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Intermountain Healthcare

Intermountain - Affordability
Fiscal Responsibility

Sound Business Policy to Keep Medical Costs Affordable
Intermountain Healthcare maintains fiscal responsibility in its financial practices, managing the organization with the goal of breaking even over the long run. Each year, we set aside a portion of revenue as an investment in future needs, such as replacing or modernizing Intermountain facilities.

FINANCIAL PRACTICES AT INTERMOUNTAIN
  1. Low margin. In 2004, our budgeted operating margin was approximately 3.3% of our gross revenue. This margin has averaged approximately 2.7% over the last five years. The entire margin is used for the future needs of the organization and is thus returned to the community in the form of improved facilities and services.
  2. Reasonable reserve funds. Intermountain's reserve levels are maintained at an adequate level for future operating and capital expenditure needs. Intermountain has on reserve 233 days of operating expenses (a financial ratio used to measure reserves), consistent with the reserve levels of other similarly rated nonprofit health care organizations. Intermountain reserve funds are set as low as possible without limiting our ability to retain a favorable bond rating, which allows Intermountain to borrow money at low rates. These savings allow us to keep our charges low.
  3. Annual investments for future needs vary. The amount allocated to reserves increases or decreases based on projections of future needs. Reserve contributions have increased over the past few years to help compensate for the $2.8 billion in capital improvements planned for 1998-2009.
  4. Bonds issued to cover future needs. As a nonprofit organization, Intermountain uses bond funding in addition to internal funds for its capital needs.
    • Intermountain bonds are premium bonds. We have an AA+ rating issued from Standard & Poor's and Aa2 from Moody's Investor Services. These ratings enable Intermountian to borrow at a lower rate.
    • Intermountain municipal bonds do not put issuing cities at risk. Law requires Intermountain to have a local municipal "sponsor" for our bonds, but we maintain full responsibility for the security of those bonds.

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