Stakeholders Report: Financial Position & Progress on Major Initiatives Issued October 2018 by Planned Parenthood South Texas
We provide and protect the health care and information people need to plan their families and their futures.
2018 BOARD OF DIRECTORS
KATHY ARMSTRONG CHAIR
LA JUANA CHAMBERS
ELISE BOYAN VICE-CHAIR
CECI GOLDSTONE
MERRITT CLEMENTS TREASURER PATRICIA MORALES SECRETARY ALISON BOONE IMMEDIATE PAST CHAIR
CHERYL DAVIS, DDS LAURIE GREENBERG, MD LUPITA GUTIERREZ ALISON KENNAMER ELLEN LAKE REV. JON LOWRY FERNANDO MARTINEZ, PHD DON MCREE, PHD AMBER MEDINA SARA METERSKY BARBARA MOSCHNER YVONNE PELAYO STUART SCHLOSSBERG SUSAN N. SMITH BRIAN STEWARD
STAFF LEADERSHIP JEFFREY HONS PRESIDENT & CEO
POLIN C. BARRAZA, RN SENIOR VICE PRESIDENT & COO
Statement of Financial Position* 2015
2016
2017
Cash & Cash Equivalents
615,449
1,976,919
2,663,294 a
Receivables
171,525
378,886
392,992 b
Inventory
112,341
95,392
96,046
Prepaid ExpensesÂ
104,593
78,141
59,495
1,003,908
2,529,338
3,211,827
Cash & Cash Equivalents - Temporarily Restricted
328,955
294,875
201,265 c
Endowment
823,632
871,351
1,064,369 d
23,342
25,156
Property and Equipment - Net
7,360,111
7,696,494
8,145,838 e
Total Noncurrent Assets
8,536,040
8,887,876
9,411,472
Total Assets
9,539,948
11,417,214
12,623,299
Accounts Payable
100,553
140,877
239,631
Accrued Expenses
482,504
473,594
586,558
Deferred Revenues
112,859
21,446
42,646 g
Loan Payable
350,000
2,250,000
2,208,292 h
1,045,916
2,885,917
3,077,127
7,786,531
7,835,616
8,929,809
i
Temporarily Restricted
473,627
460,807
380,489
j
Permanently Restricted
233,874
234,874
235,874 k
Total Net Assets
8,494,032
8,531,297
9,546,172
Total Liabilities & Net Assets
9,539,948
11,417,214
12,623,299
Current Assets
Total Current Assets Noncurrent Assets
Cash Value of Key Man Life Insurance
-
Liabilities
Total Liabilities
f
Net Assets Unrestricted
a. Our cash position has held up mainly as a result of strong charitable support. b. The large A/R results from grants that pay to us over time, and because there is lag time associated with online fundraising (and December is a big fundraising month). c. These are temporarily restricted gifts that are released from the Balance Sheet when we actually spend the funds on the intended purpose. d. Like all investments in 2017, our endowment enjoyed a healthy return. e. Improvements to our property at 920 San Pedro in San Antonio helped to increase this line.
g. These are end-of-year expenses for which we had not yet received an invoice (primarily, this is a large purchase of long-acting reversible contraceptives). h. This is revenue we have on the Balance Sheet that we have not yet earned onto the Income Statement (primarily, these are patient assistance funds that are earned onto the Income Statement when the funds are used for a medical visit). i. The increase here results from our property at 920 San Pedro. j. This is the board-designated portion of our endowment. k. This is the donor-designated portion of our endowment.
f. These are end-of-year expenses that were booked in 2017 but the checks were not written to pay the bills until January 2018. *FINANCIAL DATA DERIVED FROM 2017 FINANCIAL AUDIT
Revenue 2017 over 2016
2016
2017
Difference
% Change
Federal Family Planning Contract
869,016
877,790 a
8,774
1%
Medicaid
466,485
530,817
64,332
14%
Commercial Insurance
572,663
826,277
253,614
44%
1,518,894
1,993,411
474,517
31%
442,300
439,050
(3,250)
-1%
3,309,719
2,945,487
(364,232)
-11%
(8,515)
-7%
(150,396)
-27%
274,844
3%
Patient Fees Methodist Healthcare Ministries Contract Contributions | Annual Fund Contributions | Capital Campaign
125,314
Miscellaneous Income
563,195
Total Revenue
a. Our federal family planning support ended 8/31/18 due to unfortunate political interference. b. Earned income from our clinical operation has performed well. These revenue lines are less vulnerable to political exploitation. Further, the mix among these payer channels is noteworthy with commercial insurance on the rise.
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7,867,586
c
116,799 d
412,799 8,142,430
d
c. Donors continue to supply tremendous support through charitable contributions. The unfavorable variance to prior year is simply a mathematical reflection that a one-time gift of $950,000 in December 2016 was not repeated in 2017, nor was anyone expecting the gift to repeat. d. This line was large in 2016 as we recorded proceeds from the sale of 104 Babcock, an event that did not repeat. However, 2017 is still much higher than 2015 because we received a life insurance policy payout, we realized gains on investments, and we have rental income recorded in this line.
2017 REVENUE 5%
Miscellaneous Income
1%
Contributions: Capital Campaign
11%
Federal Family Planning Contract
7%
Medicaid
36%
Contributions: Annual Fund
10%
Commercial Insurance
5
%
Methodist Healthcare Ministries Contract
25%
Patient Fees
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Expenses 2017 over 2016
2016 Staffing & Contract Healthcare Services Medical Supplies & Expenses
2017
Difference
% Change
3,379,768
3,660,237 a
280,469
8%
1,034,465
b
314,358
30%
24,017
32%
1,348,823
Office & Program Supplies
75,748
99,765 c
Printing & Publications
43,146
43,268
Office Expenses
201,760
Travel & Training
122
0%
219,188
c
17,428
9%
52,901
129,353
d
76,452
145%
477,532
493,254
31,254
Audit, Legal & Other Promotional Services
15,722
3%
50,583
e
19,329
62%
226,172
155,540
f
(70,632)
-31%
Events, Associations & Sponsorships
164,251
260,344
g
96,093
59%
Other Expenses
252,424
257,577
5,153
2%
Depreciation
341,442
409,623
68,181
20%
Total Expenses
6,280,863
7,127,555
846,692
13%
Net Income
1,586,723
1,014,875
(571,848)
-36%
Space Costs Advertising & Program Promotion
a. We added some staff in places where we needed help. We will add a few more positions to better capacitate the organization in strategic areas. b. Long-acting reversible contraceptives are expensive, and our volume in 2017 increased considerably. c. Additional staff bring with them related expenses. Further, we have increased programmatic activity in our Habla Con Tu HermanaSM project. d. We engaged a nationally renowned performance improvement consultancy to begin work with us. Additionally, The Planned Parenthood Federation of America launched a once-in-a-generation project to assess our current reality and chart a path forward for the Planned Parenthood family. There was considerable travel expense associated with this project as senior staff and board members were expected to attend several meetings across the country.
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h
e. We were intentional about increasing our marketing efforts. f. The Planned Parenthood Federation of America made a decision to waive the usual requirement that affiliates to pay national program support, resulting in a significantly reduced expense compared to the prior year. g. Much of the 2018 annual luncheon expenses (portions of the speaker fee and catering bill) were intentionally prepaid in 2017 as a strategy to manage cash in 2018. h. Our new property at 920 San Pedro and its improvements have increased our depreciation expense.
2017 EXPENSES 2%
4%
1%
Events, Associations & Sponsorships
Office & Program Supplies
4
%
Other Expenses
2%
7%
Space Costs
Travel & Training
Audit, Legal & Other Professional Services %
3
Office Expenses
1%
Advertising & Program Promotion
19%
Medical Supplies & Expenses
6%
Depreciation
51%
Staffing & Contract Healthcare Services **Printing & Publications accounted less than 1% of 2017 expenses. Stakeholders Report 2018 | 7
External Environment and
Operating Assumptions
We continue to see significant changes in our external environment. Many of those changes come at the hands of those in elected office who have weaponized abortion rights and even family planning funding in their political calculus. But there are also industry changes (payers, science and technology, telemedicine, marketplace manifestations of generational differences) we must incorporate into our planning and strategies for success. Therefore will we continue to update our operating assumptions and adjust our plans in order to continue to deliver on our mission in the world we find around us. Regarding federal family planning funds. Throughout 2017, our detractors in the federal government worked to repeal the Affordable Care Act and simultaneously exclude Planned Parenthood organizations nationwide from Medicaid. Those efforts failed. But in recent months those same actors have focused their energy on Title X federal family planning funding. Politically motivated pressures have forced changes to the Title X funding situation in ways that combine and conspire to push Planned Parenthood South Texas (indeed, all Planned Parenthood organizations in Texas) out of this revenue stream —at least for now. Operationally, our immediate work is to become functional and sustainable without roughly $820,000 in federal support for family planning. In years past we were dealt similar financial blows by the state of Texas. We learned a great deal from those difficult years and will use that knowledge now to manage the difficulties being created by the Trump administration. At the same time, we will pursue a strategy that focuses on when and how we can attempt a return to Title X.
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Our job includes making abortion care accessible to women who live in South Texas— no matter what.
Regarding the future of abortion care. When President George W. Bush was first elected U.S. President, the Planned Parenthood family began considering what could happen if the U.S. Supreme Court composition shifted in an unfavorable way. A post-Roe task force was assembled. When Senator Mitch McConnell organized a theft of Obama’s constitutional authority to make a SCOTUS appointment after Justice Scalia died in February of 2016, we became acutely aware of the lengths that some would go to in order to politicize and control the composition of the High Court.
we will increase the use of telemedicine, combined with a medications-by-mail strategy that we believe will eventually include self-administered contraceptive injections. These new methods of service delivery will grow, thereby increasing our ability to serve women throughout South Texas. The broadest implications may even impact our plans for where we need a brick-and-mortar footprint, and the square footage requirements therein.
Today, the tipping point we theorized about is upon us, and everyone who works for or supports Planned Parenthood South Texas must understand something unequivocally: Our job includes making abortion care accessible to women who live in South Texas—no matter what. The legal and regulatory framework around abortion care may well experience changes in the coming years. So we must be ready— well positioned and with organizational capacity—to connect women in South Texas with abortion care in ways that legally overcome whatever hurdles might be created. I hope it will not become as bleak as some people fear, but we must be ready for whatever presents itself.
Strategic Initiatives
Regarding telemedicine. There is much happening with the application of telemedicine in the delivery of abortion care, limited to medication abortion of course. Bear in mind, at PPST, fully 72% of all the women we helped with abortion care chose medication over a traditional in-clinic procedure. The safety is clear, and the increased access brings options and decision making to women who might otherwise see abortion as out of reach. But Texas law currently prohibits the use of telemedicine for the purposes of providing an abortion. If abortion remains legal in Texas, that should change, eventually, as the use of telemedicine for abortion care becomes more accepted and prohibitions fail any rationale related to women’s health and safety. Separate from abortion, the use of telemedicine in offering contraception is taking off. Planned Parenthood has developed its own mobile app that will allow us to offer contraception and treatment for urinary tract infections without an in-clinic visit. That product has a soft launch in Texas this fall. In time
Progress on
Despite challenges, Planned Parenthood South Texas has realized a good deal of success in implementing key strategic initiatives. We measure and assess our work regularly using an array of metrics and data points that review our performance and measure our success. Distilling all of that work into the most important measures of organizational effectiveness and impact produces two questions: How many people did we serve? And, are we sustainable into the future? Regarding service delivery. We’ve grown the number of people we serve. 2017 was up 10.8% over the prior year—that’s an additional 1,912 people. 1,798 of that increase were female clients, and the remaining 114 of the increase were male. Our client load remains overwhelmingly female at 89%, but men are an important and growing part of our practice. In 2017 we saw 2,101 men. Contraceptive choices are evolving in the marketplace. The patch (+132.4%), the ring (+64%), the implant (+50.3%) and the IUC (+27.7%) are all on the rise. Oral contraception (the Pill, or OCs) were down 7.9%, and contraceptive shots were down 6%. This shift is something we need to understand as a marketplace indicator and predictor. Think of it this way: we have always served young clients. Last year, 67.5% of the people who walked through our doors are age 29 or younger. It is no surprise that their choices about contraception and sexual protection might differ when compared to generations that came before them. PPST must always watch the choices of our clients
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and seek to understand what those decisions indicate about the future of sexual protection and fertility control in broad terms. For our entire 80 year history, we are serving the “newest” generation of adults. Our service mix must always be on the vanguard of cultural trends. We stabilized abortion care. You may recall that uneven provider coverage in 2016 produced a reduction in our ability to provide abortion care, and we paused care that summer. We were fully staffed in 2017 and therefore women were able to find the abortion care they needed at Planned Parenthood South Texas. Providers are essential, obviously. We must increase our advocacy for making elective abortion training a mainstream aspect of preparation to be a physician, especially medical students seeking board certification as an obstetrician-gynecologist. Women become pregnant at times they do not want to be—indeed, at times they feel they cannot be pregnant. Women who want to be pregnant are, at times, faced with news about their pregnancies that indicate a risk associated with continuing a pregnancy. For these and so many more reasons, women must have access to all of their options. Without trained physicians, access to abortion care is theoretical. (Please see op-ed titled “Want to Protect the Right to Abortion? Train More People to Perform Them” published in the New York Times on Aug. 29 by Dr. Jody Steinauer, an obstetrician-gynecologist and the founder of Medical Students for Choice.) Delivering our service with kindness, confidentiality, quality and compassion has always been a priority for PPST. In recent years, we’ve articulated an explicit goal to ensure the best possible client experience for the women and men and teens that trust us with their care. We have recently taken three more steps toward this priority. We added a Performance Improvement Coach to the staff so that this work gets the attention it deserves. We engaged a nationally recognized performance improvement consultancy who specializes in health care—Coleman Associates out of Boulder, Colorado. They have proven to be the partner we need. The progress we are creating based on this engagement is evidenced in our clinic operation. Finally, we began to use the nationally recognized firm Press Ganey whose client satisfaction survey system provides exceptionally detailed data to help us “see” what we look like in the eyes of our clients.
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Regarding Organizational Sustainability. In April 2017 we relocated our Ashby clinic in San Antonio to a new property at 920 San Pedro Ave. that we own. We are nearing completion of a new 5-exam room clinical space at this site that will be the centerpiece of our sliding-fee family planning services in San Antonio. Further, in a separate clinical suite at this same property, we will begin offering abortion care. This is an important step in re-creating the access to care that was decimated in Texas following the disaster of HB 2 in 2013. Our financial position is stable. We stand here today because of you—the intelligent and compassionate people who make charitable contributions to this important health care. With the loss of federal family planning support, the coming years will require us to manage the organization even more carefully. We must balance our historical commitment to providing family planning to those with the least economic means with our need to be financially sustainable amidst a difficult external political environment. Understanding what is ahead of us, multi-year modeling will be brought to the Financial Oversight Committee so that our plans for 2019 and beyond will hold up to the pressures we will likely face over the coming years. After successfully completing Phase One of the capital campaign wherein you contributed generously to establishing our new organizational headquarters and surgery center, we expected to begin Phase Two—raising funds to relocate several health centers out of rented spaces and into properties that we would own. That is still a smart plan. However, in light of what has changed around us, we have strategically decided to “press pause” on our plan to buy more locations. The impending loss of federal family planning support, questions about the future of abortion care, and a rollout of a telemedicine joint venture (which may result in more family planning delivered at a distance instead of inside our walls) are among the many variables that will likely impact our future and the number of people who come to our health centers. We must take some time to assess how these and other variables will play out before resuming our plans to buy properties. We cannot ask you for that support until we have a solid understanding on these matters.
Meanwhile, service delivery must continue. So we will pursue a real estate strategy that meets our immediate clinical needs and creates the most effective blend of: 1) best possible expense pattern on the Income Statement, and 2) building the strongest possible Balance Sheet over time. This means we will continue to rent for our outlying clinic sites, although improved locations are needed. We will consider all sorts of real estate solutions (we’re always open to an opportunity, especially a bargain), but we may remain in rented spaces a bit longer than we were planning.
Our Future
We are adjusting our sliding-fee scale in the clinics in order to absorb the terrible reality that we will be without federal family planning dollars (for now), and to do everything in our power to achieve sustainability in the current environment. In San Antonio, our health center at 920 San Pedro will have our most generous “slide” in that, based on eligibility, a visit co-pay could be as low as $30 for adults and $15 for minors. In the outlying San Antonio centers, our fees will not “slide” as much, but some assistance will be available. In the Rio Grande Valley, our Brownsville and Harlingen health centers will slide to $30 and $15, just like San Pedro in SA metro, and we have a client assistance fund that is geographically restricted to the Valley which provides additional assistance. Finally, the LARC Assistance Fund is operational at all sites. Our LARC Assistance Fund partners with a woman who wants long-acting reversible contraception. Every time she makes a payment toward her zero interest balance, the Fund makes a companion payment—thanks to your support. We are adapting the program to what we learn and, in so doing, we are developing a strategy that I believe will carry us forward. Not offering LARCs is not an option: this next generation of women who are making their own choices about the contraception that best meets their needs are demanding them.
We must pay careful attention to trends in contraception. The shifts we are seeing in the birth control methods selected by our clients (declining numbers in pills and shots, increases in LARCs) are indicative of the contraceptive marketplace as a whole. We must remain on top of these trends, indeed ahead of them. Additionally, our practice will be shaped by telemedicine, meds-by-mail, and shifting policies on health care financing as well as insurance coverage. We will continue to expand the scope of our health care practice. Every client we see for family planning and sexual health care is very likely a person who has additional health care needs. Which of those needs does she want to rely on us to provide? We must listen to our clients and meet their health care needs, always cautious to manage mission drift. An eventual return to federal family planning funds is part of our future strategy. Realistically, such a return is not likely (perhaps not even possible) until mid-2021 when different leadership at the U.S. Department of Health and Human Services could begin the process of undoing the damage that is underway at this time. Planned Parenthood South Texas turns 80 in 2019. We’re here for the long haul. We’ve learned when to be impatient and when something requires a plan that will materialize over time. You may not hear a lot about this in the intervening years, but we’re on it. It is hard to know what precisely will happen to abortion care in the United States. It is unpleasant to contemplate scenarios where abortion is legal in some states and not legal in others. In that sort of speculation, Texas looks like one of the states that would restrict care as much as permitted by any change in law or jurisprudence. For now, abortion is health care that we can provide directly, and so we will, because it is essential that each woman ultimately control her own reproductive destiny. I am confident that PPST has the staff and organizational expertise to adapt our operation to any future change in regulation and law so that we remain an essential partner to women in South Texas who need to access abortion care. How and where they access that care may change, and our role as a provider may emphasize patient navigation more in the future, but make no mistake: you can count on PPST to be what women will need.
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On the Cover clockwise from top left
Sexually transmitted infection testing is available at every Planned Parenthood South Texas health center. Common tests include HIV/AIDs, chlamydia, gonorrhea, syphilis, and herpes. We offer treatment for patients who test positive. Gender-affirming hormone therapy is available at all Planned Parenthood South Texas health centers for transgender and gender non-conforming patients ages 18 and older. We are proud to offer these services in a compassionate, affirmative environment. PrEP, or pre-exposure prophylaxis, is a medication regimen that can help prevent HIV in patients at high-risk of contracting the virus. Taking PrEP every day can lower the chances of getting HIV from sex by more than 90 percent. We offer PrEP at all our health centers. Volunteers are crucial to our success. Our passionate volunteers give thousands of hours of their time to PPST every year, performing important functions ranging from office work to community education and advocacy. They also serve as safety aides to escort abortion patients into our building to shield them from protestors’ harassment. Well-woman exams are an important part of maintaining sexual and reproductive health. Depending on the patient’s age, sexual history and medical history, well-woman exams at Planned Parenthood South Texas may include pelvic exams, clinical breast exams, cervical cancer screenings, or family planning services. Birth control has been the focus of Planned Parenthood South Texas since our founding in 1939. We offer a full range of contraceptive methods, including long-active reversible contraceptives such as intrauterine devices (pictured).
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