Stakeholders Report 2019 by Planned Parenthood South Texas

Stakeholders Report :

Financial Position & Progress on Major Initiatives Issued September 2019 by Planned Parenthood South Texas

We provide and protect the health care and information people need to plan their families and their futures.

2019 BOARD OF DIRECTORS

KATHY ARMSTRONG CHAIR

LA JUANA CHAMBERS LAWSON

ELISE BOYAN CHAIR-ELECT

CECI GOLDSTONE

MERRITT CLEMENTS TREASURER PATRICIA MORALES SECRETARY ALISON BOONE IMMEDIATE PAST CHAIR

CHERYL DAVIS, DDS LAURIE GREENBERG, MD ALISON KENNAMER ELLEN LAKE MINA LÃ&#x201C;PEZ REV. JON LOWRY FERNANDO MARTINEZ, PHD DON MCREE, PHD AMBER MEDINA MAYRA MENDOZA SARA METERSKY CATHERINE PAYER YVONNE PELAYO BRIAN STEWARD

STAFF LEADERSHIP JEFFREY HONS PRESIDENT & CEO POLIN C. BARRAZA, RN SENIOR VICE PRESIDENT & COO

ANGELA KOESTER VICE PRESIDENT FOR COMMUNITY ENGAGEMENT

Statement of Financial Position* Current Assets

2016

2017

2018

1,976,919

2,663,294

2,082,698a

378,886

392,992

415,580b

Inventory

95,392

96,046

147,954c

Prepaid Expenses

78,141

59,495

63,708

2,529,338

3,211,827

2,709,940

Cash & Cash Equivalents - Restricted

294,875

201,265

164,146

Endowment

871,351

1,064,369

982,881d

25,156

7,696,494

8,145,838

9,184,543e

8,887,876

9,411,472

10,331,570

11,417,214

12,623,299

13,041,510

Accounts Payable

140,877

239,631

358,676f

Accrued Expenses

473,594

586,558

581,604g

Deferred Revenues

21,446

42,646

2,250,000

2,208,292

2,181,162h

2,885,917

3,077,127

3,121,442

7,835,616

8,929,809

9,215,136

695,681

616,363

704,932i

8,531,297

9,546,172

9,920,068

11,417,214

12,623,299

13,041,510

Cash & Cash Equivalents Receivables

Total Current Assets Noncurrent Assets

Cash Value of Key Man Life Insurance Property and Equipment - Net Total Noncurrent Assets Total Assets Liabilities

Loan Payable Total Liabilities Net Assets Without Donor Restrictions With Donor Restrictions Total Net Assets Total Liabilities & Net Assets a. We spent some cash in 2018 to further develop our property on San Pedro in San Antonio. b. As our commercial insurance volume grows (26% growth in 2018 over 2017), so do our receivables. c. After losing federal family planning dollars, we concomitantly lost participation in the federal government’s discount drug pricing program, 340B. Hence, our same pharmaceuticals now cost much more. Also, the LARCs (long-acting reversible contraceptives) are very pricey. Both of these factors drive up inventory valuations. d. The final months of 2018 were brutal on investments everywhere, and PPST’s endowment was no exception. e. Our continued development at San Pedro has led to increased asset value in that property.

f. More expensive LARCS (post 340B) and end-of-year ordering in the clinics result in invoices that are accrued into December but won’t be paid until January. But this figure varies month to month — e.g., June 2019 is only $197K. g. Here we see accrued salaries of $83K (time worked in December that won’t be paid until an early January payday), accrued PTO ($125K), and any number of expenses we accrue into December at the end of the year. Additionally, we hold $190K on this line for an outstanding matter that has been dormant for many years prior. h. This is a note we have that allowed us to develop our San Pedro property. i. $550K of this is donor-designated funds in the endowment. Additionally, this line includes generous donations restricted to supporting our patient assistance funds. *FINANCIAL DATA DERIVED FROM 2018 FINANCIAL AUDIT

Revenue 2018 over 2017

2017

2018

Difference

Change

(278,446)

-32%

Federal Family Planning Contract

877,790

599,324

Medicaid

530,817

472,812

Commercial Insurance Patient Fees Methodist Healthcare Ministries Contract Contributions | Annual Fund

(58,005)

-11%

826,277

1,039,482

213,205

26%

1,993,411

2,029,387

35,976

439,050

440,650

1,600

2,945,487

3,506,453d

560,966

19%

Contributions | Capital Campaign

116,799

Miscellaneous Income* Total Revenue

(116,799)

-100%

412,799

4,038

(408,761)

-99%

8,142,430

8,092,146

(50,284)

-1%

a. We lost these funds on Aug. 31, 2018, hence we had only 8 months of this revenue in 2018 compared to a full year in 2017.

revenue mix in that Commercial Insurance revenue is not politically vulnerable in the way federal family planning dollars are.

b. The decline here indicates a reduction in the number of people with Medicaid who come to PPST. Remember, Texas Medicaid eligibility for family planning coverage is abysmal (18% of poverty level) compared to many other states that cover everyone up to 100% of the federal poverty level.

d. This is YOU! Strong support from our donors and particular support for our patient assistance funds.

c. The increase indicates growth in the number of people with insurance who come to PPST. This growth helps strengthen our

4 | Stakeholders Report 2019

e. We are not currently pursuing a capital campaign. f. In 2017 we saw proceeds from the sale of real estate, a life insurance policy payout, and realized gains from investments. None of those events occurred in 2018.

2018 REVENUE

Federal Family Planning Contract

Medicaid

43%

Contributions

13%

Commercial Insurance

*Miscellaneous Income accounted for less than 1% of 2018 revenue.

25%

Patient Fees

Methodist Healthcare Ministries Contract Stakeholders Report 2019 | 5

Expenses 2018 over 2017

2017

2018

Staffing & Contract Healthcare Services

3,869,037

4,129,598

Medical Supplies & Expenses

1,140,023

1,365,603

Difference

Change

260,561

225,580

20% -5%

Office & Program Supplies

99,765

94,400

(5,365)

Printing & Publications

43,268

51,467

8,199

Office Expenses

219,188

299,331c

80,143

Travel & Training

129,353

147,515

18,162

Space Costs

493,254

519,712

26,458

50,583

83,330

32,747

65%

Audit, Legal & Other Professional Services

155,540

131,870

Events, Associations & Sponsorships

260,344

Other Expenses Depreciation

Advertising & Program Promotion

Total Expenses Net Income

37% 14% 5%

(23,670)

-15%

(85,239)

-33%

257,577

244,912

(12,665)

-5%

409,623

475,407

65,784

16%

7,127,555

7,718,250

590,695

1,014,875

480,037

(534,838)

-53%

a. Staff remains our biggest expense, which is standard for the health care industry. Increases here reflect our efforts to retain talent and build bench. b. Pharmaceuticals have become more expensive after losing 340B participation, and that is acutely felt when purchasing LARCs. c. The increase here is attributable in part to small equipment purchases for the new space we developed at our San Pedro

6 | Stakeholders Report 2019

19%

175,105

facility. Additionally, more staff and more activity leads to more expenses. d. We are increasing our efforts to send external messages and marketing about the health care we provide. e. We paid for some 2018 luncheon expenses in 2017 in an effort to contain 2018 expenses.

2018 EXPENSES 1%

Office & Program Supplies

Printing & Publications

Office Expenses

Travel & Training

Space Costs

Advertising & Program Promotion

2% 2%

Audit, Legal & Other Professional Services

Events, Associations & Sponsorships

Other Expenses

Depreciation

18%

Medical Supplies & Expenses

53%

Staffing & Contract Healthcare Services

Stakeholders Report 2019 | 7

External Environment & Operational Assumptions Our external environment remains challenging as the Trump administration continues to push policies that do not help Planned Parenthood nor help our patients. In some states—Oregon, California, New York, Illinois, Vermont, and others—the state government has taken steps to mitigate the actions of the federal government by creating a public policy and health care financing environment that is favorable to family planning and abortion access. But we know that the currently elected leadership in Texas has not, and will not, act similarly. As disappointing as that is, everyone at PPST must understand the landscape we are in and organize our operations accordingly. We experienced the dismantling of family planning funds at the hands of the Texas government in 2011 and 2013, and now something very similar is happening at the federal level. Many Planned Parenthood organizations across the country are experiencing this pain for the first time—having thought this sort of thing could only happen in a place like Texas and would never be seen nationwide. The political reality surrounding our work is daunting. At PPST we must focus our energies where we can make a difference: our own operations, and specifically, our patient assistance funds that provide financial support to low-income people who seek family planning in our clinics. These funds operate with private philanthropy—your generous support— and allow PPST to achieve its mission even though we no longer have a partnership with government. The numbers of abortions in the United States are declining. Nothing would be better news if indeed it were the case that increased access to family planning is reducing the need for abortion. And while that may be part of the story in other states, in Texas the story is more about unnecessary over-regulation at the hands of elected officials working to erect even more barriers that deprive women of access to abortion care. These Texas efforts to chip away at abortion rights notwithstanding, the larger threat to abortion access is at the U.S. Supreme Court where a newly composed Court is expected to select and then rule on one or more cases directly related to the future of Roe v. Wade.

8 | Stakeholders Report 2019

As family planning, sexual health care, and abortion policies in the United States move toward the draconian end of the spectrum, the U.S. appears retrograde when compared to much of the industrialized world. International efforts designed to make medication abortion available via the internet and mailing/shipping the medication to women in hostile environs have turned their attention to the U.S. as a place where women need this sort of international aid relief program. Demand for more assistance of this sort is likely to grow if indeed the U.S. becomes a nation where, post Roe, abortion becomes impermissible in a number of states. PPDirect, our mobile health app, launched in Texas in October 2018. While still in a rollout mode (nationwide access is expected in due course) we already see people from all over South Texas— cities, small towns, and rural areas—using the app. Nearly half of the users indicate they have not been a Planned Parenthood patient previously, anywhere. Analysis of users indicates that mobile health service delivery does not correlate with a reduction of in-clinic visits. In fact, there is some sense emerging that PPDirect may eventually lead to more people requesting an in-clinic visit at some point in the future. Imagine, a woman successfully uses the app for her birth control, then, when she needs gynecological care at some later date, she is more likely to seek that care with the same trusted provider—that’s Planned Parenthood. Further analysis of the data and service delivery patterns is needed in order to confirm, clarify, or dispute this idea.

Planned Parenthood is first and foremost a provider of health care. The overwhelming majority of our patients has always been young people. Fully 64% of our patients in 2018 were 18 to 29 years of age. What is noteworthy is this generation of younger Americans supports our work more than any cohort of twenty-somethings we’ve seen in the past. Eighty-two percent of younger Americans (age 34 and younger) believe that all commercial insurance plans should cover

birth control (Public Religion Research Institute, April 2015). This generation rejects the idea of controversy around family planning. They expect birth control to be readily available. Sixty-five percent believe abortion should be legal in most or all cases—only 51% of older Americans feel this way (PRRI). Sixtynine percent of young Americans want an abortion provider in their local community, compared to only 46% of older Americans (PRRI). The values and concerns of this generation of younger Americans align strongly with the mission of Planned Parenthood.

Organizational Accomplishments & Effectiveness Planned Parenthood is first and foremost a provider of health care. Therefore, success in our clinics is the first thing we look at each year. • Patient volume in 2018 was down 3.9% compared to 2017, but in 2017 we saw 10.8% growth over 2016. Over the past five years, total growth is 2.8%, or about .5% each year. This seems modest and unremarkable, when in fact it is impressive. Amidst innumerable difficulties and constant challenge—most recently losing $800,000+ in federal family planning support—we remain resilient, hardworking and effective. Remember, the state legislature assumed they would chase us into oblivion. Quite the contrary, we’re here, and we served 18,821 people last year. I urge you to share this with everyone you can, and when you do, pose the following question: How much more family planning and cancer screening and STD treatment and HIV prevention could PPST achieve if the right wing would just get out of the way? • We saw 2,389 men in 2018—more men than any other year previously and fully 12.7% of all our patients. Without a doubt, the health care at Planned Parenthood resonates with all people. • Birth control is our main service. An analysis of 2018 service delivery shows that oral contraception and the birth control shot saw slight declines (-8.7% and -7.3% respectively) when compared to prior year, while LARCs (long-acting reversible contraceptives) increased 10.9%. Separately, emergency

contraception volume increased. It is essential that PPST continue to analyze the contraceptive choices made by our patients and be ready to provide the methods they select. • In May 2018 we began using a nationally recognized leader, Press Ganey Associates, to assess patient satisfaction. This is the same company we’ve been using for several years to assess employee engagement. Patients rank us high for speaking to them in clear language, protecting safety and privacy, friendliness, and working together as a team. Our patients would like to see shorter wait times in clinic and an easier experience getting us on the telephone. When responses to all 31 survey questions from all 2018 participants were assembled, we ended 2018 with a 91.3% approval rating. We look forward to building on that success. • Employee engagement in the health care sector has declined—it is tough out there. But recent survey results show that the staff at PP South Texas report an engagement and satisfaction level with their jobs of 4.23 (on a 1-5 scale). PPST’s score exceeds the national average for people working in health care, which is 4.14. PPST’s score is also in the top tier of Planned Parenthood organizations nationwide. We must continue to pay close attention to staff engagement because engaged and satisfied staff is the foundation of a superior patient experience. The Patient Assistance Funds at PPST are making it possible for people to get financial support for the health care they need. When someone walks through our doors but lacks sufficient resources to pay, your support makes it possible for staff to offer significant assistance. Here’s how: • A sliding scale that offers progressive discounts based on financial need. • A health care voucher program in the Rio Grande Valley that reduces the patient co-pay to zero for patients who have no resources to pay. • A LARC assistance program that carries a zerointerest balance AND whenever the patient makes a payment of any amount, the LARC Fund matches her payment. • An abortion care fund that provides some level of support for any patient who lives at or below Stakeholders Report 2019 | 9

the federal poverty level, and has the ability to fully waive charges for the patients with the most financial need. Our success in clinic—providing care to those who need us—is only possible because of your philanthropic partnership in this endeavor. Your support is humbling and deeply appreciated. In 2018 we re-designed our Community Engagement department to develop additional support for Planned Parenthood. That starts with philanthropic support. In 2018, charitably contributed support was 48.8% of total revenue. Projections for 2019 indicate that will climb to 49.9%. These funds are essential to our mission and providing health care to our patients. In addition to this fundraising, PPST needs the support of friends and partners who stand up with us and speak out for a world where family planning is funded, reproductive self-determination is respected, and reproductive justice is a high priority. The leadership at PPST is increasingly focused on ensuring the sustainability, strength and endurance of our operation. Planned Parenthood has been an essential medical provider and social movement for eight decades in South Texas and for a century nationwide. We are a force for good. Future generations will need us just as much as the patients we served in prior decades. Our patients and our supporters are counting on us to relentlessly pursue our mission: provide and protect the health care and information people need to plan their families and their futures. We must be a strong and enduring organization if we are to be effective. That requires a financial strategy that is just as impressive as our passion for the mission. • Our current financial position is stable. Members of our Financial Oversight Committee and senior staff meet regularly to analyze performance and keep a steady hand on the ship. In 2018 we developed a new cash management policy that we use in decisionmaking on all matters financial. • With development of our San Pedro facility (in San Antonio) complete, we are turning our attention to our Marbach health center in west San Antonio where we need to make a change. The shopping center where we rent space is not well-maintained, although our clinic is the nicest-looking tenant in the entire collection. We need to move out of this rented space

10 | Stakeholders Report 2019

and into something we own, and at a location that is more appealing to our patients. Plans are underway to do just that with the hopes of moving into New Marbach in the first half of 2021. Every time we can move from a rented space to a property that we own, we increase our control over the security and aesthetics of our facility, we build our balance sheet, and we control facility costs. • We have built a multi-year budget forecast tool that takes our current performance and projects it forward for five years. An everincreasing list of assumptions are embedded into this modeling tool so that we can see years in advance where the current operation will take us, and how a small change today might create a large effect in the years to come. The idea is to detect and predict, years in advance, any need to adjust operations and decisionmaking so that PPST stays on course. Given the challenges we currently face and may likely face for some time to come, we must ensure that we remain financially stable.

Our Future If you talk to younger people about birth control, you don’t often hear the sorts of discomfort or embarrassment that we heard in previous generations. Our patients expect birth control to be readily available and an obvious aspect of their health care needs. Further, this generation is redefining gender and sexuality at a pace we’ve not seen since the sexual revolution of the 1960s. PPST must meet this generation where they are. We do, and we must continue to do just that. Planned Parenthood has the expertise to deliver the quality care that people want from their sexual health care provider. We also possess a sex-positive, sex-savvy sensibility that is a product of our deep experience providing this specialized care. Put differently, we’re good at this because we’ve been talking about sex for 80 years. We provide care with compassion and without judgment. This is a priority of our patients and aligns with their values and worldview. Texas has the highest percentage of citizens who do not have health insurance coverage (according to data from the U.S. Census Bureau). Further, many people lack the means to pay for their health care

out-of-pocket. This is true for family planning and sexual health care. The Texas government does not appear poised to make changes to health care financing policies that would improve this situation. Therefore PPST must continue to be a solution to this problem. Because of government’s inaction, many people will continue to look to us to make family planning affordable and accessible. Increasingly, we will need health outcomes research to support comparative analysis of the different policy and health care financing models that have been adopted by different states. Retrograde policies in places like Texas produce outcomes that are inferior when compared to states like Oregon, California, and New York where family planning funding and abortion access remain intact, indeed strong. Outcome-based performance evaluation is needed to lift up success stories and to indict wrong-minded policies. A nationwide experiment is underway, one that was not planned but is easily understood. If a future leaders are to make changes that will advance health outcomes, they will need research and analysis that clearly demonstrates what has worked and what has failed. On the one hand, PPST must plan to continue operating our clinics without federal family planning support and without state-level funding. But we must remain watchful for when and how we might return to a partnership with government that funds family planning. Our most optimistic analysis indicates a possible pathway back to federal family planning funds in mid-to-late 2021. That assumes a new president who reverses the terrible damage wrought by the current administration. Realistically, such a return to federal family planning funding may not be possible until 2025. PPST must be ready, operational, and sustainable no matter what. Technology is a bright spot for our future. Here are a few glimpses into what is happening now and what we may see soon: • Already telecommunications technology has allowed us to develop PPDirect, the mobile app that brings birth control to people via their devices. Related, telemedicine policies and practices are advancing rapidly and changing the delivery of health care. • The digitization of medical information increases communication, advances quality assurance, and our ability to evaluate care.

This is particularly promising as the Planned Parenthood family explores the possibility of a shared electronic medical records platform federation-wide. • The Planned Parenthood family is also working with our business and pharmaceutical partners to develop new birth control technologies that take the best of what is working today and marries that with the convenience of selfmanaged care that is emerging. • Genetics, robotics, and artificial intelligence are all expected to bring advances to care sooner than we may have thought.

We provide care with compassion and without judgment. It is an exciting time to be working in family planning and at Planned Parenthood. The future holds great promise and PPST must continue to embrace technology wherever we can. For most of us, the greatest concern about the future of our care is the painful reality that this new Supreme Court may rule on an abortion case soon, and that such a ruling may destabilize the legal precedent and protections currently found in Roe v. Wade. It is not an exaggeration or hyperbole to say that abortion may well become impermissible in Texas and several other states. The Planned Parenthood family is actively working on preventing this terrible turn of events, and we are working on plans for how we will operate if we find ourselves living in that future. No one at Planned Parenthood intends to give up on women in South Texas who need abortion care, even if we cannot provide that care ourselves. We will become what women in South Texas will need us to be in order for them to receive the abortion care they choose for themselves. This is a promise. Such work will require innovation, creativity, work ethic and determination. The people who work and volunteer at Planned Parenthood South Texas have long displayed these qualities. We are ready for whatever may come.

Stakeholders Report 2019 | 11

On the Cover clockwise from top left Laboratory Technician Mohamed Ali prepares patient specimens for analysis at the laboratory at the Babcock health center in San Antonio. Nikki Johnson, RN, General Manager of the Planned Parenthood South Texas Surgical Center, explains the patient consent form at the Babcock health center in San Antonio. Medical Assistant Leslie Barrientos greets a patient at the Babcock health center in San Antonio. Cyndi Torres, General Manager of Planned Parenthood Cameron County, answers a call from a patient at the Harlingen health center. From left: Polin Barraza, RN, Senior Vice President & COO, examines patient numbers with Toni Herrera, Performance Improvement Coach, and Jeffrey Hons, President & CEO.