1. University of Alabama Health Services Foundation, P.C.
A brief glimpse inside a Faculty Practice Plan...

2. Not a Typical MD Practice
A bona fide corporation
“Shareholder value and earnings” not in annual distributions but for
program development / expansion
compensation / expenses for operation
retention for business downturns
MDs are “fully employed / only here”

3. A Brief View of our History
Founded in 1973
IRS Tax Exempt 501(c)(3)
As a physician-led company
Superior Patient Care
Group Practice in an Academic Environment
Establish Funds for Program Development
The era was ripe for such activities
Medical Practice Plans birthed out of “university anxieties”

4. The “Stages of our Growth”
1970s - a benefit plan and to bill and collect professional revenue
1980s - organizational development
University Affiliation
Ambulatory Clinics
Complete Health Joint Venture
1990s - corporate style behavior
The Kirklin Clinic
UAB Prime Care
Sale of Complete Health
UAB Health System

5. Board of Directors Purpose Membership
Develop major policy and strategy
Provide a balanced perspective to our goals
Recruit key executives and hold them accountable for success
Membership
10 public members (“outside directors”)
9 physician leaders (“internal directors”)
Executive leadership

6. Public Board Members Eddie Adair Cordova Ventures
Dr. Neal Berte Birmingham Southern College
Donald James Vulcan Materials Company
Charles Perry, Jr. Highland Associates
Dowd Ritter AmSouth Bank
Van Richey American Cast Iron Pipe Company
Jerome Rose Lehr, MiddleBrooks, Price & Proctor
James Stephens EBSCO Industries, Inc.
Lee Styslinger, III Altec, Inc.
Michael Warren, Jr. Energen Corporation

7. Executive Leadership
A uniquely balanced and important partnership of MD / business leadership
Corporate service functions
General Counsel, Finance, Human Resources, Treasury, Corporate Compliance, et al

8. UNIVERSITY OF ALABAMA HEALTH SERVICES FOUNDATION
Corporate Services
Clinical Services Managed by UAB Health System
UAHSF
Board of Directors
UAB Health System
Executive Officers Ray L. Watts, M.D. President Reid F. Jones Executive Vice President
General Counsel
Director Human Resources
Chief Financial Officer
Management Services Organization
Executive Director TKC
Chief Information Officer
Director Insurance Risk Management

9. Financial Overview $1 billion economic impact
extremely strong Balance Sheet
$434 M endowments, $163 M debt
FY 2005 Total Operating Revenue = $349 M
FY 2005 Net Patient Care Revenue = $298M

10. Total Payor Mix Blue Cross Blue Shield 37% Medicare 21% Medicaid 9%
United Health Care 3%
Viva %
Commercial Insurance 5%
Self Pay %
Other %

11. Payor Mix - Commercial Blue Cross Blue Shield 76% United Healthcare 6%
Viva %
Other Commercial Insurance 10%

12. UAHSF Expense Structure
Salaries and Benefits $ %
Medical and Laboratory %
Administrative and General %
Contributions to UAB %
Internal Research Funding %
Other %
($ in millions)

13. General Endowment Fund
The Successful Failure
Over $100 million dollars
Research Initiatives
Creation and Implementation of the MSO
Faculty Recruitment

14. Scope of Services Portfolio
Offers services in 32 clinical specialties … primary and specialty care
Employs 850 physicians and 1,800 non-physician employees
22nd largest employer in the State of Alabama

15. Service Locations
Have the “clinical franchise” for physician services at UA Hospital
Also provide services at other hospitals, in TKC, at selected regional clinics, and in “local offices”
The Kirklin Clinic Acton Road

16. The Kirklin Clinic Designed by World Renowned Architect I.M. Pei
Imported Italian Marble
1,752 rooms

17. The Kirklin Clinic Opened June 15, 1992 454,000 Square Feet
Clinic Visits
427,000 in 1994
473,000 in 1996
543,000 in 1998
588,000 in 2000
671,000 in 2002
769,000 in 2004

18. John N. Whitaker Building
Opened in March 2000
180,000 Square Feet
Located on the old IRS Lot
Named after UAHSF President,
John N. Whitaker M.D.
Years of Service ( )
UAB Health System and
Alabama Organ Center
in JNW Building