1. OPERATIONAL TRANSFORMATION OF ST. ROSE HOSPITAL Edwin Hernandez Travis Young Natalie Eloskof Chintan Somaiya

2. THE DEBT -$75 million debt

3. STRATEGY OVERVIEW  Improve operations  Physician integration and creating a favorable payer mix  Community outreach Quality Care Employee Engagement Revenue Generation

4. STRATEGIC PLANNING PROCESS Execute Plan & Assess the Success Rate Implement Strategies & Set Measurable Goals Identify Objectives, Major Initiatives & Key Success Areas SWOT Analysis and Core Competencies Identify Effects of External Environment

5. CHANGING PAYER MIX

6. FINANCIAL IMPACT ON HOSPITALS Payment AreaPayment Reduction Over 10 years (Billions) Payment Reductions: New Payments for Care$177.3 Market Basket Update$ -112.6 Disproportionate Share Cuts$ -36.1 Reduced Readmissions$ -7.1 Hospital Acquired Conditions$ -1.5 Accountable Care Organization$ -1.5 Net Aggregate Financial Impact on U.S. Hospitals$17.06

7. INSURANCE PROFILE AreaPopulation Uninsured All ages0-17 years18-64 years Alameda County 171,43012%6%15% Hayward22,28916%7%21% Eligible People in Service AreaPopulationPercentage 74,981390,61519.2% * Approximately 30% of inpatients receive services out of the area Alameda Alliance for Health: Market Share by Hospital 20102011 St. Rose Hospital14.4%16.4%

8. PRIMARY GOAL Increase the volume of Insured Patients

9. FINANCIAL PROFILE 20102011 Operating Revenue$147,013,000$160,444,000 Operating Expense$130,801,560$150,681,628 Operating Margin-0.27%-14.57% Days in A/R65.144.7 Charity Care Charges in ED$5,044,888$5,091,996 * Large change found in unaudited and audited numbers

10. REVENUE CYCLE IMPERATIVES Changes with Accountable Care Act Expanded Coverage Payment CutsNew Requirements Economic Incentives Improving Performance and Efficiency Eligibility ProcessDenials PreventionCharity Care Policies Physician Integration

11. KEY OPERATION INITIATIVES  Nurse Navigator in the ED informs patients of financial resources  Provide automated pre-admission insurance verification, counseling, and price estimates at registration  Distinguish between charity care and bad debt accounts  Renegotiate contract with Alameda Alliance Health  Re-license suspended beds for pediatric services ( 7- beds) and medical surgical services (10 - beds)

12. PEDIATRIC SERVICES We cannot give Washington Hospital – Fremont the sole responsibility for caring for pediatric patients. SRH service area population age distribution 2016 Projection Population% of Total Age 0 - 1485,79820.4% Based on WHF’s charge master price for Pediatric room and care Revenue from 7 Pediatric Beds$2,063,418

13. OPERATIONAL BENEFITS Projected from Comparable Hospital’s results Overall Increase cash as a % of net revenue Reduce Bad Debt Charges by 48.6%~$5 million Reclassify Bad Debt to Charity Care by 15.5%~$7 million Decrease in Overall Uncompensated Care by 16.6%~$2 million Additional Revenue from Pediatric Beds~$500,000 Total~$14.5 million * Source Healthcare Financial Management Association

14. NEXT STEPS Compare Performance Adopt Best Practices Measure Performance

15. IMPROVING PHYSICIAN INTEGRATION 1. Create a sense of urgency 2. Select physician champions to become advocates for the hospital to increase referrals 3. Create and train a physician leadership team

16. IMPROVING THE CONTINUUM OF CARE  ACA will not pay for readmission  Be proactive  Create bonuses off decreasing readmission rates  Telemedicine and discharge planning  Decreasing readmission rates

17. READMISSION RATES

18. PHYSICIAN LEADERSHIP TEAM GOALS Analyze continuum of care Improve communication Empower physician leadership team Review results

19. CREATING A FAVORABLE PAYER MIX % of Payer Mix PLAN Determine service lines that attract third-party patients

20. CAN WE INCREASE UTILIZATION?  Analyze cardiology and obstetric departments system issues  Can we increase utilization? Is patient scheduling an efficient process?  Study the demographics  Hispanic -33%, Asian-29%, Caucasian-22%  According to Screenvision.com, 85% of Hispanics go to the movies  Average household income in Alameda County - $75,284

21. STEPS TO INCREASE UTILIZATION  Improve search engine marketing  Purchase Google ad words associated with cardiology and obstetrics  Create a user friendly website  Make it a 1-2-3 step process to scheduling a patient  Have a number to call for consultation  Create a general inquiry form  Purchase movie screen advertisements for $18/screen  Promote profitable service lines at health fairs  Blood pressure screenings, planned parenting classes, etc.

22. OBSTETRICS SERVICES  SRH market share (28%)  1 of 6 hospitals with a Percutaneous Coronary Intervention (PCI) contract in Alameda County  Kaiser-Hayward closing  increased occupancy  Current: 60% capacity  Target: 85% capacity  SRH market share (15%)  85% of patient discharges are Medi-Cal  Current: 44% capacity  Target: 85% capacity CARDIAC SERVICES

23. REVENUE AND PROFIT  Increasing the Cardiology department capacity from 60 - 85% will bring in $700,000 of revenue  Increasing the Obstetrics department capacity from 44 - 85% will bring in $1.8 million of revenue

24. MEASURE A FUNDS  Appeal to Alameda County Board of Supervisors for more Measure A Funds due to  St. Rose Hospital (SRH)  Medi-Cal- 60% (largest amount in county)  7.6%- indigent care  2.5%- Measure A funds  Alameda County Medical Center (ACMC)  76.5%- indigent care  75%- Measure A Funds

25. RESULTS  Profit  Cardiology: $700,000  Obstetrics: $1.8 million  Retention  Physician loyalty  Reimbursement  Measure A funds  $5 million

26. IMPROVING COMMUNITY OUTREACH SERVICES  Modify community benefit services  Proper access to primary care  Transform Silva Pediatric Clinic

27. MODIFICATIONS TO COMMUNITY BENEFIT SERVICES  Address key health concerns:  Hypertension and obesity  Educate with health monitoring and preventive care measures  Asthma  Utilize Care - A - Van services for early detection of the health issues

28. PROPER ACCESS TO PRIMARY CARE  Educate community on access to primary care  ED navigator  Triage patients to urgent care and outpatient services

29. TRANSFORMATION Silva Pediatric Clinic Silva Outpatient Clinic

30. TRANSFORM SILVA PEDIATRIC CLINIC  Retain the Silva Pediatric Clinic  Transform it into an outpatient clinic  Manage overcrowding at the ED  Currently, functioning at 103% of it capacity  Potential stress due to Kaiser’s relocation  Modify urgent care and outpatient clinic hours  Urgent care: 10:00 am to 12:00 am  Clinic hours: 7:00 am to 7:00 pm

31. STRATEGY BENEFITS  Improve operations  Collection process  Financial guidance  Renegotiating contracts  Physician integration  Cardiology: $700,000  Obstetrics: $1.8 million  Measure A funds adjustment: $5 million  Community outreach  Improve patient access  Efficient utilization Quality Care Employee Engagement Revenue Generation

32. $75 million Debt $14.5 million from Operation benefits $5 million from Measure A funds $2.5 million from Cardiology and Obstetrics TACKLING THE DEBT