Improving Cash Flow and Compliance Through the Assistance of External Partners

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

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

3. 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

4. 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

5. 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

6. 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

7. 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?

8. 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

9. 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

10. Actual VMC PerformanceFirst 10 Months (June, 2007-March, 2008) PrePost • Collection Percentage of Net Collectible Patient Revenue 96% 104.7% • Days Outstanding in A/R 52 44 • A/R % Over 90 Days 20% 14.5% • DNFB Days 10 7.2 • Cost of Collections 2.5% 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 1st year implementation and incentive costs

11. Questions?