1. Business Plan Relocation of the Romeo Plank and Clinton Township Rehabilitation Sites Presented by: Carolyn Sucaet October 29, 2013

2. Presentation Outline Overview Project Description Benefits of the Project: Support of Mission and SJP Strategic Plan Description of Operations Market Assessment Analysis of Alternatives Financial Analysis Management Recommendation

3. Overview Combining and relocating the SJ Outpatient Rehabilitation Sites currently at Romeo Plank and Clinton Twp to Schoenherr and Hall Road Benefits: –Decrease current site overlap –Increase North western Macomb County outpatient rehab presence –Capture anticipated referrals –Growth of the Ambulatory Rehab program

5. Project Description Outpatient Physical and Occupational Therapy Services for Orthopedic and Neurological referrals Specialty Services including: –Lymphedema and Oncology Rehabilitation –Hand Rehabilitation –Vestibular Therapy –Women’s Health Services –Sports Medicine Rehabilitation –Possible development of new partnerships with High School Athletic Training Services

6. Market Assessment SWOT Analysis of SJP Outpatient Rehabilitation Services SWOT Analysis of Competitors Beaumont and Henry Ford Projected population growth Projected payor mixes SJ Physicians and other referral sources

7. Growth by Zip Code – East Region

8. Physical and Occupational Therapy 5 Year Growth

9. East Region Demographics

10. 5 Year Procedure Growth – East Region

11. Analysis of Alternatives 18 Mile Road and Mound Road Location – West Macomb Partnership with Macomb Twp Parks and Recreation Remain in current locations Partnership with Warren Parks and Recreation

12. Financial Analysis Volume Projections anticipated with combined staffing Payor Mix evaluation and predictions Proforma demonstrates positive operating margin

13. Insurance Coverage Estimates – 5 Year Projection Projected 2018 Insurance Coverage Estimates Area: 5 mile radius around Hall Rd and Schoehnerr Ranked by ZIP Code(Asc) 2018 Adjusted Population ZIP CodeZIP CityTotalMedicaidMedicare Medicare Dual Eligible Private - DirectPrivate - ESI Private - ExchangeUninsured 48038Clinton Township41,2666,9027,9377931,79320,5432,399899 48042Macomb31,1312,1483,8754101,80920,8681,657365 48044Macomb56,6874,2176,3446803,32138,3523,103670 48313Sterling Heights33,4345,0605,5165621,56817,9992,000729 48314Sterling Heights21,9302,5893,8463881,08612,4181,246356 48315Utica27,3203,8915,7425561,23013,8751,456570 48317Utica27,3933,4093,5113741,42816,5721,675424 Total239,16128,21736,7713,76412,236140,62613,5344,013 % Total100.0%11.8%15.4%1.6%5.1%58.8%5.7%1.7% Insurance Coverage Estimates 1.1 ICE0002.SQP © 2013 The Nielsen Company, © 2013 Truven Health Analytics Inc.

14. Management Recommendation Favorable location Transfer of physician referrals to location Favorable demographics Commitment to eliminate service duplication Favorable financials Favorable Market penetration Recommend pursuing relocation

15. References Anderson, R. C. (2012). Rehabilitation services mission, vision, and values. Policy and Procedure Manual. Detroit: NP. CMS Manual System, Transmittal 119 Medicare Benefit Policy § 110-2 (January 15th, 2010). East Region Demographic Data compiled from © 2012 The Nielsen Company, © 2012 Thomson Reuters. U. S. Department of Health and Human Services, Centers for Medicare & Medicaid Services. (2012). CMS Manual System (Pub 100-02 Medicare Benefit Policy, Transmittal 165). Retrieved from http://www.cms.gov/Regulations-and- Guidance/Guidance/Transmittals/Downloads/R165BP.pdf

16. Questions ?