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Fourth Quarter Financial Report – FY 2009

Fourth Quarter Financial Report – FY 2009. FINANCE COMMITTEE MEETING OCTOBER 19, 2009. Highlights of Operating Results. Academic Enterprise (everything but the hospital) FY 2009 original budget operating margin = -1.5% FY 2009 amended budget operating margin = -3.2%

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Fourth Quarter Financial Report – FY 2009

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  1. Fourth Quarter Financial Report – FY 2009 FINANCE COMMITTEE MEETING OCTOBER 19, 2009

  2. Highlights of Operating Results • Academic Enterprise (everything but the hospital) • FY 2009 original budget operating margin = -1.5% • FY 2009 amended budget operating margin = -3.2% • FY 2009 actual operating margin = -2.1% • FY 2010 budgeted operating margin = 0% • Clinical Enterprise • FY 2009 budgeted operating margin = 5.1% • FY 2009 actual operating margin = 1.1% • FY 2010 budgeted operating margin = 3% • Overall • FY 2009 original budget operating margin = .9% • FY 2009 amended budget operating margin = -.2% • FY 2009 actual operating margin = -1% • FY 2010 actual operating margin = 1%

  3. Academic Financial Results

  4. Senate Bill 6 Ratios • Primary Reserve Ratio – expendable net assets / total operating expenses • Viability Ratio – expendable net assets / long-term debt • Net Income Ratio – net income / total operating revenues

  5. Senate Bill 6 Composite Score Ohio State Miami Cincinnati Akron Ohio University Scores OSU = 3.2 Miami = 2.9 UT = 2.6 Cincinnati = 2.3 Akron = 2.0

  6. Outlook for FY 2010 • Reasons for Optimism • Fall Enrollments Exceeded Budgeted Amounts • More Reliable Budget – Structural Deficits Corrected in FY 2010 Budget Process • New IT-enabled Budgetary Controls Implemented July 1, 2009 • State of Ohio Exceeded First Quarter Revenue Projections by $30 Million • New Hospital Alliances • Healthcare Reform • Reasons for Concern • State of Ohio FY 2011 Operating Budget • Video slots • Rescission of tax cut • State of Ohio FY 2012 Operating Budget • Federal stimulus dollars • UTMC Operating Margin • Partially Funded Depreciation • Payer Mix – Uncompensated Care • AFSCME Negotiations

  7. Cost Savings Initiatives - Clinical • Reduction in force and workforce reorganizations. • Vendor consolidation/renegotiation. • Controlling the use of high-cost biological agents and drugs. • New procedures to control uncompensated care. • Outsourcing/more student employment where appropriate. • Strategic service line growth strategy. • New strategic alignments/joint ventures. • New union contract (in progress). • New departmental liaison program (“Margin Marines”). • Hired new hospital budget director. • Furlough program (continued planning)

  8. Conclusion • FY 10 operating budget for the Academic Enterprise is currently solid; State of Ohio budget is an unsettled issue. • There are ongoing UTMC cost-reduction initiatives to protect its 3% operating margin and to create a more sound fiscal footing in a highly dynamic environment.

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