Milestone 1 IHP 620 for my next assignment PDF

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So this was my first milestone created for this class. My selected topic was luries' childrens hospital. I ended up getting an A...

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Amanda Palm Milestone 1 IHP 620 8/11/2021

Proposal/Non-Profit The organization I would like to focus on is Luries Children’s Hospital located in Chicago Illinois. This hospital was founded by Ann and Robert H Lurie, and it provides medical and surgical services to children. The hospital offers emergency care, women’s health services, cardiology, orthopedic, and oncology services. This establishment was founded in 1984 in the Healthcare sector/industry. The sub-industry is Health Care Facilities and Services. This hospital is considered non-profit, and has been tax exempt 501©(3) since 1987. Analysis The budgetary structure was altered a little this past year because of Covid-19. It’s known that they faced financial challenges in fiscal year 2020. Measures that were taken during the year to help conserve financial resources helped them finish the year off with net operations at $1.7 million. But unfortunately it was below the net operation budget target margin of 3% or $41 million. Lurie’s implemented plan helped preserve cash and recover substantial losses due to reduced inpatient and outpatient volumes. The estimated impact from the pandemic is estimated to be $130 million by the end of Aug 31, which is the end of the fiscal year period. “Inpatient and outpatient volumes materially decreased following the government orders with inpatient admissions decreasing 41% and outpatient activity decreasing over 60% in April 2020.” Volumes started to rebound when non-urgent surgeries and procedures were allowed to resume on May 11, and admissions rebounded but remained below budget through August 31, 2020. Their financial response plan included temporary pay reductions to staff and faculty, unpaid furloughs, and a hiring freeze, and lastly spending delays on capital projects. On a positive note, the Stanley Manne Research was granted a grant of $71 million, which allowed them to continue to make pediatric medicine advances. They were also able to prove $230million of unreimbursed charity

care and to the community benefit program through the Magoon institute. By implementing all these steps they increased their investment portfolio by 9%, which is $1.5 billion. Please remember they have a Leadership type structure, so they in fact do have a budget analyst department. They are responsible for assisting with annual operating budget processes of the Medical Center and all related entities. They are also responsible for all changes, additions, deletions and modifications to budgets of the medical center entities. They also interact with the Senior Directors and Department Managers/Directors to help monitor revenues and expenses through the fiscal year. They assist in all phases of operating budgeting processes, productivity and variance analysis for all hospital cost centers. Assist in preparation and distribution of operating and capital budgets for all affiliated corporations. Review budget submissions for accuracy, completeness and reasonableness. Conduct comprehensive variance analysis for revenues and expenses for all hospital and affiliate cost centers and determine underlying causes using analytical and thorough discussions with departmental managers. Prepare compilation of monthly utilization reports, statistical reports, and benchmarking reports. Compile and provide internal productivity reports and comparisons for position control. Provide support to Senior Directors and Department Directors requesting financial information/analysis. Lastly, handle all special projects and other duties by the Senior Director of Budget and Business Analytics. Market Behavior Impacts Lurie’s is a very open hospital, and they try to keep all of their information public so that the nation knows what Lurie’s is all about. In 2016, they established a campaign tagline called “All For You One.”This campaign was created to distinct fully distinguished themselves from other hospitals and even spread through to other countries. “The creative focuses on all of our clinical expertise, all research, all the compassion, all the advocacy, all locations, everything the

hospital brings to the care of each child.” The campaign was released via printing, outdoor, digital, and radio ads, and now run through social media like facebook and linked in. When this campaign was released a 60 second video that has well over 5000 views, and they have partners with local ad agencies like Leo Burnett to help develop this campaign and future campaigns. Though they make other campaigns and ads, that All for you one logo still stands, and is marketed to help them to continue to standout. Lurie’s has an Internal Grant Program, which helps provide resources to a faculty member or others who have PI-eligible status to help develop projects that will help lead to competitive research within 18 months of receiving the award. Then they have a Perinatal Origins of Disease Healthy Start Pilot Grant, which is a grant funded to catalyze and innovate new research in prenatal health. Planning giving opportunities includes community investments. Lurie’s Children’s absorbs the cost of unreimbursed charity care through their commitment to treat all children regardless of ability to pay; one-third of their patients live in under-resourced Chicago neighborhoods and 55% are uninsured, underinsured, or covered by Medicaid. “In 2020, the institution invested $231.5 million in unreimbursed charity care, under-reimbursed from caring for patients insured by Medicaid, and community benefit programs, an increase of more than 27% more than the previous year.” There was a total community investment of $231.5 million. Some financial challenges Lurie’s may face are ones like what Covid-19 started. “In Illinois, hospitals are trying a number of tactics to stanch the bleeding, including reaching into their reserves, halting improvement projects and sending workers home — sometimes with pay and sometimes without. Hospitals are sidelining workers because, without elective surgeries and with declines in outpatient care, there may not be enough work for them, at the moment. They

also want as few extra people in hospitals as possible, to help slow the spread of the coronavirus.” Earlier it was stated in the budgetary resources where there weakness and challenge was. They realized they were sinking during covid, and so they had their budget department create an analysis of where they could cut budgets to gain back what they lost, and fortunately because of their reputation, the government gave them some grants to stay a-float, and of course they had to be responsible with it. In conclusions, they have are financial strong, and really don’t have any challenges except for when there are unforeseen circumstances like a pandemic hitting. In the budgetary resources it is also noted why they are financial strong. Consolidated Financial Summary For the periods ending August 31, ($ in millions) Statement of Operations 2020

2019

$ 1,090.3

$ 1,103.2

Grants, Gifts, and Endowment Income

121.3

111.5

Other Revenue

117.9

68.0

Total Operating Revenue

$ 1,329.5

$ 1,289.7

Salaries and Benefits

$

$

Patient Care Revenue, Net

Supplies, Services, Other

734.4

427.0

398.0

88.2

76.7

$ 1,311.2

$ 1,209.1

$

$

Depreciation Total Operating Expenses

796.0

Income From Operations Before Interest and 18.3

73.6

Amortization Interest and Amortization of Financing Costs

16.6

17.4

Income From Operations

$

1.7

$

56.2

Other Income (Expense) Net

$

69.0

$

(5.8)

Excess of Revenue Over Expenses Balance Sheet Assets

$

70.7

$

50.4

2020 Current Assets

$

357.1

2019 $

391.1

Investments

1,491.5

1,367.3

Property and Other

1,161.9

1,176.1

$ 3,010.5

$ 2,934.5

2020

2019

Total Assets Liabilities and Net Assets

Current Liabilities

$

Long-Term Debt and Other

242.3

$

274.2

538.8

532.4

Net Assets

$ 2,229.4

$ 2,127.9

Total Liabilities and Net Assets

$ 3,010.5

$ 2,934.5

Demand Theory Based on an economic principal, Lurie’s Children Hospital is in high demand. It is in the heart of Chicago, and is considered one of the top children’s hospitals in the nation. They are also affiliated as a research hospital always trying to improve quality of care and medicine, and they also take unique cases all over the nation. I can’t speak on whether or not they have a slow period, but according to the American Hospital directory, there is total patient revenue of $2,623,001,994. So far total discharges as of 7/6/2021 are 10,738, and total patient days are 89,468. One thing I am a little confused in, and I am going to look further into is they made two separate tax filings. One on the hospital and one of the actual hospital foundations. I say this because you asked about the market, consumer behavior, and just from looking at the two tax filings, the hospital is doing very well, and the net income are in the positives, but the actual foundation, well it seems their net income is in the negatives, and it seems like they have been on

this negative network since 2017. Does this affect the outcome of what happens in the hospital? Not completely sure, but it’s something worth comparing and contrasting it to economic principals.

References:

Ann & Robert H. LURIE Children's Hospital of Chicago. American Hospital Directory - Ann & Robert H. Lurie Children's Hospital of Chicago (143300) - Free Profile. (n.d.). https://www.ahd.com/free_profile.php? hcfa_id=ee3c52d5a0e0844921b94c537f7d8ba3&ek=e785c768063cb785d4bdcca37c30c6f 2. Bloomberg. (n.d.). Bloomberg.com. https://www.bloomberg.com/profile/company/79659MF:US. Budget analyst job in Chicago at Ann & Robert H. Lurie Children. (n.d.). Retrieved Aug 11, 2021 from https://lensa.com/budget-analystjobs/chicago/jd/7f8c3a598ab332d8cf0abb8acdd5cf57 Financial strength - LURIE Children's 2020 annual report. (n.d.). Retrieved Aug 11, 2021, from http://foundation.luriechildrens.org/annualreport/financial-strength.html Internal funding opportunities. (n.d.). Retrieved April 11, 2021, from https://www.luriechildrens.org/en/research/toolkit/internal-funding-opportunities/

Ken Schwencke, M. T. (2013, May 9). Ann & Robert H Lurie Childrens Hospital of Chicago Nonprofit explorer. ProPublica. https://projects.propublica.org/nonprofits/organizations/362170833. Ken Schwencke, M. T. (2013, May 9). Ann & Robert H Lurie Childrens Hospital of Chicago Foundation - Nonprofit explorer. ProPublica. https://projects.propublica.org/nonprofits/organizations/363357006....