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Home My WebLink About20030756.tiff 1 1 1 1 I I I I I 1 I 1 1 i BANNER HEALTH Information Provided to the Weld County Commissioners on March 20, 2003 Presented by : Jon Sewell, CEO Scott Bosch, President of Colorado Region --.----.----.----.----.----.-- N O O O J Ul m 1 .•t lttpk. "National Scope" ,. .,,:ii , :, YM1 . t Y.,,. AK . Based in Phoenix, AZ `r 20 hospitals, 6 LTC K,< a ` •,- ,• .. Services in 9 western states t-kili'` r .r r 21,500 employees { '..,t .n ' ,n ., 178,209 In-patient Discharges o« x -k. -e. Or •• 30,000 Newborn Discharges JF r , y�. It,', li,il ae . C pi Ntstiaiiiiii v, ;: AZ "Regional Scope" --:-- --.----:-- --:-- --:----.----:-- --:----:-- --.-- --:----:-- *Regional Office Based in Greeley, CO *9 Hospitals (760 licensed beds) *4800 employees 1 *28,452 Discharges Worland • *3,727 Newborn Discharges *2002 Total Net Revenue: $404.1 M (annual.) WY Wheatland• • orrington N E •Ogallala Loveland--• • Sterling •Brus � I { C 0 K S Marion • ► ► ► ► ► ► ► ► ► ► ► ► ► ► ► ► ) Adoksji Banner Health® --:-- --:----.-- --:-- --.----.----:-- --:----:-- --:-- --.----:-- WELD COUNTY Colorado Region Office NCMC 357 employees * 2057 employees $ 11 .3M Compensation°t3 $101M Compensation 0 $2. 1M Goods & * 15,031 Discharges Services Local * $ 15M Capital Local Business Expenditure P Business Expenditure $4.7M Goods & Services Local Expenditure ► I ► ► ► ► I ► ► ► ► ► 1 i ► ► ► I ► B anner Health & NCMC --:-- --:----.-- --:-- --.----.----:-- --:----:-- --.-- --.----:-- 1994 2002 IP Discharges 12,311 15,031 i' OP Visits 62,981 166, 128 Outreach Clinics 360 1 ,050 Gross Revenue 164,818,299 370,619,874 Total Expenses 117,295,359 197,874,627 Salaries & Benefits 64,902,025 97, 163,370 1 i I I I I I I I I I I I I I I 1 1 1 r 0*'" e Banner Health% if) Financial Flow Colorado ,779Region Alaska- Arizona Fairbanks Region'N% Banner Health Corporate $150 million _ X System Resources HR/Payroll/Benefits Finance/Accounting/Reimbursement/Billing Legal/Risk Education and Training Mgmt/Compliance Information Technology Managed Care Materials Management/Purchasing Planning, Marketing, Communications r I 1 1 ► I I I I 1 I I I I 1 I I ► 1 1 I Banner Health® Colorado Region Financial Flow --.-- --:----.-- --:-- --:----.----:-- --:----:-- --.-- --:----;-- f NCMC McKee Sterling Medical Regional Center N MedCenter I Banner Health Colorado Region Headquarters $18 million Wyoming IN EMCH (Brush) Nebraska 1 I 1 I 1 I 1 I I I 1 1 I I 1 I 1 1 1 `I 2 Banner et Financial Flow • Health® --:-- --:----:-- --•-- --:----•----•-- --:----•-- --:-- --:----:-- Colorado Region Hospitals East Morgan County Hospital (Brush) McKee Medical Center NCMC Sterling Regional MedCenter Total Cash (2001 & 2002) $12.8 million V Banner Health Colorado Region Offices Total Cash (2001 & 2002) $14.5 million V Banner Health (Phoenix) ATTENDANCE RECORD HEARINGS ARE AS FOLLOWS ON THIS 20TH DAY OF MARCH, 2003: BANNER PRESENTATION 11 v,/i.5 Y� to G[SF c, ci eston PLEASE legibly write or print your name and complete address. 5oyr 11 OkCC' `_' yes ac no NAME ADDRESS John Doe 123 Nowhere Street, City, State, Zip 7 11F> i7�C l r4 a-r � C2Pox2�.� t �ICOG 3i Oaa btu_ 4O ILA NA- lien Ma.Jca13-l'wu.. Ljveila.+n Ca kOS$$ leis TAB) M,//d /608 3'l T` (4./Cc,-,,,L C",, Foe3y "''a �J � nJ 7� .�!z�� 31`4S ' ,3 ..14,-/e___ 5 �-)CM 0. T. c/s e—_s' MK( ilietvC1 i)-O 1 4-0'w l+4i t, ( 12-kA t e0 1)(40I31-1 7 'cm &� iAW,J / 80 I ( WI rr 5 Rao+JcaLAA- Iocdl IoTh Sr, G�f L6r 60 g063( Ai° e r rY c k 4R4e5 8S r j Lit (xvee /ey, CO 506 3V La-1, c\ ,rei Vzii--v %in (' or.Joy 24 € ).-, Co go t c Jnn'CRC S-K-v ,--> tree T�� - h0 art" 6r1--.1-77 47iArtn-r.e,e; - at ,.,Jc--!. -- 01/27),44,2,, i So, ,an b�. n> 4. `1.., 6 k, i., i�1z-en_ 7 2(C7 6% - 'e- 127 4 ev 4') (f-t96 .f/ No Lire ' ,GE'r /- 3(7 �L r ATTENDANCE RECORD HEARINGS ARE AS FOLLOWS ON THIS 20TH DAY OF MARCH, 2003: BANNER PRESENTATION Qo yE� PLEASE legibly write or print your name and complete address. ,.LI/«� NAME ADDRESS l John Doe 123 Nowhere Street, City, State, Zip 4,4inAti a 7575/ Gj 073r1 61re /e), i--0635(AAtI 67Dc 7)0 /fi= ,4 , #L/f 4%- yy RcLard Itmownet e u) sc( <r St, Qrrve_ C:raQ (e( ffo6 f No C�-u s�I,Y�N4_ � � 41 / 3 -- tt 4, 0 v� Jr� / Y-1r7-5wL,-esn0 A2 el-c7 ( aO63Lf Since Banner would like to manage our hospital for the next 15 years, what is Banner's vision for NCMC's 16'h Street campus for 15 years from now? Looking at specific action items that have been presented to the public,I have the following questions: -The proposed parking garage will only take care of parking problems for the next 5 years according to their consultants, where do they plan to build additional parking? Do they plan to purchase additional residential blocks around the hospital and scrape them for additional space? -The 21"Century project will cost approximately$130 million,how soon until the hospital begins renovating the 1952 disfunctional wing of the hospital and what is the anticipated cost? Will Banner be back in a few years seeking additional capital outlay from NCMC Inc. through additional bonds and further extension of their lease agreement? Have future renovations been taken into consideration in the designs for the current proposed renovation? -What is going to happen to the space currently occupied by outpatient radiology on the northeast side of the hospital when this service moves to the West Greeley campus? -What is the 15 year vision for the West Greeley campus? It currently appears piecemeal with some services in the outpatient surgery center, some in the medical office building, and there is talk of a new hospital on this campus as it has more room than the 16'h Ave location. -What is the impact of the 15 year vision for the West Greeley campus, on the 16`h Avenue hospital? Under all scenarios is the 16`h Street campus destined to become the county indigent care hospital? Banner has stated that competition between NCMC and Poudre Valley Hospital is a better solution than co-operation on the issue of working with PVH on the regional hospital proposed by PVH on the I-25 corridor. Banner through its employees at McKee is now complaining that the proposed PVH hospital would unduly compete and take away business from its McKee facility even though PVH will primarily offer services that are not offered to McKee. Is Banner interested in the best interest of Northern Colorado or the best interest of Banner? Given that both McKee and NCMC are very land locked at their current locations and the population growth patterns of northern Colorado, does Banner's regional plans for Northern Colorado include the option of building their own regional hospital in the area in the next 15 years? Does Banner own land in western Weld County or along the I-25 corridor? Fitch bond rating service has given Banner a favorable bond rating for bonds to raise funds for their Phoenix operations in part in reliance on Banner signing a long contract with NCMC Inc., which Fitch expected to happen in January 2003,what will be the consequences to Banner if a long term contract is not approved? NCMC Inc. was formed as a separate non profit organization back in 1993 in order to allow the hospital to engage in certain ancillary services that Weld County government could not participate in. These ancillary services provide support to the hospital services and were also viewed as revenue generating activities. These included rental of medical equipment, home health care etc. Today's phone book reflects Banner Medical Equipment,Banner Home Care, Banner Medical Solutions, Banner Staffing, and Banner managed care insurance-ChoicePlus. Have all of these ancillary services been transferred from NCMC Inc to Banner? If yes, what was the purchase price? Does the income from these services flow to Banner-Phoenix? Obviously these services provide jobs for local Banner employees, what impact has it had on other local independent business that also provide these services? What will be the grounds for termination of the expected long term contract between Banner and NCMC Inc.? Specifically, what are the performance review criteria that Banner must satisfy in order to satisfy the terms of the lease? Will the results of the patient, employee and physician satisfaction surveys be published in full, regardless of whether they are good or negative? What management decisions are made locally by Banner Colorado and what decisions are made by Banner Phoenix? -For example, supposedly the local management is not tainted by their own actions which were found to have created a conflict of interest with the NCMC Inc. Board members according to the FIGA report because NCMC Inc is only negotiating with Banner Phoenix—Is Banner Phoenix not responsible for Banner Colorado? -Banner Colorado can enter into exclusive contracts with physicians to operate at NCMC,but any appeal of this decision must be heard by some nebulous Banner-Phoenix group. -The conflict between the GI docs and family practitioners arises due to medical staff by laws which Banner Colorado claims it has no control over,yet in other departments Banner Legal is pushing through modifications to the medical staff by laws under the guise of"uniformity in all Banner facilities" Please address these inconsistencies. Has Banner offered to certain select Greeley specialist physicians to build a specialist hospital off of the existing campus, as an option to address the disagreement between the specialists and family practice physicians? Is Banner's commitment to is own business interests in Northern Colorado or to NCMC at its current 16`h Avenue location? When Banner's best financial interests and NCMC's best interests conflict,how will these issues be brought to light and how will they be resolved? All of the NCMC Foundation employees are Banner employees. How does Banner manage these employees? Do the NCMC Foundation Board members that are also Banner executives and NCMC Inc Board members recuse themselves on all issues due to the appearance of a conflict of interest? NCMC Inc. entered into a management contract with Lutheran Health Systems of Fargo North Dakota in 1995 which was a nonprofit health care organization that managed or owned 29 rural hospitals in North Dakota, South Dakota,Wyoming, Colorado and New Mexico. In 1999 Lutheran merged with Samaritan Health Services of Phoenix Arizona to form Banner Health System. Since then Banner has sold 10 of Lutheran's rural hospitals and focused its efforts in the higher growth markets in Arizona and Colorado. Banner is now headquartered in Phoenix,not Fargo and has different top management than Lutheran had when NCMC entered into the original management contract. The management company that we have now is not the management company that was chosen by NCMC, Inc. Banner's corporate structure and management style should be reviewed on its own merits to determine if it is in fact a fit for NCMC's demographics, goals, and long term best interest. Whereas Poudre Valley Hospital is locally managed and NCMC was locally managed until 1995, Banner's corporate structure has added several layers of management —the top corporate management team led by Peter Fine and located in Phoenix —Three regional Presidents —Fourteen members of their Board of Directors Total paid these key administrators in 2001 $5.4 million,total paid just Phoenix team &directors in 2000: $9.2 million and this is before all of the support personnel costs —Banner has made payments to its Former CEOs in 2000 and 2001 as follows: Jim Crews-former pres/CEO 2000- $ 661,514, 2001-$4,288,073 Steve On-former pres/CEO 2000- $2,228,923, 2001-$842,693 —Finally, somewhere down the ladder is the Local hospital administrators such as NCMC's CEO and all of the local administration management support staff I cannot help but wonder if any cost savings derived from Banner is overshadowed by the management costs of this 800 pound gorilla. Hello