Eric Montion Vi Tran Natalie Whitlock

1. Eric Montion Vi Tran Natalie Whitlock

2. Where We Stand • January 26th - • “Hospital in Turmoil” • January 26th - • “Hospital Announces Big Payroll Cuts” • February 18th - • “In a Financial Pinch” • March 13th - • “Tulare Hospital Bond Ratings Downgraded”

3. Strategies • Community Outreach and Market Share • Hospital Rebranding • Regaining Market Share • Physician-Hospital Alignment • Physician Recruitment • Physician Integration • Healthcare Reform Impact on Rural Facilities • Payment Reform • Delivery System Reform

4. Tulare Medical Foundation Tulare Regional Medical Center Federally Qualified Health Clinic 120+ Physicians on Staff Tulare Community Health Clinic Evolution’s Fitness and Wellness Center (4+1) Rural Health Clinics TRMC Lab and Diagnostic Tulare’s Pharmacy Family X-Ray

5. Demographics • Service Area: In 2010 Kaweah Delta District Hospital was the leader followed by Tulare District Hospital • Service Line: Highest percentage of services are obstetrics, followed by general medicine -Behavioral health is only at 5%

6. Demographics • Population: 2016 projection: 9.3% increase • Over 50% of service area is of Hispanic ethnicity • The percentage of adults over the age of 65 is expected to grow about 21% by the year 2016 • Payer Mix: Mostly Medicare and Medi-Cal

7. Improving the Reputation Problems • Layoffs • Public Perception • Lack of public donations

8. Improving the Reputation Solutions Build up the current workforce Involve the community Improve employee satisfaction Improve patient satisfaction Develop new patient care programs Provide integrated and coordinated care

9. Behavioral Health • Increase market share in behavioral health • There is a lack of a system of care • Excessive use of emergency rooms for behavioral health patients • Create a culturally competent workforce

10. Age Adjusted Percentage of People with Chronic Conditions in 2009 American Hospital Association. MSA is metropolitan statistical area. Large MSAs have a population of 1 million or more; small MSAs have a population of less than 1 million

11. Primary Care • Focus on primary care and preventative care • Chronic disease management • Need to develop programs and provide resources to ensure sustained disease management • Need to address the negative health behaviors • Smoking • Obesity • Binge drinking • STDs

12. Physician Alignment • Goals • Address the needs of the community • Deliver quality care through the continuum of care • Increase market share in Tulare’s service area and beyond • Improve revenue through volume and reimbursement

13. Two Models of Physician Alignment • Employment • Strongest type of physician alignment • Difficult to revert or disband the relationship • Compensation made up of (80%) Salary plus (20%) Cost Saving Sharing

14. Two Models of Physician Alignment • Management Services Organization (MSO) • Provide administrative services for the physician group • By sharing cost, equipment, and EMR/EHR • Establish relationship for the MSO to refer business to the hospital • MSO ties the physician to the success of the hospital

15. Physician Alignment • Employment (0 to 1 Year) • Establish a Tulare Medical Foundation • Physician recruitment • Start communicating with the physicians on staff (120+) • Conduct surveys to understand the needs and wants of the providers • Understand why some physicians are not referring patients to TRMC

16. Physician Alignment • MSO (0 to 1 Year) • Identify the Potential IPAs and Solo Practitioners • Setup MSO model • Cost, Legal, Contract, Reimbursement, Referral • Train middle management to be ready to take on MSO • Lean Health Management

17. Physician Alignment • Governance • Tulare Medical Foundation Board • Will need a strong involvement by physician • Give an active role to retiring physician on the board • Each large MSO should have a physician representative

18. Physician Alignment • Employment (Year 1 to 4) • Start recruiting physicians to the Tulare Medical Foundation • Address the current physician gaps • Primary Care Providers (PCP) • Aging physicians in physician pool • Service lines needed by the community

19. Physician Alignment • MSO (Year 1 to 4) • Contract with IPA to establish MSO • Five Year MSO contract • Six-month back-out clause • Continue to Improve on Quality and Increase Efficiency to create cost saving

20. Physician Alignment • The Shift (Year 4 and Beyond) • MSO to Employees • Create a stronger alignment • Start creating more value for the MSO to be employees

21. Payment Reform Challenges • Dependence on governmental payers • Disadvantaged in negotiating contracts due to size and volumes • Increase in self-pay, charity care, and bad-debt

22. Tulare Community Health Clinic (TCHC) • Federally Qualified Health Clinic (FQHC) • Free Standing Cost-Based Reimbursement= $109/visit • Annual Visits in 2010=90,571 • Est. Annual Visits Currently=100,000 • Provider Cost-Based Reimbursement=$149/visit • $149 X 100,000=$14.9 Million New Revenue

23. Revenue Cycle Improvement

24. Lean Improvements/Service Line

25. Community Outreach and Marketing

26. Tulare Medical Foundation Tulare Regional Medical Center Federally Qualified Health Clinic 120+ Physicians on Staff Tulare Community Health Clinic Evolution’s Fitness and Wellness Center (4+1) Rural Health Clinics TRMC Lab and Diagnostic Tulare’s Pharmacy Family X-Ray

27. QUESTIONS?