Health Financing Summit

04.14.10

HEALTH FINANCING: FROM A HOSPITAL

PROFIT FOR SERVICE PERSPECTIVE

A HOSPITAL & PATIENT-ORIENTED VIEW

Charles Y. Yu,MD,MScFPCP,FACPhon,FPCCPVice Chancellor for Lasallian Mission & Linkages

Past VP Medical Services/ Hospital DirectorWHO Consultant for TB PPMD

2009 MOF PCCP & 10 Filipino Outstanding Physicians (JCI Senate,DOH, PHIC,PCSO)

MAINTAIN CONSERVATIVE RETAINED EARNINGS

INCREASE CONTRIBUTION MARGIN

INCREASE DONATIONS

LEVERAGE MARKET OPPORTUNITY

PROVIDE OUTSTANDING CUSTOMER SERVICE

DEMONSTRATE CONTINUED CLINICAL & ACADEMIC EXCELLENCE (PRODUCT/SERVICE

CORE)

STRIVE FOR OPERATIONAL EXCELLENCE (PRODUCTIVITY)

EASY ACCESS(PLACE-MENT)

ON TIME SERVICE

(PROCESS-ING)

FRIENDLY, ATTENTIV

E & SINCERE INTER-

ACTIONS (PEOPLE/ STAFF)

DEVELOP LEADING EDGE TECHNIQUES &

PROGRAMS

DEVELOP RESEARCH OPPORTUNITIES ALIGNED W/ TARGETED GROWTH AREAS

CLINICAL PRACTICE & ACADEMIC

MANAGEMENT

OPTIMIZE STAFF EFFICIENCY

REDESIGN OPERATIONS FOR EFFICIENCY & EFFECTIVENESS

CONTINUALLY DEVELOP SUBSPECIALIZED CLINICAL

SERVICES

CLEARLY COMMUNICATE

EXPECTATIONS & ACCOUNTABILITIES

ALIGNED W/ STRATEGIC PRIORITIES

CREATE AN ENVIRONMENT TO

SUPPORT "CUSTOMER" & EMPLOYEE ENGAGEMENT

& COMMITMENT TO THE VMV

ALIGN AND RESTRUCTURE ORGANIZATION; RECRUIT, TRAIN

AND RETAIN QUALIFIED STAFF

IMPLEMENT TECHNOLOGY AND DEVELOP FACILITIES AND INFRASTRUCTURE TO

SUPPORT INTERNAL PROCESSES

(PHYSICAL EVIDENCE/ SERVICE VENUE)

DEVELOP LEADERSHIP AND MANAGEMENT

TALENT

FINANCIAL PERSPECTIVE: BUILD A STRONG FINANCIAL BASE TO REALIZE OUR VMV

CUSTOMER PERSPECTIVE: PRIMARY TARGET MARKET WILL PREFER HSC AS COLLEGE AND HOSPITAL OF CHOICE

INTERNAL PROCESSESPERSPECTIVE: ALIGN AND STRENGTHEN INSTITUTION TO TARGET/ PREFERRED TOTAL CUSTOMER EXPERIENCE

LEARNING & GROWTH PERSPECTIVE: ALIGN, DEVELOP AND MANAGE STRATEGIC RESOURCES FOR CONTINUALLY IMPROVING INTERNAL PROCESSES EXECUTION

OPTIMIZE CAPACITY(PRICING)

BRAND AND POSITION BY TOTAL CUSTOMER EXPERIENCE (PROMOTION 1)

CUSTOMER EDUCATION & COMMUNI-

CATION (PROMO-TION 2)

Strategic Theme: Realize DLS-HSI's VMV

*Adapted from St. Mary's Duluth Clinic Health System's Strategy Map (Strategy Maps by Robert S. Kaplan and David P. Norton, P. 59)

REVENUEHMO 109,537,289 20%COMPANY 29,915,988 5%PROMISSORY NOTE 25,126,829 5%PHILHEALTH 65,687,595 12%CASH PAYMENT 322,028,368 58%

TOTAL REVENUE 552,296,070 100%

REPORT OF REVENUES: June 2009- Feb 2010 UNIVERSITY HOSPITAL

EXPENSES FOR THE 9 MONTH PEROD 2009-2010

DISBURSEMENT

Salaries,Benefits & Staff Dev 142,918,856 27%

Drugs, Food & Oxygen 121,661,669 23%

Materials & Supplies 89,851,285 17%

Depreciation 29,572,391 6%

Outside Services 27,864,707 5%

Utilities,facilities,Maintenance 34,606,089 7%

Allow. For Bad Debts 9,037,966 2%

Interest Exp 3,111,546 1%

Meetings & PR Expenses 1,252,310 0%

Taxes & Licenses 778,910 0%

Travel & Transportation 991,699 0%

Charity Expenses 874,137 0%

Discount 18,895,605 4%

Miscellaneous 1,550,210 0%

Administrative Exp. 42,598,755 8%

525,566,135 100%

At least 7 -10% (counting the personnel and staffing of the charitywing (20% of beds) expenses go to service cases & discounts

Issues & Challenges

• As the first ISO certified hospital in the country , DLSUMC is the pioneer & most experienced in standards, including PHIC

• Many hospitals are having problems complying with PHIC, stds of care etc

• Private-public partnerships needed to improve equity• Danger of 2 worlds: gleaming palaces for the rich and

run-down decrepit hospitals for the poor• Challenge to the new administration• Di KA NAG-IISA

Health Financing Summit

04.14.10