Learning Collaborative: Capital Projects: Planning, Financing, Completing

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1 Learning Collaborative: Capital Projects: Planning, Financing, Completing Planning Identifying Areas of Improvement and Readiness for Growth Jonathan Chapman Director, CHC Advisory Services March 21,

2 Learning Collaborative Overview For health centers anticipating a capital project in one to five years. Six interactive learning sessions that will provide practical direction and tools for planning, financing, and completing a capital project. One hour learning sessions between March and September 2019, scheduled during most months. Conducted via webinars with open office hours likely following most webinars. Co-presented with various Capital Link project consultants and partners Opportunities to meet face-to-face during various conferences throughout the year. 2

3 Learning Collaborative Participants 3

4 Learning Collaborative Participants Alexander Valley Healthcare, CA AltaMed, CA Anderson Valley Health Center, CA Asian Pacific Health Care Venture, CA Betances Health Center, NY Caring Health Center, MA Charles B. Wang Comm Hlth Center NY Community Health Care IA Community Health Center MA Community Health Initiatives NY Coos County Family Health Services NH Hardeman County Comm Hlth Center TN HealthFirst Family Care Center NH Family Health Center TX Knox County Health Department - IL Lake Superior Comm Health Center MN Little Rivers Health Care VT Mountain Health & Comm Services CA NE Ohio Neighborhood Health Svcs OH Northwest Colorado Health CO Panhandle Counseling & Health Ctr OK Primary Care Health Services - PA South Central Family Health Center CA Southside Community Health Svcs MN The Chautauqua Center NY Tri-Cities Community Health WA Urban Health Plan NY Via Care Community Health Center CA Watts Health Center CA Welsh Mountain Health Centers - PA 4

5 Capital Link Launched in 1995, nonprofit, HRSA national cooperative partner Offices in CA, CO, FL, MA, MO, and WV Over $1.1 billion in financing for at least 230 capital projects - Direct assistance to health centers and complementary nonprofit organizations in planning for and financing operational growth and capital needs - Industry vision and leadership in the development of strategies for organizational, facilities, operational and financial improvements - Metrics and analytical services for measuring health center impact, evaluating financial and operating trends and promoting performance improvement 5

6 Learning Collaborative Overview Readiness and Planning: Organizational and Financial Planning: Evaluating Your Market and Determining Your Operating Model and Space Requirements Developing a Business Plan and Financial Forecast Funding: Evaluating your Financing Options and Fundraising Plans Design and Development: Assembling and Managing a Project Team Implementation: Managing a Project and Lessons Learned 6

7 Learning Collaborative Overview Readiness and Planning: Organizational and Financial Incorporating Capital Plans and Goals into the Strategic Planning Process Strategic planning, Debt capacity, Operational benchmarks, and Financing considerations 7

8 Why Have a Strategic Plan? Reduce surprise Provide a guide for every day decisions Create and maintain Adjacent Possibilities Alter systems naturally rather than though disruptive redesign Keep pace with the changes around you Learn to strategically manage Allows management at the edges 8

9 Assessing Risk at the Edges 9

10 How to Plan? What to Plan? 1. Use the NACHC/Capital Link Strategic Planning Toolkit 2. Complete a physical space assessment 3. Determine debt capacity 4. Consider financial sustainability 5. Identify sources and types of financing 10

11 Strategic Planning Toolkit The tools Provide a clear explanation of their purpose. Have instructions on how to use them. Offer guidance on who should participate. Contain questions or statements to stimulate your thinking. Are interactive so that you may insert your findings and comments. You know the questions and most of the answers, you just don t realize it these tools will enable you to identify both. They are designed to speak to you every step of the way and to guide you easily through the maze of strategic thinking and planning. 11

12 Key Strategic Planning Components 12

13 Self-Assessment 1. Readiness Checklist 2. Defining Roles 3. Vision, Mission, and Values Review 4. History and Accomplishments 5. SWOT Analysis 6. Leadership Assessment 7. Financial Capacity Review 8. Operational Readiness & Quality Assessment 9. Physical Space Assessment 10.Technology Assessment 13

14 Environmental Scan 1. Issue Inventory 2. Issue Research 3. Web Search 4. Stakeholder Input 5. Market Assessment 6. Possibilities Inventory 14

15 Impact Evaluation 1. Impact Inventory 2. Impact Assessment 3. Impact Catalog 15

16 Goal Setting 1. Establishing Strategic Goals 2. Establishing Objectives Related to Strategic Goals 16

17 Action Plan 1. Back to the Future 2. Immediate Action Plan 3. Contingent Action Plan 4. Community Action Resource 5. Sustaining Action Summary 6. Reaffirm Your Vision, Mission, and Values 17

18 POLL Strategic Plan 1. I am not familiar with our strategic plan 2. I am aware of our plan but it is not referenced frequently 3. My organization regularly references our strategic plan 4. Our strategic plan includes goals or objectives specific to growth and facilities. 18

19 Physical Space Assessment 19

20 Physical Space Considerations 1. Age and condition of current space? 2. Existing space adequate and/or attractive? 3. How is space configured? Healthcare, team-based, flexible? 4. Does it represent your community? 5. Collaboration/funding requirements? 20

21 Operational Benchmarks 21

22 Performance Snapshot 22

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24 Financial Health: Some Key Metrics Metric 1 Operating Margin 2 Bottom Line Margin 3 Personnel-Related Expense 4 Days Net Patient A/R 5 Days Cash on Hand Why This Is Important Measuring stick of your business model; margins typically small but need to be positive Is performance dependent upon large capital grants and/or other sources of non-operating revenue? Consumes 70-75% of budget; key driver of financial performance Financial management starts with collecting your money efficiently Is there enough liquidity to keep operations running smoothly? 6 Physician Productivity (visits) Productivity is the basis for revenue generation 7 Mid-Level Productivity (visits) Productivity is the basis for revenue generation 8 Dental Provider Productivity (visits) *Capital Link Performance Benchmarking Toolkit Productivity is the basis for revenue generation 24

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27 Operational Health: Some Key Metrics Metric Why This Is Important 9 Medical Provider Productivity (patients) Becomes more important in transition to team-based care 10 Medical Team Productivity Who are your teams? How do they perform? 11 Cost (Revenue) Per Visit How are your visit costs changing over time? 12 Cost (Revenue) per Patient With the move to PCMH, how are patient costs changing? 13 Medical Support Staff Ratio How strategic is the staffing the medical teams? 14 Non-Clinical Staff Ratio Non-clinical employees are not revenue drivers 15 Visit/Patient Growth Rates Are visits growing faster than patients? Is demand growing? *Capital Link Performance Benchmarking Toolkit 27

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30 POLL Our Performance Snapshot 1. I am not aware of our organization having receiving its Performance Snapshot 2. We have received our Performance Snapshot but have not reviewed 3. We received our Performance Snapshot and have begun reviewing 30

31 Debt Capacity Analysis 31

32 Debt Capacity Sensitivity Analysis 32

33 Financial Considerations 33

34 Financial Feasibility and Sustainability Historical performance (3 years audited) 5-7 year forecast Project budget Sources and uses Financing structure 34

35 Sources and Types of Financing 35

36 Sources & Uses of Project Funds 36

37 Financing Components Grants/Gifts New Market Tax Credits (NMTC) Federal & State Funds CDFIs US Department of Agriculture (USDA) Foundations Bank Loan Tax-Exempt Bonds Cash Reserves HRSA s Loan Guarantee Program (LGP) 37

38 New Markets Tax Credit Program Investment that isn t repaid Provide 20% of total project cost Eligibility Finding a Community Development Entity (CDE) Application and awards 38

39 Resources Creating a Dynamic and Useful Strategic Plan: A Toolkit for Health Centers Steps to Success: A Toolkit for Health Centers Navigating a Capital Development Venture Performance Benchmarking Toolkit for Health Centers Engaging Staff and Community in Defining Your Capital Project Capital Project Work Plan Manual These resources and more are available for download: 39

40 Learning Collaborative Upcoming Sessions April 11:00PST/2:00ET via webinar only - Planning: Evaluating Your Market and Determining Your Operating Model and Space Requirements May 9, :00PST/2:00ET via webinar only June 4, :00PST/2:00ET via webinar only July 11, :00PST/2:00ET via webinar only September 12, :00PST/2:00ET via webinar only 40

41 POLL Open Office Hours Open Office Hours = a 1.0 hour scheduled session following most webinars during which participants can discuss with Capital Link staff and/or other participants their project(s) and experiences relating to recent webinars. 1. I do not anticipate utilizing open office hours if provided. 2. I support the offering of open office hours and will encourage participation. 3. I support the offering of open office hours and will try to contribute on a regular basis. 4. I would like to suggest another method of communication w/capital Link and/or Collaborative participants. 41

42 Learning Collaborative Upcoming Opportunities NACHC Conferences and Trainings - Thursday, March 28 at 9am and 3pm in Wardman Park Tower Room Capital Link will be hosting an informal discussion on HRSA s relaunch of their Loan Guarantee Program (LGP). This is likely to be a significant resource to many, if not all, of FQHC financing for the foreseeable future. - Strategic Planning: A Realistic Approach During Rapid and Significant Change on Thursday, March 28 at 10:30et in Thurgood Marshall East. - Need Training Resources? We ve Got You Covered (T3-4) A panel on the Health Center Resource Clearinghouse on Friday, March 28, 1 1:30 p.m., Exhibit Hall C. State and Regional Conferences HRSA Webinars 42

43 Questions? Jonathan Chapman Director, Community Health Center Advisory Services Visit us online at Learn more about our products and services Download our free publications and resources Register for upcoming webinars Sign up for our e-newsletter, Capital Ink Subscribe to our blog at capitallinksblog.blogspot.com 43