07-22-02 Community & Economic Development and Residential Neighborhoods Committee

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e Y Joint Meeting of the Community and Economic Development Committee and the Residential Neighborhoods Committee July 22, 2002 Page 2 PILLAR # 5 - FINANCIAL: Memorial believes that it must be "strong, stable and secure" financially. Annual revenue is approximately $300 million with approximately one-half of that amount for personnel.Memorial's bond rating is AA-. PILLAR # 6 - GROWTH: Memorial believes that it has many opportunities ahead. Heart and vascular services must be expanded. There will be a 40% increase in demand due to aging of the population. Mr. Foti then continued the presentation. He noted that Memorial has a total of approximately 3,800 employees in its campus which is composed of 38 buildings. He noted that the South Bend community has been fortunate to receive medical services from two hospitals for well over a century. He then noted that South Bend will experience a serious increase in people over 65 years of age. South Bend will have the 2d highest concentration of persons 65 years and older in the State of Indiana by the year 2004. The percentage in this area will increase from 13% of its population to 15% by the year 2004. As a result,capacity at the hospital will be a concern. A series of overheads were then briefly summarized. Such information focused on "Payor Mix Memorial vs. Payor Mix SJMC"noting that the potential impact by the year 2006 when St. Joseph will not be in South Bend. Reimbursement from Medicare on the $1.00 is $0.37 and reimbursement from Medicaid on the $1.00 is $0.35. Mr. Foti then reviewed the "Payor Mix Trends"which indicate that a significant number of individuals who currently go to St. Joe will not go there once their move is completed. He noted that this presents a significant challenge, but "they will make it happen"so that services can be provided. Dr. Varner inquired why the client base will not follow St. Joe when they relocate outside of the city limits. Mr. Foti stated that their conclusions are "based on access to services". Mr. Foti also noted that physicians will be challenged by questioning which hospital in which to practice since their overhead would significantly increase due to the increased distance between the two hospitals which will be in effect. Council Member Pfeifer inquired whether surveys were conducted addressing people of color and the growing Latino community in light of their faith and family affiliations with regard to a religious affiliated institution like St. Joe, in addition to where the persons live. Mr. Foti stated that no specific surveys of that nature were conducted, however their data shows that the "access to services" or the "closest to services" appears to be a predominant factor. He also noted that many persons use the services of the emergency room as their medical service, and that many of these persons do not have insurance. Mr. Neufelder noted that Medicaid users primarily come from South Bend's inner city, and the west, southwest, and the southeast portions of the city. He also noted that physicians believe that based on the projections that Memorial will not have enough beds. Mr. Foti stated that 80% of Memorial has semi-private rooms, with the projections indicating a need for an increase in not only these rooms but also private rooms. Mr. Foti stated that 17% of the residents of St. Joseph County are on Medicaid. Since Memorial is a 501C3 not-for-profit corporation it must be concerned about its overall viability. The bad debt associated with residents from the City of South Bend is increasing: