seacoast hospice hospice house project ... hospice house feasibility study 2002 executive service...

SEACOAST HOSPICE

HOSPICE HOUSE PROJECT

FEASIBILITY STUDY

MAY 2002

Seacoast Hospice House Feasibility Study 2002

Executive Service Corp. of New England 2

03/17/09

TABLE OF CONTENTS

Section Page Number I. Introduction 3 Project Plan Process 4 Summary & Recommendations 5 II. Nashua Hospice House Profile 7 III. Bed Needs Assessment 9 – 13 IV. Financial Needs Projections 15 – 17 V. Action Planning 19 Attachments:

A. Projected Statement of Revenues & Expenses 20 B. Key Data Elements – Revenues 21 C. Key Data Elements – Expenses 22 – 23 D. Projected Staffing 24 E. Capital Funding Needs 25 F. Seacoast / Nashua Comparative 26 G. Revenue & Expense Assumptions 27 H. Needs Assessment Market Model – Residential 28 I. Needs Assessment Market Model – Acute 29 J. Statistical Census Model ( 75% / 65% Market Share) 30 K. Statistical Census Model ( 50% / 50% Market Share) 31 L. Service Area Map – Rockingham & Strafford Counties 32



03/17/09

Introduction The Seacoast Hospice is a not for profit (501) (c) (3) organization in the Seacoast Region of New Hampshire. Founded by volunteers in 1978, it is the only independent New Hampshire hospice. Its service area is within the two counties of Rockingham and Strafford. The Hospice received its Medicare certification for funding status in the mid-1990’s and that funding has continued to be a major source of revenue on a total revenue base of approximately $2.3 million. They employ about 50 professionals and clerical staff plus 167 volunteers under the direction of Ms. Susan Cole, Executive Director, who came to the Hospice in 1997. At the turn of the century, the Board of Directors began to actively pursue a dream of building and operating a hospice inpatient facility in their region that would provide 24/7 care for end of life patients and their families. The Board’s enthusiasm for this project was buoyed by the ten bedroom Home Hospice House Care facility that was recently completed in Nashua. In late 2001 the Seacoast Hospice had met with the heads of the four area hospitals (Exeter, Portsmouth, Wentworth – Douglass in Dover and Frisbee in Rochester) and got expressions of support for this project. A private gift of $125,000, which was matched by Tyco International, further buoyed the Board’s enthusiasms. In addition, the age wave demographics in this region as well as throughout the United States has urged the development of inpatient hospice house care facilities, which this elder segment of the population has become increasingly aware of hospice care benefits. In January 2002 the Executive Service Corp. of New England, also a not for profit organization made up of volunteer retired executives, was engaged to assist the Seacoast Hospice to develop a feasibility study. The study would include a projection of bed need, facility size and a financial model to determine whether such an inpatient residential facility could provide high quality hospice and palliative care in the region on an economically viable basis.



03/17/09

The Project Plan Process Our feasibility plan would be partially modeled after the Nashua Home House Hospice Care feasibility plan, which they shared with us, that was conceived in 1992 and approved by their Board in February 1997. The Board then endorsed a $1.5 million capital campaign for the building and equipment plus a $3 million endowment campaign fund, since they had land donated to them. Today Nashua is successfully operating a 10 bed community hospice house serving about 200 patients and families a year. A current profile of the Nashua Home Health and Hospice Care facility is described in a later section of this report. Our bed needs projection was based on two models. The first model (the Market Model) took a look at the market demand based on Seacoast Hospice data coupled with NH county area statistical data. The second model (the Statistical Census Model) took a look at the US and NH State census demographics of the Rockingham and Strafford Counties to determine statistical bed needs based on a series of assumptions. The product of each of these models was to determine the number of residential and acute beds that would be needed to serve this two county area. The number of patient beds helped determine the physical size of the facility, the staffing requirements and the general and administrative support required to operate the facility. We then developed a series of financial models after the bed needs projection; the Revenue Model, the Expense Model and the Capital Campaign Model. The culmination of those models produced a financial operating projection for the first and second operating years for the residential inpatient facility. On the periphery of our feasibility study are other ongoing issues that affect the success of this venture. Those ongoing issues are:

• Location issues as to where the facility will best serve the Seacoast area. • Legal issues of organization structure, governance, zoning, regulatory and

licensing. • Program issues concerning the quality, scope and depth of hospice care within

the facility and within the Region. • Facility issues embracing space, equipment, function, and architectural and

building issues. • Marketing issues including communication and education planning for the

facility as well as for capital campaigning. • Financial issues regarding billing, profit center accounting, budgeting, pledge

receivables financing, construction financing, etc.



03/17/09

Summary The bed needs projections, as determined from running the Market and Statistical Census Models, would suggest a facility that would range between 14 and 25 beds. It will be necessary to find a “comfort zone” from these two numbers. It appears that the lower risk “comfort zone” would be a 12 bed facility at a location yet to be determined. Preliminary building cost estimates would be about $2.4 million, plus another $400 thousand for furniture and equipment. If land need to be acquired, it could add at least another $100 thousand to the project. We have assumed land would be donated to locate the facility within the Service Area. The location of this land is very critical to this project. The estimated annual revenues produced from a 12 bed facility in a mature operating environment would be approximately $1.5 million, which includes revenues from contributions and endowment income. The estimated annual operating costs, including wages, benefits, taxes, general and administrative costs would be approximately $1.5 million as well. We forecast a mature operating facility would at least breakeven. In the first operating year it is expected that the facility would operate at a financial loss that could approximate $300 thousand, because of a lower occupancy rate and a 50% / 50% payor mix. The second operating year would have a significantly lower operating loss as the occupancy rate reaches 85% and the payor mix improves. It is expected by the third operating year the hospice house would be at least on a breakeven basis. The Market and Statistical Census Models support at least a twelve bed facility. The nascent success of the ten bed Nashua Hospice House adds positive encouragement to this project. Recommendations We recommend the Board continue to pursue this exciting and needed community project. The next steps are to acquire the land and to organize for funding the facility (estimated at $2.8 million) and its operations. Concurrent with funding issues is to more accurately determine what the facility would cost to build and operate in today’s market. Ancillary issues in the marketing, legal, program, regulatory and financial areas need to be continued through the appointment of a number of task force groups to accomplish the overall mission of building and supporting a hospice house care facility to serve this Seacoast community.



03/17/09

NASHUA HOSPICE HOUSE PROFILE



03/17/09

NASHUA HOSPICE HOUSE PROFILE Land: 13.27 acres of land donated by Pennichuck Corporation, a utility

company, in a residential neighborhood. Building Facility: Ten (10) bed facility. 12,244 square feet total space. 4,150 square

feet for patient rooms, 8,094 square feet for support functions and common space. Cost $1,955,107 ($159.68/ sq. Ft.) to prepare the site and build, plus $351,594 to furnish and equip. Fees, Contingencies, etc. were $200,250. Layout is 6 patient rooms in one cluster and 4 patient rooms in a second cluster with support and common space in the middle of a “Y” shaped building.

Capital Campaign: Raised $3.1 million. $2.5 million for the physical facility and equipment. $600,000 for endowment. Initially began a $2 million campaign for the physical facility and $500,000 endowment. The 5-year pledges are all current and none in default after their third year.

Annual Fund: Nashua Hospice House does not run a specific annual fund, however the overall organization has a “Tree of Live” Annual Fund Drive. Plus, an annual golf tournament generates $60,000 from sponsors.

Contributions: They budgeted $40,000 and have received $63,000 after 7 months of their fiscal year.

Mortgage: They have a $857,000 five year mortgage at 3.5% from the New Hampshire Housing Authority with equal amortization payments. One stipulation in their mortgage application was to agree to serve indigent patients.

Revenues: Budgeted revenues for their 2001 year were $899,488. Current year revenues, before contributions, are $779,847 after 7 months into this fiscal year..

Occupancy Rate: Began operations slowly and incrementally increased throughout the first operating year. Current occupancy rate is 77% and growing. They had budgeted for 70%.

Acuity Payor Mix: Currently they are at 74% acute payors, 25% residential and 1% respite. They had budgeted for 40% acute and 60% residential.

Length of Stay: Average length of stay is currently 16.98 patients. Total patients served is 97.

Staffing: Total Staff is 15.35 Full Time Equivalents. There is 1 House Manager, 9.4 Registered Nurses on three shifts 24/7 plus a cook, a dietary nutritionist, and other support staff. Wages, payroll taxes and benefits are 60% of all expenses

Overhead: Management overhead is allocated at 30% of wages and benefits, which covers administrative support (accounting, management services, etc.) from the central organization.

Operating Results: After 7 months ending 1/31/02, they are reporting a $65, 296 loss, including $63,462 in contributions.



03/17/09

BED NEEDS ASSESSMENT

Market and Census Driven Models



03/17/09

Bed Needs Assessment We gathered statistical data from many public and private sources. The four area hospitals through their strategic planning staffs provided valuable assistance in both the gathering and analysis of the statistical and financial data. The Seacoast Hospice staff was also a very valuable resource in the development of needed hospice data, particularly the financial and existing program data. We used the internet websites for the collection and downloading of the 2000 United States Census data as well as data from the New Hampshire Bureau of Vital Records and Statistics and the Department of Health and Human Services. The Nashua Health & Hospice Care staff was also very generous in sharing some of their data with us. We used the two Nashua model methods to validate each other and to reduce or limit the degree of uncertainty. It should be noted that neither of the two models have high degrees of statistical accuracy. They are better than nothing because they provide a more educated prediction of bed needs in a given service area. Nashua’s Market Demand Model This market demand model method is actually two models. One is used to predict the bed need for residential beds. The second is to predict the need for acute beds. It is a more market driven model utilizing data from in-house hospice analysis and discharge planners that includes number of patients with no and with limited primary caregivers, average daily census figures, average length of stay and an occupancy rate estimates. These algorithms produced the number of 20 beds needed for residential care and, at a 10% demand level, 5 beds needed for acute care patients. (See attached Market Model – Residential and Market Model – Acute – pages 28 & 28 respectively). Nashua’s Statistical Demographic Model This Nashua model utilizes more US Census and New Hampshire state and county statistical data. This model is based on hospice eligible populations within a defined service area, projected death rates in that service area, market share of the organization, the estimated total number of days of care at each care level, an estimated average daily census, and an occupancy rate. These algorithms produced the number of 13 to 19 beds needed for residential care and 1 - 2 beds needed for acute care patients in the proposed facility. (See attached Statistical Census Model (75% / 65% Market Share and 50% / 50% Market Share) – pages 30 & 31 respectively).



03/17/09

Needs Assumptions Population Rockingham County

The ten-year population growth rate in Rockingham County (1991-2000) was 12.8% with a year 2000 population of 277,359. Some 10.1% were 65 years old or older. And, non-family households with the householder being 65 and over was 7,294 or 7.0% of the 104,529 households. Households with individuals 65 and older were 19,797 or 18.9% of the households. The Service Area includes 56%k of the total Rockingham County population.

Strafford County

The same ten-year growth rate in Strafford County was 7.7% with a year 2000 population of 112,233. Some 11.2% of the population were 65 years old and older. And, non-family households with the householder being 65 and older was 3,477 or 8.2% of the 42,581 households. . Households with individuals 65 and older were 8,680 or 20.4% of the households. The Service Area includes 100% of the total Strafford County population.

The assumption was made that these population growth rates may slow over the next ten years but the percentages of 65 year and older populations would increase modestly for the next ten years. Service Area The service area has been broadly defined as Rockingham and Strafford Counties. We know that the western Rockingham County towns, like Salem, Derry, Windham and Londonderry would probably gravitate towards the Nashua or the Concord facilities because of the more efficient north – south highway system in the State. Another service area definition has been defined as being no more than a 20 minute drive from the hospice facility. The circle compass method to draw that 20 minute circle doesn’t work because of the north – south highway system. The service area footprint is more a rectangle with some jagged edges. The actual site of the facility will also play a vital role. For instance, if located in the Portsmouth area, we could draw patients from farther north along Rte. 16 and from Southern Maine border towns in York County. If located in Exeter, we could draw from Northeastern Massachusetts border towns in Essex County. Bordering Massachusetts and Maine state statistics were not used in the bed needs models. For the purposes of this feasibility study, we assumed the location of the hospice facility would be in the Seacoast Hospice Service Area and used the demographics of the Seacoast Hospice Annual Activity Report dated 6/30/2001, which tracked the 340 patients served by town of residence. We included those towns that had activity or which were geographically in some proximity to current Seacoast Hospice facilities. We assumed that from a market demand perspective, we would continue to draw from those same towns. (See Service Area Map attachment – page 32).



03/17/09

Deaths The NH Department of Health and Human Services tracks the death demographics. We looked at the deaths within the Service Area towns over a 10-year period to determine the death rates of population in those towns as well as the trends in those towns. In addition, we used the NH Regional Health Profile Deaths of cancer mortality rates per 1,000 (ages 25+) for selected Healthcare Service Areas that fit within our Service Areas (Exeter, Dover, Portsmouth and Rochester). We also know that cancer deaths produce more hospice care patients than any other disease. Cancer

Cancer deaths (Malignant Neoplasm’s) in New Hampshire reported in the NH Vital Statistics Report in 1998, the latest statistics available, were the second leading cause of death (behind heart disease) with 2,427 reported and 1,686 (69%) of those deaths being 65 or older. The average age at death for the State for this disease is 70 years old (69.1 for males and 70.9 for females). Rockingham County had 502 (21%) of those total reported deaths and Strafford County had 214 (9%) of those reported deaths. The age-adjusted death rate per 100,000 of population was 134 for the overall State with 141 for Rockingham County and 130 for Strafford County.

Heart Disease

Heart disease deaths were the leading cause of death in New Hampshire with 2,826 reported in 1998 and 2,417 (86%) of those deaths being 65 or older. The average age of death for the State for this disease is 78.2 (73.2 for males and 82.8 for females). Rockingham County had 541 (19%) of those total reported deaths and Strafford County had 216 (8%) of those reported deaths.

Other Diseases

Other disease deaths, which produce hospice care patients, are HIV, benign neoplasm’s, neoplasm’s of an unspecified nature, Alzheimer’s, other hereditary and degenerative central nervous system diseases, and chronic obstructive pulmonary disease (COPD). Collectively for the State, the reported deaths in 1998 for those as cause of death were 868 with 732 (84%) being 65 or older. Rockingham County had 129 (15%) of those total reported deaths and Strafford County had 57 (7%) of those reported deaths.

The assumption is that the mortality rates will continue at the same rates as in the past for the immediate future (five years), but the age wave could be extended as medical responses to end of life diseases and conditions continue to advance.



03/17/09

Market Share It is assumed in these models that a 75% market share for residential care and a 65% market share for acute care would be achieved. The Seacoast Hospice currently enjoys a market share approaching 30%. A concentrated marketing effort is expected that would produce that market share. We also did a 50% / 50% market share statistical census model.

Occupancy Rate

The assumed occupancy rate in these models is 85%. Nashua is currently at a 77% rate and climbing.

Average Length of Stay

The models use an average length of stay for residential care patients of 30 days and 7 days for acute care patients.



03/17/09

Nashua Hospice vs. Seacoast Hospice The populations, deaths and service areas are decidedly different between the two areas. Population

The Nashua projected population for year 2000 was 184,817, whereas the Seacoast area population (Rockingham and Strafford Counties) was 389,592, a little more than double in population size. When you look at the Rockingham Service Area population of 156,959 plus the Strafford Service Area population of 112,233 (total of 269,192), it is only 1.46 times larger.

Deaths

The Nashua projected deaths for the year 2000 was 405, whereas the projected deaths for the Seacoast area for the year 2000 is 2,627, or 6.5 times that of Nashua. When you look at the Rockingham Service Area deaths (1998 figures) of 1,168 plus the Strafford Service Area deaths of 817 (total of 1,985), it is 4.9 times larger.

Service Area

The service area for Nashua included fewer cities and towns in a more concentrated geographic area. The service area for Seacoast is more cities and towns spread out over a larger geographic area. The Nashua study included 12 cities and towns, whereas the Rockingham Service Area has 28 and the Strafford Service Area has 13 (total 41).

Other Comparisons

Nashua is also a not for profit organization with the Hospice House run as a division of the parent company. It is assumed the Seacoast Hospice House would operate a hospice house under their (501) (c) (3) tax exempt status and Medicare certification. There is a graphic comparison on page 26 of the two hospice programs.



03/17/09

FINANCIAL NEEDS PROJECTIONS

Revenues, Expenses & Capital Funding



03/17/09

Seacoast Financial Position The Seacoast Hospice has been operating as an independent non-profit (501) (c) (3) organization for 24 years in the Exeter, New Hampshire seacoast area. The hospice is in a strong financial position enjoying a balance sheet that reports a net equity position in the low seven figures mostly made up of unrestricted cash and liquid investments. The current financial position of the hospice is excellent. The total revenue base for the year ended June 30, 2001, their fiscal year end, was $2.3 million (a 26% increase over the previous year) of which 82% was from Medicare and insurance and 12% was from contributions and bequests. As you would expect, wages of the functional staff are about half of revenues. Management, general and fundraising expenses are 13% of revenues. The hospice is in a superb financial position to pursue this venture. However, they do not want to risk this enviable position with a failed venture that could rapidly deplete their valuable financial resources and adversely affect their level of quality hospice and palliative care to the community. Financial Feasibility Objective The purpose of this section of the report is to determine the sustained financial viability of a proposed hospice house in the Seacoast Area. We will attempt to identify the revenue sources, the functional and administrative expenses as well as determine the level of need for community support both to construct (capital campaign) and to maintain (annual fundraising and endowment fund) the facility. This section is preliminary only and will have to be refined as the project continues into future development phases. Financial Projections – Revenues, Expenses and Capital We did a revenue model, a cost model and a capital campaign model. The Needs Assessment suggested the bed requirements to be 12 for both the residential and acute care patients for the defined service area. The 12 beds are of pivotal importance to feeding these financial projections. Revenues

The revenue model looks at the Medicare and insurance sources of revenue at each level of care that includes best, probable and worst case scenarios. The model explores payor mix, bed mix, occupancy rates, length of stays, and free care needs. (See attached Chart – Key Data Elements for Revenue – page 21).



03/17/09

Expense

The operational expense model looks at all the functional, sales, general and administrative expenses of the proposed hospice facility based on a series of future assumptions. The largest budget element is staffing costs, which are projected for the facility. The model looks at the first and second operating years. Another section of the expense model, the fixed asset section, projects the costs to acquire the land, prepare the chosen site, build the facility and equip it to supply a level of hospice service expected by the community. (See attached Chart – Key Data Elements for Expenses – pages 22 & 23).

Operating Statements – Projected for First Two Years (See Attached Chart – Projected Statement of Revenue and Expenses – page 20)

First Year The first operating year (12 months) at a 70% occupancy rate and a level of care mix of 50/50%, and a length of stay of 30 residential days and 7 acute days, the operation throws off revenues of $1,130,588. However, operating costs of $1,546,362 result in an operating loss of $415.775. This projection is with no mortgage considered, but with a pledge receivables loan of $3,000,000 at 7% interest fully amortized over 5 years.

Second Year

The second operating year (12 months) at an 85% occupancy rate and a level of care mix of 45/55% and a length of stay the same as the prior year throws off revenues of $1,440,336. However, operating costs of $1,562,746 result in an operating loss of $122,410. Again, no mortgage is considered and the pledge loan balance is $2,400,000.

Capital Campaign

This venture requires outside financial resources to prepare the land and to build as well as equip a quality hospice that meets the needs of its constituency. The ongoing operations require an endowment to cushion the financial risks inherent in this project. It is estimated that a capital campaign of $2.9 million will be required to fund the physical facility (including land acquisition of $100,000, if necessary) plus a combination of an endowment and annual fund giving to accomplish the hospice mission in its first operating year. These are preliminary estimates given what is currently known. (See attached Chart on page 25 ). Nashua initially had a capital campaign of $2 million for the physical facility plus $500 thousand for an endowment. They later raised their capital campaign goals to $3.5 million. They actually raised $3.1 million, which included $600 thousand in an endowment fund. They are receiving funding through 5 year pledges and have had no delinquencies during the first three years.



03/17/09

Nashau Home Hospice Care Financial Profile The Nashua Home Hospice Care facility cost $1,955,107 to build a 12,244 square foot building plus another $351,594 for furniture and equipment. Each unit is 415 square feet. A utility company donated the 13.27 acres of land to them. They also have a mortgage of $857,000 at 3.5% interest over 5 years from the New Hampshire Housing Authority. They were looking at a budgeted operating revenue base of $900,000 in their first operating year and a budgeted operating loss of $290,000. Their annual fundraising campaign was budgeted for $40,000 to help offset the operating loss and at 7 months had received $63,000. Cost per day was budgeted at $466 per day. Their original projections for project costs were $1,361,750 to build plus $182,000 to equip and furnish. In addition, the original project projections showed fees, contingencies to be $206,250 and site preparation at $250,000. The total project projection was $2,000,000. We know that the Hospice began operations in a limited operational mode in their first three months and was at a 77% occupancy rate after 7 months. Their January 2002 seven-month figures indicate revenues of $843,000 with 74% inpatient fees coming from Medicare. The level of care mix was 74% inpatient and 25% routine and 1% respite. Their current operating loss is $65,296 Staffing levels show 15.35 full time equivalent paid staff. The staffing complement on a 24/7/365 basis consisted of; a House Director, 9.5 RN’s, 1.5 HHA’s, 1 Cook, 1 Dietary Aide plus limited use of an LPN, clergy, social and coordinator people. Total wages and benefits were budgeted at $715,000 for the 2001 year. Payroll taxes and benefits were factored in at 25% of payroll. Occupancy expenses were budgeted at $154,000 for the year 2001 that included $50,000 for depreciation and $30,000 for mortgage interest. An overhead expense factor of 30% of wages and benefits was factored into the expense budget to cover administrative and executive support expenses.



03/17/09

ACTION PLANNING

Location

Capital Campaign Planning

Facility Planning

Task Force Planning Groups



03/17/09

Action Planning Location Site A very critical component of this project is to determine the location of the facility. It is critical to the capital campaign. It is critical to market share determination. Capital Campaign Planning There are two important next steps in the planning process. The first step is to start organizing a capital campaign to fund the land, building and equipment costs ($2.9 million) plus the ongoing operational costs ($1 million). Facility Planning The second step is the facility planning with architects and builders to determine building, site preparation, and equipment costs. Task Force Planning Groups

The following task forces should be organized to address the following issues. The task force members should include Seacoast Hospice staff, Seacoast Hospice volunteers, hospital planners, architects, builders, fundraisers and other volunteers with an interest and commitment to this project.

• Legal

• Marketing

• Financial

• Program



03/17/09

SEACOAST HOSPICE HOUSE

HOSPICE HOUSE BUDGET PROJECTED STATEMENT OF REVENUE & EXPENSES

First Second PROBABLE CASE Year Year 12 Months 12 Months

OPERATING REVENUE: Residential - room and board $191,625 $209,419 Less: Subsidized Care ($95,813) ($104,709) Routine - medical care

$191,625 $209,419

Acute - medical care $843,150 $1,126,208

TOTAL OPERATING REVENUE:

$1,130,588 $1,440,336

OPERATING COSTS:

Direct Costs Wages & Benefits $763,336 $790,053 Occupancy $421,610 $379,610 Other Costs $132,416 $156,068 Total Direct Costs $1,317,361 $1,325,730 Overhead Costs $229,001 $237,016

TOTAL OPERATING COSTS:

$1,546,362 $1,562,746

EXCESS / (LOSS) FROM OPERATIONS:

($415,775) ($122,410)

NON OPERATING REVENUE:

Contributions / Fundraising $100,000 $100,000

EXCESS / (LOSS) REVENUE OVER EXPENSES:

($315,775) ($22,410)



03/17/09

SEACOAST HOSPICE CARE HOSPICE HOUSE BUDGET

KEY DATA ELEMENTS FOR REVENUE Year 1 Year 2

TOTAL BEDS: 12 12MAXIMUM DAYS AVAILABLE: (days in timeframe)

365 365OCCUPANCY RATE: 70% 85%MAXIMUM OCCUPIED DAYS: (total beds x Max days

avail) 4380 4380

LEVEL OF CARE MIX:

RESIDENTIAL 50% 45% ACUTE 50% 55%

PROJECTED OCCUPIED DAYS: (total occp days x care mix)

RESIDENTIAL 1,533 1,675

(total occp days x care mix)

ACUTE 1,533 2,048

(total beds x occ rate) TOTAL 3,066 3,723

LENGTH OF STAY: RESIDENTIAL 30 30 ACUTE 7 7

# OF ADMISSIONS: (occ days x length of stay)

RESIDENTIAL 51 56

(occ days x length of stay)

ACUTE 219 293

TOTAL 270 348

CHARGE PER DAY: RESIDENTIAL $125.00 $125.00 ROUTINE $125.00 $125.00 ACUTE $550.00 $550.00

FREE CARE:

RESIDENTIAL 50% 50%NON OPERATING REVENUE:

CONTRIBUTIONS $100,000 $100,000



03/17/09

SEACOAST HOSPICE CARE HOSPICE HOUSE BUDGET

KEY DATA ELEMENTS FOR EXPENSES FTE'S RATE Year 1 Year 2

WAGES: House Director

1.00 $21.72 $45,302 $46,887

Relief 0.15

$20.00 $6,257 $6,476

RN 1st Shift 7.00

$20.00 $292,000 $302,220

2nd shift, 3rd, & w/e 2.40

$21.00 $105,120 $108,799

Relief 1.11

$20.00 $46,303 $47,923

LPN -

$15.00 $0 $0

Relief 0.15

$15.00 $4,693 $4,857

HHA 1.50

$10.63 $33,257 $34,421

2nd shift, 3rd, & w/e -

$12.00 $0 $0

Relief 0.15

$9.25 $2,894 $2,995

Cook 1.05

$15.00 $32,850 $34,000

Relief 0.11

$15.00 $3,441 $3,562

Dietary Aide / Homemaker 1.05

$8.00 $17,520 $18,133

Relief 0.11

$8.00 $1,835 $1,900

Social Worker 0.20

$17.00 $7,074 $7,321

Spiritual -

$16.00 $0 $0

Volunteer Coordinator 0.38

$15.50 $12,123 $12,548

16.35

$610,669 $632,042

Full Year Full Year HOURS IN THE YEAR:

2,086

2,086 PAYROLL TAXES AND BENEFITS: 25% $152,667 $158,011

TOTAL WAGES AND BENEFITS:

$763,336 $790,053

OCCUPANCY Cost Life Building: $2,346,128 30 $78,204 $78,204 Initial Furniture & Equipment:

$421,913 10 $42,191 $42,191

Additions: Year 1 $9,000 10 $900 $900 Depreciation: $121,296 $121,296



03/17/09

Pledge Financing: 1st Year 2nd Year Total Interest per Year: $

210,000 $

168,000 $210,000 $168,000

NO MORTGAGE Sq. Ft. Cost/sq. ft. Full Year % of Year Electric

14,693 $2.12 $31,149 100% $31,149 $31,149

Gas 14,693

$0.46 $6,759 100% $6,759 $6,759

Water 14,693

$0.15 $2,204 100% $2,204 $2,204

Waste Water 14,693

$0.13 $1,910 100% $1,910 $1,910

Rubbish 14,693

$0.33 $4,849 100% $4,849 $4,849

Landscaping* $2,000 $2,000 Snow Plowing $3,230 $3,230 Repairs & Maintenance $11,124 $11,124 Telephone $50 a line per month x 14 lines plus useage $20,290 $20,290 Insurance $2,000 $2,000 Contingency $4,800 $4,800

TOTAL OCCUPANCY: Year $421,610 $379,610 OTHER COSTS: Full Year Full Year

# of Days # of Days Rate/Day Medical Supplies

3,066 3,723 $7.00 $21,462 $26,061

Pharmacy 3,066 3,723

$12.00 $36,792 $44,676

Medical Equipment 3,066 3,723

$2.00 $6,132 $7,446

Laundry /Linens 3,066 3,723

$5.00 $15,330 $18,615

IV Therapy 3,066 3,723

$2.00 $6,132 $7,446

Lab 3,066 3,723

$1.00 $3,066 $3,723

Patient Transportation 3,066 3,723

$1.00 $3,066 $3,723

Kitchen/Food and Beverages

3,066 3,723

$6.00 $18,396 $22,338

Square Foot Housekeeping

14,693 $1.50 $22,040 $22,040

TOTAL OTHER COSTS: $132,416 $156,068TOTAL DIRECT OPERATING COSTS:

$1,317,361 $1,325,730

OVERHEAD: Wages and Benefits

30% $229,001 $237,016

TOTAL OPERATING COSTS: $1,546,362 $1,562,746COST PER DAY: $504 $420



03/17/09

Seacoast Hospice House Project

Projected Staffing

1st Year Monday - Friday 7am - 3pm 3pm - 11pm 11pm - 7am 7am - 7pm 7pm - 7am

RN 3 2 2 2 2 LPN 0 0 0 0 0 HHA 1 0.5 0 0 0 Years 2 & 3 Monday - Friday

7am - 3pm 3pm - 11pm 11pm - 7am 7am - 7pm 7pm - 7am

RN 3 2 2 2 2 LPN 0 0 0 0 0 HHA 1 1 1 1 1

Weeks Hours FTE WEEKDAY WEEKEND

RN 52 376 9.4 7 2.4 LPN 52 0 0 0 0 HHA 52 60 1.5 1.5 0 House Manager 52 40 1 1 0 Cook 52 42 1.05 0.75 0.3 Dietary Aide/homemaker 52 42 1.05 0.75 0.3 Volunteer Coordinator 52 15 0.375 0.375 0 Spiritual 52 0 0 0 0 Social Worker 52 7.98 0.1995 0.1425 0

Medical Director 52 0 0 0 0 5



03/17/09

SEACOAST HOSPICE CARE

HOSPICE HOUSE BUDGET

CAPITAL CAMPAIGN MODEL

Capital Required

Land $100,000 Building Cost

$2,346,128

Furniture & Equipment $421,913 Total Facility

$2,868,041

Operating Loss Year 1 $415,775 Total Required Capital $3,283,816

Pledge Loan Principal and Interest Payment Schedule Terms: Amount $3,000,000 Interest Rate 7.00% Term 5 Payment Terms 20% of principal repaid annually Accrued Interest paid annually Principal: $3,000,000 Interest over life loan: $630,000 Principal Accrued Int Total Cash Outstandin

g Payment Schedule: Payments For the Yr Paid Out Principal Year 1 $3,000,000 $600,000 $210,000 $810,000 $2,400,000 Year 2 $2,400,000 $600,000 $168,000 $768,000 $1,800,000 Year 3 $1,800,000 $600,000 $126,000 $726,000 $1,200,000 Year 4 $1,200,000 $600,000 $84,000 $684,000 $600,000 Year 5 $600,000 $600,000 $42,000 $642,000 $0 $3,000,000 $630,000 $3,630,000



03/17/09

SEACOAST HOSPICE HOUSE NASHUA COMPARATIVE

Financial Profile Seacoast

Hospice Seacoast Hospice

Nashua Hospice Nashua Hospice

12 Month Operation First Year Second Year 2001 7 Months ending 1/31/02

% of

Projected Projected Budget Actual Budget Revenues $

1,130,588 $ 1,440,336 $ 899,488 $

779,847 87%

Expenses $ 1,546,362

$ 1,562,746 $ 1,190,181 $ 908,605

76%

Net Operating Profit / Loss $ (415,774)

$ (122,410) $ (290,693) $ (128,758)

44%

Contributions $

100,000$ 100,000 $ 40,000 $

63,462 159%

Net Profit before Inv. Income

$ (315,774)

$ (22,410) $ (250,693) $ (65,296)

26%

Investment Income $

105,000 $ 105,000 $ 21,000 $ - 0%

Net Profit / Loss $ (210,774)

$ 82,590 $ (229,693) $ (65,296)

28%

Seacoast Assumptions Seacoast Hospice Nashua Hospice

12 Bed Hospice House 10 Bed Hospice House $2.9 million Facility $2.4 million Facility 14.7 Thousand Square Ft. 12.2 Thousand Square Ft. Land Donated Land Donated No Mortgage $857,000 NH HA Mortgage 50 / 50 LOC split - 1st Yr. 40 / 60 LOC Split 45 / 55 LOC split - 2nd Yr. 70 % Occupancy - 1st Yr. 70% Occupancy 85 % Occupancy - 2nd Yr. Length of Stay - 30 / 7 Length of Stay - 30 / 10 Capital Campaign - TBD $3.5 million Capital Campaign $3 million Endowment $600,000 Endowment



03/17/09

SEACOAST HOSPICE HOUSE REVENUE & EXPENSE ASSUMPTIONS

Pro Forma Assumptions Most

ProbableNumber of Beds 12 Average Daily Census 40 Yearly Patient Days 4380 Average Length of Stay - Residential 30 Average Length of Stay - Acute 7 Occupancy Rate 85% Charge per day - Acute $ 550.00 Charge per day - Residential $ 125.00 Total Salaries as percent of Revenues 68% Number of Full Time Equivalents 16.35 Number of House Managers 1 Number of Registered Nurses (FTE) 10.5 Percentage of Salary to cover Benefit / Taxes 25% Pledge Loan Principal Amount (millions) $ 3.0 Interest percentage - APR 7% Term of the Mortgage 5 Percentage of Management Fee - Overhead 30% Endowment Fund Principal (millions) $ 3.0 Percentage return on Investment Funds 3.5% Memorial Funds - Annual results (thousands) $ 100



03/17/09

RESIDENTIAL CARE BED PROJECTION Market Model

Seacoast Hospice Data * Total County Service Areas Rockingham Strafford Combined

Total Population - Year 2000 156,959 112,233 269,192 1 Person Household - Age 65+ (A) 7.1% 7.7% 7.4%Single Headed Households + 1 over 65 (B) 3.3% 3.1% 3.2%All Deaths ( 1999) (D) 1,168 817 1,985 Ten Year Population Change 12.8% 7.7% 10.3%Poverty Rate 5.1% 9.7% 7.4%Service Area Coverage 56.6% 100.0% 78%Occupancy Rate (OR) 85% 85% 85.0%

Year 2000 Bed Projection for Residential Care 12 9 20

* Excludes: Salem, Derry, Londonderry & Windham

Formula = Number of patients with no(A) or limited (B) primary caregivers times Number of Deaths (D) times Average Length of Stay

(ALOS) divided by 365 days adjusted for the Occupancy Rate (OR). Source: Nashua Feasibility Study Models



03/17/09

ACUTE CARE BED PROJECTION Market Model

Seacoast Hospice 2000 Data Seacoast Seacoast Total Patient Care Days 14,978 Seacoast Percent of Inpatient Days (D) 1% Seacoast Inpatient Days (A) 122 Seacoast Continuous Days (B) 12 Add 30% Assumed Growth Factor (C) 40

Total Days (TD) 174 # Days in Year 365 Average Length of Stay (ALOS) 7 Occupancy Rate (OR) 85%

Year 2000 Demand Bed Projection for Acute Care Percent Number of Beds

Projected Inpatient Care Bed Demand 5% 2 Projected Inpatient Care Bed Demand * 10% 5

Projected Inpatient Care Bed Demand 15% 7 * = Most Likely Formula= Add inpatient days (A) and Continuous days (B) and

add 30% of (A) and (B). Divide by 365 to yield Predicted Acute Care Bed Needs at various levels of program utilization and adjust for Occupancy Rate (OR).

Source: Nashua Feasibility Study Models



03/17/09

STATISTICAL CENSUS DRIVEN MODEL Year 2000

County Rockingham Strafford Total Market Share 75% / 65% Model Service Area * Service Area Combined Key

Total Population - Year 2000 156,959 112,233 269,192 R Householder Living Alone 22.0% 24.8% 23.4% R

Households w/ individuals 65 years and over 18.9% 20.4% 19.7% R Hospice House Eligible Population Living with Others 221 167 387 C

Hospice Residential Care Eligible 5% (HE -Others -RC)

11 8 19 C

Hospice Acute Care Eligible 10% (HE - Others - AC) 22 17 39 C Hospice House Eligible Population Living Alone 257 203 460 C Hospice Residential Care Eligible 40% (HE - Alone -

RC) 103 81 184 C

Hospice Acute Care Eligible 10% (HE- Alone - AC) 26 20 46 C Patient Totals - Unduplicated and Duplicated @ 10%

Hospice Home Care Eligible (HE - HC) 316 243 559 C Hospice Eligible - Residential Care ( HE - RC) 145 114 259 C

Hospice Eligible - Acute Care (HE - AC) 62 48 111 C Seacoast Hospice Market Share 23.0% 16.8% 20.4% R Hospice Model Market Share Assumptions

Residential Care Market Share Assumptions (MS-RC)

75.0% 75.0% 75.0% A

Acute Care Market Share Assumptions (MS-AC) 65.0% 65.0% 65.0% A Seacoast Average Length of Stay 51 51 51 R

Average Length of Stay - Residential Care (ALOS -RC)

30 30 30 A

Average Length of Stay - Acute Care (ALOS -AC) 7 7 7 A Seacoast Average Daily Census 40 40 40 R

Average Daily Census - Residential Care(ADC-R) 7.0 5.5 12.5 C Average Daily Census - Acute Care (ADC-A) 0.8 0.6 1.4 C

Care Days Adjusted for Market Share Residential Days 2,561 2,011 4,572 C Acute Care Days 284 220 503 C

Occupancy Rate (OR) 85% 85% 85% A Number of Days in Year 365 365 365 R Total Service Area Deaths ( 1999) - (TSAD) 1,168 817 1,985 R Cancer Deaths Only (1998) 284 214 498 R Other Causes of Death 6 Diseases - Service Area Total

673 499 1,172 R

Seacoast Hospice Deaths in County (2001) 220 120 340 R Year 2000

Projected Bed Needs for Residential 10.5 8.2 18.8 Projected Bed Needs for Acute Care 0.9 0.7 1.6

Total Projected Bed Needs 11 9 20

Bed Need Formula = TSAD * % Living w/Others and TSAD * % Living Alone feed HE-Others and Alone-RC. HE-Others-RC plus HE-Alone-RC plus

* Excludes: Salem, Derry, Londonderry & Windham 10% of HR-HC equals HE-RC, then HE-RC * ALOS-RC * MS-RC / 365 / OR

Key = A - Actual; C-Computed; R-Real Data equals # Beds. Same for AC beds. Source: Nashua Feasibility Study Models



03/17/09

STATISTICAL CENSUS DRIVEN MODEL Year 2000

County Rockingham Strafford Total Market Share 50% / 50% Model Service Area * Service Area Combined Key

Total Population - Year 2000 156,959 112,233 269,192 R Householder Living Alone 22.0% 24.8% 23.4% R

Households w/ individuals 65 years and over 18.9% 20.4% 19.7% R Hospice House Eligible Population Living with Others 221 167 387 C

Hospice Residential Care Eligible 5% (HE -Others - RC) 11 8 19 C Hospice Acute Care Eligible 10% (HE - Others - AC) 22 17 39 C

Hospice House Eligible Population Living Alone 257 203 460 C Hospice Residential Care Eligible 40% (HE - Alone - RC) 103 81 184 C

Hospice Acute Care Eligible 10% (HE- Alone - AC) 26 20 46 C Patient Totals - Unduplicated and Duplicated @ 10%

Hospice Home Care Eligible (HE - HC) 316 243 559 C Hospice Eligible - Residential Care ( HE - RC) 145 114 259 C

Hospice Eligible - Acute Care (HE - AC) 62 48 111 C Seacoast Hospice Market Share 23.0% 16.8% 20.4% R Hospice Model Market Share Assumptions

Residential Care Market Share Assumptions (MS-RC) 50.0% 50.0% 50.0% A Acute Care Market Share Assumptions (MS-AC) 50.0% 50.0% 50.0% A

Seacoast Average Length of Stay 51 51 51 R Average Length of Stay - Home Care (ALOS -HC) 70 70 70

Average Length of Stay - Residential Care (ALOS -RC) 30 30 30 A Average Length of Stay - Acute Care (ALOS -AC) 7 7 7 A

Seacoast Average Daily Census 40 40 40 R Average Daily Census - Residential Care(ADC-R) 4.7 3.7 8.4 C

Average Daily Census - Acute Care (ADC-A) 0.6 0.5 1.1 C Care Days Adjusted for Market Share

Residential Days 1,707 1,341 3,048 C Acute Care Days 218 169 387 C

Occupancy Rate (OR) 85% 85% 85% A Number of Days in Year 365 365 365 R Total Service Area Deaths ( 1999) - (TSAD) 1,168 817 1,985 R Cancer Deaths Only (1998) 284 214 498 R Other Causes of Death 6 Diseases - Service Area Total 673 499 1,172 R Seacoast Hospice Deaths in County (2001) 220 120 340 R

Year 2000 Projected Bed Needs for Residential 7.0 5.5 12.5 Projected Bed Needs for Acute Care 0.7 0.5 1.2

Total Projected Bed Needs 8 6 14

Bed Need Formula = TSAD * % Living w/Others and TSAD * % Living Alone feed HE-Others and Alone-RC and AC. HE-Others-RC plus HE-Alone-RC plus

* Excludes: Salem, Derry, Londonderry & Windham 10% of HE-HC equals HE-RC, then HE-RC * ALOS-RC * MS-RC / 365 / OR

Key = A - Actual; C-Computed; R-Real Data equals # Beds. Same for AC beds.

Source: Nashua Feasibility Study Models



03/17/09

Source: New Hampshire Department of Transportation



03/17/09

seacoast hospice hospice house project ... hospice house feasibility study 2002 executive service...

Documents