Minutes of the meeting of the Finance Committee of the Board of Directors of the Cook County Health and Hospitals System held Friday, March 23, 2018 at the hour of 8:30 A.M., at 1900 W. Polk Street, in the Second Floor Conference Room, Chicago, Illinois. I. Attendance/Call to Order Acting Chairman Hammock called the meeting to order. Present: Acting Chairman M. Hill Hammock and Directors Mary Driscoll, RN, MPH (Substitute Member) Robert G. Reiter, Jr. and Mary B. Richardson-Lowry (3) Director Ada Mary Gugenheim and Steven Scheer (non-director Member) Absent: Director Hon. Jerry Butler (1) Additional attendees and/or presenters were: Ekerete Akpan Chief Financial Officer Debra Carey Deputy Chief Executive Officer, Operations Douglas Elwell Deputy Chief Executive Officer, Finance and Strategy Donna Hart Chief Information Officer Charles Jones Chief Procurement Officer Gladys Lopez Chief Human Resources Officer Jeff McCutchan General Counsel Deborah Santana Secretary to the Board II. Public Speakers Acting Chairman Hammock asked the Secretary to call upon the registered public speakers. The Secretary called upon the following registered speaker: 1. George Blakemore Concerned Citizen III. Action Items A. Minutes of the Finance Committee Meeting, February 15, 2018 Director Richardson-Lowry, seconded by Director Driscoll, moved to accept the minutes of the Finance Committee Meeting of February 15, 2018. THE MOTION CARRIED UNANIMOUSLY. B. Contracts and Procurement Items (Attachment #1) Charles Jones, Chief Procurement Officer, provided an overview of the requests presented for the Committee s consideration. The Committee reviewed and discussed the requests. Page 1 of 48
III. Action Items B. Contracts and Procurement Items (continued) Douglas Elwell, Chief Executive Officer of Finance and Strategy, provided additional information. With regard to request number 3, Mr. Jones noted that an error was corrected on the transmittal. The correct grant renewal amount is reflected as $88,125.00, and the correct contract period is from July 1, 2017 through June 30, 2020. Director Richardson-Lowry stated that she is recusing herself from the discussion and vote on request number 4. Mr. Jones commented on requests 5 through 13; these consist of increases and extensions to existing contracts. They are listed as non-competitive processes, because although the original contracts are procured under a competitive methodology such as a Request for Proposals or under the Group Purchasing Organization, when it is subsequently extended or increased, it is done so based on Supply Chain Management s knowledge of needing to leverage the existing contract. The Procurement Policy allows for this to be done, with Board approval when necessary. In most cases, the cost basis for services and unit pricing for supplies are the same. With regard to request number 12, Mr. Elwell provided information on the different components to be received under the request, relating to licensing fees, adding or changing interfaces, and those needed due to regulatory requirements that did not exist at the time the original contract was negotiated and executed. Director Richardson-Lowry noted that there are other methodologies, such as fixed price and sum certain, that can be employed when negotiating contracts like this to reduce the likelihood of coming back with contract increases/amendments; she encouraged him to think about utilizing the methodology of sum certain with module changes in future contracts. Mr. Elwell noted that the administration is still negotiating with the vendor; this was originally a request for a $9 million increase but was reduced by $4 million. Donna Hart, Chief Information Officer, provided additional information. In response to a question regarding whether CCHHS costs for these services are comparable to what other institutions pay, she stated that she is currently exploring that question. She stated that CCHHS has a full suite of products; she needs to compare it to an institution using the same components/products/interfaces. With regard to request number 13, Director Richardson-Lowry requested information on the original Minority and Women-Owned Business Enterprise (M/WBE) goals set and status of the vendor s compliance. Mr. Jones responded that he will provide this information. With regard to the subject of Contract Compliance and M/WBE goals, Acting Chairman Hammock inquired whether a report will be provided going forward to track Contract Compliance efforts more closely. Mr. Jones responded affirmatively; he stated that he is developing metrics that he plans to present in the near future. Director Richardson-Lowry, seconded by Director Reiter, moved the approval of request numbers 1 through 24, as amended, and subject to completion of review by Contract Compliance, where appropriate. THE MOTION CARRIED. Director Richardson-Lowry abstained and voted PRESENT on request number 4. C. Any items listed under Section III Page 2 of 48
IV. Report from Chief Procurement Officer A. 1 st Quarter FY2018 Report of Purchases made under the authority of the Chief Executive Officer (Attachment #2) B. Report of emergency purchases Mr. Jones provided an overview of the 1 st Quarter FY2018 Report of Purchases made under the authority of the Chief Executive Officer. There were no emergency purchases that were recently made. V. Report from the Chief Financial Officer (Attachment #3) Metrics Financials through January 2018 Ekerete Akpan, Chief Financial Officer, provided an overview of the information contained in his report. The Committee reviewed and discussed the information. Mr. Elwell noted that, in the future, they are going to break the financials down to show: 1) financial information regarding activities relating to detainees and Public Health; 2) financials as a provider; and 3) financials as CountyCare. By being able to see all three (3) pieces, it will make it easy to track where problems may exist. During the discussion of the CountyCare financials, it was noted that March 31 st is the last day for members to change plans. Mr. Elwell stated that the administration should receive the data relating to membership changes some time before the April Finance Committee Meeting. Acting Chairman Hammock requested that a budget line that reflects year-to-date data be added to the CountyCare financials so there is a benchmark to measure against. VI. Adjourn As the agenda was exhausted, Acting Chairman Hammock declared the meeting ADJOURNED. Respectfully submitted, Finance Committee of the Board of Directors of the Cook County Health and Hospitals System XXXXXXXXXXXXXXXXXXXXXX M. Hill Hammock, Acting Chairman Page 3 of 48
Attest: XXXXXXXXXXXXXXXXXXXXXX Deborah Santana, Secretary Follow-up / Requests: Request: Request for information on the original M/WBE goals set and status of vendor s compliance for request number 13 (Evolent). Page 2 Follow-up: Metrics on Contract Compliance will be presented to the Committee in the near future. Page 2 Request: Request for a budget line to be added to CountyCare financials that reflects year-to-date data. Page 3 Page 4 of 48
Cook County Health and Hospitals System Finance Committee Meeting Minutes March 23, 2018 ATTACHMENT #1 Page 5 of 48
COOK COUNTY HEALTH AND HOSPITALS SYSTEM ITEM III(B) MARCH 23, 2018 FINANCE COMMITTEE MEETING CONTRACTS AND PROCUREMENT ITEMS - AS AMENDED Request # Vendor/Entity Service or Product Fiscal impact not to exceed: Method of acquisition Total # of bidders/ RFP responses / GPO companies available Affiliate / System Begins on Page # Accept Grant Renewals 1 2 3 Illinois Department of Public Health Cook County Health Foundation Illinois Department of Public Health Service - Illinois Tobacco- Free Communities Program Service - for the provision of Medication-Assisted Treatment (MAT) for Opioid Use Disorder in the Cook County Department of Corrections Service - body art and tanning facilities inspections in suburban Cook County Grant renewal amount: $641,557.00 n/a n/a CCDPH 4 Grant renewal amount: $189,571.13 n/a n/a System 5 Grant renewal amount: $29,375.00 $88,125.00 n/a n/a CCDPH 6 Accept Grant Award 4 Corporation for Supportive Housing (CSH) Service - data analysis of CCHHS utilization and jail data and project planning and development $4,000.00 n/a n/a System 7 Increase Contract 5 Lab Metrics, Inc. Services - Sterile Products Quality Assurance Training and Testing Program $70,548.00 This request - noncompetitive process leveraging existing contract Original contract - competitive RFP process in 2015/1 response) System 8 Extend and Increase Contracts 6 Schwab Rehabilitation Hospital Service - acute rehabilitation services $600,000.00 This request - noncompetitive process leveraging existing contract Original contract - competitive RFP process in 2012/2 responses) System 9 Page 6 of 48
COOK COUNTY HEALTH AND HOSPITALS SYSTEM ITEM III(B) MARCH 23, 2018 FINANCE COMMITTEE MEETING CONTRACTS AND PROCUREMENT ITEMS - AS AMENDED Request # Vendor/Entity Service or Product Extend and Increase Contracts (continued) 7 Imperial Parking (U.S.), LLC Fiscal impact not to exceed: Service - parking lot management $319,594.00 Method of acquisition This request - noncompetitive process leveraging existing contract Total # of bidders/ RFP responses / GPO companies available Original contract - competitive RFP process in 2014/3 responses) Affiliate / System Begins on Page # PHCC, SHCC 10 8 Carminati Consulting, Inc. Service - professional consulting (organizational education) $200,000.00 This request - noncompetitive process leveraging existing contract Original contract - competitive RFP process in 2016/4 responses) System 11 9 10 11 Mobile Instrument Service & Repair, Inc. LearnSoft Technology Group Anchor Mechanical, Inc. Service - repair surgical instruments $200,000.00 Product - Learning Management System $158,400.00 Service - maintenance and repair of boilers and chillers at Stroger Hospital and Oak Forest Health Center $151,800.00 This request - noncompetitive process leveraging existing contract This request - noncompetitive process leveraging existing contract This request - noncompetitive process leveraging existing contract Original contract - competitive GPO procurement in 2017 / 4 vendors available in GPO SHCC 12 Original contract - competitive RFP process in 2014/4 responses) System 13 Original contract - competitive RFP process in 2014/3 responses) SHCC, OFHC 14 Amend and Increase Contract 12 Cerner Corporation Service - software support, maintenance and enhancements $5,945,471.00 Sole Source n/a System 15 Page 7 of 48
COOK COUNTY HEALTH AND HOSPITALS SYSTEM ITEM III(B) MARCH 23, 2018 FINANCE COMMITTEE MEETING CONTRACTS AND PROCUREMENT ITEMS - AS AMENDED Request # Vendor/Entity Service or Product Fiscal impact not to exceed: Method of acquisition Total # of bidders/ RFP responses / GPO companies available Affiliate / System Begins on Page # Amend, Extend and Increase Contract 13 Evolent Health Service - CountyCare thirdparty administrative services $189,000,000.00 This request - noncompetitive process leveraging existing contract Original contract - competitive RFP process in 2015/4 responses) Managed Care 16 Execute Contracts 14 Imperial Parking (U.S.), LLC Service - parking management $7,817,562.00 RFP 2 PHCC, SHCC 18 15 CDW Government Product - hardware $6,166,089.90 GPO 2 System 19 3M Health Service - software support, Information maintenance and 16 Systems enhancements $4,720,407.87 Sole Source n/a System 20 17 Abbott Diabetes Sales Corporation Product - blood glucose meters and test strips $2,561,103.50 RFP 4 System 21 18 ABM Healthcare Service - shuttle bus service $2,016,648.00 RFP 7 SHCC 22 19 20 Abbott Laboratories Honeywell International, Inc. Product - I-Stat cartridges and reagents for chemistry and coagulation testing at point-of-care $976,126.78 GPO 2 System 23 Service - fire alarm and HVAC maintenance for Oak Forest Health Center $865,036.50 RFP 1 OFHC 24 21 Olympus America 22 23 W.L. Gore & Associates Alivio Medical Center Product - endoscopy disposable surgical supplies $750,000.00 GPO 4 SHCC 25 Product - intravascular grafts and supplies $600,000.00 GPO 4 SHCC 26 Service - patient facilitators and consulting $490,762.53 RFP 5 SHCC 27 Extend and Increase Lease Agreement 24 Banc of America Leasing & Capital, LLC For the leasing of capital equipment under a Master Lease Agreement $15,000,000.00 n/a n/a System 28 Page 8 of 48
Page 9 of 48
Page 10 of 48
Page 11 of 48
Page 12 of 48
Page 13 of 48
Page 14 of 48
Page 15 of 48
Page 16 of 48
Page 17 of 48
Page 18 of 48
Page 19 of 48
Page 20 of 48
Page 21 of 48
Page 22 of 48
Page 23 of 48
Page 24 of 48
Page 25 of 48
Page 26 of 48
Page 27 of 48
Page 28 of 48
Page 29 of 48
Page 30 of 48
Page 32 of 48
Page 33 of 48
Cook County Health and Hospitals System Finance Committee Meeting Minutes March 23, 2018 ATTACHMENT #2 Page 34 of 48
Vendor Purchased Under the Authority of the Chief Executive Officer Contracts Under $150K Dec 2017 - Feb 2018 Contract Number Product/Service Purpose Value Contract Term Northwest Center Against Sexual Assault H17-25-0069 Services; Rape Crisis Counseling Original PO 40,000.00 12 months Pillars Sexual Assault H17-25-0070 Services; Rape Crisis Counseling Original PO 40,000.00 12 months Rape Victim Advocates H17-25-0071 Services; Rape Crisis Counseling Original PO 90,000.00 12 months YMCA of Metropolitan Chicago H17-25-0072 Services; Rape Crisis Counseling Original PO 65,000.00 12 months Mujeres Latinas En Accion H17-25-0073 Services; Rape Crisis Counseling Original PO 40,000.00 12 months Pitney Bowes Inc H17-25-0088 Servcies; Postal Original PO 30,621.00 36 months CCDPH University of Chicago Medical Center H17-25-0099 Services; Reference Testing Original PO 50,000.00 38 months Elsevier Inc. H17-25-0102 Services; Nursing Original PO 82,798.00 12 months Davis Bancorp H17-25-0103 Services; Armored car Original PO 57,354.00 36 months Barton-Carey Medical Products Inc. H18-25-0003 Services; Custom Burn Garments Original PO 50,000.00 36 months Northwest Housing Partnership H18-25-0006 Services; Client Education-Lead Original PO 104,400.00 24 months CCDPH Neighborhood Housing Services H18-25-0007 Services; Client Outreach Lead Educatio Original PO 104,400.00 24 months CCDPH Joint Commission Resources, Inc. H18-25-0008 Services; Joint Commission Survey Original PO 63,100.00 6 months The Washington Group LTD H18-25-0013 Services; Administrative Original PO 114,000.00 12 months Paul V. Beddoe Government Affairs LLC H18-25-0024 Services; Health Care Policy Consulting Original PO 75,000.00 12 months Harmon Linda H18-25-0031 Services; Pathology Original PO 50,000.00 6 months CDW Government LLC H18-76-0027 Capital; Countycare Equipment for Relocation Capital PO 60,975.84 one time purchase Page 35 of 48
Cook County Health and Hospitals System Finance Committee Meeting Minutes March 23, 2018 ATTACHMENT #3 Page 36 of 48
1 Cook County Health & Hospitals System Finance Committee Meeting March 2018 Ekerete Akpan CFO Finance Committee : March 2018 Page 37 of 48
2 Financial Statements Finance Committee : March 2018 Page 38 of 48
3 Income Statement for the Two Months ending Jan 2018(in thousands) Fiscal Year To Date Actual($) Budget($) Variance in $ Variance in % Operating Revenue 374,424 328,415 46,009 14.0% Operating Expenses Salaries & Benefits 99,781 110,914 11,133 10.0% Overtime 8,803 6,037 (2,767) 45.8% Pension* 53,599 53,599 (0) 0.0% Supplies 5,695 8,803 3,108 35.3% Pharmaceutical Supplies 17,139 13,791 (3,348) 24.3% Purch. Svs., Rental, Oth. 45,723 45,969 246 0.5% External Claims Expense 217,598 154,742 (62,857) 40.6% Insurance Expense 3,728 3,728 0.0% Depreciation 4,455 4,515 60 1.3% Utilities 1,943 1,943 (0) 0.0% Total Operating Exp 458,465 404,041 (54,424) 13% Operating Margin (84,041) (75,626) (8,415) 11% Operating Margin % 22% 23% 0% 3% Non Operating Revenue 35,903 35,903 0% Net Income/(Loss) (48,138) (39,723) (8,415) 21% *Year to Date (2 months) Pension Liability per GASB Finance Committee : February 2018 Unaudited Financial Statement Page 39 of 48
4 Volumes / Stats Finance Committee : March 2018 Page 40 of 48
5 25,000 20,000 15,000 10,000 5,000 Primary Care Provider Visits Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target FY2018 YTD: 34,597 FY2017 YTD: 35,046 FY2018 Average: 17,299 Finance Committee : March 2018 Page 41 of 48
6 30,000 25,000 20,000 15,000 10,000 5,000 Specialty Care Provider Visits Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target FY2018 YTD: 41,071 FY2017 YTD: 39,009 FY2018 Average: 20,536 Finance Committee : March 2018 Page 42 of 48
7 2,000 1,500 1,000 500 Total Inpatient Discharges FY2018 YTD: 3,134 FY2017 YTD: 3,643 FY2018 Average: 1,567 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target *includes PICU Finance Committee : March 2018 Page 43 of 48
8 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 Average LOS Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target FY2018 YTD: 6.07 FY2017 YTD: 5.06 FY2018 Average: 6.07 *includes PICU Finance Committee : March 2018 Page 44 of 48
9 15,000 10,000 5,000 Total Emergency Room Visits FY2018 YTD: 25,922 FY2017 YTD: 25,145 FY2018 Average: 12,961 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target *includes Adult, Peds and Trauma Finance Committee : March 2018 Page 45 of 48
10 200 150 100 50 Total Deliveries Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target FY2018 YTD: 162 FY2017 YTD: 180 FY2018 Average: 81 Finance Committee : March 2018 Page 46 of 48
11 1,500 1,000 500 Total Surgical Cases Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2018 Actual 2017 Actual 2018 Target FY2018 YTD: 2,391 FY2017 YTD: 2,266 FY2018 Average: 1,196 Finance Committee : March 2018 Page 47 of 48
FY 2018 CountyCare Supplemental Statement YTD Member Months 294,863 679,273 384,410 YTD YTD CM Revenue December-2017 January-2018 January-2018 PMPM Total Revenue $ 96,190,132.93 $ 269,715,711.93 $ 173,525,579 Administrative Expenses Third Party Administrator (TPA) $ 3,719,798.00 $ 8,909,333.46 $ 5,189,535 Pharmacy Benefits Manager (PBM) $ 60,000.10 $ 157,581.45 $ 97,581 Care Management Analytics $ 587,998.00 $ 1,154,533.00 $ 566,535 Salaries & Benefits $ 104,515.54 $ 209,030.54 $ 104,515 Other $ 158,016.07 $ 332,848.31 $ 174,832 Dental and Vision Benefits Manager (DBM) $ 194,004.85 $ 434,551.65 $ 240,547 Stop Loss Insurance $ 150,703.00 $ 631,365.00 $ 480,662 Total Administrative Expenses $ 4,975,036 $ 11,829,243 $ 6,854,208 CCHHS Clinical Expenses CCHHS Claims $ 5,384,156.00 $ 11,814,850.00 $ 6,430,694 CCHHS Pharmacy Claims $ 2,851,923.00 $ 6,049,598.70 $ 3,197,676 CCHHS Care Management $ 652,596.00 $ 1,305,192.00 $ 652,596 CCHHS Clinical Expenses 8,888,675.00 19,169,640.70 $ 10,280,966 External Clinical Expenses External Claims $ 51,495,500.00 $ 155,407,510.41 $ 103,912,010 External Pharmacy Claims $ 17,169,204.56 $ 45,349,700.44 $ 28,180,496 External Care Management $ 2,288,502.50 $ 6,695,557.20 $ 4,407,055 External Dental Claims $ 3,030,576.00 $ 6,700,052.87 $ 3,669,477 External Transportation Claims $ 1,068,328.80 $ 2,071,484.47 $ 1,003,156 External Optical Claims $ 573,043.85 $ 1,123,498.86 $ 550,455 External Member Incentives $ 250,600.00 $ 250,600 External Clinical Expenses $ 75,625,156 $ 217,598,404 $ 141,973,249 Medical Loss Ratio (MLR) 87.9% 87.8% 87.7% Total Expenses $ 89,488,866 $ 248,597,288 $ 89,488,866 IGT 1,918,514.33 5,049,054.33 $ 3,130,540 CountyCare Net Income After IGT $ 4,782,752 $ 16,069,369 $ 11,286,617 12 Page 48 of 48