 and 2018 March 31 June 30, 2019 Budget 2018 Current assets: Current liabilities: Cash and investments: Current portion of long-term debt $ 951,917 963,700 935,661 911,840 Cash and cash equivalents $ 974,277 311,800 499,231 663,293 Accounts payable 538,413 358,100 681,507 633,351 Money market account 1,816,348 2,427,800 1,719,110 874,658 Accrued expenses: Certificates of deposit - 116,300 115,038 115,382 Salaries, wages, paid time off & benefits 916,951 818,000 901,304 767,769 Total cash and investments 2,790,625 2,855,900 2,333,379 1,653,333 Interest 7,072 10,000 7,482 27,984 Patient accounts receivable - net: Amounts receivable to third party programs: Gross patient accounts receivable 3,670,671 2,985,800 4,662,804 3,759,921 Due (from) to Medicare 445,299 80,000 333,900 Less contractual adjustment allowance (326,800) (299,000) (507,470) (403,117) Due (from) to Medicaid (99,530) (99,700) (281,720) Less allowance for uncollectible accounts (762,000) (312,600) (1,339,000) (512,000) Net third party program receivable 345,769 (19,700) 52,180 Net patient accounts receivable 2,581,871 2,374,200 2,816,334 2,844,804 Construction retainage payable 100,000 Total current liabilities 2,760,122 2,130,100 2,678,134 2,340,944 Other receivables 218,777 307,200 374,939 350,191 Inventories 583,405 459,900 435,218 517,971 Prepaid expenses 278,753 225,400 260,826 279,758 Long-term liabilities: Amounts receivable from third party programs: Bruning State Bank note, less current portion Due from (to) Medicare (225,000) Long-term debt, less current portion 4,843,101 4,822,000 5,795,642 5,663,263 Due from (to) Medicaid 277,700 Total long-term liabilities 52,700 Total current assets 6,453,431 6,222,600 6,220,696 5,698,757 Total liabilities 7,603,223 6,952,100 8,473,776 8,004,207 Capital assets: Deferred inflows of resources - unearned revenue 516,450 516,000 1,324,720 1,122,652 Non-depreciable capital assets (CWIP) 390 435,153 Depreciable capital assets - Net: Land, buildings, and improvements 25,503,035 26,215,000 25,762,128 Equipment 9,379,585 11,368,500 11,123,919 9,223,411 Net position: Less accumulated depreciation (15,654,858) (18,350,400) (15,568,292) (13,548,504) Balance at beginning of year Net depreciable capital assets 19,227,762 19,233,100 21,317,755 21,177,942 Revenue in excess of expenses Capital assets - Net 19,228,152 21,752,908 Capital grants and contributions   Net position at end of period Other assets 15,032 TOTAL ASSETS $ 25,681,583 25,455,700 27,988,636 26,876,699 TOTAL LIABILITIES AND NET POSITION

Thayer County Health Services Statements of Revenues, Expenses, and Changes in Net Position For the Nine Months Ended March 31, 2019 and 2018 March Year-to-Date Variance Actual Budget Prior Year % Patient service revenue Inpatient Outpatient Home health revenue   Professional fees Total patient service revenue Deductions from revenue Contractual adjustments Administrative adjustments Provision for bad debts Charity care Total deductions from revenue Net patient service revenue $ Net patient service revenue % Other operating revenue Pharmacy revenue 340B revenue EHR incentive Other Total other operating revenue Total revenue Salaries and wages Employee benefits Management fee - CHI Total compensation expense 340B expense Contract services/professional fees Depreciation & amortization Equipment lease/rental Insurance Maintenance & repairs Minor equipment Pharmacy Supplies Training/travel/dues/licenses Utilities Total operating expenses Operating income (loss) $ Operating income (loss) % Non-operating revenue (expense) Tax revenue Interest income Interest expense Gain (loss) on disposal of capital assets Total non-operating revenue - net Excess of revenue over expenses Total margin % EBIDA $ EBIDA % Capital grants and contributions - net Increase (decrease) in unrestricted net position

Thayer County Health Services Statements of Cash Flows For the Nine Months Ended March 31, 2019 and 2018 March Year-to-Date Variance Actual Budget Prior Year % Increase in cash and cash equivalents: Cash flows from operating activities: Cash received from patients, third-party payers, and other operating revenue Cash paid for employee compensation and fringe benefits Cash paid to suppliers and contractors   Net cash provided by operating activities Cash flows from noncapital financing activities: Tax funds received Noncapital grants and contributions received - net of fund-raising expense Net cash provided by noncapital financing activities Cash flows from capital and related financing activities: Capital grants and contributions received Capital expenditures Principal payments on long-term debt and capital lease obligations Proceeds from issuance of long-term debt Proceeds from sale of capital assets Interest paid - Net of amounts capitalized Net cash used in capital and related financing activities Cash flows from investing activities: Interest received Net investments in short-term investments Net cash provided by (used in) investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning Cash and cash equivalents at end Reconciliation of gain from operations to net cash provided by operating activities: Income from operations Adjustments to reconcile gain from operations to net cash provided by operating activities: Depreciation and amortization Provision for bad debts Changes in operating assets and liabilities: Patient accounts receivable Other receivables Inventories Prepaid expenses and other assets Amounts receivable from/payable to third-party reimbursement programs Accounts payable Accrued salaries, wages, paid time off, and benefits Construction retainage payable Unearned revenue Total adjustments

Thayer County Health Services Statements of Revenues, Expenses, and Changes in Net Position - Comparative by Month For the Nine Months Ended March 31, 2019 and 2018 FY19 Actual Amounts FY19 Budget Amounts Prior Year Amounts Patient service revenue July August September October November December January February March Total YTD Mar Annual Inpatient Outpatient Home health revenue Professional fees   Total patient service revenue Deductions from revenue Contractual adjustments Administrative adjustments Provision for bad debts Charity care Total deductions from revenue Net patient service revenue $ Net patient service revenue % Other operating revenue Pharmacy revenue 340B revenue EHR incentive Other Total other operating revenue Total revenue Operating expenses Salaries and wages Employee benefits Management fee - CHI Total compensation expense 340B expense Contract services/professional fees Depreciation & amortization Equipment lease/rental Insurance Maintenance & repairs Minor equipment Pharmacy Supplies Training/travel/dues/licenses Utilities Total operating expenses Operating income (loss) $ Operating income (loss) % Non-operating revenue (expense) Tax revenue Interest income Interest expense Gain (loss) on disposal of capital assets Total non-operating revenue - net Excess of revenue over expenses Total margin % EBIDA $ EBIDA % Capital grants and contributions - net Increase (decrease) in unrestricted net position Significant variance in current month from monthly trends

Thayer County Health Services Statistical Graphs - Imaging For the Nine Months Ended March 31, 2019

Questions & Answers Doug Wismer’s contact information: dwismer@tchsne.org Work – (402) 768-4634 Cell – (402) 730-9050