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20130314 Davis Testimony 1213

20130314 Davis Testimony 1213

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Published by Susie Cambria
Testimony of United Medical Center before DC Council Committee on Health, Ward 7 CM Yvette Alexander, chair
Testimony of United Medical Center before DC Council Committee on Health, Ward 7 CM Yvette Alexander, chair

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Published by: Susie Cambria on Mar 16, 2013
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03/16/2013

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P
RESENTATION TO
 T
HE
C
OUNCIL OF THE
D
ISTRICT OF
C
OLUMBIA
 C
OMMITTEE ON
H
EALTH
 C
OUNCILMEMBER
Y
VETTE
A
LEXANDER
,
 
C
HAIR
 
N
OT
-F
OR 
-P
ROFIT
H
OSPITAL
C
ORPORATION
 
P
ERFORMANCE
O
VERSIGHT
 F
ISCAL
Y
EAR
2012MICHAEL
 
DAVISC
HIEF
 
F
INANCIAL
 
O
FFICER
 N
OT
-F
OR
-P
ROFIT
H
OSPITAL
C
ORPORATION
 M
ARCH
14,
 
2013
 
Good afternoon Chairwoman Alexander and members of the Committee on Health. My name is Michael Davis. Iam the Chief Financial Officer of the Not-for-ProfitHospital Corporation (commonly known as UnitedMedical Center). I have been at the hospital since July2012. Prior to joining UMC, I was located in Nashville,Tennessee. I have over 30 years of hospital financialexperience ranging from single facility operations tomulti-facility operations.As you have heard from our CEO, United Medical Centerhas seen double-digit growth related to volumes since thedistrict has taken over the operations. Total Encounters,which is an indicator of access to our services, hasexperienced an annualized growth rate of almost 13%since the District has owned the facility. However, UMCsaw a financial loss in Fiscal Year 2012. This loss is dueto UMC’s provision of care to a primarily low-incomepopulation, declining reimbursement trends, and thereduction of Medicaid DSH payments.As Mr. DeLisi stated, in FY 2012, UMC had a net loss of $322,000 which was $2.8 million below FY 2011 levels.The $2.8 million negative variance was impacted by threemajor factors:
 
1.
 
The reduction of DSH revenue, which accounted for$10.7 million of the negative variance.2.
 
The growth in expenses relative to the slower growthin net patient service revenue, which accounted for a$4.2 million negative variance.3.
 
The recording of a District subsidy which consistedof a $7.7 million cash payment received in FY 2012and $6.0 million cash payment received in FY 2010for a positive variance of $13.7 million.Mr. DeLisi went into great detail related to the impact of DSH, so I will not repeat what he has accuratelydescribed.While our net patient service revenue increased 10.9%compared to FY 2011, the growth was reflected in ourhighest resource-intensive areas such as our EmergencyRoom and Behavioral Health Unit, causing expenses togrow at 14.3% and therefore outpace the rate of growth inrevenue.It should be noted that the Hospital was informed in June2012, approximately eight months into its then currentFiscal Year, that first, it had been overpaid and therewould be no further DSH payments made to UMC for the

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