CONTROLLER Kootenai Health Coeur d Alene, Idaho Prepared by WK Advisors November 12, 2012
2 OVERVIEW OF THE ORGANIZATION Kootenai Hospital District owns and operates Kootenai Medical Center. The District is organized and exists as a political subdivision under the laws of the State of Idaho to provide health care services to the residents of Kootenai County and to the five counties of northern Idaho. The District (as a public hospital district) has the ability to levy taxes for capital expenditures and general operations, although no taxes have been levied since 1995. In 1984, a new replacement hospital was opened and changed names from Kootenai Memorial Hospital to Kootenai Medical Center. Kootenai Health is a recently adopted company brand for all programs and services associated with the hospital. Kootenai is a community-owned hospital providing a full range of health services for the people of northern Idaho. Today, Kootenai is Idaho s fourth largest hospital with 246 beds, but it has the state s busiest emergency room with over 49,500 visits in 2010. Kootenai Health is comprised of several centers of excellence dedicated to cancer, cardiac, behavioral health, imaging, rehabilitation and diabetes care. These and other services include: Kootenai Cancer Center, Kootenai Heart Center, Women s & Children s Center, Kootenai Imaging Center, Kootenai MRI, Kootenai Behavioral Health, McGrane Center for Rehabilitation and Therapeutic Care, Kootenai Laboratory, Kootenai Health Park Post Falls, Kootenai Radiation Therapy, Kootenai Outpatient Surgery, Walden House and Health Resource Center. Kootenai Health also purchased a davinci surgical robot in 2008 and has expanded its Cancer Center to include locations in Coeur d Alene, Sandpoint and Post Falls. Kootenai Health is an award-winning regional healthcare organization with a long history of providing modern, high quality healthcare services. In 2003, Kootenai initiated comprehensive cardiac services, including open-heart surgery, interventional cardiology procedures and related diagnostic and cardiac rehab services. In the summer of 2004, the Kootenai Heart Center was opened. In its first year, the Center performed over 150 open-heart surgeries and 1,200 catheterizations including stents and angioplasty and will perform over 200 open-heart surgeries this year. In 2010, Kootenai Medical Center was named one of healthcare s Most Wired hospitals for the eleventh time in the last twelve years. Numerous other accolades have been received in recent years to include Top 100 Community Value hospital, Magnet Hospital designation (2006 and again in 2011), VHA s President s Award the last two years (one of three hospitals to receive this award two
3 years in a row), and several patient satisfaction awards. In 2011, Kootenai was recognized in Modern Healthcare the Best Place to Work in Healthcare for large employers with over 1,000 employees. Kootenai Health belongs to the North Idaho Rural Health Consortium (NIRHC) which is comprised of the five hospitals of North Idaho. NIRHC provides a regional cooperative approach to the delivery of rural health care in the five northern counties of Idaho. Kootenai has five joint ventures with physicians and hospitals including Kootenai Outpatient Surgery, Kootenai Laboratory, Kootenai Outpatient Imaging Center, Kootenai Radiation Therapy Facility and Kootenai Urgent Care. These joint ventures are a reflection of how providers can partner to efficiently deliver healthcare services to the community. In each of these ventures, Kootenai is at least a 50 percent owner. The Kootenai Health Foundation, Inc. is a non-profit corporation established in 1984 to support the medical center through successful fundraising programs. The foundation is governed by a nine member board of directors. It encourages private support of the medical center from individuals, corporations, private foundations and other institutions to help ensure Kootenai Health continues to provide quality health services to the region. Kootenai Health has almost 2,000 employees with a workforce average tenure of 7.8 years. Kootenai is the largest employer in the county and is considered a highly desirable place to work. There are no labor unions in the organization and, by all accounts, employee morale is very high. As a result, the organization has assembled a strong cadre of exceptionally wellqualified medical staff and employees who share a commitment to quality and dedication to patients. A testament to this culture is its designation as a Magnet Hospital by the American Nursing Credentialing Center and designation as a Best Place to Work in Healthcare in 2009, 2010 and 2011. Demand for care in the service area is likely to increase in the near future due to the aging and growing population of northern Idaho, especially Kootenai County. As a result, Kootenai Health is likely to face a continued increase in hospital admissions, patient days and outpatient services. To prepare for that growth, Kootenai engaged Stroudwater and Associates consulting firm to develop a long range strategic plan which has been approved by the Board of Trustees. From 2010 to 2011, inpatient volumes declined slightly but outpatient volumes and revenue continues to grow. Pre-audit financials for 2011 project a healthy total margin of over 6%.
Over the last few years, Kootenai has responded to physicians seeking greater alignment with the establishment of Kootenai Physician Clinics consisting of several hospital-based clinics with 90 employed or contracted physicians of varying specialties and growing rapidly. As health reform advances, changes in payments to doctors and hospitals and the need to improve quality, safety, and cost management will require a more collaborative, integrated health system to be successful. This should include an investment in physician education, leadership and more physician involvement in management of service lines. As more physicians become part of the hospital, a selfgoverning imbedded medical group will evolve as well as practice management competencies. Kootenai recently acquired Heart Clinics Northwest one of the largest Cardiology groups in the Northwest with 21 physicians. Under the new agreement, Kootenai Health employs the physicians and staff of Heart Clinics Northwest and sets the stage for further growth of cardiac services at Kootenai Health. Kootenai Health has made significant investment in information technology including implementation of a Meditech clinical system and utilized NextGen EMR for the ambulatory setting. The go live date of the upgraded Meditech 6.0 was September 1, 2011 which will enable the development of Computerized Physician Order Entry. The organization has targeted 2013 for Meaningful Use compliance. Historically, Kootenai has outsourced information services to Inland Northwest Health Services (INHS) in Spokane. INHS was founded in 1994 as a joint venture between the four hospitals in the Spokane market to oversee several collaborative healthcare services, but primarily healthcare information technology services. Today, INHS provides information technology services and support to 34 hospitals and 450 clinics in the western United States. Kootenai is committed to developing its own I.T. technical resources and expertise. The North Idaho Health Network (NIHN) is a non-profit network of health care providers in Idaho s five northern counties and is comprised of five community hospitals and more than 280 physicians. NIHN is a regional means of integration and could take on the role of an Accountable Care Organization envisioned in many of the reform proposals where NIHN would manage the health of a regional population. Kootenai provided the initial funding under a lease-back arrangement and is hosting Meditech 6.0 for four of the five rural hospitals in NIHN. They are in discussions with other hospitals in the region about providing Meditech 6.0 services and support. The Board of Trustees has recently approved the creation of a family medicine residency program affiliated with the University of Washington School of Medicine. The UW School of Medicine is a regional resource for Washington, Wyoming, Alaska, Montana and Idaho - the WWAMI states. Its teaching programs are ranked among the best in the country in the 2009 4
5 rankings by U.S. News & World Report with family medicine training ranked as the top program in the country for the 18 th year in a row. The first residents will begin in 2014. Mission: Vision: Values: We improve health one patient at a time in a friendly and professional culture committed to superior quality and safety. By 2020 Kootenai Health will be a comprehensive regional medical center delivering superior, patient-centered care and will be recognized among the premier healthcare organizations in the U.S. There is no higher priority than living our values. Superior Quality and Safety: Ensure measurably superior quality, safety & patient experience. Patient-focused: The patient is the focus of decision making. Healthy Culture: We will nurture the quality & vitality of our workforce. Stewardship: We will use our resources wisely. Visionary Leadership: Our leadership style will be forward thinking. The following tables contain some financial and operational statistics for Kootenai Health. Payer Mix Medicare Traditional & Managed 51% 48% 47% Medicaid Traditional & Managed 10% 9% 9% Commercial/Managed Care 28% 31% 32% Self-Pay 7% 6% 5% Work Comp & Other 4% 6% 7% Percentage IP Business (hospital) 53% 53% 54% Percentage OP Business (hospital) 47% 47% 46% Balance Sheet Long Term Debt 2,660,000 2,481,000 2,754,000 Days Cash on Hand 202 208 201 Net Days in AR 72 72.12 64.01
6 Kootenai Health Projected 2012 Financial Data Revenues Audited CY2011 Audited CY2010 Gross Revenues 639,497,728 531,720,448 502,129,853 Net Patient Revenues 282,445,121 249,305,578 234,295,443 Other Revenues 11,346,270 7,875,606 10,826,166 Total Revenues 293,791,391 257,181,184 245,121,609 Expenses Salary & Benefit Costs 153,901,352 119,075,170 111,458,902 Supplies, Pro Fees & Other 118,418,986 111,968,946 109,041,710 Depreciation & Amortization 14,486,560 13,340,965 12,942,773 Total Expenses 286,806,898 244,385,081 233,443,385 Net Income on Operations 6,984,493 12,796,101 11,678,224 Non-Operating Revenue/Expense 9,766,054 5,588,413 2,593,540 Total Income 16,750,547 18,384,514 14,271,764 Operating Data Operating Beds 246 246 246 Average Daily Census 153 142.8 151 Admissions 13,948 12,822 13,966 Patient Days (excludes Nursery/NICU) 58,969 60,711 54,623 Births 2,819 Total Catheterizations 1,106 Open Heart Surgeries 217 192 167 Inpatient Surgeries 4,588 Outpatient Visits (non-er) 117,531 111,605 110,974 Emergency Room Visits 48,550 48,741 49,576 ALOS Medicare 4.6 4.7 4.6 ALOS Hospital Wide Adults 4.3 3.6 4.3 Total FTEs 1,769 1,578 1,523 Case Mix Index, Adult 1.65 1.665 FTE/AOB 5.1 4.8 4.6 For additional information, visit www.kootenaihealth.org.
7 OVERVIEW OF THE POSITION The Controller is operationally responsible for planning, organizing, overseeing, budgeting, staffing and evaluating the efficiency and effectiveness of the financial management functions within Kootenai Health. The Controller works closely with the CFO and senior leadership team on revenues, expenses, income and cash flow of the System. He/she will insure the accuracy and timeliness of the monthly financial and statistical reports, and coordinates the annual independent audit of the System s financial statements as part of the audit process. The Controller will also support the development and implementation of the strategic goals and objectives of the hospital while working in conjunction with the system insurance, information services, and internal audit department. The Controller will establish financial objectives and policies to maximize return on Kootenai Health financial assets. He/she will establish financial policies, procedures, and reporting systems within the system and will include review of monthly, quarterly, and annual financial statements and statistics, management, preparation, and review of annual operating capital budgets, and management of accounts payable. This key leader will also oversee the functional operations of accounting/general ledger, budgeting, auditing, financial analysis/decision support/financial planning, cost accounting, cost reports, and treasury. The direct reports in this department are the Manager of Decision Support and the Manager of Accounting. There are a total of 13 FTE s. The Controller will report directly to the Chief Financial Officer for Kootenai Health. Below are the key duties and responsibilities. Guides financial decisions by establishing, monitoring, and enforcing policies and procedures in accounting, payroll, and accounts payable. Organize and staffs the areas of responsibility in order to accomplish the work and goals of Kootenai Health within the budget provided. Provides the Health System and related components with monthly financial statements. Analyze and advise on monthly financial statements to assure effective financial explanation to each hospital or business unit with comparisons to budget and previous periods, as needed. Provides recommendations concerning methods of reducing operating cost and increasing income. Ensures that Kootenai Health s general ledger key conversion table is accurately reported.
8 Oversees the Health System's voluntary compliance with Sarbanes-Oxley initiatives. Actively manages the System's annual operating cash, capital budget, and investments. Prepares the accounting department s annual budget and assists other departments with their budget needs. Reviews and monitors employee s payroll, benefits and retirement plans and ensure that they comply with tax laws. Identify income-generating activities of the Health System that represent unrelated business income which is taxable for federal and state income tax purposes. Ensure compliance with tax laws. Supervises all accounting for the System's malpractice liability, general liability, and workers' compensation self-insurance programs. Ongoing evaluation of intradepartmental processes for effectiveness to determine further enhancement/modification for increased efficiency and productivity. Assists and participates in various debt management functions including debt structure management; variable rate debt management and accounting; and interest rate swap (and other financial derivatives) monitoring, management and accounting. Supervises and coordinates the annual external audit of the Health System's and the Foundation's financial statements with an independent CPA firm. Candidate Qualifications The section below outlines the qualifications and selection criteria for the ideal candidate for the Controller position. Education, Licensure, & Certifications Bachelor of Science in Accounting/Finance is required; Masters in Business, Accounting or related field is preferred. Designation as a Certified Public Accountant is strongly preferred; if no CPA must have a master s degree. Experience Minimum of five to seven years management experience overseeing Accounting, Auditing, or Finance in a hospital or health system. Candidates with significant
9 experience in a public accounting firm/consulting company who have worked with hospitals/systems will also be considered. Prior experience with a public accounting firm would be strongly preferred. Candidates with experience in an organization, where patient/customer satisfaction is considered a very high priority and a part of the culture is essential. Demonstrated success in managing the financial functions (financial and statistical reporting, operations analysis, planning, forecasting, integrity and contracting) required to support the growth of a large hospital or multi-hospital system. Proven ability to develop and implement systems which address costs, quality, regulatory requirements, and resource utilization management; a knowledge of the operational issues and challenges which must be addressed in running a managed care responsive health care organization. A history of innovation in organization development, team development, and in developing solutions to support a user driven environment. Demonstrated strength in financial management to include financial planning, financial and statistical reporting, operations analysis and implementation of processes to insure achievement of organization objectives. Experience in presenting information to senior leadership, management, and employee groups is a must. Ideally, this individual will have been involved with and presented information to a board of directors as well. Must be comfortable in leading the relationship with auditing agency and the annual audit process. Ideally, this person will have a history of no audit adjustments with regard to their past audit processes. Personal Characteristics Possess superior interpersonal qualities and the demeanor and style to quickly establish credibility in the organization. Someone who is energetic, enjoys working with people at all levels of the organization, and has a good sense of humor. An individual of unquestioned integrity and moral character; an individual the organization can trust without reservation to represent the values of the organization. A creative and can-do problem solver with the willingness to take the initiative in leading change as well as the ability to effectively manage change. An uncompromising commitment to the value of staff involvement in decisionmaking and finding solutions to future challenges.
10 Strong interpersonal skills; can work with individuals at all levels of the organization from entry-level staff to the executive suite, and board members. He/she will be someone who has a high level of personal ownership in the future success of the hospital/system in which they belong. Willingness to address tough issues, one who possesses good judgment and common sense, and the ability to act decisively at the right time. Ability to persuade others, develop consensus, influence outcome and stay the course. Adjectives and phrases that describe the successful candidate for this position are: up-front, honest/straight-forward, good sense of humor, approachable, positive and can-do style, and is energized by improving the working environment for employees. Excellent written and verbal communication skills and the confidence to represent the organization to the various constituents in the community and business environment. He/she will also have excellent oral presentation skills. Goals & Objectives During the first 12 to 18 months of his/her tenure, the Controller will be expected to achieve the following: Earn the trust and establish credibility among the employees, senior leadership council and management team within Kootenai Health. Gain a solid understanding of the culture and operational strategies of Kootenai Health. Ensure that these are in place in the financial division. Earn the reputation as a credible and respected part of the management team within Kootenai Health. Employees such as other managers/directors, senior leadership, and others will see this person as a consultative resource on matters regarding case management and utilization review. See that monthly, quarterly, board, and year end reports are as timely as possible and highly accurate (error free). Put into place a decision support function that will integrate the financial information along with the clinical information within Meditech. Put into place productivity monitoring system that is useful and value added to the operational areas. Establish a solid rapport with the auditing firm and see that the audit process is clean and adjustment free.
11 Provide the necessary mentorship and leadership for the management team within these areas to grow. Identify opportunities to improve efficiency with the use of technology and other performance improvement initiatives. For consideration please contact or submit resumes to: April Allen WK Advisors 2000 Warrington Way, Suite 200 Louisville, Kentucky 40222 Phone: 877-228-4030 Email: aallen@wkadvisors.com