St. Rose Hospital

1. St. Rose Hospital 2013 HCE College Bowl Case Study Kevin Cao, La Ronda Jones, Wenbin Zhang

2. Alecto’s Vision for the Future of St. Rose Hospital • As the CEO’s of Alecto Healthcare Services, we must address the following issues in managing St. Rose Hospital • Financial hardship • Addressing provisions of the Patient Protection and Affordable Care Act

3. Current Ratio per Alecto Audit

4. Alecto Audit Net Income *Numbers in Thousands • * See calculation in Appendix

5. Net Income Without InterventionProjected * See calculation in Appendix

6. Potential Growth OpportunitiesDue to Healthcare Reform • Healthcare Exchange • Medicaid Expansion

7. Two Step Initiative for Hospital Survivability

8. Initiative 1 Revamping Financial Outputs

9. Strategies for Cost Containment • In order to reduce costs we must restructure our expenditures to remain financially viable for the future • Reducing Community Benefit Service Expenses • Addressing the suspended SNF Unit Beds • Administrative Services Budget Cut

10. Skilled Nursing Facility Beds • The Skilled Nursing Facility was closed and the beds were put in suspense as a reaction to the financial losses incurred • We recommend the continued suspense and closure of the Skilled Nursing Beds due to reduced SNF reimbursement rates from CMS

11. Skilled Nursing Facility Beds • There are over 10 Long Term Care facilities located in the Health Service Area of SRH

12. Integrated Nurse Leadership Program (INLP) • Currently, this program costs the hospital over $290,000 each year in volunteer hours • While we recognize the significance of this program, cuts across the board are required for financial survivability

13. Integrated Nurse Leadership Program 25% Reduction

14. Tattoo Removal Day • The Tattoo Removal Program involves 30 participants • With a goal of adding 5 additional participants every year, the hospital will incur an additional $76,500 in expenses over 5 years • We recommend that the program continue with a maximum of 30 participants for an interim period to reduce the amount of excess costs

15. Tattoo Removal Day Data *See calculation in Appendix

16. Administrative Services Budget Cut • Our management team will keep administrative costs down to 6.5% of our total expenses from the previous year • This will help us keep our total expenses down from year to year in an effort to implement new programs that will positively affect patient care

17. Administrative Services Data • *See calculation in Appendix • *Source: OSHPD HAFD

18. Initiative 2 Patient Inreach Service Implementation

19. Patient Inreach Service Receive Staff Training Patient Education, Enrollment and Retention Target Population 1 Target Population 2 Increased Patient Volume Increased Service Quality and Patient Value Increased Revenue

20. Patient Inreach Service Target Group I, Uninsured Population

21. Benefit Enrollment ProgramTraining • Covered California supports consumers benefit training through a Benefit Assister Training program Employees selected for training • Inpatient Services will utilize Discharge Planners and Social Workers for enrollment • Outpatient Clinic Services will utilize the business office staff for enrollment • All St. Rose Certified Interpreters

22. Benefit Enrollment ProgramInterpreter Services • With a total of 22, 289 uninsured patients in Hayward 32.5% are not proficient in English • At no additional cost St. Rose Hospital can enroll current employees who are interpreters in the program for training which will be vital for our non-English speaking patient population *Source:US Census Bureau, American Community Survey, 2008

23. Benefit Enrollment ProgramPatient Enrollment • Utilizing our EHR for the enrollment process • Capturing enrollment opportunities 24 hours around the clock • This flowchart will explain in detail the patient discharge process for the benefit enrollment program and patient follow up to decrease Medicare 30 day readmissions

24. Physician orders Discharge Proceed with discharge collect insurance Determine Eligibility YES NO Notification to Staff Assist patient with submission Continue with discharge process Visits patient in ED or follow-ups within 72 hours Patient goes home Patient is then matched and enrolled Educate patient about Covered California Patient Follow Up Call Post-Discharge Educate about benefits of the selected program

25. St. Rose Hospital Payer Mix Target Group *Other include self-pay, workers* compensation, other government, and other payers Source: OSHPD Financial Disclosure Report, FY 2011 (based on inpatient discharges)

26. Benefit Program Target Group • 21 Million uninsured in 18-34 age group • Projected decrease of the 42% of uninsured currentlyexisting between the ages of 18-65 due to Covered California enrollment

27. Alameda County Uninsured by Age Group Target Population *Source: County of Alameda

28. Patient Inreach Service Target Group II, Medi-Cal Population Streamline Eligibility and Enrollment Process for Potential Medi-Cal Patients

29. Medicaid Statue It requires that states make DSH payments to hospitals treating large numbers of low-income patients because: • Low-income patients are more likely to be uninsured or Medicaid enrollees. • Uncompensated Care • Low Medicaid Payment Rate

30. *Mitchell 2012

31. DSH Funds Received by SRH *Source: OSHPD HAFD

32. Total Medicaid DSH Allotments Numbers in Billions ( Middle Class Tax Relief and Job Creation Act of 2012 ) *Mitchell 2012

33. Californians under Age 65 Newly Eligible for Medi-Cal with Expansion *Lucia & etc. 2013

34. Being Eligible Does Not Mean Being Enrolled • Lack of awareness of Medi-Cal • Lack of awareness of eligibility standards • Dislike of the program • Belief that they are insured • Paperwork is too difficult *Lucia & etc. 2013

35. Predicted Increase in Medi-Cal Enrollment of Newly Eligible Californians *Lucia & etc. 2013

36. Predicted Increase in Medi-Cal Enrollment of Newly Eligible SRH Service Area Population *See calculation in Appendix

37. Predicted SRH Potential Increase in Medi-Cal Net Patient Revenue *See calculation in Appendix

38. Revenue from newly enrolled Medi-Cal Patients *Source: OSHPD HAFD

39. Two Step Initiative for Hospital Survivability

40. Conclusion • Our findings indicate that the current state of St. Rose is undesirable • Without intervention the hospital would not be financially viable for the future • Our recommendation is for a two step initiative that places the hospital in a better position

41. References Alameda County. (2013). Preparing for 2014 ACA implementation. Retrieved from http://achealthcare.org/wp-content/uploads/2013/03/Eligibility-Enrollment-Maps-Presentation-2.11.13.pdf California Health Benefit Exchange. (2013). Covered California. Retrieved from http://www.coveredca.com/about_us.html California State Office of Statewide Health Planning & Development. (2007-2011). Healthcare Information Division. Retrieved from http://www.oshpd.ca.gov/HID/DataFlow/HospMain.html Eden Youth & Family Center. (2012). New Start Tattoo Removal Program. Eden Youth & Family Center. Retrieved from http://www.eyfconline.org/programs/new-start-tattoo- removal-program/ Flex Monitoring Team. (2012). Why Do Some Critical Access Hospitals Close Their Skilled Nursing Facility Services While Others Retain Them? Flex Monitoring Team. Retrieved from http://flexmonitoring.org/documents/Briefing%20Paper32-CAH-SNF Lucia, L. Jacobs, K. Watson, G. Dietz, M. Roby, D. H. (2013). Medi-Cal Expansion under the Affordable Care Act: Significant Increase in Coverage with Minimal Cost to the State. UC Berkeley Center for Labor Research and Education. UCLA Center for Health Policy Research. Retrieved from http://laborcenter.berkeley.edu/healthcare/medi-cal_expansion.shtml

42. References (Continued) Medical Development Specialist, LLC. (2012) Effect of Alecto Healthcare Services Hayward LLC’s Management and Acquisition of Rose Hospital in the Availability or Accessibility of Healthcare Services. Retrieved from http://oag.ca.gov/sites/all/files/agweb/pdfs/charities/pdf/srh_health_impact.pdf Mitchell, A. (2012). Medicaid Disproportionate Share Hospital Payments. Congressional Research Service. Retrieved from https://www.fas.org/sgp/crs/misc/R42865.pdf Moore Foundation. (2013). Betty Irene Moore Nursing Initiative. Gordan and Betty Moore Foundation. Retrieved from http://www.moore.org/nursing.aspx OSHPD Hospital Annual Financial Data Pivot Table 2007-2011. Retrieved from http://www.oshpd.ca.gov/HID/Products/Hospitals/AnnFinanData/PivotProfles/default. Asp Preliminary Medi-Cal Enrollment by Zip Code Pivot Table. Retrieved from http://www.dhcs.ca.gov/dataandstats/statistics/Pages/Medi- Cal%20Enrollment%20by%20Zip%20Code.aspx

43. References (Continued) United States Department of Health and Human Services. (2012). Initial Guidance to State on Exchanges. Retrieved from http://www.healthcare.gov/law/resources/regulations/guidance- to-states-on-exchanges.html U.S. Department of Commerce United States Census Bureau. (2008) Retrieved by http://www.census.gov/acs/www/data_documentation/2008_release/

44. APPENDIX

45. Alecto Audit Net Income

46. Integrated Nurse Leadership Program

47. Tattoo Removal Day

48. Administrative Services Cut

49. Calculation of SRH new Eligible Enrollment • In 2011, SRH service area has 74,981Medi-Cal beneficiaries(page 37). • In 2011, there are 7,790,828 total Medi-Cal beneficiaries in CA (Preliminary Medi-Cal Enrollment by Zip Code Pivot Table). • The ratio is 74981/7790828 = 0.96% • Thus, the increase of new eligible enrollment in SRH service area will be: • 0.96% x California number of increase • For example: • In 2014, there will be 0.96% x 480,000 = 4608 newly eligible enrollment in SRH service area under base scenario.

50. Calculation of SRH potential increase in Medi-Cal net patient revenue after 2014 • In 2011, SRH Net Patient Revenue from Medi-Cal was $47,434,200 (OSHPD HAFD Pivot Table 2011) • In 2011, SRH service area had 74,981Medi-Cal beneficiaries (page 37). • The ratio is 47434200/74981 = 632.62 dollars/ beneficiary • The potential increase in Medi-Cal net patient revenue is: 632.62 dollars/ beneficiary x number of newly enrolled For example: the number for 2014 under base scenario will be: 632.62 dollars/ beneficiaries x 4608 = $2,915,113