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Introduction

Introduction/Agenda

  • CEO Responsibility
  • Develop a strong & clear strategic vision
  • Gain Board of Directors' support for Strategy

  • Agenda
  • Strategy presentation, not an operating plan presentation
  • Critical Access Hospital (CAH) & Rural Health Clinic (RHC)
  • CAH/RHC Financials & Reimbursement
  • Strategic Plan
  • Next Step
  • Authority Matrix Review
  • Approval of Overall Strategy
  • Rebranding (Tentative)

CAH/RHC

Critical Access Hospital (CAH) &

Rural Health Clinic (RHC)

Finance

CAH

Critical Access Hospital (CAH)

Benefit: For Medicare patients only. Enhanced reimbursement model, otherwise no different that a Prospective Payment System (PPS) Hospital

Eligible hospitals must meet the following conditions to obtain CAH designation:

  • Located in a rural area
  • 25 or fewer acute care inpatient beds
  • Be located more than 35 miles from another hospital (initial only)
  • Maintain an annual average length of stay of 96 hours or less for acute care patients
  • Provide 24/7 emergency care services

Required Services

  • Inpatient beds
  • ER
  • Lab, Radiology, basic services
  • Meet CMS requirements for a hospital

Historical Financial Models in CAH

  • 1965: Bill signed in to law that created Medicare & Medicaid.
  • Reimbursement started as cost-based model
  • 1983: Medicare Part A (Hospital) moved from cost based to a prospective payment system (PPS). PPS is a fixed amount per DRG.
  • 1983-1990s: Approximately 400 hospitals closed due to change in PPS
  • 1997: Balanced Budget Act created the Medicare CAH provider type (simplified financials)
  • Reimbursement based on allocated costs to Medicare patients
  • 2004: CAHs became eligible for allowable cost plus 1% reimbursement (101%)
  • 2010: Affordable Care Act (ACA) signed in to effect
  • 2013: CAH reimbursement is subject to 2% sequestration
  • Budget Control Act of 2011 imposed mandatory reduction
  • Rural Hospital closures:
  • 2013-2019: 109
  • 2010-2019: 126

RHC

Rural Health Clinic (RHC)

Benefit: For Medicare and Medicaid patients

Purpose: intended to increase access to primary care services for patients in rural communities

RHC Requirements:

  • Must be located in rural, underserved areas (HPSA).
  • Must be staffed at least 50% of the time with a Nurse Practitioner, Physicians Assistant, or Certified Nurse Midwife
  • Required to provide outpatient primary care services and basic laboratory services.

Types of RHCs:

  • Provider-based RHCs (Hospital owned)- Reimbursement without Cap (Atchison $184)
  • Independent RHCs are free-standing clinics (Privately owned)- Reimbursement Capped (National $86.31)

Rural Health Clinic (RHC)

RHC visits may take place:

  • In the RHC
  • At the beneficiary’s home (including an assisted living facility)
  • In a Medicare-covered Part A Skilled Nursing Facility (SNF)
  • At the scene of an accident

Atchison Hospital

& Clinics

Revenue Mix

by Payor

Inpatient vs Outpatient

  • Total Patient Revenue is prior to Contractual Adjustments.
  • Contractual Adjustments: Estimated/Varied

Inpatient

17.4% of Total Patient Revenue

Outpatient/Phys Office

Outpatient: 70% of Total Patient Revenue

Phys Office: 12.6% of Total Patient Revenue

Inpatient- Medicare (45% of overall total revenue)

  • Inpatient and swing bed services:
  • Based on 101% of average cost per day for inpatient services (as computed in the Medicare cost report).
  • Excluding non-allowable costs
  • minus 2% Sequestration
  • Paid on an interim basis using a per diem rate for routine and ancillary costs
  • Final settlement for each fiscal year is based on the filed Medicare cost report after the intermediary completes their audit
  • Non-allowables: Surgeon, Hospitalist.....
  • Higher costs, higher loss

Inpatient- Medicaid (11% of overall total revenue)

  • Not part of CAH cost based reimbursement
  • Reimbursement typically below cost
  • Includes Obstetrics/Deliveries

Inpatient- Blue Cross Blue Shield & other commercial

(BCBS 24%, Other Commercial 15% of overall total revenue)

  • Not part of CAH cost based reimbursement
  • Breakeven to minimal profit on inpatient stay, typically profitable if surgery is needed
  • Atchison Hospital
  • Older contracts
  • Last negotation 8 years ago
  • Agreement at 1/2 of Maximum Allowable Payment (MAP)
  • More opportunity to negotiate with Economies of Scale

Inpatient- Self Pay (5% of overall total revenue)

  • Self pay discount
  • Charity Care
  • Low percentage of collections

Summary of Inpatient

  • Required service of a Hospital
  • Loss Leader Service Line

Physician Office (RHC and Specialty)

  • RHC
  • All-Inclusive Reimbursement Rate (Average Cost per Visit)
  • Atchison Rate for Medicare $184, Medicaid $179
  • RHC is a space within a clinic facility
  • Specialty (Ortho)
  • Medicare/Medicaid at non-RHC rate $45/visit (below cost)
  • Commercial Insurance (above cost)

Outpatient Departments- Medicare

Outpatient Surgery, Outpatient Depts, ER

  • Based on 101% of cost to provide services to Medicare patients (as computed in the Medicare cost report):
  • Paid on an interim basis using a percentage of Medicare charges
  • Percentage calculated by dividing the overall allowable Medicare costs by the overall Medicare charges, Medicare cost-to-charge ratio
  • Final settlement for each fiscal year is based on the filed Medicare cost report after the intermediary completes their audit
  • Oupatient Surgery, Radiology, and RHC are the facility profit centers

Outpatient Departments- ER

  • Loss Leader Service Line
  • Expensive Care (Excessive testing to Rule Out)
  • ER Misutilization

Financial Metrics

Metrics

Financial Statements

& Contractual Adjustments

Estimates

  • Patient Revenue
  • Contractuals
  • Medicare based on last rates

Expenses are Actual

Contractual Adjustments

Medicare

  • 2% Sequestration
  • Advantage Plans >40 variances, Unclear coverage
  • Prior Authorizations
  • Varied rate based on costs

Medicaid

  • Prior Authorization

Commercial Insurance

  • > 25 Payors & >120 Plans (cards incorrect, excessive changes
  • In or Out of Network, Varied deductibles,
  • Prior Authorizations

Self-Pay

  • Self-Pay discounts & Payment Plans dependent on compliance

Summary

Financials Revenue= an average/estimated overall rate,

resulting in a significant variance at times

Revenue Cycle

Revenue Cycle Challenges

Lack of Financial Information Systems/Electronic Medical Records interoperability resulting in:

  • Billing- outsourced
  • Charges and Reimbursement don't match and not standardized
  • Unable to accurately verify appropriate payment from Payor
  • Managing 65,000 visits with Excel Spreadsheet, and Manual entry in to electronic accounts
  • Patient Balances vary due to Claim Results
  • Long-term goal to reduce suprise billing
  • Financial Information System
  • Electronic Claim Submission & Inbound Processing to match original account

Key Financial Indicators

Key Financial Indicators

  • Monthly Financial Statements
  • Weak reliance for Monthly Revenue
  • Strong reliance for Expense Control
  • Moderate reliance comparing Year-to-Date Revenue if daily expense & stats are steady
  • Days Cash on Hand
  • Cash Flow- Revenue Cycle
  • Total Accounts Receivable (AR) Balance
  • Discharged Not Final Bill (DNFB) After 3-Day Hold
  • 90-Day Average Daily Revenue
  • Debt to EBIDA 3.98 (Stay below 4)
  • Current and Long-Term Debt $25,934,311
  • EBIDA $6,517,410
  • No more debt

Cash on Hand

Projecting:

169 days in March

Discharged Not Final Bill (DNFB) After 3-Day Hold: $749,357.92

Total AR Balance = $13,556,507.37 (charges)

90-Day Average Daily Revenue = $290,527.45

Inpatient

Ancillary Stats

Financials

  • Goal to improve financial detail
  • Dept and Service Line Detail
  • Per patient tracking
  • Per insurance plan tracking
  • Need Financial Information System

Strategic Plan

Create a Sustainable

Regional Rural Health System

Strategic

Plan

Overview

Mission Statement

Summarized Strategic Plan (Internal Use Only)

Strategic Plan: Create a Sustainable Regional Rural Health System with Strategic Growth & Partnership/Collaboration.

  • Priority Focus of Strategy is:
  • Culture Competencies. Strong attention & focus on advancing OUR Culture Competencies:
  • Talent Experience
  • Customer Experience (Quality/Satisfaction)
  • Operational & Financial Acumen
  • Strategic Growth
  • Community Impact
  • Develop Atchison Hospital & Clinics Leadership Team & Employees
  • Create relationships/opportunities towards Economies of Scale:
  • Hospitals (Merger, Shared Services, New Services)
  • RHCs (New or Expanded)
  • Specialty Clinics
  • Nursing Homes
  • Evaluate Opportunity Rapidly as it arises

Regional Rural Health System

  • Nursing Home - Medical Directorship
  • RHC Visits (Combined with Clinic)
  • Home Health & Hospice
  • Deficient:
  • EMS
  • Transportation (to clinic and Hospital)
  • Mobile Services: CT, Mammo, MRI
  • Telehealth/e-visits
  • Behavioral Health
  • Managed Care Health Plan
  • Community benefit
  • Replace commercial payor
  • Hospital- CAH (2 or more)
  • Inpatient
  • Surgery
  • Emergency Room
  • CT/MRI (Radiology) & Laboratory
  • Outlying Clinics- RHC Provider-Based
  • Primary Care
  • Specialists (Clinics rotation:

Orthopedics, Cardiology)

  • Routine x-ray
  • Pharmacy
  • CLIA waived lab (Reference lab to

Atchison Hospital)

  • Outpt Rehab Services

1

Strategic

Growth

Strategic Statement

Economies of Scale

through Growth is the #1 & probable only way for Rural Healthcare Sustainability

Why Growth & Economies of Scale?

CAH/RHC Reimbursement Reductions

  • Medicare Hospital Insurance Trust Fund wouldn't last past 2026 without upcoming & new cuts
  • Federal Payment Reductions to Hospitals 2010-2028 in addition to ACA
  • Total Payment Reduction: $218.2 Billion
  • Sequestration- Budget Control Act of 2011 imposed mandatory reductions, after several extensions/versions extended through 2027 (2027 reduction of 4% for first 6 months, resulting in 2% for full FY).
  • The ACA required reduction in federal Medicaid Disproportionate Share Hospital (DSH) allotments of $18.1 billion. Legislation delayed since 2010, pending additional legislation to maintain delay
  • Drug Pricing- 340B
  • Surprise Medical Billing Legislation
  • Way & Means Committee bill is Supported by hospital associations as it protects patients from surprise medical bills while preserving the appropriate role of providers and insurers in negotiating payment rates
  • Education & Labor Committee bill supports a median rate for resolving out-of-network costs
  • Price Transparency- advantage to insurance companies, takes away negotiations and bad debt
  • Coverage Transparency is to improve patient access to estimates of their individual cost-sharing liability prior to care.
  • Price transparency- AHA is attempting to prevent disclosure of negotiated contracts. Negative: will be used to “standardize charges” without

Reimbursement Reductions

are Inevitable

Most CAH

are unprepared

Financials

FY 2019 Results

  • ($1,430,307) Net Operating Loss, Before 340B
  • $2,482,488 340B Profit
  • $1,052,181 Net Operating Profit (includes 340B)
  • $2,103,895 Total Profit from Operations (includes 340B + investments/contributions)
  • 5.2% Total Margin
  • $1,052,181 Net Operating Profit / $39,696,801 Net Operating Revenue
  • 2.6% Operating Margin

As of Fiscal YTD Jan 2020

  • 5.7% Total Margin
  • 3% Operating Margin

Financials

Projected Reimbursement Cuts

  • $350,000= Projected New Annual Reimbursement Reduction (Enacted)
  • Projected Operating Margin decrease from 2.6% to 1.7% (includes 340B)
  • Projected Total Margin decrease from 5.2% to 4.4% (includes 340B + Investments/Contributions)

Margin Goal

  • Routine Capital Needs (Equip & Facility), Competitive Salaries, Advanced Techology/Care
  • Operating Margin Goal: >8%
  • Total Margin: >12%

Economies of Scale

Hospital/Clinic Acquisitions

  • Operational changes resulting in Market Share & Net Income Increases
  • Low provider production vs False control of costs
  • Cost report expected productivity: Physician 4200 visits & NP/PA 2100 Visits/year
  • Inpatient "Butts in Beds" vs RHC Visits & Outpatient Surgery. Reduce regional beds
  • Hospital vs Surgeon billing
  • Begin or Grow profit centers: RHC, Surgery, Radiology
  • Acquiring RHCs (Reimbursement increase)
  • Opening new RHCs (Overall rate benefits)
  • Shared Services Agreement- Anesthesia, Credentialing, Materials Management, General Surgery, Orthopedic Surgeon, OB, ER Providers, Recruiting, Biomed, .......
  • Management Services Agreement- Exec Team, Facilities Management, ...........

Why achieve Economies of Scale through Growth?

  • Reimbursement Reductions
  • Benefits of Economies of Scale
  • There is only one region and limited options to achieve Economies of Scale
  • We Can't Lose this Opportunity
  • Likely only have limited time to achieve

Primary Care-

RHC

Specialty Care

Timely Access

Customer Experience

Cardiology,

Other....

Timely Access

Customer Experience

Community Perception

Unavailable Specialists

Inpatient/ Swing Bed

Specialists

Radiology

Population Health

Surgery

ER

Home Health

&

Hospice

Laboratory

Access

OB/Maternal

ER

Specialty Care

6%

Ortho, Procedure (TIF)

Primary Care- RHC

94%

Market

Share

Includes Outpatient clinic, radiology, laboratory, surgery, rehab

  • Opportunity in all Northeast Kansas counties
  • Supports need for outlying clinics
  • Out-migration: Mosaic
  • Opportunity to increase local services, improve access & customer experience

Strategic Plan involves NorthEast Kansas

Outpatient KHA Data for NorthEast Kansas

  • Opportunity: Cushing Patients, Minimize opportunity for Mosaic, improve access & customer experience, Horton Clinic
  • No concerns
  • Majority are patients that require higher level of care
  • Opportunity: Improve ability to care for higher acuity patients, improve access & customer experience
  • Bed size range 25- 910
  • Majority are patients that require higher level of care
  • Opportunity: Improve ability to care for higher acuity patients, improve access & customer experience

Future Plans for Market Data

  • Break down by service line & trended

Strategic Growth

of a

Regional Rural Health System

Vision of

Strategic

Growth

Critical Access Hospital

Healthcare System:

Access to a complete network of services

Critical Access Hospitals (2 or more)

STRATEGIC PLAN

  • Inpatient (50 or more Beds, 2 or more Hospitals)
  • Remove bed capacity limitations (medical & OB)
  • Surgery
  • Shared: General Surgeon 1.5 FTEs
  • Shared: Anesthesia
  • Shared: Ortho Surgeon 1.5 FTEs
  • Emergency Room
  • Consideration of Level IV ER Status
  • Laboratory
  • Begin reference lab for hospitals, clinics, & nursing homes

CURRENT

  • Inpatient (25 Beds)
  • Medical/Surgical Unit
  • Intensive Care Unit
  • Swing Bed (skilled nursing)
  • Obstetrics
  • Surgery (Inpatient & Outpatient)
  • General Surgery
  • Orthopedics
  • Opthamology
  • Emergency Room
  • Laboratory
  • Radiology
  • CT/MRI/Mammo/US/X-ray

Clinics

Clinics

Consists of:

  • Rural Health Clinics (RHCs) in many communities
  • Control of all Primary Care is #1 priority of strategic growth
  • New: Trial for Licensed Clinical Social Workers (LCSW)- Mental Health
  • CLIA waived lab (Reference lab to Atchison Hospital)
  • Specialists (Rotates to each Clinic)
  • Orthopedics, Cardiology, General Surgery
  • Specialty Clinics: Atchison (Addt'l Specialists), Leavenworth
  • Outpatient Departments (hospital outpatient dept)
  • Digital Radiography (X-ray)
  • Rehab Services (PT, OT)
  • Pharmacy- 340B

Clinics:

Why Horton Clinic is critical for OUR Strategy

  • Part of "Economies of Scale" growth strategy
  • Potential for volume loss- 16%
  • Loss to competition w FW Huston and Stormont purchase
  • Benefit: Increase RHC Rate

Clinics

Nursing Homes & Assisted Living

Nursing Homes & Assisted Living

CURRENT

  • RHC Visits- 2 sites

STRATEGIC PLAN

  • RHC Visits- Additional sites
  • Expand Medical Directorships
  • Reference Lab
  • PT/OT
  • Quality, Clinical, Dietary, Materials Management, Facility consultants or service agreements
  • Clinically Integrated Network (CIN)
  • Shared Electronic Medical Record (EMR)

Nursing Homes & Assisted Living

Home Health & Hospice

Home Health & Hospice

Goal: Care in Home for patient comfort & reduce expensive hospital utilization

Current

  • Service in Atchison County & minimal outside counties
  • Short-term reimbursement reductions up to 6%

Strategic Plan

  • Slow Growth in other counties after Hospital & RHC additions
  • Long-term reimbursement improvements are expected
  • New Trial: Private Pay Home Care Assistants
  • New Trial: TeleHealth

EMS &

Transportation

Transportation & EMS

Current

  • Transportation
  • Frequent transportation barriers To And From Clinics, Hospital, then Home
  • Current options not meeting demand

  • EMS
  • Transporting high acuity patients to KC, St Joseph, Topeka
  • Patient preference miscommunication

Strategic Plan

  • Transportation efforts to cover all OUR service areas
  • Grants/Donations
  • Negotiate with local agencies such as Crittendon & Northeast Kansas Area Agency on Aging

  • EMS
  • Develop relationship with all EMS
  • Training in Atchison ER
  • Build protocols to ensure appropriate care for higher acuity patients
  • Negotiate with local EMS to tighten relationship with Atchison Hospital Facilities (Horton, Troy, Leavenworth)
  • Long-Term Possibility: Owned EMS

Behavioral

Health

Behavioral Health

New Service Line

  • Licensed Clinical Social Worker
  • Behavioral Health Counseling
  • Qualifies as a Rural Health Clinic visit/rate

  • Recruitment
  • Location
  • Community Relationships
  • Long-term: Recruit Clinical Psychiatrist

Health Insurance

Managed Care Health Plan

Long-term Goal

Details

  • Commercial Insurance 38% of Atchison Hospital & Clinics Revenue
  • Reimbursement just above costs, much lower than Urban Hospitals
  • Community benefit
  • Similar to our self-funded employee health insurance
  • Net Income positive if adequate number of enrollees

Resources

Resources- Technology

  • Electronic Information Systems
  • Meditech Expanse (current system optimization)
  • Time & Money to make it efficient & interoperable
  • Business Clinical Analytics (BCA)
  • Financial Information System
  • Materials Management Information System
  • Human Resources Information System
  • Credentialing & Peer Review Information System
  • Telehealth/e-visits (Long-term consideration)

Capital History

2017 $826,900

2018 $1,008,040

2019 $3,785,935 – Meditech- $3,373,577, Non-Meditech-$412,358

$500,000 each year from Riverbend Foundation

Resources- Capital Equipment/Facility

5- Year Capital Plan

  • Board will approve Annual Operating & Capital Plan that includes strategic items
  • Authority Matrix process
  • Allows CEO to make decisions and ensure progress
  • Prevents CEO from creating catastrophe
  • Sources of funds- Cash on Hand & Grants
  • Spending vs building cash on hands
  • "Strategic Cash"
  • 200 days is not growing, low % of employees, & typically
  • New goal recommednation: 150
  • Debt Capacity Analysis
  • Days Cash on Hand 290.16 as of 9/30
  • $30.3 million unrestricted cash & investments / $104.3k daily operating expenses
  • Unrestricted Cash to Long Term Debt Ratio 109% (S&P Median: 75.9%- 154.9%)
  • Debt Service Coverage Ratio: 2.02 times (S&P: 1.9- 2.5)
  • Conclusion:
  • Capacity to issue $6.5 million of additional tax exempt bonds, & contribute up to $4.5 million in cash toward a potential project

Resources- Personnel

  • Staffing Matrix
  • Personnel included in Proforma

  • Needs
  • Physicians
  • APPs
  • Registered Nurses

  • System
  • Billing
  • Coding

Atchison Hospital Space Update & Proposal

Non-Clinical Space Needs

1) Home Health & Hospice Offices

2) Move offices out of Clinic Space

3) Accounts Payable Dept (4)

4) Quality Director

5) Education Coordinator

6) Marketing Specialist

7) Billing Department (6-10)

8) Parking Spaces

Clinical Growth Priorities

1) Surgery/Infusions expansion (move HIM)

2) Add Materials Management building

3) Rural Health Clinic Expansion

4) Ortho/AHS Suite

5) Purchase Mosaic Clinic ($320,000)

6) OB Storage to Patient Room Conversion

7) Capital Equipment Needs

  • Radiology: MRI, Fluoro, Digital Radiography
  • Surgery: 3rd room equipment

Atchison Hospital Facility Update

  • Recent Construction Changes:
  • Initial/1st Plan: Advanced Health Expansion ($2.4 million)- Physician/Service Line Profitability
  • 2nd Plan: Ortho/AHS Suite & Materials Management building ($1.7 million)
  • New need due to Current Growth: Surgery/Infusions, Rural Health Clinic, Office spaces, & expanded specialists

  • Construction Options ($2.4 million available from bonds):
  • Option 1 ($1.3 million, $1.62 million with Mosaic Clinic purchase):
  • New Materials Management building (inexpensive & opens space)
  • Surgery/Infusions expansion (move HIM)
  • Possible ability to expand office in old Materials Management, excluding Home Health
  • Option 2 ($2.54 million, $2.86 million with Mosaic Clinic purchase):
  • Ortho/AHS Suite
  • New Materials Management building (inexpensive & opens space)
  • Surgery/Infusions expansion (move HIM)
  • Requires offsite leased space for non-clinical areas beginning in July/Aug
  • Critical Question: Are we going to need to expand building to allow for growth?

Atchison Hospital Facility Update

Construction Recommendation

  • Option 1 ($1.3 million, $1.62 million with Mosaic Clinic purchase):
  • New Materials Management building (inexpensive & opens space)
  • Surgery/Infusions expansion (move HIM)
  • AHS- minor change without construction + Leavenworth Clinic
  • Remaining Capital: Pause spending of $780,000, Consideration of Radiology spend
  • Leased Space
  • Lease building for Home Health & Hospice, possibly Education, Billing, HIM
  • Realtor/Space Challenges
  • Reassess in 6 to 12 months: Health System growth may require onsite support service building

**Requesting Board of Directors to approve ($1.85 million):

1) Purchase of Mosaic Clinic at Atchison Hospital for up to $350,000.

2) Change Construction Plans to Option 1 ($1.3 million) and RHC space improvement($200,000)

Stages of Growth

One Stage of Growth with Prioritized Opportunities

Continuous Stage

  • Culture Competencies. Strong attention & focus on advancing OUR Culture Competencies:
  • Talent Experience
  • Customer Experience (Quality/Satisfaction)
  • Operational & Financial Acumen
  • Strategic Growth
  • Community Impact
  • Develop Atchison Hospital & Clinics Leadership Team & Employees
  • Create relationships/opportunities towards Economies of Scale:
  • Hospitals (Merger, Shared Services, New Services)
  • RHCs (New or Expanded)
  • Specialty Clinics
  • Nursing Homes
  • Evaluate Opportunity Rapidly as it arises
  • Prioritized Opportunities
  • Horton Clinic- RHC
  • Hiawatha Hospital & Clinics
  • Access Points: Nursing Homes & RHCs

Strategic Growth

of Regional Rural Healthcare Model

  • Hiawatha Community Hospital
  • NDA signed
  • 1st Meeting: Discussed models; Hiawatha requested Joint RHC vs compete
  • 2nd Meeting: Hiawatha Chief of Staff discussed model; plan to offer services instead of Joint RHC
  • Nursing Home
  • Country Care (Easton)
  • Mission Village (Horton)
  • Wathena and Highland Nursing Homes
  • Rural Health Clinic (RHC)
  • Horton
  • Troy- Acquire Mosaic clinic or add provider to current clinic
  • Wathena- possible new clinic site, meeting
  • Winchester (KU)
  • Non-RHC= Leavenworth opportunities

Hiawatha Terms: Option 1 MSA/SSA

  • Structure
  • Management Services Agreement (MSA) & Shared Services Agreement (SSA)
  • Maintain current separate legal entities & individual Boards of Directors
  • Brands remain separate
  • Atchison retains system decision for Hiawatha for anything in addition to Limited Services
  • Leadership
  • Regional & Hospital CEO (Atchison Hospital)
  • Regional CFO (Atchison Hospital)
  • Regional COO for Clinics- (Expand Atchison's RHCs around Hiawatha- Rate benefit)
  • Hospital CEO (Hiawatha Hospital)
  • Benefits
  • Hiawatha: Capital Investment, Receives system benefits, maintains minimum services
  • Profit Sharing based on:
  • MSA & SSA
  • Termination Terms
  • Hiawatha non-compete, pay back of capital investment

Hiawatha Terms: Option 2 Acquisition/Merger

  • Structure
  • Acquisition/Merger
  • Atchison Hospital Governing Board, Hiawatha Advisory Board
  • One Brand
  • Atchison retains system decision
  • Leadership
  • Regional & Hospital CEO (Atchison Hospital)
  • Regional CFO (Atchison Hospital)
  • Regional COO for Clinics- (Expand Atchison's RHCs around Hiawatha- Rate benefit)
  • Hospital CEO (Hiawatha Hospital)
  • Benefits
  • Hiawatha: Capital Investment, Receives system benefits, maintains minimum services
  • Continued Hospital/Clinic services
  • Termination Terms
  • Hiawatha non-compete, pay back of capital investment

Strategic Growth

Merger Benefits

  • Standardizing quality/service
  • Controlling Market Share
  • Growth outside Atchison Service Area
  • Eliminate need for construction: Additional Surgery and OB Suites
  • Change Operations resulting in net income gains (RHC Ownership, Expenses= Volume)
  • Savings
  • Management ($200,000)
  • Providers ($300,000)
  • Employees ($200,000)
  • Supplies ($100,000)
  • TOTAL SAVINGS= $800,000

Partnership

&

Collaboration

2

Partnership & Collaboration

Update

Continuous Strategy Development & Progress

2) Partnership/Collaboration

  • Types (Affiliation, Merger)
  • If & When (All about timing & benefit)
  • Goal is start our own Due Diligence (Years)
  • Economies of Scale
  • Payor Contract
  • Resources (Best Practice, Expertise)
  • Current Models (Mosaic, Saint Lukes, KU Health, Rural Health System )

Partnership/Collaboration

  • Saint Lukes- Hedrick Medical Center, Chillicothe, MO
  • KU Health
  • NDA (non-exclusive)
  • Mosaic
  • ER Physicians
  • Improving Materials Management/Group Purchasing pricing

Next

Step

Next Step

  • Approve Updated Construction Plan
  • Approve Overall Strategic Plan
  • Authority Matrix- Additional capital needs, merger/acquisition approved by Board
  • Operating/Capital Budget approved by Board
  • Possible future decision to approve Due Diligence for Hiawatha, Wathena, Leavenworth

Rebrand

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