2004 to 2020

1
2004 to 2020

• UK HealthCare Growing to Serve Kentucky

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PLANNING AND GOVERNANCE STRUCTURE
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FACILITIES PLANNING

• Process Objectives
• Reassess the long-range functionality of existing
  buildings at the UK Chandler Medical Center
• Assess adequacy of ambulatory care space and
  develop appropriate on and off campus
  opportunities for additional outpatient care
• Develop a zoning vision for the future and
  incremental phasing plan
• Identify and address any immediate tactical space
  issues
• Develop an implementation plan
• Estimate costs of the early phases

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FACILITIES PLANNING
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FACILITIES PLANNING

• Ambulatory Care
• Ambulatory care facilities are inadequate
• Kentucky Clinic will remain main ambulatory site
  for tertiary and quaternary programs
• Student Health Services will move to new space
  adjacent to Kentucky Clinic
• Build additional space for ambulatory care
• Reallocate space in Kentucky Clinic to increase
  efficient use

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FACILITIES PLANNING

• Site zoning for clinical, research and education
• Hospital development to the South
• Parking replacement across S. Limestone
• Changes to vehicular circulation on Hospital Dr.,
  Rose St., and Virginia Ave.
• Kentucky Clinic remains patient care
• Student Health outside Kentucky Clinic envelope
• Future research across (west of) S. Limestone
• Include new vivarium
• Education zoned to overlap with both clinical and
  research as appropriate

E Education C Clinic H Hospital R
Research SH Student Health
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FACILITIES PLANNING
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FACILITIES PLANNING

• Proposed Phase 1a development
• Replace parking
• 1,000 spaces potentially built across S.
  Limestone
• Construct new beds and shelled DT platform
• 240 beds
• New kitchen
• New CSR
• New ED
• 200,000 DGSF shelled DT space
• Phase 1b
• New bench research facility vivarium
• New shared education building

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STRATEGIC PLANNING

• Comprehensive strategic planning requires an
  understanding of the following
• Facility Needs
• Patient Throughput and Quality
• Market Development
• Strategic Clinical Initiatives

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STRATEGIC PLANNING

• Patient Throughput and Quality
• We have undertaken a number of operations
  initiatives focused on
• Maintaining High Quality Care
• Improving Customer Satisfaction
• Increasing Operational Efficiencies

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STRATEGIC PLANNING
UK HealthCare must stabilize and improve the
provider base of its secondary and tertiary
markets through outreach programs. Patients are
moved to Lexington only when specialty services,
which are only available at our academic medical
center, are required.
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STRATEGIC PLANNING

• Strategic Clinical Initiatives
• Cardiology and Cardiovascular Surgery
• Neurology and Neurosurgery
• Oncology and Oncological Surgery
• Orthopedics
• Digestive disorders
• Minimally invasive and robotic surgery
• Pediatrics sub-specialties
• Transplantation

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STRATEGIC PLANNING
In order to meet our growth demands, a
significant investment must be made in the
strategic initiatives.
Clinical Initiative Investment Requests (in
millions)
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STRATEGIC PLANNING
The strategic initiatives include a significant
increase in the projected growth of discharges
over the next five fiscal years.
Projected Growth in Discharges
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STRATEGIC PLANNING
Incremental growth in discharges will increase
the average daily census (ADC). The annual rate
of growth in the ADC is not unrealistically
aggressive given the commitment of resources to
these initiatives and can be accommodated by the
present licensed capacity of UK Hospital.
Potential Growth in Average Daily Census
16
FINANCIAL PLAN
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FINANCIAL PLANNING

• The leadership of UK HealthCare recognizes that
  we will have to be responsible for all clinical
  programs that we initiate and all clinical
  building projects that we commence through the
  use of
• Cash flow
• Debt
• Philanthropy

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FINANCIAL PLAN

• Historical Activity and Projected Growth
• The clinical activity of the last two years shows
  we have regained lost volume. General market
  trends and specific program development will
  allow us to retain the volume and realize the
  growth necessary for future plans.

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8
19
FINANCIAL PLAN

• Historical Activity and Projected Growth
• The growth required to meet our strategic and
  capital plans is well within the total potential
  growth we may experience.

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FINANCIAL PLAN

• Access to Capital
• Operating and balance sheet ratios are well
  within current norms for an excellent investment
  grade rating.
• UK HealthCare is committed to maintaining a
  strong credit rating after initial investments.
• Will continually monitor and re-project our
  proformas and make adjustments expeditiously.

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FINANCIAL PLAN

• In summary, our financial models demonstrate that
  through operating cash flows and debt of
  approximately 250 million, we will be able to
  fund Phase 1A and still sustain an appropriate
  financial position to continue with subsequent
  phases.

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EARLY SUCCESSES

• Increase in clinical activity
• Improved financial performance of the hospital
  and practice plans
• Successful recruitment of senior leaders from
  outside UK and retention and appointment of
  senior leadership from within
• Substantial new research funding

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EARLY SUCCESSES

• Operating Margins up to 9.6 from 8.9 the first
  quarter of last year

• Clinical Discharges up 13 from the first quarter
  of last year

• Practice Plan billings are up 8.5 from the first
  quarter of last year

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EARLY SUCCESSES

• External Recruits
• Michael Karpf, MD Executive Vice President for
  Health Affairs
• Jay Perman, MD Dean, College of Medicine
• William Balke, MD Sr. Assoc. Dean for
  Clinical Research
• David Moliterno, MD Chief, Cardiology
• Kevin McDonagh, MD Chief, Hematology and
  Oncology Deputy Director, Markey Cancer
  Center
• John Rinehart, MD Director, Clinical Oncology
  and Clinical Research, Markey Cancer Center
• Leslie Crofford, MD Chief, Rheumatology Gloria
  Singletary Chair
• Timothy Bricker, MD Chair, Pediatrics
• Richard Lofgren, MD Chief Medical Officer, UK
  HealthCare
• Sergio Melgar Chief Financial Officer, UK
  HealthCare
• Raymond Gagliardi, MD Director, Minimally
  Invasive Surgery
• Deborah Erikson, MD Professor of Urology,
  Department of Surgery
• Internal Senior Appointments
• Roger Humphries, MD Chair, Emergency Services
• James Buck, MD Chair, Radiology
• Joseph Springer, MD Cardinal Hill Endowed Chair
  in Rehabilitation

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EARLY SUCCESSES

• The College of Medicine has increased its
  sponsored project awards through the first four
  months of this year 20 over the same period last
  year.
• Research planning has begun with arrival of Dean
  Jay Perman.

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ECONOMIC IMPACT

• The Minnesota IMPLAN economic impact multipliers
  forecast that the patient care facility project
  will create around 1,600 jobs during the peak of
  construction and approximately 1,300 permanent
  jobs upon completion, most of which are
  professional.

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MOVING FORWARD

• We need support from the state and university
  including
• Approval of a number of projects which must be
  initiated immediately
• Approval to issue revenue bonds when appropriate
  in an expeditious manner to begin phase 1A, which
  includes the construction of the parking garage,
  site and utility work, land acquisition, and the
  construction of the new patient care facility
  and
• Approval of an ambulatory care building adjacent
  to Kentucky Clinic South.

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• These plans and the people that support them will
  poise the University of Kentucky to achieve
  top-20 status as an academic medical center. More
  importantly, these plans will allow
• UK HealthCare to serve the citizens and patients
  of Kentucky better and better in the future.