Item Description:
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Approval of the 2024 Hennepin Healthcare System, Inc. Financial Plan as submitted by the Hennepin Healthcare System, Inc. Board of Directors - Revised
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Resolution:
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BE IT RESOLVED, that the Hennepin County Board of Commissioners approves the 2024 Hennepin Healthcare System Annual Budget, including operational and capital budget, as submitted by the Hennepin Healthcare System, Inc. Board of Directors, but subject to the modifications set forth below; and
BE IT FURTHER RESOLVED, that HHS shall not take any action to conduct any layoff, furlough, or reduction in force of incumbent staff until after the HHS Board Chair or designee briefs the County Board in the first quarter of 2024, except that this resolving clause shall not impede HHS’s ability or authority to take disciplinary action up to and including discharge; and
BE IT FURTHER RESOLVED, that HHS shall not take any action to adjust the CEO’s annualized base salary without the HHS Board Chair or designee first briefing the County Board on any proposed adjustment; and
BE IT FURTHER RESOLVED, that the HHS Board Chair or designee shall brief the County Board in the first quarter of 2024 on any existing or proposed leadership compensation plan including but not limited to any plan related to incentive pay; and
BE IT FURTHER RESOLVED, that the County Administrator provides a report to the County Board no later than March 1, 2024, which analyzes the 2024 HHS Employee Health Plan including but not limited to impacts for cost-burdened workers, families and birthing people, and households in need of treatment for chronic illness; and in that report, the County Administrator shall further offer any recommendations for further actions by the County Board.
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Background:
The Hennepin County Board of Commissioners has certain reserved powers over Hennepin Healthcare System, Inc. (HHS), one of which is the power to approve the corporation’s annual budget. On November 8, 2023, the 2024 HHS operating and capital budget was approved by the HHS Board of Directors and is now recommended by that Board for approval by the Hennepin County Board of Commissioners.
Hennepin Healthcare System, Inc.’s 2024 budget includes Hennepin Healthcare, Hennepin Healthcare Research Institute, and Hennepin Healthcare Foundation.
The organization is focused on aligning resources to mission, vision, and values as well as assuring quality of and access to care. To achieve this, focus will be on proactive high-quality care made easy, standing as a national leader in trauma care, modeling world class health equity and racial justice in medicine, and supporting a workplace culture of respect, learning, and growth.
The HHS 2024 budget anticipates providing approximately 126,000 days of hospitalized care to 17,000 patients discharged from inpatient care. Additionally, patients will seek care through 840,000 outpatient encounters. This includes approximately 12,000 patients treated in HHS operating rooms.
Contained in the 2024 budget there are $127 million in margin improvement initiatives which includes revenue cycle, growth and throughput, alignment of staffing to volumes, premium pay, and non-staffing expense savings.
The 2024 budget anticipates spending $1.48 billion and generating almost $1.49 billion in revenues, resulting in a $16.2 million operating margin. A positive cash flow margin of $118.4 million will be generated. Capital expenditures, exclusive of County Funded Capital, are budgeted at $42.3 million. This includes $31.5 million for routine capital expenditures and continued investment in the Comprehensive Campus Development Plan, and debt repayment of $10.8 million.
Finally, a part of the HHS Budget is the projected revenue HHS receives from the County pursuant to the Uncompensated Care Formula. It is projected that this formula will produce $28 million in payments during 2024.
recommendation
Recommendation from County Administrator: Recommend Approval