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10DRIVINGchangeANNUALREPORTFY2013BONSECOURSHEALTHSYSTEMPreparingforICD-10CodingOnOctober12014akeyelementothedataoundationotheUnitedStateshealthcaresystemwillundergoamajortransormationtransitioningromtheoutdatedNinthEditionotheInternationalClassicationoDiseasesICD-9setodiagnosisandinpatientprocedurecodestoavastlylargermuchmoredetailedTenthEditionothecodesetsorICD-10usedbymostdevelopedcountriesthroughouttheworld.Theregulationsareintendedtoacilitatethetransitiontoelectronichealthrecords.OriginallyscheduledorimplementationonOctober12013themandatewasdelayedoneyear.ForthreeyearsBonSecoursHealthSystemhasbeenworkingtoimplementthismassivechangeinthecodingsystemwhichwillimpactallacilitiesthatusehealthcareinormationcontainingadiagnosisorinpatientprocedurecode.EachlocalsystemhasassembledanICD-10TransitionOversightTeamandisnowworkingtoensurereadinessorthego-livedateoOctober12014.FiscalYear2013FinancialsForthescalyearendedAugust312013BonSecoursHealthSystemreportedoperatingincomeo123.9milliona3.7operatingmargin.TheseresultswereimprovedromtheprioryearendedAugust312012whichhadoperatingincomeo118.0millionalsoa3.7operatingmargin.Theresultsorscalyear2012includeda16.7millionMedicareBudgetNeutralitySettlement.Operationallyacuteinpatientvolumesasmeasuredbyadjusteddischargeswere4.0belowthepriorscalyearandthemixwasmoremedicalthansurgical.Outpatientsurgicalvolumeswerealsobelowthepriorscalyearby2.8.TheconsolidatedbalancesheetasoAugust312013indicatedassetso3.2billionexceededliabilitieso2.1billionoratotalnetassetpositiono1.1billionascomparedto843.5millionatAugust312011.TotalnetassetpositionisavorabletoprioryearduetothepositiveOperatingIncome123.9millionTotalNetRevenue3.4billionAcuteDischarges127509AdjustedDischarges296589TotalCommunityBenetDollars296.0millionpensionliabilityadjustmento171millioninadditiontotheavorableoperatingmargin.Totalunrestrictedcashandinvestmentswere1087.8millionrepresenting128.2daysodailycashoperatingexpenseswhichisavorabletothe110daysromtheprioryear.Thedebt-to-capitalizationratioo47.6improvedcomparedtothescalyear2012ratioo57.0andissignicantlylessthandebtcovenantrequirementso65.0.Investmentreturnsnishedtheyearpositivelywithgainso78.0milliona6.3returncomparedtolastyearsgainso54.6milliona4.8return.Thecapitalmarketscontinuetohavevolatilitywithinterestratesondebtcontinuingtodecrease.InDecember2012FitchStandardPoorsandMoodysafrmedtheSystemsbondratingsatA-A-andA3respectivelyallwithstableoutlooks.BonSecoursHealthSystempresentedscalyear2013perormancetotheRatingAgenciesinNovember2013.