MCV PHYSICIANS ANNUAL MEETING

1. MCV PHYSICIANSANNUAL MEETING OCTOBER 25, 2007 WELCOME

2. MCV PHYSICIANSANNUAL MEETING OCTOBER 25, 2007 Patient Access, Jet Blue and the Gold Standard Richard P. Wenzel, MD. M.Sc. President

3. MCV PHYSICIANSANNUAL MEETING OCTOBER 25, 2007 Annual Business Report James J. Potyraj, MS, MHA Executive Director

4. AGENDA • Governance and Administration • Financial Report • Operations • Strategic Planning • Challenges and Opportunities

5. I. Governance and Administration Board Members ChairsTerm David Cifu, MD, Physical Med & Rehab 2008 Joel Silverman, MD, Psychiatry 2009 Harold Young, MD, Neurosurgery 2009 David Wilkinson, MD, PhD., Pathology 2010 Non ChairsTerm Mary Ann Turner, MD, Radiology 2008 Vacant 2009 Alistar Erskine, MD, Internal Medicine 2009 Wilhelm Zuelzer, MD, Orthopaedic Surgery 2010 Ex-Officio Dean, School of Medicine: Jerome F. Strauss, MD, PhD. Term of Office President: Richard P. Wenzel, MD Term of Office Executive Director: James J. Potyraj Term of Office

6. Governance and Administration Board Appointed Ad Hoc Committees CommitteeChair Clinical Practice Council Robert A. Halvorsen, MD, Radiology Mark M. Levy, MD, Surgery Clinical Workforce Committee Anton J. Kuzel, MD, Family Medicine Documentation Policy Workgroup John D. Ward, MD, Neurosurgery Finance and Budget Committee John W. Seeds, MD, OB/GYN Wilhelm Z. Zuelzer, MD, Orthopaedics Revenue Process Workgroup Sherry Elliot, MBA, Radiology

7. Governance and Administration MCVP Senior Staff Richard P. Wenzel, MD, MSc. President James J. Potyraj, MHA, MS Executive Director John D. Ward, MD, MSHA Chief Medical Officer Jalana L. McCasland, MPH Vice President, Ambulatory Care Gregory Strickland, MBA Director, Revenue Cycle Vacant Operations Officer Key Staff Members Keith W. Purcell Controller Accounting Anne Bonnevie-Cordero Executive Assistant Administration Deborah Justis, RN Director of Nursing Ambulatory Care Rodney Johnson Director of Clinical Ambulatory Care Operations L. Jo Weller Clinical Data Analyst Decision Support

8. II. Financial Performance • Statement of Operations: Year End • Sources and Uses of Cash • Balance Sheet • 10 Year Income Summary • Payor Mix • Cash on Hand

9. Year-to-Date Prior Variance Variance Actual Budget Year Percent Projected Prior Year Percent Operating Revenue $ 104,915 $ 110,750 $ 98,058 Net patient service revenue -5.3% $ (5,835) $ 6,857 7.0% 9,822 9,146 9,987 State funding 7.4% 676 (164) -1.6% 46,294 44,456 41,256 COSA revenue 4.1% 1,838 5,038 12.2% 20,077 18,505 17,310 Other operating revenue 8.5% 1,572 2,767 16.0% $ 181,109 $ 182,857 $ 166,612 Total Operating Revenue -1.0% $ (1,748) $ 14,498 8.7% Operating Expenses $ 146,406 $ 151,623 $ 137,175 Salaries and benefits 3.4% $ 5,217 $ (9,232) -6.7% 1,722 4,424 4,053 Malpractice expense 61.1% 2,702 2,331 57.5% 4,648 4,790 4,376 Clinical earnings contributions to VCU 2.9% 141 (272) -6.2% 3,245 2,472 2,112 Supplies and purchased services -31.3% (773) (1,134) -53.7% 17,269 17,785 17,566 Other expense 2.9% 516 297 1.7% 618 411 463 Provision for depreciation / amortization -50.3% (207) (154) -33.3% $ 173,909 $ 181,505 $ 165,745 Total Operating Expenses 4.2% $ 7,596 $ (8,164) -4.9% Operating Excess/(Loss) $ 7,200 $ 1,353 $ 866 $ 5,848 $ 6,334 Quality of Earnings Adjustments /Non-Operating: $ (447) $ (100) $ (579) Transfers (to) MCVF for Academic Mission $ (347) $ 132 11,041 1,035 5,051 Investment income 10,006 5,990 (49) (25) 47 Donations and Gifts (23) (95) $ 10,546 $ 910 $ 4,519 Total Non-Operating Revenues and Expense $ 9,636 $ 6,026 Total Excess / (Loss) $ 17,746 $ 2,263 $ 5,386 $ 15,483 $ 12,360 1,768,448 1,760,000 1,642,000 Work Relative Value Units (RVU) 0.5% 8,448 126,448 7.7% Statement of Operations – MCV PhysiciansFor the Twelve Months Ending June 30, 2007($ in thousands)

10. Sources and Uses of Cash For the Twelve Months Ending June 30, 2007($ in thousands)

11. MCV Physicians Balance SheetStatement of Financial PositionAs of June 30, 2007 ($ in thousands)

12. MCV Physicians 10 Year Income Summary

13. Work RVUs by Payer Mix as of June 30, 2007

14. 194.8 200.0 178.5 176.6 73.9 144.1 66.4 150.0 64.2 126.3 115.0 48.2 51.9 64.0 100.0 Benchmark=90.0 120.9 112.1 112.4 95.9 50.0 63.1 62.3 0.0 2002 2003 2004 2005 2006 2007 MCV PhysiciansDays Cash on Hand as of June 30, 2007

15. III. OPERATIONS • Ambulatory Care Operations • Appointment of a dedicated management team. • Provider based management model. • Stony Point facility. • Patient Physician Resource Center. • Expanded physician leadership in operations, management and policy formation • Appointment of a Chief Medical Officer for MCVP. • Appointment of a Clinical Workforce Committee and Documentation Policy Workgroup. • Physician membership on MCVP Finance and Budget Committee. • Compliance Program • Documentation Policy Workgroup. • Revenue Process Workgroup. • Provider Education Program. • Chart Reviews.

16. OPERATIONS • Revenue Cycle Operations • Increased adoption of information systems tools. • Increased coordination with MCVH programs. • National Provider Identifier (NPI) Program. • Continuing to work self pay, AR, workers comp, bad debt. • Managed Care Operations • Wellpoint/Anthem contract. • CIGNA contract. • United Healthcare.

17. IV. Strategic Planning • Jet Blue • Program initiated in the Department of Internal Medicine. • Objective is to improve patient access and safety and to promote cultural change in our clinics. • Expanded use of information systems technology. • Development of a Community Strategy • Historically, departmental based initiatives with little coordination among services or programs. • Market assessment: population dynamics, physician mapping software. • Role of Stony Point facility. • Expanded community presence. • Funding models. • Coordinated Strategy within VCUHS • Fully transparent effort with partner hospital. • VCUHS (Dr. Retchin) leading system-wide planning. • Has to support a long term vision.

18. IV. Strategic Planning • Medical Society of Virginia • Need to maximize value of membership. • Six delegates from MCVP attending Annual Meeting. • Assume greater role in statewide affairs related to health and medical care. • Size, composition and plans for our clinical workforce • How large are we? • How is faculty recruitment coordinated among departments. • Faculty employment contract, compensation, non-competes.

19. IV. Strategic Planning

20. V. Challenges and Opportunities • Faculty morale and retention. • Faculty recruitment and expansion of clinical programs. • Patient access and service. • Market share and market competition. • Increased government regulations. • Reimbursement for professional services: government payors and commercial payors. • Continued adoption of clinical practice standards.

22. MCV PHYSICIANSANNUAL MEETING OCTOBER 25, 2007 Quality of Care and Service John D. Ward, MD., MSHA Chief Medical Officer

23. CMO Who and what are you ? Why do we need you ? What good are you ?

24. CMO • QUALITY • SAFETY • ACCESS • STRATEGY • COMMUNICATION • Patient - physician - Institution • Physician - physician – Institution • GROUP PRACTICE MENTALITY

25. Clinical Practice Standards Ambulatory appointment organization and availability Communication (call, pages, coverage, letters, referrals) Diagnostic services availability Inpatient consultations (type, how soon, how) Emergency Department consultations Patient issues (complaints, waiting times, access) Professionalism

26. CMO Current Agenda • Inpatients Consultations • Patient Access • Strategic Issues

27. P4P On December 20, 2006 the President signed the Tax Relief and Health Care Act of 2006 (TRHCA). Section 101 under Title I authorizes the establishment of a physician quality reporting system by CMS. CMS has titled the statutory program the Physician Quality Reporting Initiative (PQRI). PQRI establishes a financial incentive for eligible professionals to participate in a voluntary quality reporting program. Eligible professionals who successfully report a designated set of quality measures on claims for dates of service from July 1 to December 31, 2007, may earn a bonus payment, subject to a cap, of 1.5% of total allowed charges for covered Medicare physician fee schedule services

28. Payment Aligned with Quality • Quality based purchasing, also known as pay-for-performance (P4P), is a quality improvement and reimbursement methodology which is aimed at moving towards payments that create much stronger financial support for patient focused, high value care. • Pay-for-performance attempts to promote reimbursement or quality, access efficiency, and successful outcomes. CMS supports states in their efforts to implement P4P programs.

29. Principles for Pay-for-Performance Programs (P4P) Ensure quality of care. Foster the patient/physician relationship. Offer voluntary physician participation. Use accurate data and fair reporting. Provide fair and equitable program incentives.

30. P4P Voluntary program (for now). Based on 74 Quality Measures. From Asthma to CAD to ESRD to Syncope. Each Measure has a Reporting Frequency. Per episode, per patient Some have Performance Timeframes. Most recent, within 12 months.

31. In order to receive the bonus each provider who participate must: Pick at least 3 Quality Measures. Report on at least 80% of the Medicare patients that meet the criteria of the 3 Quality Measures. P4P

32. P4P What should we do?????? • Participate – eventually and appropriately • Promise less and deliver more • Utilize automated processes • Aim for Quality not cost containment • Be Careful

33. PQRI