JPS Capital Improvements: Meeting Growing Healthcare Needs in Tarrant County

1. Work Session JPS Health Main Campus Capital Improvements Tarrant County Commissioners Court May 26, 2015

2. JPS – A Community Asset

3. JPS Mission and Role • Provides medical care to Tarrant County residents in need through… • More than 1 million patient encounters in 2014, including treatment of more than 20,000 behavioral health patients annually • An Emergency Department (“ED”) peaking at 400 patient visits/day (compared to 175 five years ago) – 113,000 emergency visits/ year • Urgent Care volume at 60,000 visits/year • Delivering on average5,000 babies annually • Providing the onlyLevel 1 Trauma Centerin Tarrant County • Providing correctional health • Only psychiatric emergencycenter in Tarrant County

4. JPS Contribution • More than 6,000 team members – 7th largest employer in Tarrant County • Estimated economic impact of $1.7 billion in FY 2012 – creating more than12,500 jobs in Tarrant County • The most successful public hospital-based organ procurement program in the country – second only to Vanderbilt University Medical Center • Sponsoring nine residency programs – including nation’s largest hospital-based family medicine residency program

5. JPS Community Partnerships and Collaboration • Examples of JPS’ partnership role • MHMRand Mental Health Connection • 1115 Waiver Region 10 Anchor • Education Institutions (such as UTA, TCU, UNTHSC, TCC, TWU and Tarleton State) • Fort Worth Foundation and Tarrant County Homeless Coalition • Tarrant County Criminal District Attorney’s office • Local governments • Community non-profits and service agencies

6. Agenda • Trends and conditions influencing facility needs • Overview of facility needs • Summary financial analysis • Measurements of success – now and after construction • Moving forward

7. Trends and Conditions

8. Industry Trends and Market Context • Around the country… • Affordable Care Act is affecting access, reimbursement, outcomes and wellness • Quality, cost and patient satisfaction are increasingly scrutinized by employers, payers and patients • Aging population will drive demand across the care continuum • Organizing around the care continuum is strategically important • In our market… • Tarrant County will add~300,000 people over the next decade (over 15% growth) • The 65+ age cohort will grow by approximately 30% over the next decade • Uninsured pressures continue to increase (386,000 / 24% uninsured in Tarrant County) • Other health systems continue to invest in their facilities to influence choice

9. JPS Environment Today • System and Campus Level • Outpatient demand is growing and evolving • Service line components are fragmented – hospital services split by Main Street • Hospital and outpatient services lack efficiency, capacity, and in challenging locations • Department Level • Inpatient bed use is high, creates bottlenecks in other areas like the ED • Inpatient units are outdated (semiprivate rooms, lack of support space, etc) • Emergency Department has reached maximum capacity, compounded by lack of appropriate support space and organization • Behavioral health has disparate and challenging locations, lacks capacity • Women’s and newborn services lack clear access and adequate facilities • Outpatient clinics and urgent care are undersized and poorly configured

10. If JPS does nothing… • JPS will not match demographic and population growth of county, diminishing its ability to meet community health needs. • JPS will jeopardize reimbursements based on quality and satisfaction. • JPS will negatively impact other area hospitals because of lack of capacity. • JPS will experience higher costs for piecemeal replacement and maintenance of aged and over utilized facilities. • JPS will experience continued negative impact on efficiency and performance because of unmet facility needs.

11. Overview of Facility Needs

12. Hospital Services • Operational efficiency and quality of care challenges: • Lack of appropriate adjacencies of departments and services • Semiprivate rooms • Inability to group patients in the hospital by service line • Lack of capacity • Insufficient access points

13. Existing Conditions Main Street Note: this image for demonstration only

14. Existing Conditions Semiprivate rooms do not support: • Patient and family privacy • Patient satisfaction • Operational efficiency • Quality outcomes Medical and surgical patients are split by Main Street and mixed on many floors, creating: • Additional patient transfers, hand-offs • Inconsistent care • Operational inefficiencies • Teaching inefficiencies

15. Existing Conditions Existing neonatal ICU spaces are inadequate: • Lack privacy and family-centered care standards • Inability to control lighting and noise which is critical to development • Shortage of capacity and support spaces Inpatient pharmacy area is congested and lacking enough work stations for staff Note: this picture shows the old outpatient pharmacy, which is indicative of current inpatient pharmacy congestion

16. Existing Conditions • Urgent Care is separated from the main hospital ED, which results in numerous patient transfers: • ~600 monthly transfers from Urgent Care to ED • ~150 monthly transfers from ED to Urgent Care Urgent Care Main ED Main Street

17. Existing Conditions • Correctional health patients are interspersed on inpatient floors, resulting in: • Customized workflows • Duplicative security precautions • Inefficient security force staffing • Diminished patient and family experience

18. Behavioral Health Services • Operational efficiency and quality of care challenges: • Inadequate capacity, particularly to support an aging population, which impacts the county and the state • Lack of private rooms • Poor departmental adjacencies don’t support timely care and creates hand-offs • Outdated and undersized physical space

19. Existing Conditions • Psychiatric Emergency Center is located on the 10th Floor of the hospital bed tower creating access challenges and risks to others. • Psychiatric patients require lengthy and unsafe transfers between disparate facilities. 10th Floor Psychiatric Emergency Center Trinity Springs Pavilion Main ED

20. Outpatient Services • Operational efficiency and quality of care challenges: • Lack of capacity • Location of high volume outpatient clinics • Outdated design • Insufficient access points and wayfinding

21. Existing Conditions Issues with Outpatient Clinics: • Waiting occurs in corridors and is remote from clinic access • Sub-optimal locations • Land-locked • Lack of capacity • Registration occurs at several locations and is confusing for visitors • Outdated design limits productivity and performance improvement

22. Existing Conditions Pedestrians, including handicapped patients and visitors, must cross vehicular traffic. Handicap parking is not convenient or adjacent to building entrance.

23. Project Components to Meet Patient Needs New Inpatient Tower 739,011 gsf New Construction 1 3 Renovations to Existing Facilities 164,619 gsf Renovation 2 Psychiatric Hospital 220,000 gsf New Construction

24. 1. New Patient Tower • Benefits and Features • Capacity –Addresses current and future demands for beds, procedures and support services operations. • Patient Quality and Satisfaction - All single-occupancy rooms maximize patient and family privacy, quality of care, patient satisfaction and reimbursements. • Staff and Physician Satisfaction - Work environment and productivity improved. • Academic Support – Space, technology and resources to advance teaching mission. • Operational Efficiencies - Interdependent patient areas and ancillary services on east side of Main Street; appropriate sites of care; bed organization by service; patient/staff/physician/visitor/material flow improvements.

25. 1. New Patient Tower • Impact by the numbers • Inpatient: 87 additional beds should allow for additional 5,773 inpatient admissions per year • Obstetrical Deliveries: 62 OB beds to 80 OB beds and 15 LDRs to 18 LDRs will allow for an estimated additional 800 deliveries and associated antepartum encounters per year. • Neonatal ICU: 35 today going to 40 will allow for treatment of an additional 80 critically ill babies. • Emergency Department: Additional 16 exam rooms will allow for at least 20,000 additional annual visits. • GI Endoscopy: future capacity will be four procedure rooms with the ability to care for at least 1,000 additional patients annually.

26. Best Practice Examples… Waiting Area and Private Triage UHS Waiting Current JPS Waiting

27. Best Practice Examples… JPS Semiprivate Inpatient Room Parkland Private Inpatient Room

28. Best Practice Examples… JPS Neonatal ICU Dell Children’s NICU Parkland NICU

29. Best Practice Examples… UHS Nursing Station UHS Nurse Charting Station UHS Patient Floor Corridor

30. 2. Psychiatric Hospital • Benefits and Features • Capacity – Enables timely care for vulnerable population and decreases need for transfers and delays in care. • Patient Quality and Satisfaction - Private rooms resulting in better outcomes and satisfaction. All private rooms enables treatment of more patients by eliminating need to “block” beds for patients of similar age, gender. • Operational Efficiency - Full continuum of care in one location enables clinical effectiveness, operational efficiencies and reduces duplication of resources. • Security and Safety - Promotes appropriate site of care for psychiatric emergency center patients. • Staff and Physician Satisfaction - Work environment and productivity improved. • Academic Support – Space, technology and resources to advance teaching mission.

31. 2. Psychiatric Hospital • Community impact by the numbers • Growing from 96 inpatient beds to 148 beds will allow for an additional3,000 annual admissions, including the addition of geriatric psychiatry patients • Psychiatric Emergency Center would be increased from 20 to 30 treatment positions allowing treatment of an additional 7,000 patients annually.

32. 3. Renovations to Existing Facilities • Benefits and Features • Increased Capacity– Provides for development of “medical home” for patients, higher level of care coordination for high acuity, at-risk population. • Patient Quality and Satisfaction – Provides adequate treatment, support, waiting and registration areas. • Operational Efficiency – Improves space utilization; moves high traffic primary clinic and orthopedic clinic to more appropriate first floor; Allows for implementation of modern care models, flows. • Security and Safety – Protects pedestrians from vehicular traffic and inclement weather. • Staff and Physician Satisfaction - Work environment and productivity improved. • Academic Support – Space, technology and resources to advance teaching mission.

33. 3. Renovations to Existing Facilities Community impact by the numbers Overall, expect to care for an additional 40,000 patient visits annually.

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35. Financial Analysis

36. Process for Development of Financial Projections • First Southwest engaged Financial Resource Group (FRG) to develop financial projections for JPS and the projects • Based on Functional and Space Program Volume 1 from Broaddus • Baseline operational model intended to represent current JPS operations trended forward • Separate operational models were built for each project component • Forecast Model aggregates the baseline and the individual project models out to 2024

37. Financial Model Assumptions • Volume and Revenue/Reimbursement Rates • Annual inpatient growth at 1.5% and outpatient growth at 2.0% • No change in payor mix • Average length of stay reduced 1.0% annually • State Disproportionate Share Revenue increasing 1.0% annually • 1115 Waiver and DSRIP Revenue reduced 1.0% annually • Productivity Improvements • Annual 3% productivity improvement over 10 years to meet industry average • 2015 JPS Budget reflects 6.9 FTEs/Adj Occupied Bed; similar facilities average 5.6. • Improvement attributable to efficiencies of new facility, improved processes, patient flow, and technology.

38. Financial Model Assumptions (cont.) • Property Taxes • NO INCREASE IN PROPERTY TAX RATE • 2.0% annual increase on property values • Inflation Factors • 2.0% annual increase on all payors • 2.6% annual wage increase and 3.0% on all other operational expenses • Bond Financing (assumes AAA/Aaa GO ratings) • $809.1 million in bonds are authorized by an election and repaid over 30 years • $714.52 million sold in Feb. 2016 with est. borrowing cost of 4.5% for all projects except renovation of existing hospital facilities • Remaining $94.55 million sold in Feb. 2018 with est. borrowing cost of 5.0%

39. Project Cost Assumptions

40. JPS Income Statement - Baseline

41. JPS Income Statement - Forecast

42. Measurements of Success

43. Destination Metrics (Strategic Plan Goals)

44. Destination Metrics

45. Reports for Board of Managers Transparency and Accountability – Before and After Construction:

46. Operational Metric Statistics JPS tracks an extensive number of operational metrics and will continue to monitor these after occupancy of the new facilities… Days Cash on Hand Debt to Capitalization EBITDA Margin Total Margin % Value Analysis Team Operating Expense Budget DSRIP CG-CAHPS Average Boarding Hours HCAHPS ED-HCAHPS Next New Appointment Employee Engagement Voluntary Turnover Rate Preventive Health Bundle Ambulatory Care Sensitive Admissions Rate Readmission Rate Preventable Injuries Mortality Length of Stay

47. Reporting During Construction • Benefits and Features • Accountability – Shows Schedule, Budget, and Management challenges as well as successes. Milestone dates, schedule progress, budgets and budget variances clearly illustrated. • Transparency – Standard, consistent format • Timeliness - Regular monthly updates. Progress photos changed with each report. • Flexibility – Open fields for special items

48. Schedule Assuming favorable November 2015 bond election, the following design and construction schedules are anticipated:

49. Moving Forward

50. Positioning JPS for Success • Proposed Actions Items before Bond Election: • Functional and Space Program Update • Brief Board of Managers and the Commissioners Court on Pre-Bond Planning • Create Program Implementation Plan (to define design and construction approach) • Evaluate Internal and External Organization Structure (staffing plan) • Document Development (for procurements) • Budget Development • Schedule Development