Bureau of Primary Health Care Financial Performance Measures

1. Bureau of Primary Health CareFinancial Performance Measures FY 2011 New Access Points September 23, 2010

2. Objectives • Understanding how the measures are presented • Baselines • Goals • Contributing and restricting factors • Understanding the financial measures • What is measured • The data needed • How the measures are calculated

3. Five Financial Performance Measures • Measures based upon UDS defined data • Total cost per patient • Medical cost per medical visit • Measures based upon financial audit data • Change in net assets as a percent of expense • Working capital to monthly expense ratio • Long term debt to equity ratio

4. How the Measures are Used • The measures are now required for all BPHC grant applications • The financial measures address cost and financial viability • Applicants set baselines and five-year goals in the New Access Point and Service Area Competition applications • Progress is presented in the Budget Period Renewal application • The focus is on performance improvement rather than performance standards

5. Baselines and Goals • Baselines are set using data from the calendar year and audit periods completed prior to the application submission • Applicants without baseline data must state when baseline data will be available • Goals are set to be accomplished by the end of the project period

6. Goal Setting • Goals are set for the project period • Goals may be revised—progress or setbacks • Goals set in relation to baselines, not standards • Set as percent change and absolute values • Goals must be reasonable, achievable, and represent improvement • Goals should be logically consistent between measures

7. Financial Performance Measures Form

8. Focus Area, Measure, and Goal • Focus area and measure are shown in the form • Goal Description: shown as annual rate of increase and absolute target at the end of the five year project period

9. Measure Calculation Description The numerator and denominator are described for each measure

10. Baseline Data • Baseline • Data prior to project period • Baseline calculation not shown on form • If baseline not available state when it will be • Data source: UDS defined data

11. Key Factors, Actions, and Comments • Factors: up to three factors affecting measure • Actions: up to two per factor • Comments: supplementary and related information

12. Data Needed for the Financial Measures • UDS defined calendar year data • Fiscal year audit data • UDS defined data needed for: • Total cost before donations – table 8a • Total patients – table 3a, 3b, and 4 • Medical cost – table 8a • Medical visits – table 5 • See UDS manual for definitions: http://www.hrsa.gov/data-statistics/health-center-data/reporting/2009udsreportingmanual.pdf

13. Calendar Year Cost Data • Total cost • Defined by UDS table 8a, line 17, column c • Facility and administrative costs are included • Donated costs are excluded • Medical cost • Defined by UDS table 8a, line 1 plus line 3, column c • Excludes lab, x-ray, pharmacy, and other clinical cost

14. Calendar Year Patient Data • Need unduplicated count of patients in the calendar year for the total cost per patient measure • Patients defined as individuals with one or more reportable visits during the calendar year • Unduplicated patients are reported in the UDS on tables 3a, 3b, and 4

15. Calendar Year Visit Data • Need to know how a reportable visit is defined in order to know the number of unduplicated patients • Reportable visits include six types of service visits: • Medical, dental, mental health, substance abuse, and other professional • A reportable visit must meet the following criteria: • Face-to-face contact between the patient and clinician • The clinician must be licensed or credentialed • The clinician must be acting independently • The visit must be documented in the patient record • Individuals with one or more reportable visits during the calendar year are included in the count of total patients

16. Calendar Year Medical Visit Data • Need a count of the reportable medical visits in the calendar year for the medical cost per medical visit measure • Medical visits are defined and reported in the UDS on table 5 • Medical visits used in the medical cost per medical visit measure exclude nursing visits, table 5, line 15 minus line 11, column b

17. What the Measures Indicate • Total cost per patient: • The dollar value of service provided • Medical cost per medical encounter: • Medical cost efficiency • Change in net assets as a percent of expense: • Financial performance during audit period • Working capital to monthly expense ratio: • Current financial condition • Long term debt to equity ratio: • Long term financial condition

18. Total Cost Per Patient • Measurement: Quantity of service provided • Data source/definition: UDS • Description: Total accrued cost before donations and after allocation of overhead divided by total patients • Formula: (T8A L17 CC / T4 L6 CA)

19. Total Cost Per Patient: Numerator (Table 8A, line 17, column c)

20. Total Cost Per Patient: Denominator (Table 4, line 6, column a)

21. Medical Cost per Medical Visit • Measurement: Medical cost efficiency • Data source/definition: UDS • Description: Total accrued medical staff and medical other cost after allocation of overhead (excludes lab and x-ray cost) divided by non-nursing medical encounters (excludes nursing and psychiatrist encounters) • Formula: (T8AL1CC + T8AL3CC) / (T5L15CB - 5L11CB)

22. Medical Cost per Medical Visit: Numerator (Table 8A, line 1, Column C) + (Table 8A, line 3, Column C)

23. Medical Cost per Medical Visit:Denominator (Table 5, Line 15, Column b) – (Table 5, Line 11, Column b)

24. Change in Net Assets as a % of Expense • Measurement: Financial performance during the audit period • Data source/definition: Audit • Description: Change in net assets divided by total expenses • Formula: (Ending Net Assets - Beginning Net Assets) / (Total Expense) • Also known as: Change in Net Assets to Expense Ratio

25. Change in Net Assets: Sample

26. Working Capital to Monthly Expense Ratio • Measurement: Current financial condition related to size of operation • Data source: Audit • Description: Working capital, current assets less current liabilities, divided by average monthly expense • Formula: (Current Assets - Current Liabilities) / (Total Expense / Number of Months in Audit) • Also known as: Months in Working Capital

27. Working Capital: Sample Balance Sheet

28. Working Capital: Sample Measure

29. Long Term Debt to Equity Ratio • Measurement: Long term financial condition • Data source: Audit • Description: Long term debt divided by net assets • Formula: Long term liabilities / Net assets

30. Long Term Debt to Equity Ratio: Sample Measure

31. Public Entities • Audit measures likely not relevant • May use substitute audit measures in their business plans • Substitute audit measures • Comparable to financial measures: cost and viability • Limit to scope of proposed NAP

32. Questions