Heather Kaupa
MACC518
Final Project
Via Christi Health, Inc. Organizational Analysis
Via Christi Health (VCH) is the largest provider of health care services in Kansas. Via Christi
Health serves Kansas and northeast Oklahoma through hospitals, senior villages, physician services and
health services. They are a catholic health system that follows their Mission: Inspired by the Gospel and
our Catholic tradition, we serve as a healing presence with special concern for our neighbors who are
vulnerable. Via Christi’s Health, Inc.’s history extends back over 100 years and today along with their
sponsoring congregations they respond to community needs. The obligation to reach to those in need
and improve community health flows directly from their identity as a faith-based healing ministry. As a
mission driven organization, they provide community benefits because they are also committed to their
core values of: Human Dignity, we recognize and respect the sacredness of each person, Stewardship,
we responsibly care for all resources entrusted to us and Excellence, and we extend ourselves in
outstanding service. Their patients and residents range from the insured to those who pay for their own
care directly to the uninsured.
Due to the size of the Via Christi organization and the different locations and divisions, it has an
extensive list of Leadership Teams, Executives and separate Boards of Directors. My focus is on Via
Christi Health, and the board members are representatives of the local community by overseeing
operations, these elected policymakers strategically plan and direct the hospital's activities, furthering
the mission and core values of Via Christi. VCH Board of Directors and health system senior leadership
has established performance targets for VCH to achieve top performance on all of our quality metrics as
a statement of their commitment to improving patient safety and quality. The Board and senior
leadership regularly review the performance and are committed to making those results available to the
public. The finance and audit committees meet four times a year to report to the quarterly board
meetings.
The main source of funding is the net revenues of patient care. Net patient service revenues are
reported at the estimated net realizable amounts from patients, third-party payers, and others for
services rendered and include estimated retroactive adjustments due to futures audits and reviews. Net
revenues from the Medicare program accounted for approximately 36% and net revenues from the
Medicaid program accounted for approximately 10% of the Health System’s net patient revenues for the
year ended September 30, 2011. The provision for bad debt expense is based upon management’s
assessment of expected net collections considering economic conditions, historical experience, trends in
health care coverage, and other collection indicators. VCH also has a policy of providing charity care to
those who are deemed unable to pay for the services received based on financial information obtained
from the patient. Since VCH does not expect or pursue payment, charges for charity care are not
reported in the net patient service revenue. VCH also received cash and other assets recorded as
contributions, gifts, bequests, and grants.
Via Christi Foundation raises funds to help support important services and ministries, such as
Children’s Miracle Network, improvements to hospital clinical services, care for the vulnerable,
educational opportunities and Via Christi International Family Medicine Fellowship. They receive
Heather Kaupa
MACC518
Final Project
donations, as well as many volunteer hours from adults, college students, retirees and teens in many
different capacities. Generous gifts from donors, and special events and fundraisers held year-round all
help Via Christi Foundation support the Via Christi Mission of providing quality health care to all,
especially the poor and underserved.
Via Christi Health has been impacted by the current state of the economy, as well as an increase
in the unemployment rate in Kansas. They have seen an increase in charity and Medicaid services.
Another factor is that donations and contributions have decreased as people are not able to give the
same way they have in the past and are more likely to be using the services offered. One of the most
difficult reporting issues is proving their non-profit status is more time consuming than filing their actual
financial statements. I was provided with a copy of their consolidated financial statements and their
Return of Organization Exempt from Income Tax. It appears that there are more requirements and
schedules to be completed every year, making it more and more difficult for Via Christi to prove their
non-profit status. The main difference between VCH and Wesley (for profit hospital), is that VCH files
the exemption form for taxes by showing it’s community benefit and Wesley would file and pay an
actual tax return. Another focus of Wesley is cost cutting and trying to maximize the shareholders
return. They focus on income. However, VCH provides charitable funding and the financial surpluses
are used to fulfill charitable obligations and their focus is revenue over expenses.
Finally, I learned that Via Christi Health is a very large organization with many different ways it
serves its patients and community. They have 12 owned or partially owned hospitals, 16 owned or
managed senior care villages or programs, home health and home medical services, ambulatory surgery
and imaging centers, more than 10,000 employees, and employs over 300 physicians and 117 mid-level
providers and 1,100 physicians have medical privileges at Via Christi Hospitals. In fiscal year 2011, they
provided $82 million in community benefits. In my particular job I am struggling with all of the different
computer systems, different insurance contracts, and trying to determine and locate contacts at the
new hospitals. I can only imagine how this has to be an accounting nightmare when there are so many
rules and regulations that have to be followed. Via Christi Health main focus in my area is looking at
salaries, benefits and expenses. The Hospitals are budgeted separately. Although they are non-profit
the millions and millions of dollars that pass through door make it hard to compare to other non-profits
that rely on donations, fundraisers and membership fees.
Heather Kaupa
MACC518
Final Project
Appendix
Interviewed: Scott Hahn, Senior Accountant
The reason I interviewed him instead of a manager is that Scott, has knowledge of both Wesley
and Via Christi accounting, as he has worked for both entities. Also, on the accounting side he has more
experience and information about the organization as a whole. If I interviewed someone at the
management level, they may only be familiar with their particular cost center or department, whereas
Scott has both accounting and reporting experience with VCH.
What are your duties and experience with VCH? Scott has been with VC for about 4 years. He
recently started working in more of a reporting and analysis position, but previously worked on the
financial statements and general accounting.
I know you worked with both VC and Wesley, what are some of the major differences that VCH
faces as a non-profit compared to Wesley? He stated that Wesley was more interested in cost cutting
and maximizing shareholders returns. VCH focus is on charitable funding and the financial surpluses are
used to fill charitable obligations. They have to show community benefit instead of paying taxes.
What funding or reporting issues have you seen with the current economy? He has seen an
increase in charity and Medicaid cases due to the rise in unemployment, where many people have lost
their health insurance and/or do not have the ability to pay. Also, trying to prove their non-profit status
gets more difficult every year with new requirements and more schedules than ever before.
How is the health system and hospitals reported? He states they are all reported separately and
work their way up to the health system. The main focus in his area is salaries and administrative
expenses, but they file the final reports. His area is not specifically tasked with charges for hospital
services or staffing costs.
How often does the Board meet? He stated that they meet four times a year, as does our
Finance and Audit committees, who then report to the Board of Directors.
How are costs controlled or viewed by each person in the organization? He stated that there
are costs centers, and then there are managers that are responsible for one or more cost centers, then
directors, then senior management, and moves up the “food chain”. However, it’s not at focused as
Wesley is on actual budgets and trying to cut specific costs, but staying within the budgets that have
been created.