Financial Plan

An initial financial planning effort was undertaken in 2004 and later updated in 2005. The proposed financial plan is achievable, based on the support of several key constituencies. Specifically, relatively dedicated utilization and admissions support will be required from the LSU faculty. Additionally, state funding should be maintained with incremental growth. Finally, as MCLNO seeks to expand its primary care network in partnership with the City of New Orleans, ongoing support from local government will be required.

The essential elements of the financial plan include realizing significant savings as a result of consolidation of the two existing facilities, increasing the external support base by 3% annually, increasing the gross charge rates by 6% annually from FY 2007 Ð FY 2011 and growing them 4% annually thereafter, gradually improving the commercial collection rate from FY 2007 to FY 2011 to 85% and holding it thereafter as well as capturing an additional 2,000 paying patient discharges by FY 2013 as a result of opening the new facility.

Key programs include the enhancement of the Level I Trauma Center and post-trauma-related services, the enhancement of geriatric services, the enhancement of already strong disease management capabilities in order to better manage the health status of at-risk populations, the potential joint partnership with the City of New Orleans in the establishment of satellite primary care clinics throughout the city and the expansion of clinical research opportunities.

The success of the financial plan is also based on successful operations initiatives, capital requirements and external funding. Recommended operational changes include improving the charge structure and paying patient collections to industry norms. The improvement of patient flow, management process and IT/business system infrastructure is also recommended, along with maintaining productivity at least consistent with current levels.

From a strategic standpoint, infrastructure improvements, faculty support, physician network, revised clinic operations and public outreach efforts should be well in place prior to the opening of the new hospital. With respect to capital requirements and external funding, a plan for facility upkeep and reinvestment in equipment is suggested, as well as the obtaining of sufficient state UCC funding and outside funding to assure long-term viability.

A financial plan consistent with the strategic and operating plan described above is summarized below. It results in adequate cash and debt service outcomes in the years after project completion:

The patient care goals from 2005 - 2014 include a commitment to care for the current market share of the area indigent and a modest annual growth (1.3%) of paying patients to assure some stability for the future of MCLNO.