Performance Outcome Goals

1. Performance Outcome Goals FY 2014 Recap & 2015Executive Bonus Plan

2. FY 2014 Bonus Results

3. Total Operating Margin Hit Target Target: 2.4% and 60-days cash-on-hand (budget) Target Plus: 4.0% and 60-days cash-on-hand (beyond budget)

4. Quality Missed Target

5. Customer Service Missed Target

6. Outcomes Measure Hit Target Plus

7. Physician Satisfaction ?

8. Employee Satisfaction ?

9. Culture of Safety Missed Target

10. FY 2014 Results • Stewardship Target Achieved • Quality Missed • VBP (outcome score) Target Plus Achieved • Customer Service Missed • Employee Satisfaction Missed • Physician Satisfaction Missed • Culture of Safety Missed

11. FY 2014 Payout • Helen Wheeler $ 5,400 • Frank Hilbert $ 9,900 • Kim Stout $ 7,800 • Chris Whybrew $ 2,800 • Darryl Linnington $18,151 • David Keith $32,436 • Total: $76,487

12. FY 2015 Bonus Plan

13. Executive Leadership Team • Who’s involved in bonus • Administrator, Physician Services • CNO • CIO • COO • CFO • President/CEO

14. Bonus Structure • Goals align to three primary MRHC initiatives: • Stewardship • Quality • Customer Service

15. Bonus Structure • Achievement Defined • Target is to be challenging and achievable • Target-plus is to be true stretch goals and remarkable • Metric has to be met or exceeded • No credit for partial metric completion • Achievement validated by the data source There are three types of statistics: lies, darn-lies, and statistics

16. Bonus Structure • Performance based • Weighted in favor of stewardship • Payout is different by position • Percentages apply to base salary • Stewardship is the trigger • No payout unless we achieve a favorable EBIDA

17. Stewardship – the trigger • EBITDA Margin % of 11.1% • Defined as: (Net Operating Income + Depreciation) / Net Operating Revenues. • Source : Audited financials • Baseline: FY13 @ 7.1%, FY14 @ 9.1%, BY15 Target 11.1% • Net Revenue Collection Ratio (NRCR%) • Defined as: Cash Receipts / Net Operating Revenues • Source : Audited financials • Baseline: FY13 @ 104%, FY14 @ 108%, BY15 Target 102% Target: EBITDA Margin 11.1%, NRCR% 102% Target Plus: EBITDA Margin 12.0%, NRCR% 103%

18. Quality • Clinical Process of Care • SCIP – Inf – 2 • Definition: Prophylactic Antibiotic Selection for Surgical Patients • Source: CMS Reporting and VHA Value Analyzer . • Baseline: The MRHC most current published results to CMS as of 2Q2013 is 96.2% . Target: 99 (Moving from 96 to 99 is when MRHC begins to achieve monetary award) Target Plus: 100 (Moving from 99 to 100% MRHC achieves the greatest monetary opportunity of all clinical process of care measures.)

19. SCIP – Inf - 2 Current score as of 2Q2013 as published by CMS is 96.2%

20. Quality • Outcomes Measure • AMI 30 Day Survival Rate • The 30 day mortality measures assess deaths that occur within 30 days after admission, which, depending on the length of stay, may occur post-discharge. • Source : Centers for Medicare & Medicaid Services, & VHA Analyzer • Baseline: Baseline: The MRHC most current published results to CMS as of 2Q2013 is 76% . Target: 77% (Moving from 76 to 77% is when MRHC begins to receive monetary award) Target Plus: 79% (by moving from 76 to 79% is when MRHC receives the greatest monetary award within this area)

21. AMI 30 Day Survival Rate • Current score as of 2Q2013 as published by CMS is 76%

22. Customer Service • Patient Experience of Care Measure • Clean and Quiet • Indicator Definition: • During this hospital stay, how often were your room and bathroom kept clean? • During this hospital stay, how often was the area around your room quiet at night? • Source: HCAHPS Survey Data submission & VHA Value Analyzer. • Baseline: Results as of 2Q2013 are: Clean 72%, Quiet 54% Target: Clean 74%, Quiet 56% (Moving from 72 to 74% Clean and 54 to 56 Quiet is when MRHC begins to receive a monetary award ) Target Plus: Clean 80%, Quiet 60% (Moving from 72 to 80% Clean and 54 to 60% quiet is when MRHC potential $3000 monetary award)

23. Clean and Quiet • Current score as of 2Q2013 as published by CMS: Clean 72% Quiet 54%

24. RN Communication • Patient Experience of Care Measure • RN Communication • Indicator Definition • During this hospital stay, how often did nurses treat you with courtesy and respect? • During this hospital stay, how often did nurses listen carefully to you? • During this hospital stay, how often did nurses explain things in a way you could understand? • During this hospital stay, after you pressed the call button, how often did you get help as soon as you wanted it? • Source: CMS Reporting and VHA Value Analyzer • Baseline: MRHCs most current published results to CMS as of 2Q2013 are 74% Target: 78 (Moving from 74 to 78% is when MRHC begins to achieve monetary award) Target Plus: 80 (by moving from 78 to 82% is when MRHC potential of $6000 monetary award)

25. RN Communication • Current score as of 2Q2013 as published by CMS: 74%

26. Discharge Instructions • Patient Experience of Care Measure • Discharge Instructions • Indicator Definition: • After you left the hospital, did you go directly to your own home, to someone else’s home, or to another health facility? • During this hospital stay, did doctors, nurses or other hospital staff talk with you about whether you would have the help you needed when you left the hospital? • During this hospital stay, did you get information in writing about what symptoms or health problems to look out for after you left the hospital? • Source: CMS Reporting and HVA Value Analyzer • Baseline: The MRHC most current published results to CMS as of 2Q2013 is 76%. Target: 79 (Moving from 76 to 79% is when MRHC begins to achieve monetary award) Target Plus: 84 (Moving from 76 to 84% is when the MRHC potential $6000 monetary award)

27. Discharge Planning • Current score as of 2Q2013 as published by CMS: 76%

28. Target Grid

29. Scoring Grid - AET

30. Bonus Cost Potential • Trigger not achieved: $0 • Trigger achieved: • Target: $98,030 • Target Plus: $147,047 • Target for all outcome goals: $196,061 • Target Plus for all outcome goals: $294,091