Improving Cash Flow and Compliance Through the Assistance of External Partners Michael Bernstein Senior Vice President/CFO

Table of Contents Reasons for Partnering Expected Outcomes Evaluation Process Performance Indicators Actual VMC Performance Common Myths

Reasons For Partnering Staffing Issues – Shortages and Qualifications Enhance Staff Training and Education Increase Cash Flow/Capital Needs Enhance Compliance and Regulatory Standards Reduce Operating Costs Billing and Coding Complexities Streamline Revenue Cycle Processes Improved Patient Satisfaction Improved A/R = Improved Operating Income

Expected Outcomes Sustainable Results Access to Professional Qualified Staff Increased Cash Reduction in A/R Days Avoid Losses From Aging Receivables Reduction in Bad Debts Reduce Operating Cost Access to Enhanced Technology Improved Customer Satisfaction

Evaluation Process Study What a Partnership Means to Your Organization Ask Yourself – Is Your Current Process Achieving Your Goals? Understand Your Data Communicate, Communicate, Communicate, Etc! – With Senior and Middle Management and Board

Evaluation - Continued Identify Potential Partners Prepare an RFI ( Request for Information) Oh Yeah! Did I Mention Communicate? Conduct Due Diligence Site Visits – Partner and Clients Reference Checks

Evaluation - Continued Don’t Expect What You’re Not Willing to Inspect Don’t Rush the Process Partner Culture Fit Don’t Be Afraid to Succeed Oh Yeah! Did I Mention Communicate?

Performance Indicators Cash Collections DNFB % A/R Over 90 Days Patient Satisfaction Compliance There Is No Limit As To What You Should Ask For Weight Them As You Deem Appropriate to Achieve Your Goals Incentives As Well As Penalties

Common Myths You Lose Control You’re Admitting to Failing The Most Important Factor Is Selecting The Lowest Priced Partner Only a Few Need to Make the Decision You Can Expect a Seamless Transition Specific Performance Standards Are Not Needed Termination Is An Easy Process The Hospital Is Indemnified Against Claims

Actual VMC Performance First 10 Months (June, 2007-March, 2008) PrePost Collection Percentage of Net Collectible Patient Revenue96%104.7% Days Outstanding in A/R52 44 A/R % Over 90 Days20% 14.5% DNFB Days Cost of Collections2.5% 3.4%/2.4%* This Equals An Additional $17.7 Million Over Our Historical Collection Rate As These Indicators Improve, Your Contractual Allowances and Bad Debts Will Decrease Over Time * Excludes 1 st year implementation and incentive costs

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