OCH MITIGATION PLAN
March 23, 2015
ITEM
PROJECTED
FINANCIAL IMPACT
NET REVENUE INCREASE
Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
Closure of Peds & NICU - OCH
Closure of OP PT services
Closure of OB -SLRH
Closure of Peds - SLRH
Impact of change in Transfer Policy
Total: Net Revenue Enhancements
$
$
$
$
7,336
(5,029)
6,100
$
$
$
$
$
$
(6,543)
(900)
964
$
$
$
$
$
$
9,528
2,580
4,066
8,876
-
$
$
$
$
$
7,281
1,527
33,858
$
$
91
3,126
$
$
142
25
OPERATING EXPENSE REDUCTIONS
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Closure of Peds & NICU - OCH
Closure of OP PT services
Closure of OB -SLRH
Closure of Peds - SLRH
Sub-Total- Labor
Non-Labor Expenses Impact
General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Closure of Peds & NICU - OCH Supplies
Closure of OP PT services -OCH Supplies
Closure of OB -SLRH Supplies
Closure of Peds - SLRH Supplies
Total Supplies Impact
Impact of SCFHP/VHP Termination-Other Exp
Service Line/Program Closures
Closure of Peds & NICU - OCH Other Exp
Closure of OP PT services -OCH Other Exp
Closure of OB -SLRH Other Exp
Closure of Peds - SLRH Other Exp
Total Other Exp Impact
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
3,384
0.6
$
$
125
247
$
$
$
$
$
$
373
1,003
4,760
Total: Operating Expenses
38,618
Annualized EBIDA Improvement
39,581
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings excluding severance related costs. Detail listing to be provided for review.
OCH reviewed OP Reference Lab and OP MRI and determined they currently have a positive
contribution
margin. These programs are dependent on volumes from the Medical Foundation. If the Medical
Foundation situation eliminates referral volumes, these services would be adjusted or terminated
based
upon remaining volumes.
Mitigation Plan
Facility:
Prepared Date:
O'Connor
3/23/2015
$(000)s
Net Revenue Impact
Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
Impact of change in Transfer Policy
Total: Net Revenue Enhancements
$
$
$
$
$
$
$
7,336
(5,029)
6,100
(7,443)
964
Operating Expenses Impact
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Sub-Total- Labor
$
$
$
$
$
$
$
$
9,528
2,580
4,066
8,876
8,808
33,858
Non-Labor Expenses Impact
General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
$
$
$
$
$
$
91
3,126
540
1,003
4,760
Total: Operating Expenses
38,618
Annualized EBIDA Improvement
$
39,581
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings excluding severance related costs. Detail listing to be provided for review.
OCH reviewed OP Reference Lab and OP MRI and determined they currently have a positive contribution
margin. These programs are dependent on volumes from the Medical Foundation. If the Medical
Foundation situation eliminates referral volumes, these services would be adjusted or terminated based
upon remaining volumes.
OCH
MITIGATION PLAN
March 20, 2015
ITEM
PROJECTED
FINANCIAL IMPACT
-$4,952,000
$TBD
REVENUE INCREASE
Discussions with Managed Care Payers
Renegotiate Health Plan of San Mateo Medi-Cal Managed Care contract
Net Revenue Loss due to service line closures, OB,NICU,Card Rehab, UC
Observation Unit Practice Change
$TBD
-$4,952,000
$TBD
SURGERY
All scheduled surgeries need financial approval
Clinical documentation to work with top active surgeons to improve clinical
documentation
No elective surgeries are to be scheduled on the weekends
SUPPLIES
Supplies are reduced by 10%
$0.00
$0.00
$0.00
$3,900,000
$3,900,000
Implants cannot exceed 50% of Medicare DRG
MD CONTRACTS
90-Day Notice for Medical Directors and Hospital Based Physician
Contracts/reduction
Medical Directors (Unit and Service Line Directorships)
Hospital Based Physician Contracts (ED, Radiology, Pathology, Anesthesia)
Eliminated Service Line Contracts (OB/NICU/ER Call)
Hospitalists program
$TBD
$2,715,201
$250,000
$700,000
$1,165,201
$600,000
$20,540,793
LABOR COST REDUCTIONS
FTE reduction of management and associates
20 FTEs non-contractual and recent resignations
25 FTEs contractual (Dietary/RT/Rad Onc/Diag/ASC)
5 FTEs Cardiac Rehab
26 FTEs OB/Level 2 Nursery
4 FTEs New Life Center
Interim CFO position
Benefits Reduction due to RIFs- Estimated at 30%
Medicare GMLOS Improvement
$3,467,580
$1,339,416
$419,515
$2,635,546
$227,736
S564,000
$2,426,000
$9,461,000
$2,430,000
$678,000
$1,752,000
Savings Included
Above
PRODUCTIVITY
Productivity Improvements
Reduction of Overtime, Double time and Registry use
SERVICE LINE/PROGRAM CLOSURE
Obstetrics/GYN and NICU
Level 2 Nursery Unit
New Life Center
Cardiac Rehab Unit
Observation Unit
Express Care
TOTAL
$24,633,994
Mitigation Plan
Facility: Seton Medical Center/Seton Coastside
Prepared Date:
3/20/2015
Net Revenue Enhancements:
Managed Care Payers (1)
Observation Unit Impact
Service Line/Program Closure (2)
Other Initiatives
Total: Net Revenue Enhancements
$
$
$ (4,952,000)
$
$ (4,952,000)
Operating Expenses:
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Sub-Total- Labor
$ 6,248,662
$
678,000
$ 9,461,000
$
$ 1,752,000
$ 4,267,131
$ 22,406,793
Non-Labor Costs
Supplies
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
$
$
$
$
Total: Operating Expenses
$ 29,585,994
3,900,000
564,000
2,715,201
7,179,201
Annualized EBIDA Improvement
$ 24,633,994
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings net of severance related costs. Detail listing to be provided for review.
SLRH MITIGATION PLAN
March 23, 2015
ITEM
NET REVENUE INCREASE
Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
PROJECTED
FINANCIAL IMPACT
$
$
$
$
500
(500)
3,350
Closure of Peds & NICU - OCH
Closure of OP PT services
Closure of OB -SLRH
(4,555)
Closure of Peds - SLRH
(568)
Impact of change in Transfer Policy
350
Total: Net Revenue Enhancements
(1,423)
$
$
$
$
$
$
2,800
473
2,064
-
$
$
$
$
$
5,100
340
10,777
$
$
1,000
$
$
$
$
135
65
OPERATING EXPENSE REDUCTIONS
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures:
Closure of Peds & NICU (Net)
Closure of OP PT services (Net)
Closure of OB -SLRH
Closure of Peds - SLRH
Sub-Total- Labor
Non-Labor Costs
General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Closure of Peds & NICU - OCH Supplies
Closure of OP PT services -OCH Supplies
Closure of OB -SLRH Supplies
Closure of Peds - SLRH Supplies
Total Supplies Impact
Impact of SCFHP/VHP Termination-Other Exp
Service Line/Program Closures
Closure of Peds & NICU - OCH Other Exp
Closure of OP PT services -OCH Other Exp
Closure of OB -SLRH Other Exp
Closure of Peds - SLRH Other Exp
Total Other Exp Impact
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
1,200
-
$
$
$
$
$
$
$
$
$
$
400
298
698
258
2,156
Total: Operating Expenses
12,933
Annualized EBIDA Improvement
11,510
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings excluding severance related costs. Detail listing to be provided for review.
Mitigation Plan
Facility:
Prepared Date:
St. Louise
3/23/2015
$(000)s
Net Revenue Enhancements:
Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
Impact of change in Transfer Policy
Total: Net Revenue Enhancements
$
$
$
$
$
$
$
500
(500)
3,350
(5,123)
350
(1,423)
Operating Expenses:
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures:
Sub-Total- Labor
$
$
$
$
$
$
$
$
2,800
473
2,064
5,440
10,777
Non-Labor Costs
General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
$
$
$
$
$
$
1,000
898
258
2,156
Total: Operating Expenses
12,933
Annualized EBIDA Improvement
$
11,510
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings excluding severance related costs. Detail listing to be provided for review.
SLRH
SFMC MITIGATION PLAN
March 23, 2015
ITEM
NET REVENUE INCREASE
PROJECTED
FINANCIAL IMPACT
$2,413,320
Institute a hybrid ED hospitalist program with CDS
Increase FFS Mcare admissions via SNF relationships
Limit observation (reduce 6-8 down to 3-4 average per day)
OPERATING EXPENSE REDUCTIONS
OPERATING UNIT EFFICIENCY- SURGERY
Review operating margins of outpatient surgeries and GI procedures
Evaluate profitability of weekend cases and impact on LOS
LABOR COST REDUCTIONS
FTE reduction
29 FTEs future RIF
One time cash needs Severance $487,806 + PTO balances $150,707
19 FTE reduction due to recent attrition
Patient Care Services Reorganization (net of new positions)
11.5 net FTEs FLC Newborn Nursery staffing
Medicare GMLOS Improvement
UNAC agreement (average estimated annual savings)
Productivity/Premium Pay/Registry Improvement
Recommended market adjustments
Addition of 4 CDS positions
Contracted CDS oversight (Pathway Medical Group/ Dr. Alkhouli)
SUPPLIES
Supplies are 15% of net revenue excluding implants.
MD CONTRACTS
90-Day Notice for Medical Directors and Hospital Based Physician
Contracts/reduction
Medical Directors
Hospital Based Physician Contracts Emergency Department
Anesthesia, pathology and radiology
PURCHASED SERVICES
Touchpoint Nutrition Services, EVS and Transportation
Crimson (Advisory Board), Compspec, Happy Docs, Dr. Dadourian, White Stone,
catering reduction
SERVICE LINE/PROGRAM CLOSURE
Outpatient Clinics (PSA with SFMSG vs FQHC divestiture)
Grant funded outreach as funding cycles close programs will be phased out:
Health Benefit Resource Center/Partnership for Patients
HCI
Palliative Care
TOTAL
$2,413,320
$14,889,531
TBD
TBD
$13,758,243
$2,513,277
$2,291,001
$1,246,000
$1,060,495
$3,149,680
$4,007,500
$310,500
($120,210)
($600,000.00)
($100,000.00)
$130,288
$130,288
$705,000
$455,000.00
$250,000.00
TBD
$296,000
TBD
$296,000
$0
TBD
$0
$17,302,851
Mitigation Plan
Facility:
Prepared Date:
St Francis Medical Center
3/23/2015
Net Revenue Enhancements:
Managed Care Payers (1)
Observation Unit Impact/Mcare Documentation
Service Line/Program Closure (2)
Other Initiatives
Total: Net Revenue Enhancements
$
$
$
$
$
Operating Expenses:
Labor Costs
Reduction In Force, including Reoganization (3)
Productivity Improvement
Medicare GMLOS Improvement
UNAC Agreement
Service Line/Program Closures
Sub-Total- Labor
$ 6,390,563
$
310,500
$ 3,149,680
$ 4,007,500
$
$ 13,858,243
Non-Labor Costs
Supplies
Professional Fees- CDI Oversight
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
$
$
$
$
Total: Operating Expenses
$ 14,889,531
2,413,320
2,413,320
130,288
(100,000)
705,000
296,000
1,031,288
Annualized EBIDA Improvement
$ 17,302,851
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings net of severance related costs. Detail listing to be provided for review.
SVMC MITIGATION PLAN
March 18, 2015
ITEM
PROJECTED
FINANCIAL IMPACT
TBD
NET REVENUE INCREASE
Discussions with Managed Care Payers
$0
Institute dialogue with top 15 admitters and review documentation and LOS
$0
Limit observation admissions
$0
Other Initiatives
$0
OPERATING EXPENSE REDUCTIONS
OPERATING UNIT EFFICIENCY- SURGERY
All scheduled surgeries need financial approval
Institute a 3 day surgery scheduling notice to allow evaluation of costs
Clinical documentation to work with top active surgeons to improve clinical
documentation
No elective surgeries are to be scheduled on the weekends
TBD
$0
$0
$0
$0
LABOR COST REDUCTIONS
FTE reduction of exempt management and associates
44 FTEs
Medicare GMLOS Improvement
Other LOS Reduction Initiatives
Productivity Improvement
Premium Pay/Registry Use
$9,810,288
$4,718,288
SUPPLIES
Supplies are 15% of net revenue excluding implants. Reduce by $2 Million
Sodexo Contract Payment Reduction of $750,000.00
$2,750,000
$2,000,000
$750,000
MD CONTRACTS
90-Day Notice for Medical Directors and Hospital Based Physician Contracts/
Reduction
$0.5 Million for Medical Directors
$1 Million for Hospital Based Physician Contracts
$1,500,000
PURCHASED SERVICES
SERVICE LINE/PROGRAM CLOSURE
Casa de Amigos
APLC
Health Benefit Resource Center
Multicultural Health Awareness and Prevention Center
General Orthopedic Clinic
TBD
$2,250,000
$400,000
$450,000
$400,000
$400,000
$600,000
$2,092,000
$2,000,000
$0
$1,000,000
TOTAL
$500,000
$1,000,000
$16,310,288
Mitigation Plan
Facility:
Prepared Date:
SVMC
3/18/2015
Net Revenue Enhancements:
Managed Care Payers (1)
Observation Unit Impact
Service Line/Program Closure (2)
Other Initiatives
Total: Net Revenue Enhancements
$
$
$
$
$
Operating Expenses:
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Sub-Total- Labor
$ 4,718,288
$
$ 2,092,000
$ 2,000,000
$ 1,000,000
$ 2,250,000
$ 12,060,288
Non-Labor Costs
Supplies
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs
$
$
$
$
$
$
Total: Operating Expenses
$ 16,310,288
2,000,000
1,500,000
750,000
4,250,000
Annualized EBIDA Improvement
$ 16,310,288
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings net of severance related costs. Detail listing to be provided for review.
