hmp metrics™: childrens hospitals october, 2010
DESCRIPTION
HMP can easily create customized reports and mix or create new peer groups and compare them to state or national benchmarks.TRANSCRIPT
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October 2010 2
Table of Contents
Executive Summary 3 - 5
Financial and Operational Study 6 - 41
• Total Profit Margin 6 - 12• Total Operating Profit Margin 13 - 17• Total Labor Cost as a Percentage of Total Operating Revenues 18 - 23• Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB) 24 - 29• Days Net Patient Revenue in Accounts Receivable (AR) 30 - 35• Average Age of Plant and Equipment 36 - 41
Introduction to Healthcare Management Partners 42 - 46
Clients Our Professionals Have Served 47 - 48
Firm Leadership 49 - 52
Contact Information 53
October 2010 3
Healthcare Management Partners (HMP) is a hospital and healthcare services management firm. For decades, all of its seniorexecutives have been building and operating thriving healthcare organizations, including CEO, COO and CFO assignmentsacross the spectrum of healthcare services providers. This knowledge base gives HMP a unique perspective on what tools arenecessary to handle the issues facing any healthcare provider organization, and is what prompted HMP to create HMPMetricsTM. Our executives understand the value of being able to measure hospital performance relative to comparablefacilities and against “1st Quartile” or “High Performing” competitors.
Utilizing the last six years of publicly available hospital Medicare cost report data, HMP has conducted an extensive studycomparing performance within six hospital peer groups. We can easily create custom peer groups and metrics. These groupsselected include the following:
1. All General Acute Care Hospitals Regardless of Ownership or Sponsorship2. All Investor Owned General Acute Care Hospitals3. All Not-For-Profit General Acute Care Hospitals, including Institutions Sponsored by Religious Organizations4. All State and Local Government Owned General Acute Care Hospitals5. Free Standing Children’s Hospitals6. All Non-Federal Major Teaching Hospitals
Using proprietary filters, data contained in the HMP Metrics database has been “scrubbed” to exclude partial period orstatistically aberrant data elements for individual hospitals or health systems. It also excludes Federal Government hospitals,specialty hospitals (e.g., long-term acute care) and general acute care hospitals for which 30% or more of its total licensedbeds are comprised of sub-acute beds. This data validation process produces highly accurate and defensible peer groupcomparisons for dozens of standard industry metrics.
This report measures several commonly used metrics to further stratify these hospital types into quartiles in order to illustratethe benchmarks for poor to exceptional performance for each of the metrics. With this information, one can quickly assess therelative financial well-being of any facility in any of these groups. HMP can easily create custom reports and mix or createnew peer groups and compare them to state, local or national benchmarks.
Executive Summary – Overview
October 2010 4
Quartile Rankings: Quartile rankings were assigned based on the mean values calculated for all children’s hospitals within the peer groups.
As noted above, the first quartile contains the top 25% of the best performing hospitals in an applicable peer group, the second quartile contains those hospitals falling in the 26% to 50% range, the third quartile contains those hospitals falling in the 51% to 75% range, and finally the fourth quartile contains those hospitals falling below 76%.
Mean Value: The mean value is the average of all amounts within a defined quartile or population.
Median Value: The report also contains the median value by quartile or total population.
Count: Actual number of qualified hospitals included in the mean or median calculation.
Excluded Cost Reports: Represents those metrics values not considered normative (i.e., outlier values). For example, certain metric values that were greater than two standard deviations from the mean of a reported population would be excluded from the analysis and included in this category.
Executive Summary – Key Terms
Mean Median Count Mean Median Count Mean Median Count1st Quartile 17.11% 17.65% 12 12.72% 9.96% 13 17.97% 17.76% 132nd Quartile 8.96% 7.97% 12 7.73% 6.60% 13 11.92% 12.48% 143rd Quartile 4.09% 3.90% 14 1.98% 1.02% 13 8.82% 9.67% 144th Quartile (5.18%) (4.04%) 15 (5.72%) (6.25%) 15 0.60% 3.02% 16
Total Population 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57Excluded Cost Reports 10 17 13
Total Cost Reports 63 71 70
Total Profit MarginAll Children's Hospitals in the United States Regardless of Bed Size
Quartile Rank2009 2008 2007
October 2010 5
Executive Summary – Hospital Performance Metrics
Source: Metrics are based on data extracted from Medicare cost reports filed each year with the Federal Government. Accuracy of the data contained in the Medicare cost reports is certified by hospital management when the report is filed. Any changes resulting from desk or field audits by Medicare and subsequently included in the Hospital Cost Report Information System (HCRIS) database have also been reflected in the calculations. Excludes partial-year Medicare cost reports, hospitals where 30% or more of total inpatient beds are non-acute, and hospitals where the computed metric is more than 2 standard deviations from the mean.
Total Profit MarginA measure of overall hospital profitability presented as a percentage. A negative percentage indicates an overall loss, while a positive percentage indicates profitability.
Total Operating Profit MarginA measure of operating profitability presented as a percentage. A negative percentage indicates overall loss, while a positive percentage indicates profitability.
Total Labor Cost as a Percentage of Total Operating Revenues
A measure of labor productivity. This metric divides labor costs by operating revenues. A higher percentage compared to its peers indicates that a hospital uses more labor to produce its revenue.
Full-Time Equivalent Staff (FTEs) per Adjusted Occupied Bed (AOB)
Measures the number of full-time equivalent (FTE) employees used for each occupied bed. Similar to the previous ratio, a higher percentage compared to its peers indicates that a hospital uses more labor to treat its patients.
Days Net Patient Revenue in Accounts Receivable (AR)
Measures the number of days it typically takes to collect accounts receivable. A higher percentage compared to its peers indicates that the hospital's revenue cycle is not as efficient as its peers.
Average Age of Plant and EquipmentMeasures the average age of the hospital including capital improvements and major equipment purchases. A higher age compared to its peers indicates that the hospital has deferred the replacement of its capital when compared to its peers, which can lead to further distress.
October 2010 6
Total Profit Margin - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 2.23% 0.47% 10 4.05% 3.58% 12 6.68% 6.74% 12101 to 200 Beds 9.63% 8.68% 13 10.18% 13.42% 13 11.09% 11.90% 13201 to 300 Beds 3.05% 5.78% 18 1.83% 1.85% 17 9.82% 10.96% 19Over 300 Beds 7.51% 7.29% 12 (0.53%) 2.36% 12 9.44% 11.11% 13
Total All Hospitals 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57Excluded Cost Reports 10 17 13
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less 0.05% 2.89% 12 5.28% 5.31% 11 4.33% 6.55% 9201 to 300 Beds 9.34% 10.09% 14 6.77% 6.58% 14 7.11% 3.96% 14301 to 400 Beds 8.01% 9.01% 18 7.50% 8.82% 18 5.48% 6.25% 19401 to 500 Beds 10.73% 12.47% 13 8.75% 9.56% 13 8.84% 9.34% 12
Total All Hospitals 7.28% 8.22% 57 7.17% 7.82% 56 6.46% 6.57% 54Excluded Cost Reports 15 16 19
Total Cost Reports 72 72 73
Number of Licensed Beds2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 7
Peer Group Comparison – Total Profit Margin
Mean Median Count Mean Median Count Mean Median Count1st Quartile 12.11% 12.11% 2 14.64% 9.96% 3 18.70% 17.76% 32nd Quartile 7.36% 7.36% 2 5.78% 5.09% 3 8.85% 8.30% 33rd Quartile (0.51%) (1.94%) 3 1.13% 1.75% 3 4.91% 4.41% 34th Quartile (5.06%) (4.00%) 3 (5.34%) (6.25%) 3 (5.72%) (4.99%) 3
Total Population 2.23% 0.47% 10 4.05% 3.58% 12 6.68% 6.74% 12Excluded Cost Reports 7 8 8
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 6.84% 7.17% 3 15.18% 15.18% 2 12.72% 12.72% 22nd Quartile 4.88% 5.25% 3 7.95% 6.36% 3 9.49% 9.49% 23rd Quartile 0.57% 1.68% 3 2.78% 1.86% 3 6.46% 6.46% 24th Quartile (12.08%) (15.64%) 3 (1.51%) 0.62% 3 (6.13%) (4.26%) 3
Total Population 0.05% 2.89% 12 5.28% 5.31% 11 4.33% 6.55% 9Excluded Cost Reports 9 10 13
Total Cost Reports 21 21 22
Quartile Rank2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States with 100 Licensed Beds or Less
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 8
Peer Group Comparison – Total Profit Margin
Mean Median Count Mean Median Count Mean Median Count1st Quartile 20.12% 20.25% 3 17.87% 17.72% 3 19.95% 20.75% 32nd Quartile 10.98% 10.95% 3 14.55% 14.23% 3 13.45% 12.92% 33rd Quartile 7.81% 8.18% 3 10.16% 9.54% 3 11.13% 10.82% 34th Quartile 2.10% 3.11% 4 1.16% 2.48% 4 2.63% 3.29% 4
Total Population 9.63% 8.68% 13 10.18% 13.42% 13 11.09% 11.90% 13Excluded Cost Reports 2 4 4
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 20.81% 18.98% 3 18.14% 18.38% 3 18.71% 18.31% 32nd Quartile 14.66% 15.29% 3 13.11% 12.81% 3 10.13% 10.63% 33rd Quartile 8.65% 9.23% 4 4.08% 3.21% 4 3.12% 2.59% 44th Quartile (2.57%) (1.71%) 4 (3.82%) (3.44%) 4 0.12% 0.37% 4
Total Population 9.34% 10.09% 14 6.77% 6.58% 14 7.11% 3.96% 14Excluded Cost Reports 3 3 3
Total Cost Reports 17 17 17
Quartile Rank2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 9
Peer Group Comparison – Total Profit Margin
Mean Median Count Mean Median Count Mean Median Count1st Quartile 16.52% 16.33% 4 10.65% 9.46% 4 16.08% 15.61% 42nd Quartile 7.63% 7.22% 4 6.22% 7.14% 4 12.49% 12.74% 53rd Quartile 4.09% 3.66% 5 (0.27%) (0.65%) 4 9.19% 9.88% 54th Quartile (12.44%) (13.90%) 5 (7.07%) (6.35%) 5 2.79% 4.18% 5
Total Population 3.05% 5.78% 18 1.83% 1.85% 17 9.82% 10.96% 19Excluded Cost Reports 1 4 1
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 13.13% 12.13% 4 13.47% 13.72% 4 12.82% 11.63% 42nd Quartile 10.22% 10.20% 4 10.87% 10.98% 4 8.73% 9.01% 53rd Quartile 8.13% 8.22% 5 7.82% 8.39% 5 3.77% 4.30% 54th Quartile 2.02% 2.12% 5 (0.31%) 1.95% 5 (1.92%) (1.41%) 5
Total Population 8.01% 9.01% 18 7.50% 8.82% 18 5.48% 6.25% 19Excluded Cost Reports 3 3 2
Total Cost Reports 21 21 21
Quartile Rank2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 10
Peer Group Comparison – Total Profit Margin
Mean Median Count Mean Median Count Mean Median Count1st Quartile 18.21% 18.77% 3 8.41% 8.57% 3 17.79% 17.49% 32nd Quartile 9.78% 8.43% 3 4.86% 4.97% 3 12.51% 11.84% 33rd Quartile 4.96% 4.03% 3 (2.34%) (0.07%) 3 9.82% 9.46% 34th Quartile (2.91%) (5.60%) 3 (13.05%) (12.85%) 3 0.58% 4.04% 4
Total Population 7.51% 7.29% 12 (0.53%) 2.36% 12 9.44% 11.11% 13Excluded Cost Reports 0 1 0
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 19.35% 17.40% 3 14.25% 14.55% 3 13.76% 14.18% 32nd Quartile 14.11% 14.11% 3 11.93% 12.35% 3 10.04% 10.14% 33rd Quartile 11.06% 10.90% 3 7.83% 7.24% 3 7.72% 7.57% 34th Quartile 1.48% 3.58% 4 2.92% 3.16% 4 3.83% 4.00% 3
Total Population 10.73% 12.47% 13 8.75% 9.56% 13 8.84% 9.34% 12Excluded Cost Reports 0 0 1
Total Cost Reports 13 13 13
Quartile Rank2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States with Over 300 Licensed Beds
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 11
Peer Group Comparison – Total Profit Margin
Mean Median Count Mean Median Count Mean Median Count1st Quartile 17.11% 17.65% 12 12.72% 9.96% 13 17.97% 17.76% 132nd Quartile 8.96% 7.97% 12 7.73% 6.60% 13 11.92% 12.48% 143rd Quartile 4.09% 3.90% 14 1.98% 1.02% 13 8.82% 9.67% 144th Quartile (5.18%) (4.04%) 15 (5.72%) (6.25%) 15 0.60% 3.02% 16
Total Population 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57Excluded Cost Reports 10 17 13
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 14.89% 15.63% 13 15.12% 14.63% 12 14.51% 14.32% 122nd Quartile 10.91% 10.74% 13 10.96% 11.45% 13 9.47% 9.68% 133rd Quartile 7.34% 8.61% 15 5.82% 6.63% 15 4.82% 5.27% 144th Quartile (1.91%) 1.86% 16 (0.61%) 0.56% 16 (1.07%) (0.66%) 15
Total Population 7.28% 8.22% 57 7.17% 7.82% 56 6.46% 6.57% 54Excluded Cost Reports 15 16 19
Total Cost Reports 72 72 73
Quartile Rank2006 2005 2004
Total Profit MarginAll Children's Hospitals in the United States Regardless of Bed Size
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 12
Total Operating Profit Margin - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 0.32% (1.17%) 8 1.22% 1.50% 9 2.19% 1.37% 7101 to 200 Beds 5.33% 3.95% 12 5.88% 1.53% 12 3.40% 3.44% 10201 to 300 Beds (3.30%) (2.05%) 18 (2.45%) 1.16% 18 (1.96%) 0.40% 19Over 300 Beds (3.20%) (0.68%) 11 (5.27%) (3.17%) 12 (0.35%) (2.94%) 11
Total All Hospitals (0.57%) 0.37% 49 (0.51%) 1.00% 51 0.17% 1.37% 47Excluded Cost Reports 14 20 23
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less (8.19%) (8.41%) 8 (0.84%) 1.79% 7 3.47% 2.31% 5201 to 300 Beds 5.92% 3.78% 11 3.99% 4.25% 11 (1.09%) (0.46%) 11301 to 400 Beds (2.84%) 1.02% 19 0.34% 2.78% 15 (2.08%) (0.46%) 16401 to 500 Beds (2.13%) (0.17%) 12 (3.77%) (4.23%) 11 (5.23%) (3.05%) 10
Total All Hospitals (1.60%) 1.11% 50 0.03% 1.43% 44 (1.91%) (0.80%) 42Excluded Cost Reports 22 28 31
Total Cost Reports 72 72 73
Total Operating Profit MarginAll Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Number of Licensed Beds2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 13
Peer Group Comparison – Total Operating Profit Margin
All Children's Hospitals in the United States with 100 Licensed Beds or Less
Mean Median Count Mean Median Count Mean Median Count1st Quartile 10.97% 10.97% 2 12.97% 12.97% 2 20.77% 20.77% 12nd Quartile 1.76% 1.76% 2 4.29% 4.29% 2 12.54% 12.54% 23rd Quartile (4.03%) (4.03%) 2 0.75% 0.75% 2 (2.15%) (2.15%) 24th Quartile (7.41%) (7.41%) 2 (8.36%) (8.94%) 3 (13.12%) (13.12%) 2
Total Population 0.32% (1.17%) 8 1.22% 1.50% 9 2.19% 1.37% 7Excluded Cost Reports 9 11 13
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 5.67% 5.67% 2 16.80% 16.80% 1 14.46% 14.46% 12nd Quartile (1.82%) (1.82%) 2 9.24% 9.24% 2 8.48% 8.48% 13rd Quartile (14.46%) (14.46%) 2 0.41% 0.41% 2 2.31% 2.31% 14th Quartile (22.16%) (22.16%) 2 (20.98%) (20.98%) 2 (3.96%) (3.96%) 2
Total Population (8.19%) (8.41%) 8 (0.84%) 1.79% 7 3.47% 2.31% 5Excluded Cost Reports 13 14 17
Total Cost Reports 21 21 22
Total Operating Profit Margin
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 14
Peer Group Comparison – Total Operating Profit Margin
All Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 17.42% 20.01% 3 18.71% 19.87% 3 15.99% 15.99% 22nd Quartile 6.21% 7.00% 3 5.56% 6.12% 3 5.45% 5.45% 23rd Quartile 1.90% 2.30% 3 1.12% 1.00% 3 2.98% 2.56% 34th Quartile (4.20%) (3.96%) 3 (1.87%) (0.58%) 3 (5.94%) (1.12%) 3
Total Population 5.33% 3.95% 12 5.88% 1.53% 12 3.40% 3.44% 10Excluded Cost Reports 3 5 7
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 23.65% 23.65% 2 21.01% 21.01% 2 12.26% 12.26% 22nd Quartile 9.40% 8.54% 3 11.97% 13.74% 3 6.31% 8.44% 33rd Quartile 1.89% 1.26% 3 1.37% 0.40% 3 (3.04%) (3.19%) 34th Quartile (5.37%) (5.37%) 3 (12.74%) (10.05%) 3 (15.44%) (17.63%) 3
Total Population 5.92% 3.78% 11 3.99% 4.25% 11 (1.09%) (0.46%) 11Excluded Cost Reports 6 6 6
Total Cost Reports 17 17 17
Quartile Rank2006 2005 2004
Total Operating Profit Margin
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 15
Peer Group Comparison – Total Operating Profit Margin
All Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 14.02% 13.41% 4 10.50% 10.20% 4 10.00% 9.71% 42nd Quartile 4.13% 3.79% 4 3.70% 3.40% 4 3.65% 4.26% 53rd Quartile (6.44%) (5.83%) 5 (1.24%) (0.54%) 5 (3.28%) (2.92%) 54th Quartile (19.97%) (20.47%) 5 (18.95%) (20.13%) 5 (15.82%) (17.55%) 5
Total Population (3.30%) (2.05%) 18 (2.45%) 1.16% 18 (1.96%) 0.40% 19Excluded Cost Reports 1 3 1
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 8.89% 8.68% 4 9.42% 7.05% 3 6.47% 6.87% 42nd Quartile 2.64% 2.27% 5 5.35% 5.99% 4 1.20% 1.15% 43rd Quartile (2.70%) (0.82%) 5 0.78% 1.59% 4 (3.28%) (3.74%) 44th Quartile (17.85%) (17.96%) 5 (11.93%) (11.68%) 4 (12.69%) (12.78%) 4
Total Population (2.84%) 1.02% 19 0.34% 2.78% 15 (2.08%) (0.46%) 16Excluded Cost Reports 2 6 5
Total Cost Reports 21 21 21
Quartile Rank2006 2005 2004
Total Operating Profit Margin
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 16
Peer Group Comparison – Total Operating Profit Margin
All Children's Hospitals in the United States with Over 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 6.94% 6.94% 2 4.13% 4.48% 3 11.69% 11.69% 22nd Quartile 1.51% 1.56% 3 (1.31%) (1.16%) 3 2.94% 4.86% 33rd Quartile (3.91%) (4.93%) 3 (6.23%) (7.22%) 3 (3.35%) (3.22%) 34th Quartile (13.96%) (14.18%) 3 (17.66%) (20.24%) 3 (8.66%) (8.57%) 3
Total Population (3.20%) (0.68%) 11 (5.27%) (3.17%) 12 (0.35%) (2.94%) 11Excluded Cost Reports 1 1 2
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 7.48% 7.31% 3 4.78% 4.78% 2 1.36% 1.36% 22nd Quartile 3.77% 3.93% 3 0.30% (0.27%) 3 (1.12%) (1.12%) 23rd Quartile (5.14%) (4.28%) 3 (5.65%) (5.49%) 3 (3.46%) (3.62%) 34th Quartile (14.64%) (12.98%) 3 (11.67%) (9.74%) 3 (14.12%) (10.12%) 3
Total Population (2.13%) (0.17%) 12 (3.77%) (4.23%) 11 (5.23%) (3.05%) 10Excluded Cost Reports 1 2 3
Total Cost Reports 13 13 13
Quartile Rank2006 2005 2004
Total Operating Profit Margin
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 17
Peer Group Comparison – Total Operating Profit Margin
All Children's Hospitals in the United States Regardless of Bed Size
Mean Median Count Mean Median Count Mean Median Count1st Quartile 13.11% 11.18% 11 11.37% 10.20% 12 12.90% 13.15% 92nd Quartile 3.60% 1.85% 12 3.01% 2.72% 12 5.25% 4.83% 123rd Quartile (3.56%) (3.93%) 13 (1.54%) (0.00%) 13 (1.68%) (2.92%) 134th Quartile (13.01%) (14.18%) 13 (12.75%) (13.01%) 14 (11.47%) (10.34%) 13
Total Population (0.57%) 0.37% 49 (0.51%) 1.00% 51 0.17% 1.37% 47Excluded Cost Reports 14 20 23
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 10.60% 8.47% 11 12.08% 10.88% 8 7.51% 6.95% 92nd Quartile 3.77% 3.64% 13 6.39% 6.11% 12 3.00% 1.15% 103rd Quartile (4.01%) (3.76%) 13 (0.74%) (0.07%) 12 (2.76%) (3.19%) 114th Quartile (14.89%) (16.18%) 13 (13.57%) (11.68%) 12 (12.28%) (10.04%) 12
Total Population (1.60%) 1.11% 50 0.03% 1.43% 44 (1.91%) (0.80%) 42Excluded Cost Reports 22 28 31
Total Cost Reports 72 72 73
Total Operating Profit Margin
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 18
Total Labor Cost as a Percentage of Total Operating Revenues - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 50.74% 51.50% 8 50.21% 48.61% 9 53.29% 51.83% 8101 to 200 Beds 50.45% 49.65% 14 50.71% 49.90% 13 50.15% 47.73% 13201 to 300 Beds 44.15% 43.46% 19 44.37% 43.64% 20 43.51% 43.37% 19Over 300 Beds 46.00% 48.75% 11 46.71% 47.15% 12 45.36% 44.95% 12
Total All Hospitals 47.25% 47.94% 52 47.39% 48.10% 54 47.10% 46.54% 52Excluded Cost Reports 11 17 18
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less 51.29% 54.55% 9 51.12% 54.57% 9 48.63% 44.42% 7201 to 300 Beds 48.16% 48.28% 12 50.19% 48.68% 12 48.70% 48.91% 12301 to 400 Beds 43.64% 41.56% 20 45.83% 46.54% 17 46.12% 45.93% 19401 to 500 Beds 47.02% 46.83% 12 47.41% 46.27% 12 50.34% 51.06% 12
Total All Hospitals 46.73% 47.59% 53 48.21% 48.23% 50 48.10% 48.91% 50Excluded Cost Reports 19 22 23
Total Cost Reports 72 72 73
Total Labor Cost as a Percentage of Total Operating RevenuesAll Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Number of Licensed Beds2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 19
Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. Revenues
All Children's Hospitals in the United States with 100 Licensed Beds or Less
Mean Median Count Mean Median Count Mean Median Count1st Quartile 37.53% 37.53% 2 39.92% 39.92% 2 43.48% 43.48% 22nd Quartile 50.22% 50.22% 2 46.60% 46.60% 2 49.90% 49.90% 23rd Quartile 52.83% 52.83% 2 50.58% 50.58% 2 53.66% 53.66% 24th Quartile 62.36% 62.36% 2 59.23% 56.85% 3 66.11% 66.11% 2
Total Population 50.74% 51.50% 8 50.21% 48.61% 9 53.29% 51.83% 8Excluded Cost Reports 9 11 12
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 34.60% 34.60% 2 37.60% 37.60% 2 34.66% 34.66% 12nd Quartile 49.91% 49.91% 2 42.37% 42.37% 2 40.18% 40.18% 23rd Quartile 54.74% 54.74% 2 55.12% 55.12% 2 49.76% 49.76% 24th Quartile 61.03% 58.43% 3 63.29% 63.26% 3 62.94% 62.94% 2
Total Population 51.29% 54.55% 9 51.12% 54.57% 9 48.63% 44.42% 7Excluded Cost Reports 12 12 15
Total Cost Reports 21 21 22
Total Labor Cost as a Percentage of Total Operating Revenues
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 20
All Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 40.81% 42.25% 3 41.52% 41.16% 3 40.95% 41.94% 32nd Quartile 44.70% 43.99% 3 45.74% 44.61% 3 45.87% 45.65% 33rd Quartile 52.00% 52.77% 4 52.98% 53.68% 3 49.66% 49.86% 34th Quartile 60.46% 58.45% 4 59.62% 58.80% 4 60.63% 61.63% 4
Total Population 50.45% 49.65% 14 50.71% 49.90% 13 50.15% 47.73% 13Excluded Cost Reports 1 4 4
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 40.18% 40.14% 3 39.26% 37.92% 3 39.33% 39.09% 32nd Quartile 45.47% 45.52% 3 47.05% 47.19% 3 47.08% 47.15% 33rd Quartile 50.32% 50.75% 3 51.76% 50.15% 3 50.80% 51.10% 34th Quartile 56.69% 57.18% 3 62.69% 63.49% 3 57.61% 57.37% 3
Total Population 48.16% 48.28% 12 50.19% 48.68% 12 48.70% 48.91% 12Excluded Cost Reports 5 5 5
Total Cost Reports 17 17 17
Quartile Rank2006 2005 2004
Total Labor Cost as a Percentage of Total Operating Revenues
Quartile Rank2009 2008 2007
Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. Revenues
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 21
All Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 32.73% 32.56% 4 33.46% 33.45% 5 31.65% 31.74% 42nd Quartile 37.81% 37.93% 5 39.25% 39.57% 5 36.86% 35.50% 53rd Quartile 46.33% 45.76% 5 47.84% 48.64% 5 45.89% 46.24% 54th Quartile 57.46% 54.45% 5 56.92% 53.60% 5 57.26% 54.02% 5
Total Population 44.15% 43.46% 19 44.37% 43.64% 20 43.51% 43.37% 19Excluded Cost Reports 0 1 1
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 32.05% 31.84% 5 34.26% 34.38% 4 34.32% 34.82% 42nd Quartile 38.64% 38.76% 5 39.82% 40.00% 4 42.01% 43.51% 53rd Quartile 47.18% 48.56% 5 50.66% 51.64% 4 49.84% 49.86% 54th Quartile 56.68% 54.26% 5 56.01% 55.30% 5 55.95% 54.78% 5
Total Population 43.64% 41.56% 20 45.83% 46.54% 17 46.12% 45.93% 19Excluded Cost Reports 1 4 2
Total Cost Reports 21 21 21
Quartile Rank2006 2005 2004
Total Labor Cost as a Percentage of Total Operating Revenues
Quartile Rank2009 2008 2007
Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. Revenues
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 22
All Children's Hospitals in the United States with Over 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 35.87% 35.87% 2 38.42% 38.68% 3 36.19% 36.10% 32nd Quartile 41.67% 42.48% 3 43.83% 43.44% 3 41.63% 40.16% 33rd Quartile 49.48% 49.84% 3 50.28% 49.38% 3 48.02% 49.23% 34th Quartile 53.62% 53.70% 3 54.33% 54.04% 3 55.59% 55.59% 3
Total Population 46.00% 48.75% 11 46.71% 47.15% 12 45.36% 44.95% 12Excluded Cost Reports 1 1 1
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 37.62% 38.06% 3 37.60% 37.77% 3 40.06% 41.45% 32nd Quartile 42.30% 41.14% 3 43.25% 43.27% 3 45.69% 43.80% 33rd Quartile 50.11% 50.25% 3 50.88% 48.90% 3 54.80% 55.83% 34th Quartile 58.03% 54.81% 3 57.90% 56.33% 3 60.81% 58.44% 3
Total Population 47.02% 46.83% 12 47.41% 46.27% 12 50.34% 51.06% 12Excluded Cost Reports 1 1 1
Total Cost Reports 13 13 13
Quartile Rank2006 2005 2004
Total Labor Cost as a Percentage of Total Operating Revenues
Quartile Rank2009 2008 2007
Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. Revenues
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 23
All Children's Hospitals in the United States Regardless of Bed Size
Mean Median Count Mean Median Count Mean Median Count1st Quartile 36.38% 34.45% 11 37.46% 37.18% 13 37.08% 36.65% 122nd Quartile 42.20% 42.48% 13 42.93% 43.44% 13 42.05% 40.84% 133rd Quartile 49.55% 49.39% 14 50.01% 49.38% 13 48.45% 48.53% 134th Quartile 58.19% 56.92% 14 57.59% 56.07% 15 59.13% 58.84% 14
Total Population 47.25% 47.94% 52 47.39% 48.10% 54 47.10% 46.54% 52Excluded Cost Reports 11 17 18
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 35.60% 35.95% 13 36.90% 36.39% 12 37.28% 36.15% 112nd Quartile 42.80% 41.56% 13 42.91% 42.60% 12 43.75% 44.19% 133rd Quartile 49.75% 49.68% 13 51.73% 51.64% 12 51.19% 51.10% 134th Quartile 57.91% 56.80% 14 59.41% 59.07% 14 58.53% 57.72% 13
Total Population 46.73% 47.59% 53 48.21% 48.23% 50 48.10% 48.91% 50Excluded Cost Reports 19 22 23
Total Cost Reports 72 72 73
Total Labor Cost as a Percentage of Total Operating Revenues
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. Revenues
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 24
Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB) - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 5.02 5.25 7 5.47 5.44 8 6.21 5.73 9101 to 200 Beds 6.09 6.94 11 6.83 7.47 11 5.99 6.27 11201 to 300 Beds 6.62 7.47 8 6.22 7.54 9 6.63 7.73 11Over 300 Beds 7.08 7.25 4 7.29 7.61 5 7.28 7.46 6
Total All Hospitals 6.11 6.60 30 6.40 7.12 33 6.44 6.98 37Excluded Cost Reports 33 38 33
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less 5.56 5.58 10 5.30 4.64 7 4.91 4.94 5201 to 300 Beds 5.95 6.45 13 5.81 5.86 10 5.70 5.62 12301 to 400 Beds 6.94 7.80 13 7.69 7.77 8 7.27 7.66 13401 to 500 Beds 7.22 7.58 5 6.95 7.49 6 6.87 7.09 6
Total All Hospitals 6.32 7.14 41 6.40 6.98 31 6.35 6.78 36Excluded Cost Reports 31 41 37
Total Cost Reports 72 72 73
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Number of Licensed Beds2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 25
Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)
All Children's Hospitals in the United States with 100 Licensed Beds or Less
Mean Median Count Mean Median Count Mean Median Count1st Quartile 2.33 2.33 1 3.66 3.66 2 3.85 3.85 22nd Quartile 3.94 3.94 2 4.68 4.68 2 5.26 5.26 23rd Quartile 5.58 5.58 2 5.99 5.99 2 6.57 6.57 24th Quartile 6.87 6.87 2 7.56 7.56 2 8.19 8.16 3
Total Population 5.02 5.25 7 5.47 5.44 8 6.21 5.73 9Excluded Cost Reports 10 12 11
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.42 3.42 2 3.01 3.01 1 3.58 3.58 12nd Quartile 4.12 4.12 2 4.12 4.12 2 3.83 3.83 13rd Quartile 5.67 5.68 3 5.32 5.32 2 4.94 4.94 14th Quartile 7.84 8.11 3 7.61 7.61 2 6.10 6.10 2
Total Population 5.56 5.58 10 5.30 4.64 7 4.91 4.94 5Excluded Cost Reports 11 14 17
Total Cost Reports 21 21 22
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 26
Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)
All Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.25 3.25 2 4.35 4.35 2 3.59 3.59 22nd Quartile 4.71 4.78 3 5.76 5.45 3 4.67 4.67 33rd Quartile 7.33 7.39 3 8.01 8.26 3 6.92 6.88 34th Quartile 8.13 8.12 3 8.35 8.33 3 7.97 8.09 3
Total Population 6.09 6.94 11 6.83 7.47 11 5.99 6.27 11Excluded Cost Reports 4 6 6
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.56 3.18 3 3.57 3.57 2 3.46 3.39 32nd Quartile 4.67 4.63 3 4.58 4.58 2 4.83 4.78 33rd Quartile 6.94 7.14 3 6.19 6.30 3 6.64 6.44 34th Quartile 7.95 7.98 4 7.75 7.99 3 7.89 7.75 3
Total Population 5.95 6.45 13 5.81 5.86 10 5.70 5.62 12Excluded Cost Reports 4 7 5
Total Cost Reports 17 17 17
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 27
Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)
All Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.87 3.87 2 2.81 2.81 2 2.79 2.79 22nd Quartile 6.64 6.64 2 5.60 5.60 2 6.16 6.95 33rd Quartile 7.75 7.75 2 7.66 7.66 2 7.91 7.83 34th Quartile 8.23 8.23 2 7.94 7.97 3 8.37 8.36 3
Total Population 6.62 7.47 8 6.22 7.54 9 6.63 7.73 11Excluded Cost Reports 11 12 9
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.75 3.36 3 6.79 6.79 2 5.61 6.52 32nd Quartile 7.31 7.49 3 7.64 7.64 2 7.26 7.33 33rd Quartile 7.95 8.01 3 8.00 8.00 2 7.71 7.68 34th Quartile 8.30 8.26 4 8.35 8.35 2 8.20 8.20 4
Total Population 6.94 7.80 13 7.69 7.77 8 7.27 7.66 13Excluded Cost Reports 8 13 8
Total Cost Reports 21 21 21
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 28
Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)
All Children's Hospitals in the United States with Over 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 6.15 6.15 1 6.02 6.02 1 5.85 5.85 12nd Quartile 7.22 7.22 1 6.82 6.82 1 6.28 6.28 13rd Quartile 7.28 7.28 1 7.61 7.61 1 7.46 7.46 24th Quartile 7.67 7.67 1 8.00 8.00 2 8.31 8.31 2
Total Population 7.08 7.25 4 7.29 7.61 5 7.28 7.46 6Excluded Cost Reports 8 8 7
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 5.57 5.57 1 5.25 5.25 1 5.19 5.19 12nd Quartile 6.54 6.54 1 5.45 5.45 1 6.28 6.28 13rd Quartile 7.58 7.58 1 7.49 7.49 2 7.09 7.09 24th Quartile 8.21 8.21 2 8.02 8.02 2 7.79 7.79 2
Total Population 7.22 7.58 5 6.95 7.49 6 6.87 7.09 6Excluded Cost Reports 8 7 7
Total Cost Reports 13 13 13
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 29
Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)
All Children's Hospitals in the United States Regardless of Bed Size
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.79 3.87 6 3.95 4.15 7 3.76 3.79 72nd Quartile 5.32 4.87 8 5.59 5.22 8 5.48 5.15 93rd Quartile 6.99 7.33 8 7.37 7.58 8 7.25 7.51 104th Quartile 7.78 8.01 8 8.00 8.02 10 8.20 8.23 11
Total Population 6.11 6.60 30 6.40 7.12 33 6.44 6.98 37Excluded Cost Reports 33 38 33
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.82 3.36 9 4.83 4.81 6 4.50 4.15 82nd Quartile 5.64 4.91 9 5.44 4.70 7 5.80 5.71 83rd Quartile 6.93 7.18 10 6.69 6.86 9 6.91 7.37 94th Quartile 8.07 8.11 13 7.91 8.04 9 7.66 7.91 11
Total Population 6.32 7.14 41 6.40 6.98 31 6.35 6.78 36Excluded Cost Reports 31 41 37
Total Cost Reports 72 72 73
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 30
Days Net Patient Revenue in Accounts Receivable (AR) - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 59.67 50.20 11 58.86 60.57 12 65.17 63.90 11101 to 200 Beds 54.35 50.78 15 59.00 55.09 14 59.81 60.21 12201 to 300 Beds 48.43 44.90 19 48.49 46.84 20 50.37 49.78 18Over 300 Beds 51.71 51.11 12 56.37 55.89 13 56.24 54.78 13
Total All Hospitals 52.85 50.20 57 54.83 52.44 59 56.89 56.50 54Excluded Cost Reports 6 12 16
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less 66.27 61.90 11 66.89 64.92 10 49.45 51.26 6201 to 300 Beds 59.52 59.88 14 61.60 59.67 13 59.71 60.94 13301 to 400 Beds 49.57 44.36 19 48.38 42.86 17 50.95 47.13 19401 to 500 Beds 55.74 54.46 12 59.82 59.05 12 59.85 62.64 12
Total All Hospitals 56.66 54.46 56 57.89 56.13 52 55.18 58.42 50Excluded Cost Reports 16 20 23
Total Cost Reports 72 72 73
Days Patient Revenue in Accounts Receivable (AR)All Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Number of Licensed Beds2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 31
Peer Group Comparison - Days Net Patient Revenue in Accounts Receivable (AR)
All Children's Hospitals in the United States with 100 Licensed Beds or Less
Mean Median Count Mean Median Count Mean Median Count1st Quartile 30.40 30.40 2 30.15 32.28 3 36.33 36.33 22nd Quartile 48.74 49.14 3 49.13 49.72 3 46.87 47.33 33rd Quartile 59.15 52.20 3 67.46 67.20 3 73.96 70.34 34th Quartile 90.64 89.11 3 88.70 91.04 3 93.92 90.97 3
Total Population 59.67 50.20 11 58.86 60.57 12 65.17 63.90 11Excluded Cost Reports 6 8 9
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 44.17 44.17 2 43.53 43.53 2 27.93 27.93 12nd Quartile 56.95 58.68 3 50.45 50.45 2 37.34 37.34 13rd Quartile 68.83 68.47 3 67.43 71.50 3 51.26 51.26 24th Quartile 87.77 89.47 3 92.89 90.55 3 64.44 64.44 2
Total Population 66.27 61.90 11 66.89 64.92 10 49.45 51.26 6Excluded Cost Reports 10 11 16
Total Cost Reports 21 21 22
Days Net Patient Revenue in Accounts Receivable (AR)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 32
Peer Group Comparison - Days Net Patient Revenue in Accounts Receivable (AR)
All Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 42.36 41.27 3 44.31 44.22 3 45.98 43.58 32nd Quartile 48.59 48.99 4 52.19 52.20 3 57.67 57.38 33rd Quartile 52.87 52.62 4 57.94 57.67 4 61.64 61.61 34th Quartile 70.56 71.68 4 76.19 72.86 4 73.95 73.20 3
Total Population 54.35 50.78 15 59.00 55.09 14 59.81 60.21 12Excluded Cost Reports 0 3 5
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 41.68 42.03 3 44.95 49.05 3 35.40 40.44 32nd Quartile 51.88 48.71 3 55.55 55.73 3 58.21 60.41 33rd Quartile 61.56 60.43 4 60.51 59.83 3 62.91 63.69 34th Quartile 76.58 73.33 4 79.45 79.84 4 76.66 76.09 4
Total Population 59.52 59.88 14 61.60 59.67 13 59.71 60.94 13Excluded Cost Reports 3 4 4
Total Cost Reports 17 17 17
Quartile Rank2006 2005 2004
Days Net Patient Revenue in Accounts Receivable (AR)
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 33
Peer Group Comparison - Days Net Patient Revenue in Accounts Receivable (AR)
All Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 30.74 32.91 4 30.27 28.69 5 33.07 32.80 42nd Quartile 42.05 42.27 5 45.64 46.10 5 39.52 38.52 43rd Quartile 50.40 49.26 5 49.58 50.30 5 54.81 56.32 54th Quartile 66.99 62.67 5 68.46 67.91 5 68.43 63.55 5
Total Population 48.43 44.90 19 48.49 46.84 20 50.37 49.78 18Excluded Cost Reports 0 1 2
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 36.65 36.80 4 32.43 32.39 4 32.46 31.59 42nd Quartile 40.12 40.41 5 39.65 39.64 4 40.95 41.45 53rd Quartile 49.91 50.94 5 43.77 43.57 4 50.25 48.83 54th Quartile 69.01 70.45 5 71.82 64.35 5 76.46 75.03 5
Total Population 49.57 44.36 19 48.38 42.86 17 50.95 47.13 19Excluded Cost Reports 2 4 2
Total Cost Reports 21 21 21
Quartile Rank2006 2005 2004
Days Net Patient Revenue in Accounts Receivable (AR)
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 34
Peer Group Comparison - Days Net Patient Revenue in Accounts Receivable (AR)
All Children's Hospitals in the United States with Over 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 41.57 43.58 3 45.89 44.65 3 44.57 42.90 32nd Quartile 48.10 48.15 3 52.39 52.44 3 53.08 53.19 33rd Quartile 52.78 52.50 3 56.73 57.04 3 56.28 56.68 34th Quartile 64.37 58.69 3 66.95 67.62 4 67.32 68.30 4
Total Population 51.71 51.11 12 56.37 55.89 13 56.24 54.78 13Excluded Cost Reports 0 0 0
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 45.22 46.34 3 45.72 48.26 3 41.86 41.15 32nd Quartile 52.80 52.25 3 54.53 56.53 3 58.08 60.92 33rd Quartile 56.12 54.82 3 64.55 64.89 3 65.18 64.89 34th Quartile 68.81 67.88 3 74.49 70.85 3 74.28 68.10 3
Total Population 55.74 54.46 12 59.82 59.05 12 59.85 62.64 12Excluded Cost Reports 1 1 1
Total Cost Reports 13 13 13
Quartile Rank2006 2005 2004
Days Net Patient Revenue in Accounts Receivable (AR)
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 35
Peer Group Comparison - Days Net Patient Revenue in Accounts Receivable (AR)
All Children's Hospitals in the United States Regardless of Bed Size
Mean Median Count Mean Median Count Mean Median Count1st Quartile 36.30 37.30 12 36.60 39.88 14 39.72 40.67 122nd Quartile 46.34 46.94 15 49.24 50.65 14 48.53 47.38 133rd Quartile 53.29 52.09 15 56.81 57.00 15 60.69 59.09 144th Quartile 72.15 69.59 15 73.81 70.73 16 74.34 73.20 15
Total Population 52.85 50.20 57 54.83 52.44 59 56.89 56.50 54Excluded Cost Reports 6 12 16
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 41.30 40.46 12 40.73 41.76 12 35.41 34.79 112nd Quartile 48.96 49.93 14 49.15 50.57 12 49.25 48.03 123rd Quartile 58.04 58.92 15 57.89 59.83 13 56.77 59.19 134th Quartile 74.74 72.62 15 78.60 82.16 15 74.34 74.56 14
Total Population 56.66 54.46 56 57.89 56.13 52 55.18 58.42 50Excluded Cost Reports 16 20 23
Total Cost Reports 72 72 73
Days Net Patient Revenue in Accounts Receivable (AR)
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 36
Average Age of Plant and Equipment - Summary
Mean Median Count Mean Median Count Mean Median Count100 Beds or Less 6.43 5.61 10 6.50 5.28 13 7.87 6.73 10101 to 200 Beds 7.60 7.20 14 7.67 6.53 13 8.71 10.52 12201 to 300 Beds 9.26 8.32 17 9.79 8.92 18 10.00 9.79 17Over 300 Beds 11.35 10.13 8 10.40 8.92 9 10.06 8.29 9
Total All Hospitals 8.55 7.96 49 8.57 7.48 53 9.24 9.00 48Excluded Cost Reports 14 18 22
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count200 Beds or Less 7.86 7.75 11 6.74 6.32 10 8.33 7.36 7201 to 300 Beds 8.64 10.14 14 8.93 10.72 12 7.54 9.90 9301 to 400 Beds 9.31 9.09 18 9.01 8.74 16 8.93 8.68 17401 to 500 Beds 10.59 9.97 8 8.66 7.84 10 9.82 10.24 10
Total All Hospitals 9.01 8.67 51 8.45 8.74 48 8.75 8.88 43Excluded Cost Reports 21 24 30
Total Cost Reports 72 72 73
Average Age of Plant and EquipmentAll Children's Hospitals in the United States Ranked by Number of Licensed Beds
Number of Licensed Beds2009 2008 2007
Number of Licensed Beds2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 37
Peer Group Comparison - Average Age of Plant and Equipment
All Children's Hospitals in the United States with 100 Licensed Beds or Less
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.25 3.25 2 1.36 1.01 3 3.67 3.67 22nd Quartile 4.26 4.26 2 3.63 3.65 3 5.89 5.89 23rd Quartile 5.83 5.74 3 6.22 6.13 3 6.92 7.21 34th Quartile 10.61 9.69 3 12.72 11.82 4 12.93 11.02 3
Total Population 6.43 5.61 10 6.50 5.28 13 7.87 6.73 10Excluded Cost Reports 7 7 10
Total Cost Reports 17 20 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 2.77 2.77 2 0.67 0.67 2 2.36 2.36 12nd Quartile 5.30 5.24 3 3.07 3.07 2 5.82 5.82 23rd Quartile 7.90 7.78 3 6.45 6.39 3 8.12 8.12 24th Quartile 13.79 13.61 3 13.53 11.87 3 14.04 14.04 2
Total Population 7.86 7.75 11 6.74 6.32 10 8.33 7.36 7Excluded Cost Reports 10 11 15
Total Cost Reports 21 21 22
Average Age of Plant and Equipment
Quartile Rank2009 2008 2007
Quartile Rank2006 2005 2004
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 38
Peer Group Comparison - Average Age of Plant and Equipment
All Children's Hospitals in the United States with Between 101 and 200 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 2.21 2.24 3 3.82 5.07 3 3.17 3.01 32nd Quartile 5.92 5.98 3 5.45 5.52 3 7.42 6.11 33rd Quartile 8.03 7.78 4 7.76 7.31 3 11.15 11.18 34th Quartile 12.47 12.11 4 12.17 12.45 4 13.09 12.25 3
Total Population 7.60 7.20 14 7.67 6.53 13 8.71 10.52 12Excluded Cost Reports 1 4 5
Total Cost Reports 15 17 17
Mean Median Count Mean Median Count Mean Median Count1st Quartile 2.13 2.75 3 3.06 2.13 3 1.38 1.38 22nd Quartile 5.70 5.93 3 9.03 10.37 3 5.31 5.31 23rd Quartile 10.30 10.32 4 11.14 11.11 3 10.06 10.06 24th Quartile 14.06 13.96 4 12.50 12.78 3 11.46 11.45 3
Total Population 8.64 10.14 14 8.93 10.72 12 7.54 9.90 9Excluded Cost Reports 3 5 8
Total Cost Reports 17 17 17
Quartile Rank2006 2005 2004
Average Age of Plant and Equipment
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 39
Peer Group Comparison - Average Age of Plant and Equipment
All Children's Hospitals in the United States with Between 201 and 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 5.86 6.14 4 6.31 6.35 4 5.22 6.78 42nd Quartile 7.94 7.93 4 7.63 7.45 4 8.79 8.87 43rd Quartile 9.13 9.14 4 9.84 9.71 5 10.10 9.97 44th Quartile 13.14 11.94 5 14.25 11.97 5 14.71 13.83 5
Total Population 9.26 8.32 17 9.79 8.92 18 10.00 9.79 17Excluded Cost Reports 2 3 3
Total Cost Reports 19 21 20
Mean Median Count Mean Median Count Mean Median Count1st Quartile 4.29 5.05 4 6.64 6.63 4 6.58 6.70 42nd Quartile 8.34 8.44 4 8.08 8.02 4 8.03 8.01 43rd Quartile 9.62 9.66 5 9.36 9.41 4 9.06 9.01 44th Quartile 13.77 12.02 5 11.97 10.37 4 11.43 10.07 5
Total Population 9.31 9.09 18 9.01 8.74 16 8.93 8.68 17Excluded Cost Reports 3 5 4
Total Cost Reports 21 21 21
Quartile Rank2006 2005 2004
Average Age of Plant and Equipment
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 40
Peer Group Comparison - Average Age of Plant and Equipment
All Children's Hospitals in the United States with Over 300 Licensed Beds
Mean Median Count Mean Median Count Mean Median Count1st Quartile 6.75 6.75 2 5.52 5.52 2 4.27 4.27 22nd Quartile 8.67 8.67 2 7.85 7.85 2 7.43 7.43 23rd Quartile 10.87 10.87 2 9.87 9.87 2 9.23 9.23 24th Quartile 19.11 19.11 2 15.71 17.37 3 16.22 17.45 3
Total Population 11.35 10.13 8 10.40 8.92 9 10.06 8.29 9Excluded Cost Reports 4 4 4
Total Cost Reports 12 13 13
Mean Median Count Mean Median Count Mean Median Count1st Quartile 4.75 4.75 2 2.54 2.54 2 3.55 3.55 22nd Quartile 8.59 8.59 2 5.26 5.26 2 6.10 6.10 23rd Quartile 10.60 10.60 2 8.65 8.93 3 10.51 10.97 34th Quartile 18.41 18.41 2 15.02 15.39 3 15.78 16.35 3
Total Population 10.59 9.97 8 8.66 7.84 10 9.82 10.24 10Excluded Cost Reports 5 3 3
Total Cost Reports 13 13 13
Quartile Rank2006 2005 2004
Average Age of Plant and Equipment
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 41
Peer Group Comparison - Average Age of Plant and Equipment
All Children's Hospitals in the United States Regardless of Bed Size
Mean Median Count Mean Median Count Mean Median Count1st Quartile 4.55 3.84 11 4.32 5.22 12 4.21 4.53 112nd Quartile 6.85 7.80 11 6.12 6.35 12 7.64 8.10 113rd Quartile 8.30 8.32 13 8.53 8.92 13 9.42 9.97 124th Quartile 13.26 12.28 14 13.62 12.10 16 14.31 13.04 14
Total Population 8.55 7.96 49 8.57 7.48 53 9.24 9.00 48Excluded Cost Reports 14 18 22
Total Cost Reports 63 71 70
Mean Median Count Mean Median Count Mean Median Count1st Quartile 3.51 3.69 11 3.83 3.75 11 4.28 4.93 92nd Quartile 6.96 7.23 12 6.92 7.72 11 6.66 6.29 103rd Quartile 9.59 10.06 14 8.94 9.09 13 9.46 9.50 114th Quartile 14.52 14.24 14 13.16 11.87 13 12.84 11.12 13
Total Population 9.01 8.67 51 8.45 8.74 48 8.75 8.88 43Excluded Cost Reports 21 24 30
Total Cost Reports 72 72 73
Quartile Rank2006 2005 2004
Average Age of Plant and Equipment
Quartile Rank2009 2008 2007
Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 42
Introduction to Healthcare Management PartnersWho We Are
HMP is a hospital and healthcare services management firm. All of its senior executives have decades of healthcare experienceincluding CEO, COO and CFO assignments across the spectrum of healthcare service providers. Our senior management has deepexperience in building and operating thriving healthcare organizations. Part of that experience includes taking decisive action in crisesor turnaround situations. This knowledge base gives HMP a unique perspective and all the tools necessary to handle the issues facingany healthcare provider organization. HMP provides Hospital Contract Management, Turnaround Management and Interim or CrisisManagement services.
Our Approach
Our approach to every assignment is built upon the straightforward application of three simple steps or guiding principles.
Listen – We listen carefully to our clients, their key stakeholders and the marketplace throughout each assignment.
Evaluate – We employ detailed, fact-based analysis to evaluate and validate assumptions, findings and recommended actions.
Implement – We have a bias toward “getting it done.” We take decisive action to quickly convert opportunities or solve problems .
The HMP Difference Total commitment to providing C-Level attention throughout each assignment by experienced healthcare executives
Small, dedicated teams of operating professionals for each assignment
Absolute integrity of our fact-based approach
Action-oriented diagnostic and business planning processes
Proven ability to drive positive outcomes in all sectors of healthcare
Depth of HMP network, providing critical access to key resources and people
Commitment to the highest professional standards
October 2010 43
Introduction to Healthcare Management Partners
Management Services
HMP is a hospital and healthcare services management firm. All of its senior executives have decades of healthcare experienceincluding CEO, COO and CFO assignments across the spectrum of health services. Examples of specific assignments include serving asthe Chief Executive Officer (CEO) of the following types of healthcare organizations:
Religious affiliated or sponsored multihospital systems
Free standing not-for-profit or government owned community hospitals
University and major teaching hospitals
Single site and multihospital regional operations for investor owned hospital management companies
De Novo organizations (start-up) planning, construction and operation of new general acute care hospitals, free-standing heartand cancer hospitals, a continuing care retirement community and many other related facilities
Hospitals that are in bankruptcy or for sale
Financially distressed skilled nursing facilities
Home health, hospice and physician practices
“HMP’s senior staff members are professional healthcare service executives who also possess consulting skills, not professional consultants. We understand and are committed to the provision of quality healthcare services
at every provider organization where we have a management role.”
October 2010
Hospital Contract Management
HMP is positioned to undertake the long-term (3 to 5 years) contract management of hospitals of all sizes and stages ofdevelopment. Our executives are experienced in leading the development of new or replacement general acute care or specialtyhospitals or the turnaround and repositioning of existing hospitals. They can effectively lead initiatives in the following areas:
44
Introduction to Healthcare Management Partners
Strategic Leadership Clinical Excellence Operational Excellence Financial Performance
Market Positioning Clinical Process Redesign Patient Throughput Revenue Cycle
Brand Development Evidence‐Based Care Emergency Department Clinical Efficiency
Business Office Consolidation
Service Line Development Resource Utilization and Cost of Quality
Surgical Services Clinical Efficiency
Managed Care Contracting
Capital Planning and Investment Pay for Performance Inpatient Length of Stay and Level of Care
Risk Management and Insurance
Physician Relations Care and Case Management Processes
Human Resources Management Budgeting / Financial Planning
Physician Integration Quality and Safety Indicators Ambulatory Care Capital Programs
Continuum of Care Design and Implementation Strategic Plans
Hospice and Home Care Supply Chain
Corporate and Medical Staff Governance
Mission and Vision Best Practices and Operating Metrics
Financial Reporting and Accounting
We will be directly accountable to the board of directors and will assume full responsibility to plan, organize, staff, direct andcontrol the successful and cost effective operations of the hospital.
Because HMP is not a management consulting firm, our contract management executives are free to always bring the best and mostcost-effective solution, from whatever source, to the hospital should outside assistance prove necessary to implement a givenstrategic or tactical initiative.
October 2010
Turnaround Management
HMP’s executives have served as chief restructuring officers of healthcare companies through bankruptcies, crisis situations and in theearly stages of high-profile criminal and civil fraud investigations. In each of these situations, their leadership helped theseorganizations bolster performance through discipline and carefully planned action.
Some consultants assess your problems and provide a recommended course of action. But HMP executives take the helm of failingorganizations and assume direct responsibility for transforming them. Time and again, they have succeeded in revitalizing providers ofall kinds, from a rural nursing home chain to a 1,000 bed teaching hospital or a 179 bed county owned community hospital.
There are no quick fixes in turnaround management, but HMP has developed a highly effective, streamlined approach for achievinglasting improvements as soon as possible. We begin by developing a strong knowledge base of your organization. Individuals fromevery level of the organization are interviewed: management, medical and nursing staff members, board of directors, employees,patients and their families. Their input, combined with a depth of healthcare industry knowledge, allows HMP to:
Stabilize the crises,
Identify immediate opportunities and challenges,
Develop a strategic plan, including milestones and deadlines,
Define expected outcomes,
Build consensus with all constituents – medical and nursing staffs, management, unions, and the local community,
Change cultures, and
Optimize performance.
In all of its healthcare provider turnaround assignments, HMP has successfully designed and executed plans that simultaneously addedpatient volume and revenues, reduced costs and improved profitability and cash flow.
From the outset, HMP builds on each organization’s strengths, working side‐by‐side with management, directors and other keystakeholders to drive desired results. HMP also focuses on winning the support and active participation of the medical and nursingstaffs, which is fundamental for delivering quality healthcare services and improving financial results.
45
Introduction to Healthcare Management Partners
October 2010
Interim and Crisis Management
HMP serves in interim and crisis management roles when required to help guide providers through periods of crisis or change.Companies that are underperforming and in crisis, or healthy but in transition, may need additional experienced healthcare industryleaders to stabilize operations and improve financial performance or maintain continuity in the rapid implementation of critical strategicinitiatives.
Our professionals can offer critical advice or step into key leadership positions such as Chief Restructuring Officer, Chief FinancialOfficer, or Chief Executive Officer to provide needed stability during periods of change. Our proven interim management capabilitiesadd valuable support in crisis situations. We immediately fill critical leadership vacancies and shorten the lead‐time for implementingspecific initiatives. HMP provides much needed leadership and speed to create value in executing crisis management and restructuringplans.
Our crisis and interim management services include:
Immediate staffing of critical senior management positions
Reducing lead‐time for implementing strategic initiatives
Managing communications processes with Members of the medical and nursing staffs, board members, employees and regulators,and if required
Bankruptcy process planning and administration
46
Introduction to Healthcare Management Partners
October 2010
Clients Our Professionals Have Served
47
Investor Owned Hospitals or Health SystemsAmeris Health Systems Health South Corporation Integrated Healthcare
Holdings, Inc.Shasta Regional Medical Center
Doctors Hospital, Houston Hospital Corporation of America
Lakeside Hospital at Bastrop St. Joseph Hospital, Houston
Doctors Hospital, Los Angeles Hugh Chatham Memorial Hospital
LifePoint Hospitals Tenet Healthcare Corporation
HealthPlus Hughston Hospital and Clinic Monroe Hospital, LLC Vanguard Health Systems
Hospital Partners of America Integra Healthcare Promise Healthcare
Not-For-Profit or Governmental Hospitals or SystemsBaylor College of Medicine Hahnemann University
HospitalNew York United Hospital Medical Center
Southern Chester County Medical Center
The Brooklyn Hospital Center Health Alliance of Cincinnati Nyack Hospital St Vincent’s Catholic Medical Centers, New York
Devereux Foundation National Health Service, United Kingdom
Rahway Hospital Temple Health System
Franciscan Health System Legacy Health System Raritan Bay Health System Tri‐Lakes Medical Center
General Health System Mercy Health System Robert Wood Johnson Health Network
University Hospital Consortium of Pennsylvania
Good Samaritan Hospital Natchez Regional Medical Center
Sisters of Mercy Health System
October 2010 48
Law and Accounting FirmsBird Marella LLP Deloitte Kantrow, Spaht, Weaver & Blitzer Patton Boggs
Bradley Arant Boult Cummings LLP
Gearhiser, Peters, Lockaby, Cavett & Elliott, PLLC
KPMG Ramirez International, Inc.
Brown McCarroll LLP Hogan & Hartson LLP Latham & Watkins Whiteford Taylor Preston, LLP
Fulbright & Jaworski LLP Hooper, Lundy & Bookman Mancuso & Franco PC Schiavetti, Corgan, Soscia, DiEdwards and Nicholson, LLP
Decosimo Jones Day Milbank, Tweed, Hadley and McCloy LLP
Waller Lansden Dortch & Davis
Clients Our Professionals Have Served
Senior Care and/or Continuing Care Retirement CommunitiesGrace Care of Texas Monarch Landing, Inc.
Jenner’s Pond Continuing Care Retirement Community National Senior Campuses (Erickson Retirement Communities)
Life Care Centers of America Sedgebrook, Inc.
Linden Ponds, Inc. St. Edward Mercy Health Systems (Ft. Smith, AR)
Mercy Hospitals of Texas St. Johns Nursing Home (St. Louis, MO)
Other Providers / PayorsBlue Cross of Tennessee Best Choice Home Health Community Behavioral Health
Network of PAColumbia Home Care
October 2010 49
Firm Leadership
Scott PhillipsTitle Managing Director
Education B.S. from University of FloridaCPA
Boards & Organizations American Bankruptcy Institute Healthcare Subcommittee Chair
Telephone 267.207.2929
Mobile 267.804.3885
E-Mail [email protected]
Scott has more than 30 years of healthcare industry management and consulting experience. Prior to founding HMP in 1997, he served as thepresident and chief executive officer of a 636-bed academic medical center, as national partner and regional healthcare practice director for ToucheRoss & Co., and as the chief financial officer of a faith-based multihospital system operating 12 hospitals across seven states.
Scott has significant management and consulting experience with government, tax-exempt and investor owned healthcare service providers. Heunderstands the organization and delivery of high-quality health services, including the role of corporate and medical staff governance duringdifficult periods of transition. Scott has executive level experience with mergers, acquisitions and turnaround situations, including restructuring inbankruptcy. In all of his many healthcare provider turnaround assignments, he has successfully designed and implemented plans that simultaneouslyadded patient volume and revenues while conserving cash and reducing unit costs. He understands this approach builds on the organization’sstrengths and attracts the support of the local community and medical and nursing staffs, which is essential for the long-term provision of qualityhealthcare services.
Over the past several years, Scott has served as the chairman and CEO of an investor owned healthcare provider with operations in 15 states andchief executive officer of a publicly traded medical staffing company with more than 2,000 employees. Both turnaround assignments included thecrises management of complex organizations in the early stages of high-profile criminal and civil fraud investigations by multiple federal agencies.
Scott has expert knowledge of the bankruptcy process as well as its implications and obligations on an operating provider of healthcare services. Herecently led the successful financial turnaround and Chapter 9 reorganization of a 179-bed county-owned hospital.
Recently he was the financial advisor to 18 tax-exempt continuing care retirement communities with more than 20,000 residents in twelve states,affected by the bankruptcy and sale of Erickson Retirement Communities.
Scott graduated from the University of Florida with a Bachelor of Science in accounting. He is a licensed certified public accountant and member ofnumerous professional organizations. He is currently serving Leader Special Projects, Healthcare Committee, American Bankruptcy Institute.
October 2010 50
Firm Leadership
Michael MorganTitle Managing Director
Education MBA from University of Central OklahomaB.S. from University of Science and Arts of Oklahoma
Boards & Organizations Fellow of American College of Healthcare Executives
Telephone 713.968.6521
Mobile 214.701.9990
E-Mail [email protected]
Michael is a former hospital chief executive officer with more than 30 years of experience in healthcare management. He brings expertise and talentfor turning around ailing healthcare providers and optimizing healthy organizations.
In his 25-year career at the Sisters of Mercy Health System, Michael was responsible for turning around five of the system’s 19 hospitals. He servedas president and chief executive officer for several Sisters of Mercy hospitals, including St. John’s Mercy Health Care, which has over $800 millionin operating revenues, employs more than 8,000 individuals and includes the system’s flagship 957-bed teaching hospital. As the CEO, he has setsuccessful new strategies, improved clinical and administrative operations and changed organizational cultures. His trademark is developing capablemanagement teams that in turn increase service quality, employee and medical staff satisfaction, patient volume, profitability and maximize cashflow.
After leaving the Sisters of Mercy system, Michael served as the chief restructuring officer and CEO for a two-hospital, investor owned system inTexas. In eight months, he led the successful turnaround, emergence from bankruptcy and recapitalization of the hospitals by a physician-led limitedpartnership. He led the turnaround of a chain of five nursing homes in Texas and the bankruptcy turnaround of a two-campus, acute-care hospital inMississippi. He was the oversight Managing Director for a two-campus rehab and specialty hospital chapter 11 bankruptcy. He also recently servedas the CRO for three individual CCRC’s under a large CCRC management company bankruptcy, and provided financial advisory services for a largeinvestment banking group on a 500-bed hospital system.
Michael holds a Bachelor of Science in business administration from the University of Science and Arts of Oklahoma and a Master of Science inbusiness administration from the University of Central Oklahoma. He is a fellow of the American College of Healthcare Executives and has servedas an officer or director of numerous hospitals and business organizations, including a 280,000-member for-profit health insurance plan.
October 2010 51
Firm Leadership
Bruce BuchananTitle Managing Director
Education MBA from George Mason UniversityMHSA from University of MichiganB.A. from Princeton University
Boards & Organizations Fellow of American College of Healthcare Executives
Telephone 713.968.6521
Mobile 602.363.1140
E-Mail [email protected]
Bruce has more than 30 years of experience in the healthcare field and is a senior healthcare executive with a successful track record in both the not-for-profit and investor owned sectors. He possesses multimarket experience at the hospital and health system chief executive officer level. He hasdeep experience and expertise in revenue growth, physician collaboration/integration, organizational development, productivity improvement andquality enhancement.
Before joining HMP, Bruce served as CEO of Phoenix Baptist Hospital, where he turned around the distressed 236-bed teaching hospital by reducingoperating costs while enhancing the quality of care. Bruce led a similar turnaround of Northeast Baptist Hospital in San Antonio, including recruitingnew physicians, doubling the hospital’s physical space and growing market share. He also served as president and CEO of Atlanta Medical Centerand Mercy Health System Oklahoma and its Mercy Health Center in Oklahoma City. Bruce also held senior management positions with HillcrestHealthcare System and Saint Joseph Hospital and worked for Invalesco Group as an operations consultant to healthcare organizations.
Most recently with HMP, Bruce served as Chief Restructuring Officer for a rehabilitation hospital company with two facilities. He successfully ledthe company through a Chapter 11 bankruptcy process and a Section 363 sale to a new, privately held owner. He also served as CEO of a countyhospital and guided it through a Chapter 9 bankruptcy, which resulted in all unsecured creditors receiving three year notes for full payment plusinterest.
Bruce has a Bachelor of Arts in sociology from Princeton University, a Master of Health Services Administration from University of Michigan, and aMaster of Business Administration from George Mason University. He is board-certified in healthcare management and a Fellow in the AmericanCollege of Healthcare Executives. He also is a member of the Turnaround Management Association.
October 2010 52
Firm Leadership
Derek PierceTitle Managing Director
Education B.S. from Samford University
Telephone 205.202.0459
Mobile 615.584.0719
E-Mail [email protected]
Derek has over 20 years of professional experience focused solely in the healthcare industry, having served as chief financial officer, chiefrestructuring officer, director of reimbursement, court-appointed examiner, Medicare auditor, Medicare cost report preparer, forensic accountant,compliance consultant, financial auditor, and financial advisor. He has audited, managed and consulted with all types of healthcare providers,including government owned, community not-for-profit, academic, and investor owned entities.
Most recently, Derek served as the restructuring chief financial officer of a two-campus, not-for-profit hospital in Chapter 11 bankruptcy. In additionto his CFO responsibilities, he led the Section 363 sale process and conducted a forensic review into the circumstances that led to the hospital’sbankruptcy filing. Throughout the project, Derek worked closely with senior lenders, debtor-in-possession lenders and the applicable federal loanprogram to a successful plan of reorganization.
Starting his career with the Medicare fiscal intermediary as a Medicare auditor, Derek developed deep expert knowledge of the patient revenue cycle,third-party contracting, and Medicare and Medicaid rules and regulations. He is expert in the areas of corporate and regulatory compliance andforensic accounting in conjunction with the defense of civil and criminal fraud claims or allegations. He led teams conducting forensic analysis insupport of settlement negotiations with the government at both Hospital Corporation of America (HCA) and HealthSouth Corporation, two of thelargest and most complex civil fraud settlements in history.
In his career, Derek has led or participated in interim management and consulting assignments for more than 40 healthcare providers, includingBaptist Memorial Health Care, National Health Service (United Kingdom) Washington Hospital Center, Lifepoint Hospitals, Tampa GeneralHospital, Legacy Health System and IASIS Healthcare.
Prior to joining HMP as a managing director, Derek was a Director with Alvarez & Marsal in its New York-based healthcare practice. Before that,he was a senior manager with Arthur Andersen in its Atlanta-based healthcare consulting practice.
Derek is a graduate of Samford University with a Bachelor of Science in accounting and is a member of numerous professional associations.
October 2010
Contact Information
Philadelphia• Contact: Scott Phillips
Managing Director• Address:
One Liberty Place1650 Market Street36th FloorPhiladelphia, PA 19103
• Phone: 267.804.3885• Fax: 215.689.4386
New York• Contact: Nihal Shah
Director• Address:
Healthcare Management Partners LLC1185 Avenue of the Americas30th FloorNew York, NY 10036
• Phone: 212.461.4243• Fax: 212.461.4252
Houston• Contact: Mike Morgan
Managing Director• Address:
Healthcare Management Partners LLC5100 WestheimerSuite 200Houston, TX 77056
• Phone: 713.968.6521• Fax: 866.422.6176
Birmingham• Contact: Derek Pierce
Managing Director• Address:
Healthcare Management Partners LLC402 Office Park Drive, Suite 108Birmingham, AL 35223
• Phone: 205.202.0459• Fax: 615.523.1835
Phoenix• Contact: Bruce Buchanan
Managing Director• Address:
Healthcare Management Partners LLC243 E. Glenn DrivePhoenix, AZ 85020
• Phone: 602.363.1140 • Fax: 866.794.9501
London, UK• Contact: Tim Bolot
Founder and Managing Director• Address:
Bolt Partners LLP 192 Haverstock Hill,Belsize Park,London NW3 2AJ
• Phone: +44 (0)20 7435 7349
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