January 24, 2003

Financial overview: Financial overview: Strong volume, along with rate increases and increases in ancillary services, led to Net Patient Service Revenues that were 3.6 percent better than budget and 11 percent better than last year. In spite of the volume increases, the hospital was able to contain expense increases to 2.7 percent over budget and 10 percent over last year. The operating results were positive with a $63.1 million operating gain, which was a full $17.7 million better than budget. This represents a 4.3 percent operating margin. However, the investment income more than offset the operating gains with a non-operating result of $28.8 million below budget. The net gain of $48 million was $11.1 million worse than budget. Without the strong operating results, the down market would have been significantly problematic.

Admissions increased 4.4 percent over FY '01, with a strong showing in the second half of FY '02. Although below budget for FY '02, births increased and posted positive variances in the last two quarters.

Length of stay (LOS) met budget of 5.86 days and improved .11 days from FY '01. Combined LOS was .09 days over the target.

Average daily census was above budget by 6.

Outpatient visits finished slightly over budget and 3.5 percent over FY '01 despite a weak fourth-quarter volume caused by vacations and budget seasonalization. On-campus visits finished the year 6,874 visits under budget. Health center visits produced a positive variance of 6,209, and the Emergency Department finished FY '02 with 2,605 visits over budget.