indian river memorial hospital, inc. d/b/a · pension plan c. pension plan risk management tactics...

Indian River Memorial Hospital, Inc. d/b/a

Indian River Medical Center

Dec 10, 2015 at 04:30 PM - 05:30 PM

IRMC Boardroom

1000 36th Street

Vero Beach, FL

This meeting may be recorded

a. Approval of Minutes

1. William Baxt, M.D.

1. Class of 2018

b. Nominating Committee

1. Minutes Dated October 28, 2015

II. Consent AgendaWayne T. Hockmeyer, Ph. D.

For Action

1. Residency Requirement

2. Compliance Committee Membership

1. Residency Requirement

a. Bylaw Revisions

III. Chairman's ReportWayne T. Hockmeyer, Ph. D.

For Action

a. Presentation of Employee CampaignCommittee

IV. Foundation Chairman's ReportAnthony Woodruff

For Information

a. Human Resource Annual Report For Information

V. President's ReportJeffrey L. Susi

I. Call to OrderWayne T. Hockmeyer, Ph. D.

For Information

2. Juliette Lomax-Homier, M.D.

1. Compliance Committee Membership

b. November/December Report

Meeting Book - Board of Directors

Board of Directors

Page 4

Page 8

Page 17

Page 19

1

Page 22

Karen Mitchell

b. November/December Report

1. Annual Human Resources Report

a. October 2015 Consolidated, Hospital, Physician& Imaging

b. IRMA Physician Practice Update

1. Pension Plan

c. Pension Plan Risk Management Tactics

1. October 2015 Consolidated Financials

1. FY 2015 IRMA Financials

VI. Finance CommitteeJack Weisbaum

1. William Kelley, M.D.

2. Fran Ross, Esq.

a. Recognition of Outgoing Board Members

VII. Other BusinessWayne T. Hockmeyer, Ph.D.

For Information

1. November/December Report

2. Towers Watson Presentation

3. Charles Celano, M.D.

VIII. Public Comment

IX. Adjoun to the Private Session

Page 25

Page 51

Page 56

Page 60

Page 73

Page 76

INDIAN RIVER MEMORIAL HOSPITAL, INC. D/B/A

INDIAN RIVER MEDICAL CENTER BOARD OF DIRECTORS

MINUTES

The regular meeting of the Indian River Medical Center Board of Directors was convened by Chairman Wayne Hockmeyer, Ph.D. on October 28, 2015 at 5:40 p.m. in the Hospital Boardroom. MEMBERS PRESENTS: Wayne Hockmeyer, Ph.D., Chairman

Charles Celano, M.D. Michael Hammes Kathy Hendrix John Lindenthal, M.D. Hugh McCrystal, M.D. Keith Morgan Jack Pastor Matthew Reiser Gerri Smith Jeffrey L. Susi Jack Weisbaum Anthony Woodruff

MEMBERS EXCUSED: William Kelley, M.D. Donald Laurie Pranay Ramdev, M.D. Fran Ross, Esq.

OTHERS PRSENT: Jan Donlan

Warren Fuller Greg Gardner Barbara Grimaldi Lisa Hedenstrom, Ph.D., R.N. Allen Jones Valerie Larcombe, Esq. Lisa Licitra Charles Mackett, M.D. Ann Marie McCrystal, R.N. Nate McCollum Karen Mitchell William Neil Steven Salyer Grace Simonson Cary Stowe, M.D. Richard Van Lith, Pharm. D.

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CONSENT AGENDA The following items were previously discussed at respective committees and distributed for review to the Board of Directors as Consent Agenda:

1. Approval of Minutes

a. IRMC Board of Directors Minutes dated August 26, 2015

2. Governance Committee

a. 2016 Proposed Slate of Officers

Wayne T. Hockmeyer, Ph.D.

Jeffrey L. Susi, President/Chief Executive Officer

Jack Pastor, Vice Chairman

Gerri Smith, Secretary

Jack Weisbaum, Treasurer

3. Nominating Committee

a. Class of 2018 Reappointment

Jack Weisbaum – Three year term

4. Joint Conference Committee

a. Medical Staff Privilege Forms Revisions

Gastroenterology

Family Medicine

b. Medical Staff Chief of Staff and Vice Chief of Staff Elections – Two Year Term

Hal Brown, M.D. – Chief of Staff

John Lindenthal, M.D. – Vice Chief of Staff

5. Finance Committee

a. FY 2016 Operating and Capital Budget Dr. Hockmeyer asked the Board Members if anyone wished to remove any item under the Consent Agenda for further discussion. There were no requests. Dr. Hockmeyer asked for a Motion to accept the Consent Agenda. Upon MOTION made by Dr. McCrystal, duly seconded by Mr. Pastor and unanimously carried, the Board of Directors approved the Consent Agenda as presented.

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FOUNDATION CHAIRMAN’S REPORT Mr. Woodruff reported on the beginning of the new season for the Foundation. November 4th is a orientation for six new Foundation Board members. On November 18th there will be a soft opening of the Scully Welsh Cancer Center. The Grand Opening will be held in January. Mr. Woodruff referred to the most recent Foundation mailing that includes a timeline of fundraising efforts since 1998. It is incredible how much has been accomplished in this timeframe. The Cancer Campaign still needs $8 million to reach its goal. The Foundation has also committed $4.5 million for EP. A donor has also given $1million to start the funding of an endowment. PRESIDENT’S REPORT Mr. Susi explained that the Medical Center has been working collaboratively on several project with the District. The Partners Collaborative, led by Allen Jones for the District and Kathy Hendrix for the Medical Center, have been working on a quality metrics for the Partners Program. Ms. Hendrix explain the Collaborative Group has worked on defining the needs of women in the community and developed solutions to help monitor and provide services for the high risk pregnancies. The work of the Collaborative is being developed into an agreement between the Medical Center and the District. The Collaborative will continue to meet quarterly. Discussion ensued. Mr. Susi explained that he is authorized to sign the agreement on behalf of the organization but suggested that given the importance of this issue, the Chairman be authorized to execute this agreement. Upon MOTION made by Ms. Hendrix, duly seconded by Mr. Weisbaum and unanimously carried, the Board of Directors authorizes Dr. Hockmeyer to execute the Partners agreement between the Medical Center and the District. Recently a review of the Emergency Department has been completed by Dr. William Baxt and Ms. AnnMaire Papa who are affiliated with the University of Pennsylvania. Dr. Baxt is an Emergency Physician and Ms. Papa is a nurse. They had very positive things to say about Dr. Giasi and felt IRMC had the right leadership in place. They also complemented the organization for the performance excellence hour which takes place each day. During the performance hour, all of the leadership meets to address the real time issues. Dr. Baxt did have some recommendation regarding the electronic medical record and suggested the nursing director of the Emergency Department report directly to the Chief Nursing Officer. This change has already been implemented. Mr. Susi noted the invitations to the annual employee awards banquet, the Medical Staff Holiday Party and the IRMA Quarterly Business Meeting. Governance Committee The Bylaw Revision discussion was deferred until next month. Joint Conference Committee Dr. Celano explained the proposed Medical Staff Leadership criteria which will be going to the Medical Staff for ratification. The criterion includes committee attendance obligations.

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Investment Committee The Investment Committee received the quarterly report of the investments as of September 30, 2015. The Frozen Pension Plan liability is projected based on a snapshot on September 30, 2015. The liability was approximately $18 million on that date but today the gap would be about $5 million less. The Plan is 80% funded similar to the majority of other institutions. Finance Committee The Finance Committee met for more than two hours yesterday and reviewed the consolidated results. The financial impact from the HAVAC event will be approximately $1 million, but we are still evaluating insurance coverage. The Committee also reviewed in depth review of the imaging business which was recently acquired. The meeting adjourned to the private session at 5:36 p.m. Respectfully submitted, Wayne T. Hockmeyer, Ph.D. Chairman

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Section 4.2. QUALIFICATIONS, TENURE AND ELECTION.

APPOINTMENT PROCEDURES.

4.2-1 Number and Voting. There shall be seventeen members ofDirectors

on the Board. Each member, except the President, shall have a vote.

4.2-2 Composition, Qualifications and Terms.

4.2-2.1 Composition. The Board shall be composed of twelve

Independent Directors, three of whom shall be designated by the District;

one elected Medical Staff Representative; and four ex-officio Directors; the

President; the Chairman of Indian River Medical Center Foundation (or

designee nominated by the Chairman of the Indian River Medical Center

Foundation and approved by the Board of Directors); the Chief of the

Medical Staff; and the Vice Chief of the Medical Staff.

4.2-2.2 Qualifications. Any adult Florida resident is eligible to serve

as an Independent Director other than: (1) a Public Official; (2) a member

of the Medical Staff with current clinical privileges; or (3) an employee of

Indian River Memorial Hospital, Inc. or any of its subsidiaries. and

affiliates. The Nominating Committee or the District, as the case may be,

shall find one or more of the following characteristics in prospective

Independent Directors: demonstrated management or professional acumen,

prior experience in health care delivery, a history of voluntary service, or a

particular attribute or skill considered desirable.distinctive competency

considered desirable. All Directors should possess universal competencies

as assessed by the Board in accordance with its Guidelines for Developing

Board Competency Based Standards.

4.2-2.3 Terms. Independent Directors shall be divided into three

equally-sized annual classes. Each class shall be elected for a term of three

years. The Medical Staff Representative shall serve two-year terms.

4.2-3 Election Procedures.

A. 4.2-3.1 Elected Directors. A Nominating CommitteeSubcommittee

shall be appointed annually in accordance with Section 6.1-1. The

Nominating CommitteeSubcommittee shall present its nominees for

Independent Director to the Board no later than the regular Board meeting

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preceding the Annual Meeting. The number of nominees presented shall

equal the number of Independent Directors to be elected by the Board at

such meeting. Nominees for re-appointment to the Board shall require a

majority vote of the Nominating CommitteeSubcommittee. Nominees to be

newly appointed to the Board shall require the unanimous vote of the

Nominating CommitteeSubcommittee. The Board shall elect Independent

Directors from among those persons nominated by the Nominating

CommitteeSubcommittee at or before its regular monthly meeting

immediately preceding the Annual Meeting. A newly-elected Independent

Director shall assume his or her position at the start of the Annual Meeting.

Section 4.2-4. TENURE. After completing three consecutive three-year

terms, no Independent Director shall be eligible for either election or

designation as an Independent Director until the next Annual Meeting,

provided, however, the Chairman of the Board may continue to serve for an

additional one (1) year term if the Governance Committee recommends and

the Nominating Committee and the Board approves an exception for the

Chairman to continue to serve as Chairman.

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6.1-6 COMPLIANCE COMMITTEE.

6.1-6.1 Composition and Appointment. The Compliance Committee

shall consist of the Committee’s Chairman, the Corporation’s Treasurer and

six (6) Independent Directors as assessed by the Board in accordance with its

policy on the Independence of Directors. It is intended that the Compliance

Committee shall be solely comprised of Independent Directors.

6.1-6.2 Authority and Function. The Compliance Committee assists

the Board of Directors consistent with the Compliance Committee Charter in

fulfilling the Board’s corporate governance and oversight fiduciary duties in

relation to corporate compliance, executive compensation, enterprise risk

management and internal control systems including the internal and external

audit function of the Corporation and its affiliates. The Compliance

Committee shall operate in accordance with its Charter then in effect or as

amended from time to time. To fulfill its Compliance function, the

Compliance Committee oversees three (3) Subcommittees (Audit, Physician

Compensation and Executive Compensation) each of which is further

described in Subsections 6.1-6-2, 6.1-6-3 and 6.1-6-4 of this Section 6.1-6.

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Indian River Medical Center Foundation Report


Board of Directors

October/November 2015

Campaign for Excellence in Cancer Care

The recent announcement of Dr. James Grichnik as Director of the Scully-Welsh Cancer Center

generated widespread and enthusiastic response in the community. Dr. Grichnik’s international

reputation, impressive resume and Duke connection resonated with donors and prospective

donors to the Campaign for Excellence in Cancer Care.

On the heels of Dr. Grichnik’s appointment, the completion of the Scully-Welsh Cancer Center

in mid-November amplified the progress in cancer care. Attendance at the November 18

preview reception numbered 185, all anxious to meet the new director and tour the state-of-the-

art center. Prior to the event, a timely Foundation mailing provided donors and prospects with

a draft of the donor recognition list resulting in a wave of interest. Many were motivated to

support the campaign via naming opportunities and additional gifts arrive daily. To date, total

funds raised for Excellence in Cancer Care tally $42 million. Additional verbal commitments have

been received further narrowing the gap to our $48-million campaign goal. Naming options

remain available on both the first and second floors of the center and tours continue to

showcase the center and these opportunities to give.

Continuing to exceed expectations, the Foundation’s November 19 season kick-off event

presented an all-star cast to members of the Foundation Board, Honorary Board, Advisory

Council, Community Leadership Committees and James B. Malloy Society. Led by Foundation

Chairman Tony Woodruff, IRMC CEO Jeff Susi and Foundation President Jan Donlan, the

program featured visionaries in both the clinical and philanthropic arenas. Addressing future

medical advancements were Dr. James Grichnik, Dr. Linda Sutton, Director Duke Oncology

Network, Dr. James Daubert, Cardiology and Clinical Cardiac Electrophysiology at Duke, and

IRMC’s Chief Nursing Officer/Vice President of Patient Safety Lisa Hedenstrom. Passionately

illustrating the continuing importance of philanthropic vision were donors Carol Welsh,

Marlynn Scully and the initiator of our new Endowment for Excellence in Patient Care, Al

Martinelli.

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Within days of the kickoff, Community Leadership Committees began to focus on prospects

and activities to complete Excellence in Cancer Care. Volunteers will also help to introduce the

new $5-million initiative to support development of IRMC’s electrophysiology program and

specialized cardiac catheterization lab, as well as the endowment effort introduced by Al

Martinelli.

Beginning its volunteer efforts even before the kick-off event, Grand Harbor Leadership

Committee hosted the first Eagle Society event of the season for 118 dinner guests. On

November 11, radiologist Dr. Heather Nagel shared a “grateful physician’s” view of the

importance of philanthropy to the delivery of outstanding healthcare for our community. Dr.

Nagel’s heartfelt progress report highlighted the cancer care program and the incomparable

benefits philanthropy offers to patients throughout IRMC.

Also prior to kickoff, new members of the Foundation Board of Directors and Advisory Council

joined Foundation President Jan Donlan and IRMC CEO Jeff Susi for an informative orientation

and tour. New Board members include: Jim Balog, Kay Brown, Chris Clifford, Dick Sameth and

Buzz Wurzer. Returning to the Board are Jack Rohrbach and Dr. Richard Milsten. Joining the

Honorary Board are Bernadette Emerick, Allen Jones and Barry Reardon. New to the Advisory

Council are Nancy Cruce, Ted Herget, France Kenyon, Ellen Kowalyk, Brian Kroh, Diana Stark

and Dr. Ted von Zielinski.

Planned Giving

Members of the Foundation’s Professional Circle gathered for their annual luncheon and

update on IRMC advancements and Foundation initiatives. Capping an enlightening program,

Al Martinelli shared his views on the importance of endowment giving. Best known as founder

of Buckeye Partners and a former chairman of the board at Philadelphia’s Hahnemann

University Hospital, Al and his wife Aline committed $1 million to start the general endowment

for Excellence in Patient Care at IRMC. With their son and daughter pledging an additional

$500,000, the family is encouraging others to help build an endowment that will enable medical

center leaders latitude to day-to-day challenges and opportunities associated with delivering

quality healthcare. To support Al’s dream of a $60-million endowment, the Foundation will

seek immediate outright commitments and, with the help of the Planned Giving Committee and

Professional Circle, promote deferred gifts to the endowment.

FY16 Annual Fund

Each fiscal year, Annual Fund contributions largely are generated by direct mail appeals in

October and December. Typically, two appeals are sent to members of The Eagle Society and to

non-Eagles throughout the IRMC community. With the Campaign for Excellence in Cancer Care

in its final phase, our direct mail strategy was modified to capitalize on year-end giving.

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In October of FY16, the non-Eagles across the community were solicited, as usual, for

contributions to the Annual Fund. However, members of The Eagle Society instead received a

draft of the Campaign for Excellence in Cancer Care donor recognition display, along with an

opportunity to make their first or an additional gift to the campaign before December 31,

thereby earning or enhancing their position on the recognition wall.

Also mailed in October to more than 15,000 community households, was the Foundation’s

Philanthropy at Work Timeline, an illustration of IRMC advancements made possible by The Eagle

Society since the mid-1990s. Though not a solicitation, the timeline resulted in $255,679 in

unrestricted gifts to the Annual Fund.

As of November 30, 2015, a total of $314,813 in unrestricted gifts and pledges had been received

for the Annual Fund. Included are contributions resulting from direct mail appeals, the Annual

Fund includes honor/memorial gifts, estate distributions, unsolicited gifts, unrestricted online

gifts, and those generated by special mailings such as the timeline.

Also as of November 30, 2015, the Foundation had received $1,449,121 in gifts and pledges to

the Cancer Campaign, prompted by the October mailing to The Eagle Society. During the same

period last year, Annual Fund mailings to Eagles and non-Eagles netted $539,079. While the

FY16 results represent a decrease of $224,266 in Annual Fund gifts, the net gain is $1,224,855 in

combined support of the Annual Fund and cancer care.

As in years past, there will be two direct mail appeals in early December. Featured in the

mailing will be the impressive compilation of ten awards for excellence received by IRMC in

just six months. One mailing will be sent to non-Eagles who did not respond to the October

Annual Fund appeal. The other mailing will reach Eagles who did not respond to their October

appeal and will offer the option to support either the Annual Fund or Excellence in Cancer Care.

May Pops

Mark your calendars for the 27th annual May Pops: Sunday, May 1, 2016 at Windsor.

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Human Resources Highlighted Results

July 2014 to Present

Presented December 10, 2015 by Karen Mitchell, VP/CHRO

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Broad HR Functional Areas

• Recruitment

• Employee and Labor Relations

• Benefits

• Compensation

• Occupational Health

• HRIS

• Organizational Development & Training

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Recruitment Process

Application

Submitted

Inclusive of

Behavioral

Assessment

Tool

HR Screens

for Minimum

Qualifications

and Selects

Candidates(s)

for Initial

Interview

HR Conducts

Behavior

Based

Interview to

Confirm

Minimum

Qualifications

Met and

Screen for

Cultural Fit

Applicant is

Hired and

Begins Work

HR Begins

Pre-

Employment

and

OnBoarding

Activities

Candidates

Who are

Successful

in HR

Interview are

Referred to

Hiring

Leader(s)

Hiring

Leader

Conducts

Behavior

Based

Interview

Using Guide

Hiring

Leader

Makes

Selection

Decision

and Advises

HR

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Selection Tools &

Interview Guides

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OnBoarding & Orientation

• IRMC’s OnBoarding & Orientation

programs provide a sense of community

for new employees; inspiring

engagement and commitment;

integrating new employees into the

culture; and promoting knowledge, and

excellence throughout the organization.

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OnBoarding & Orientation Design

Prepare

Day 1 –New

Employee Orientation

First 90 Days

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Prepare Phase Components

• Consistent welcoming practices

– Work station/locker ready

– New Employee profile posted

– Work orders submitted

– OnBoarding Champion assigned

– Announcement in huddle

– Training plan prepared

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Day 1 –

Initial Orientation Changes

• Welcome table & greeter

• Branded folder for handouts

• PowerPoint updates

• Badge photo in HR

• Audience participation/raffle

• Lunch ticket (managers)

• Online feedback survey

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Day 1 –

Recent Orientation Changes

• Slogan - “It starts with me”

• New agenda grouped by theme - Handout

• Executive Presentation of Mission/Vision/Values

• Presenting HCAHPS & Core Measures

• Icebreakers & stretch breaks

• Same PPT template for all presenters

– Include master slide set for ease of transition

• Add group work & role play

• OnBoarding program explained in NEO

• Room setup semi-banquet style

– Promotes getting to know others in orientation

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First 90 Days

• Onboarding Champion AssignedIntroduce to peers Build Social Ties Hospital Tour

Lunch Do’s & Don’ts

• Manager 1 week check-in 30/60 day meetingGauge how new hire is adjusting Surface retention concerns

Surface performance/training concerns

• 90 day new employee online surveyAcculturation Pre-Employment Manager and Coworker Interaction

OnBoarding Champion Interaction

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OnBoarding Badge Reel

• Purpose –recognize

new employees

– Smile & speak

– Offer help

– Return to HR after 90

days

• Replace w 90+ badge reel

• Staff meeting info

sessions

• Explain in NEO35 of 103

Employee Engagement

At the time - 2014 Survey

• Reduction in Force

• Projected financial losses

At the time - 2015 Survey

• Grassroots efforts

• Internal Engagement

Champions

• Developed Action Plans

by Department

• Implemented huddles and

rounding programs

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Employee Survey Results

13

IRMC’s national percentile rank across all employee

survey items—IRMC went from performing better than

10 percent of healthcare organizations in the national

database to outperforming 40 percent!

10th 40th

2014 2015

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14

2015

Employee

Engagement

Score

A Focus on Employee

Engagement at IRMC

IRMC

Overall

4.92

Diff. from

Prev

+.50

Diff. from

Nat’l.

Avg.

-.06

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Personal Appearance Policy

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Benefits

• Contracted and transitioned to Florida

Blue as ASO Provider effective

1/1/2015

• Redesigned health plan to increase

domestic steerage

• Kept employee contributions same for

three plan years

• Spousal exclusion effective 1/1/201640 of 103

Benefits

• RFP for supplemental life and disability,

resulting in savings

• Implemented with vendor for ACA

tracking and compliance

• Auto Enrollment in the 403(b) retirement

plan effective 1/1/2016

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Incentive Compensation

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Occupational Health –

Flu Vaccination Compliance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Employees Medical Staff Allied Staff Volunteers

2014/15

2015/16

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Workers Compensation

0

500

1000

1500

2000

2500

Lost Days

2012/13

2013/14

2014/15

120

130

140

150

160

Total Incidents

2012/13

2013/14

2014/15

0

500

1,000

1,500

2,000

2,500

Modified Days

2012/13

2013/14

2014/15

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Occupational

Health Visits

0

1000

2000

3000

4000

5000

6000

7000

8000

Total Visits

2013/14

2014/15

• New Hire Physicals

• Return to Work

Clearance

• Injuries

• TB Screening

• Fit-Tests

• Vaccinations

• Blood Pressure

• Workstation

assessments

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HRIS

• Evaluated current systems:

– HR & Payroll – Infinium

– Time & Attendance – Kronos

– Learning Management – Healthstream

– Staffing & Scheduling – ESP

– Benefits Enrollment - ADP

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Developing Our Leaders –

Leadership Institute

Mission: The IRMC Leadership Institute supports the

mission of IRMC by delivering engaging development

activities to facilitate excellence in leadership and

cultivate organizational learning, knowledge, and

wisdom.

Goals & Objectives: – Align development actions with organizational mission, vision,

values, and strategic goals

– Ensure a pipeline of future leaders are prepared for executive

positions

– Deliver development activities appropriate to leadership level in the

organization

– Develop and strengthen IRMC’s key leadership competencies and

behaviors in all leaders

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New Manager

Orientation

Co

ach

ing

Lea

de

r

Nurse Manager

Development

Fundamental

Management

Skills

Mid Level –

Advanced

Management

Skills

Me

nto

r L

ea

de

r

Successor

Development

Continuing

Education &

Development

Mentoring HIPOs & Successors

Tra

nsfo

rma

tio

na

l Lea

de

r

Advanced

Facilitation

HIPO

Development

Coaching &

Developing Leaders

Su

pe

rvis

or/

Lead

Ma

na

ge

rD

ire

cto

r/

AV

PE

xec

uti

ve

Developing Leadership

Institute Programs

Priority for 10/1 launch

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Manager Development Program Courses & Schedule

FALL 2015 Topic Time Location Facilitator Executive

9/15/15

Tue

Introduction & Role of the Manager 4 hours

10a-2:30p

MED A&B Rosalie Hakker Jeff Susi

9/16/15

Wed

Budgeting and Finance for Non-

Financial Managers

3 hours

10a-1:30p

MED C Warren Fuller Warren Fuller

9/22/15

Tue

Employment Law & Diversity 4 hours

10a-2:30p

MED A&B Susan Eisenberg &

Rosalie Hakker

Valerie Larcombe

9/29/15

Tue

Personality Plus (MBTI) &

Interpersonal Communication Skills

6 hours

10a-4p

MED A&B Rosalie Hakker Lisa Hedenstrom

10/1/15

Thu

Managing Multiple Priorities 4 hours

10a-2:30p

MED A&B Rosalie Hakker Bill Neil

10/6/15

Tue

Interview & Selection Practices 6 hours

10a-4p

MED A&B Rosalie Hakker Dr. Mackett

10/13/15

Tue

Coach to Lead 4 hours

10a-2:30p

MED A&B Rosalie Hakker Steven Salyer

10/20/15

Tue

Corrective Actions 4 hours

10a-2:30p

MED A&B Rosalie Hakker Karen Mitchell

10/21/15

Wed

Conflict Resolution 4 hours

10a-2:30p

MED A&B Rosalie Hakker Lisa Hedenstrom

10/27/15

Tue

Teambuilding & Collaboration 4 hours

10a-2:30p

BHC Café & Gym Rosalie Hakker &

Chris Ellison

Jan Donlan

11/3/15

Tue

Leadership in Action 4 hours

10a-2:30p

MED A&B Rosalie Hakker Lewis Clark

11/10/15

Tue

Performance Appraisals 4 hours

10a-2:30p

MED A&B Rosalie Hakker Karen Mitchell

11/17/15

Tue

Managing Change 4 hours

10a-2:30p

MED A&B Rosalie Hakker Richard Vanlith

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What’s Next

• Continuous improvement of employee engagement,

including a mid-year pulse survey

• Reduction in turnover rate, including exit interview

research

• Compensation program and structure audit and

redesign

• Implementation of core HR/Payroll, Time &

Attendance and Staffing & Scheduling Technologies

• Continued focus on people development, for both

leaders and staff

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PRESIDENT’S REPORT

November/December 2015

Scully-Welsh Cancer Program - Medical Director Dr. James Grichnik, an international expert on the diagnosis and treatment of melanoma, has been named Medical Director of the Scully-Welsh Cancer Center at Indian River Medical Center. Dr. Grichnik brings extensive knowledge in cancer research and the use of innovative technologies to detect and treat cancer at the earliest, most curable stages. He has directed melanoma programs at the University of Miami (UM) and Duke University Medical Center in Durham, N.C. Dr. Grichnik earned his medical degree from Harvard Medical School in Boston and has a Ph.D. in cell biology from Baylor College of Medicine in Houston. Dr. Grichnik’s experience is critical in Indian River County, where cancer is the leading cause of death and melanoma is one of the fastest growing cancers according to the American Cancer Society. Grichnik will relocate in January 2016, when he assumes his new role on January 4. The Scully-Welsh Cancer Center was built through the generosity of donors to Indian River Medical Center Foundation’s Campaign for Excellence in Cancer Care. Affiliated with Duke Cancer Institute, the Cancer Center brings world-class resources and a full continuum of cancer care to IRMC. The facility gives patients access to the latest technology, research and treatment options for a seamless journey from diagnosis through treatment.

Campaign for Excellence in Cancer Care The recent announcement of Dr. James Grichnik as Director of the Scully-Welsh Cancer Center generated widespread and enthusiastic response in the community. Dr. Grichnik’s international reputation, impressive resume and Duke connection resonated with donors and prospective donors to the Campaign for Excellence in Cancer Care.

On the heels of Dr. Grichnik’s appointment, the completion of the Scully-Welsh Cancer Center in mid-November amplified the progress in cancer care. Attendance at the November 18 preview reception numbered 185, all anxious to meet the new director and tour the state-of-the-art center.

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Prior to the event, a timely Foundation mailing provided donors and prospects with a draft of the donor recognition list resulting in a wave of interest. Many were motivated to support the campaign via naming opportunities and additional gifts arrive daily. To date, total funds raised for Excellence in Cancer Care tally $42 million. Additional verbal commitments have been received further narrowing the gap to our $48-million campaign goal. Naming options remain available on both the first and second floors of the center and tours continue to showcase the center and these opportunities to give.

IRMC Earns “A” Grade in Fall 2015 Leapfrog Hospital Safety Score Indian River Medical Center earned an “A” in patient safety—the top grade in the latest Leapfrog Hospital Safety Score. This study rates how well hospitals protect patients from accidents, errors, injuries and infections. This is IRMC’s second consecutive “A” rating, also receiving the honor this spring. The Hospital Safety Score is compiled under the guidance of the nation’s leading experts on patient safety and is administered by The Leapfrog Group, an independent industry watchdog. The first and only hospital safety rating to be peer-reviewed in the Journal of Patient Safety, the Hospital Safety Score is free to the public and designed to give consumers information they can use to protect themselves and their families when facing a hospital stay. More than 2,500 U.S. general hospitals were assigned scores in April 2015 with less than 31 percent—or 733 nationwide—receiving an “A” grade. Calculated under the guidance of Leapfrog’s Blue Ribbon Expert Panel, the Hospital Safety Score uses 28 measures of publicly available hospital safety data to produce a single “A,” “B,” “C,” “D,” or “F” score representing a hospital’s overall capacity to keep patients safe from preventable harm. The Hospital Safety Score is fully transparent, and its website offers a full analysis of the data and methodology used in determining grades. To see how IRMC’s score compares locally and nationally, and to access safety tips for patients and their loved ones, visit the Hospital Safety Score website at www.hospitalsafetyscore.org.

Mission Lifeline STEMI Receiving Center Gold Award From American Heart Association Indian River Medical Center is proud to receive the prestigious Mission: Lifeline STEMI Receiving Center Gold Award for the second year in a row. The award, presented by the American Heart Association, recognizes the medical center’s success in implementing the highest standard of care for heart attack patients. ST-segment elevation myocardial infarction, or STEMI, is the deadliest form of heart attack during which one of the heart’s major arteries (one of the arteries that supplies oxygen and nutrient-rich blood to the heart muscle itself) is blocked. To prevent death, it’s critical to restore blood flow as quickly as possible, either by surgically opening the blocked vessel or by giving clot-busting medication. Hospitals participating in Mission: Lifeline are referred to as STEMI Receiving Centers and are evaluated on eight performance achievement measures, including the percentage of STEMI patients who received percutaneous coronary

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http://www.hospitalsafetyscore.org/

intervention (PCI) within 90 minutes of first medical contact, a metric that involves collaboration with the EMS agencies that deliver patients to the medical center. To receive an award, IRMC must achieve 85 percent or higher composite adherence on these measures, with no single measure below 75 percent over a number of consecutive months. IRMC exceeded these benchmarks. Gold is the highest award level, recognizing two consecutive years of achieving these standards. Every year, more than 250,000 people experience a STEMI, the deadliest form of heart attack. IRMC stands ready as an award-winning STEMI Receiving Center to deliver the best cardiac care.

New OnBoarding Program IRMC recently announced a new OnBoarding Program for new employees. There are two key components of the program designed to help other employees recognize new employees. Karen Mitchell, VP and Chief Human Resources Officer will be giving an update on Human Resources at the Board meeting this month.

New Employee Profile: Posters/profiles will be created with a new employee’s photo

and hung in the new employee’s department. This will give everyone some basic information about their new coworker. It is posted only in the department where the person will be assigned and is intended to encourage everyone to be friendly. Studies show that the faster a new employee has friends in their department, the more likely they are to remain employed there.

Yellow Star Badge Reel: All new employees will be asked to wear the yellow star badge reel (pictured below), so everyone will be able to recognize our new coworkers across all departments. When you see someone wearing this reel, please take a moment to say, “Hello” and welcome them to IRMC.

Health & Wellness Center

Can we get a picture?

Health and Wellness construction is well underway and ahead of schedule for

completion late in 2016. Progress can be seen from the Scully-Welsh Cancer Center or

from the exit ramp of the Emergency Department.

Information Services Update The older MUSE ECG system was replaced with the McKesson ECG system.

This included replacing all of our older ECG carts with new Mortara carts. The new ECG replacement system with new Mortara carts went live November 30th.

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McKesson is in the process of performing a strategic assessment of the Surgical Services Department for the purpose of identifying opportunities to target for system optimization efforts. Initial findings are showing opportunities in surgical case scheduling, case card rebuild and the education of staff.

The Emergency Department optimization and rebuild of the Paragon ED system is progressing. Information and material content received from other Paragon ED healthcare organizations is being evaluated and built into our system based on our workflows. The IT Clinical Informatics staff is working closely with Dr. Paul Giasi, ED Medical Director, and Stephanie Kerensky, Director of Emergency Services.

Compliance Point is currently performing our annual HIPAA / HITECH Security Risk assessment for both the hospital and our IRMA practices. They are focusing on Security Standards, Administrative Safeguards, Physical Safeguards, Technical Safeguards, Organizational Requirements and Policy & Procedures.

Clinical Research The oncology clinical research program at IRMC is working collaboratively with Duke Cancer Network (DCN) on the following: Studies

A new venous thrombo-embolism study will be reviewed December 15, 2015 by the Indian River Medical Center (IRMC) Clinical Research Review Committee (CRRC). The objective for this study is to assess the efficacy and safety of rivaroxaban compared with placebo in the prevention of symptomatic venous thromboembolism in high-risk, medically ill patients, to include patients with a history of cancer. IRMC will have a study initiation visit by Janssen Pharmaceuticals on January 13 and enrollment at IRMC is expected to begin late-January 2016. IRMC research staff will be working in collaboration with Dr. Suen on this study.

Working with Duke’s Institutional Review Board (IRB), it is anticipated that the ALLIANCE A011104 study will be presented and reviewed at the January 2016 CRRC meeting. This study will compare the rates of local-regional recurrence following attempted breast conserving therapy in women with triple negative or HER-2 amplified breast cancer. Patients qualifying for this study will be randomized to preoperative staging with mammography or mammography plus breast MRI. We will be collaborating with VRA and local community general surgeons.

CIRB (National Cancer Institute Central Institutional Review Board Initiative)

Membership

The application for membership to CIRB was submitted in October (must have ALLIACE membership approval first, for which we obtained September 28, 2015) and we are waiting for membership approval. IRMC is on the list, along with multiple other sites, to be reviewed. It is not known yet if the NCI will hold a review meeting in December.

May Pops Mark your calendars for the 27th annual May Pops to be held on Sunday, May 1, 2016 at Windsor.

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Florence Booms’ Celebration of Lights The Auxiliary held the 25th annual Tree of Lights ceremony on Thursday, December 03, 2015. At the ceremony, it was announced that the program is being renamed the Florence Booms’ Celebration of Lights. It was Florence’s dream and persistence that initiated the celebration 25 years ago. Funds raised from this program are used to purchase unbudgeted items for women’s and children’s programs in various areas of the hospital. To date, over $295,250 has been donated. In 2015, funds raised by the Tree of Lights program, (over $17,000), was used for the purchase of new hearing test equipment for newborns. In conjunction with the renaming of the celebration, lighting of the tree outside of the Ambulatory Services Center and the star on the roof of the hospital was expanded to include the lighting of a menorah. Rabbi Michael Birnholz and Reverend Robert Bremer shared in the Invocation and lighting ceremony. Kristi Beckett (daughter of Dr. Clarke Beckett) and Cantor Dannah Rubinstein provided vocal entertainment. Florence volunteered at the hospital from January 1987 to October 2011 and served in various positions. She was the Auxiliary President from 1997 to 2000, and the Tree of Lights Chairperson from 1991 to 2006. She also served as a second vice president, corresponding secretary, and was a Life Member of the Auxiliary. She also served as a Director on the IRMC Board from 1999 to 2004 and served as Board Secretary.

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Act / Bud Act / PY

Volume Actual Budget Prior Year % Var % Var

Admissions 1,238 1,249 1,277 -0.9% -3.1%

Observation Discharges 341 311 302 9.6% 12.9%

Total Admissions & Observation 1,579 1,560 1,579 1.2% 0.0%

Adjusted Admissions 2,141 2,098 2,130 2.0% 0.5%

Patient Days 4,867 5,025 5,220 -3.1% -6.8%

Adjusted Patient Days 8,416 8,442 8,706 -0.3% -3.3%

Average Daily Census 157 162 168 -3.1% -6.8%

Urgent Care Visits 1,299 1,341 1,341 -3.1% -3.1%

ER Visits 4,953 5,265 5,012 -5.9% -1.2%

Surgeries 644 668 627 -3.6% 2.7%

FTE's - Overall 1,515.5 1,479.3 1,386.2 2.4% 9.3%

AR Days 41.5 41.0 42.0 1.3% -1.0%

Days Cash on Hand 75.1 76.0 70.1 -1.1% 7.2%

Case Mix Index 1.54 1.56 1.56 -1.0% -1.2%

Income Statement Act / Bud Act / PY

(in thousands) Actual Budget Prior Year % Var % Var

Patient Revenue 17,513 19,203 17,599 -8.8% -0.5%

DSH / UPL 264 277 302 -4.9% -12.5%

Medicaid / UPL 50 54 63 -7.7% -20.8%

Other Revenue 1,328 1,340 1,342 -0.9% -1.0%

Bad Debt (814) (1,197) (1,390) -32.0% -41.5%

Net Revenue 18,342 19,677 17,915 -6.8% 2.4%

Total Personnel Cost 10,796 10,845 9,711 -0.5% 11.2%

Contracted and Other Services 3,942 3,959 3,627 -0.4% 8.7%

Supplies 3,624 3,751 3,530 -3.4% 2.7%

Depreciation 1,065 1,087 984 -2.1% 8.2%

Interest Expense 27 27 31

Total Operating Exp 19,453 19,669 17,883 -1.1% 8.8%

Excess (Deficit) Revenue Over Expenses (1,111) 9 32


Consolidated Financial InformationOctober 2015

Month to Date

Month to Date

1,800

2,000

2,200

2,400

2,600

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Adjusted Admissions

Actual Budget

(2,500)

(1,000)

500

2,000

3,500


Excess (Deficit) Revenue Over Expenses to Budget (In Thousands)

Actual Budget

7,500

8,500

9,500

10,500


Operating Expense Per Adjusted Admission

Actual Budget

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Act / Bud Act / PY


Admissions 1,238 1,249 1,277 -0.9% -3.1%

Observation Discharges 341 311 302 9.6% 12.9%

Total Admissions & Observation 1,579 1,560 1,579 1.2% 0.0%

Adjusted Admissions 2,141 2,098 2,130 2.0% 0.5%

Patient Days 4,867 5,025 5,220 -3.1% -6.8%

Adjusted Patient Days 8,416 8,442 8,706 -0.3% -3.3%

Average Daily Census 157 162 168 -3.1% -6.8%

ER Visits 4,953 5,265 5,012 -5.9% -1.2%

Surgeries 644 668 627 -3.6% 2.7%

FTE's - Overall 1,282.2 1,241.2 1,182.4 3.3% 8.4%

AR Days 43.4 42.0 43.4 3.3% 0.0%

Days Cash on Hand 75.1 76.0 70.1 -1.1% 7.2%

Case Mix Index 1.54 1.56 1.56 -1.0% -1.2%



Patient Revenue 13,996 15,219 14,692 -8.0% -4.7%

DSH / UPL 264 277 302 -4.9% -12.5%

Medicaid / UPL 50 54 63 -7.7% -20.8%

Other Revenue 1,118 1,134 1,175 -1.4% -4.8%

Bad Debt (814) (1,197) (1,390) -32.0% -41.5%

Net Revenue 14,615 15,488 14,841 -5.6% -1.5%

Total Personnel Cost 7,821 7,651 7,304 2.2% 7.1%

Contracted and Other Services 3,175 3,164 2,716 0.4% 16.9%

Supplies 3,419 3,545 3,319 -3.6% 3.0%

Depreciation 943 959 869 -1.7% 8.5%

Interest Expense - - -

Total Operating Exp 15,358 15,319 14,208 0.3% 8.1%

Excess (Deficit) Revenue Over Expenses (743) 169 633


Hospital Only Financial InformationOctober 2015

Month to Date

Month to Date

1,800

2,000

2,200

2,400

2,600


Adjusted Admissions

Actual Budget

5,500

6,500

7,500

8,500


Operating Expense Per Adjusted Admission

Actual Budget

(2,500)

(1,000)

500

2,000

3,500



Actual Budget

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Act / Bud Act / PY


Patient Visits 13,038 13,842 12,234 -5.8% 6.6%

Urgent Care Visits 1,299 1,341 1,341 -3.1% -3.1%

Hospital Outpatient Surgeries 154 - 124 24.2%

FTE's - Overall 233.3 238.1 203.8 -2.0% 14.5%



Patient Revenue 2,534 3,022 1,959 -16.2% 29.3%

DSH / UPL

Medicaid / UPL

Other Revenue 205 201 162 2.3% 26.5%

Bad Debt - - -

Net Revenue 2,739 3,222 2,122 -15.0% 29.1%

Total Personnel Cost 2,660 2,901 2,149 -8.3% 23.8%

Contracted and Other Services 482 487 623 -1.2% -22.7%

Supplies 91 121 122 -25.1% -25.7%

Depreciation 62 65 59 -4.4% 5.3%

Interest Expense - - -

Total Operating Exp 3,295 3,575 2,954 -7.8% 11.5%

Excess (Deficit) Revenue Over Expenses (556) (352) (832)


Physician Financial InformationOctober 2015

Month to Date

Month to Date

-

5,000

10,000

15,000

20,000


Total Patient and Urgent Care Visits

Actual Budget

(2,000)

(1,000)

0

1,000

2,000



Actual Budget

-

1,000

2,000

3,000

4,000


Operating Expense

Actual Budget

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Patient Revenue 983 962 947 2.2% 3.8%

DSH / UPL 0 0 0

Medicaid / UPL 0 0 0

Other Revenue 5 5 5

Bad Debt - - -

Net Revenue 988 967 952 2.2% 3.8%

Total Personnel Cost 315 293 258 7.4% 22.2%

Contracted and Other Services 285 308 289 -7.4% -1.3%

Supplies 114 84 88 34.7% 29.0%

Depreciation 60 63 56 -5.8% 6.6%

Interest Expense 27 27 31 1.5% -13.1%

Total Operating Exp 800 775 721 3.2% 10.9%

Excess (Deficit) Revenue Over Expenses 188 192 231 -2.0% -18.4%


Outpatient Imaging Services Financial InformationOctober 2015

Month to Date

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Physician Services Division

FY 2015 Financial Performance

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Physician Services Division

FY 2015 Financial Performance

The Physician Services Division includes the results of

employed physicians, excluding OBGYN’s and Psychiatrists.

The financial results of the 5 OBGYN physicians practicing

at the Partner’s Program and the 3 Psychiatrist practicing at

BHC are consolidated in Hospital operating performance.

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• As of September 30, 2015, includes 36 physician who

practice at 16 distinct leased office sites

• 23 of these physicians who practice at 8 of the office sites

will be relocating into the Health and Wellness Center in the

fall of 2016

• 11 Primary Care Physicians will continue to practice at 6

office sites, while 2 cardiologist will practice solo at offsite

offices

Office Based Practices

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Office Based Practices

• In aggregate, the office based physician practices generated

$26.5 million of net revenue during FY 2015. For these 36

physicians, the average per physician net revenue is

approximately $736,000

• After allocation of IRMA overhead costs (coding, billing

and collections and management) the combined income for

FY 2015 was $138,000

• The losses sustained at the Surgical Specialist are offset by

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Hospital Based Practices

• As of September 30, 2015, includes 22 of the 58 physicians

accounted for in the Physician Services Division. These 22

physicians practice exclusively within the Hospital, serving

primarily inpatients

• In aggregate, the Hospital based practices generated $6.7

million of net revenue during FY 2015. For these 22

physicians, the average per physician net revenue is

approximately $306,000, less than one-half of the average

of office based physicians

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• The losses at the Hospital based practices who serve

inpatients, account for all the losses within the Physician

Services Division

• From a financial reporting perspective, consideration

should be give to consolidating the results of the Hospital

based practices with the Hospital, while leaving the office

based physician practices in the Physician Services

Division

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• As of September 30, 2015 there was $6.2M of

capital in the office based practices, which

included $2.8M of accounts receivable and $3.4M

book value of FF&E

• As of September 30, 2015 there was $1.3M of

capital invested in the Hospital based practices,

which included $1.2M of accounts receivable and

$100K value of FF&E


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Physician Services

Statement of Revenue and Expenses (000's)

FY 2015

6093 Hospital Based Office Based Total

Number of Employees:

Physicians 22 36 58

ARNP's 9 10 19

Staff 18 123 141

Total FTE's 49 169 218

Net Revenues $ 6,744 $ 26,498 $ 33,242

Operating Expenses:

Salaries and Wages 6,588 19,218 25,806

Employee Benefits 322 827 1,148

Contracted Services 4,374 287 4,661

Professional Fees - 0 0

Medical Supplies 20 1,039 1,059

Other Supplies 19 301 320

Bad Debts - 0 0

Interest - 0 0

Depreciation and Amortization 45 665 710

Other Expenses 296 320 616

Utilities 10 212 222

Purchased Services 17 1,721 1,737

Insurance - 292 292

Total Operating Expenses 11,690 24,882 36,571

Operating Income (Loss) $ (4,946) $ 1,616 $ (3,329)

IRMA Adinistartion 376 1,478 1,854

Adj. Operating Income (Loss) $ (5,322) $ 138 $ (5,183)

after overhead

Budget Operating Income (Loss) (3,146) (604) (3,750)

Variance $ (2,176) $ 742 $ (1,433) 67 of 103


Physician Services


FY 2015

6093 Hospital Based Primary Care Medical Specialties

Surgical

Specialties IRMA Admin Total


Physicians 22 17 14 5 0 58

ARNP's 9 1 9 0 0 19

Staff 11 43 43 11 33 141

Total FTE's 42 61 66 16 33 218

Net Revenues $ 6,744 $ 8,564 $ 14,535 $ 3,399 $ 351 $ 33,594

Operating Expenses:

Salaries and Wages 6,588 5,514 9,918 3,786 1,322 27,128

Employee Benefits 322 282 426 119 94 1,242

Contracted Services 4,374 33 229 25 38 4,699

Professional Fees - 0 0 0 94 94

Medical Supplies 20 293 655 91 9 1,068

Other Supplies 19 123 137 41 41 361

Bad Debts - 0 0 0 - 0

Interest - 0 0 0 - 0

Depreciation and Amortization 45 192 456 17 5 714

Other Expenses 296 96 176 48 393 1,009

Utilities 10 81 101 30 8 230

Purchased Services 17 719 698 304 202 1,939

Insurance - 0 145 147 - 292

Total Operating Expenses 11,690 7,333 12,940 4,608 2,205 38,777

Operating Income (Loss) $ (4,946) $ 1,230 $ 1,595 $ (1,209) $ (1,854) $ (5,183)

Budget Operating Income (Loss) (2,791) 544 1,264 (1,060) (1,707) (3,750)

Variance $ (2,154) $ 686 $ 331 $ (149) $ (147) $ (1,433)68 of 103


Hospital Based Physician Services


FY 2015

6093

6096

Hospitalists

6094

Intensivists 6099 Intervent

6093

Pediatrics

6207

Pathology

6102 Infectious

Disease

Hospital

Based


Physicians 13 3 2 0 2 2 22

ARNP's 6 2 0 0 0 1 9

Staff 1 4 1 0 1 4 11

Total FTE's 20 9 3 0 3 7 42

Net Revenues $ 3,929 $ 663 $ 37 $ 1,124 $ 990 $ 6,744

Operating Expenses:

Salaries and Wages 3,318 1,504 41 62 761 901 6,588

Employee Benefits 177 61 3 2 31 48 322

Contracted Services 3,537 - 621 117 98 - 4,374

Professional Fees - - - - - - 0

Medical Supplies 3 2 - - - 15 20

Other Supplies 9 2 - - 1 7 19

Bad Debts - - - - - - 0

Interest - - - - - - 0

Depreciation and Amortization - - - - - 45 45

Other Expenses 202 20 9 1 58 6 296

Utilities 10 - - - - - 10

Purchased Services 0 0 - - - 16 17

Insurance - - - - - - 0

Total Operating Expenses 7,257 1,590 673 182 950 1,038 11,690

Operating Income (Loss) $ (3,329) $ (927) $ (673) $ (144) $ 175 $ (48) $ (4,946)

Budget Operating Income (Loss) (1,834) (672) (657) (103) 512 (37) (2,791)

Variance $ (1,495) $ (255) $ (16) $ (41) $ (338) $ (10) $ (2,154)

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Primary Care Physician Services


FY 2015

6093

6200 Sebastian

Urgent Care

6201 Pointe

West Urgent

Care

6106 Family

Practice North

6107 Family

Practice South

6104 PW

Family

Practice

6204 Concierge

Practice

6095 Vero

Internal Med

6203 Barefoot

Bay Primary Care


Physicians 2 2 3 1 2 2 4 1 17

ARNP's 0 0 0 0 0 0 1 0 1

Staff 7 7 7 3 5 3 8 3 43

Total FTE's 9 9 10 4 7 5 13 4 61

Net Revenues $ 1,171 $ 1,130 $ 719 $ 463 $ 932 $ 2,179 $ 1,665 $ 304 $ 8,564

Operating Expenses:

Salaries and Wages 670 689 525 278 567 1,602 869 315 5,514

Employee Benefits 38 45 35 16 32 48 49 17 282

Contracted Services 19 13 - - 0 - 0 1 33

Professional Fees - - - - - - - - 0

Medical Supplies 34 26 70 16 82 35 24 7 293

Other Supplies 11 15 28 2 25 4 31 6 123

Bad Debts - - - - - - - - 0

Interest - - - - - - - - 0

Depreciation and Amortization 51 47 17 19 22 18 10 8 192

Other Expenses 6 24 44 1 8 1 10 1 96

Utilities 12 9 6 12 11 4 15 12 81

Purchased Services 124 216 46 57 37 37 187 15 719

Insurance - - - - - - - - 0

Total Operating Expenses 965 1,085 771 402 783 1,750 1,194 382 7,333

Operating Income (Loss) $ 206 $ 45 $ (52) $ 62 $ 149 $ 428 $ 470 $ (78) $ 1,230

Budget Operating Income (Loss) 62 (44) (102) (17) 74 291 321 (40) 544

Variance $ 144 $ 90 $ 50 $ 79 $ 76 $ 138 $ 150 $ (39) $ 686

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Medical Specialties Physician Services


FY 2015

6093 Cardiology 6205 Vero GI

6209

Endocrinology Medical Specialties


Physicians 8 5 1 14

ARNP's 6 3 0 9

Staff 32 8 3 43

Total FTE's 46 16 4 66

Net Revenues $ 9,289 $ 5,139 $ 108 $ 14,535

Operating Expenses:

Salaries and Wages 6,588 3,121 210 9,918

Employee Benefits 256 156 14 426

Contracted Services 6 223 - 229

Professional Fees 0 0 - 0

Medical Supplies 285 369 1 655

Other Supplies 92 29 16 137

Bad Debts 0 0 - 0

Interest 0 0 - 0

Depreciation and Amortization 258 195 3 456

Other Expenses 93 80 3 176

Utilities 71 24 5 101

Purchased Services 526 134 37 698

Insurance 86 59 - 145

Total Operating Expenses 8,261 4,391 288 12,940

Operating Income (Loss) $ 1,028 $ 748 $ (181) $ 1,595

Budget Operating Income (Loss) 703 662 (100) 1,264

Variance $ 325 $ 86 $ (81) $ 331 71 of 103


Surgical Specialties Physician Services


FY 2015

6093

6098

Cardiovascular 6097 Urologists 6100 Neurosurgery

6105 General

Surgery

Surgical

Specialties


Physicians 2 1 1 1 5

ARNP's 0 0 0 0 0

Staff 3 3 1 4 11

Total FTE's 5 4 2 5 16

Net Revenues $ 1,248 $ 1,034 $ 772 $ 346 $ 3,399

Operating Expenses:

Salaries and Wages 1,508 726 1,040 511 3,786

Employee Benefits 44 24 29 24 119

Contracted Services - - 25 - 25

Professional Fees - - - - 0

Medical Supplies 1 81 1 8 91

Other Supplies 14 14 9 4 41

Bad Debts - - - - 0

Interest - - - - 0

Depreciation and Amortization - 10 5 3 17

Other Expenses 13 9 14 12 48

Utilities 7 12 8 3 30

Purchased Services 115 70 87 31 304

Insurance 128 19 - - 147

Total Operating Expenses 1,831 965 1,217 595 4,608

Operating Income (Loss) $ (583) $ 69 $ (445) $ (249) $ (1,209)

Budget Operating Income (Loss) (712) 153 (204) (297) (1,060)

Variance $ 129 $ (84) $ (241) $ 47 $ (149)72 of 103

Pension Plan Review

December 8, 2015

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Pension Plan Review

• Towers Watson will provide the Finance Committee

with a review of the pension plan and update

assessment of pension plan risk transfer strategies.

The table that follows shows the history of the

balance of Pension Benefit Obligation and Plan

Assets and the resulting funding statuses, over the 13

year period subsequent to the plan being frozen on

December 31, 2002

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Indian River Memorial CenterPension Plan Review

Bob BruechertFinance Committee Meeting

December 8, 2015

© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.

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Today’s Agenda

Overview Mortality Update Pension Accounting under GAAP Funding Results Forecasts Appendix


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Overview – Fundamental Concepts

The costs and liabilities of the Pension Plan are determined using actuarial assumptions and methods related to future demographic events (such as employee turnover, retirements and mortality) and economic events (such as investment returns and interest rates)

Required cash contributions to the Plan, and the pension expense on the financial statement, are different calculations using different methods

IRS rules and assumptions are used to determine required cash contributions. GAAP rules and assumptions are used to determine pension expense on the Income Statement and liability for the Balance Sheet. Both values are determined only once each year, as of September 30 IRS cash funding rules allow use of an average interest rate and the

smoothing of investment returns in the valuation of assets GAAP results are based on a spot interest rate and market value of

assets However, the ultimate cost of the Pension Plan = benefits paid to

participants Less net investment income


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Overview

Economic Environment Corporate bond rates remained level during 2015 (unchanged at 4.5%) Returns on Market Value of Assets for fiscal year 2015 were lower than expected (2.7%

loss versus 7.25% expected return) GAAP Results

PBO funded ratio decreased from 87% to 78%– New mortality table was adopted for FYE 2015 and contributed to the decline in funded ratio

Expense for FY 2016 expected to be $500K, up from $(700K), in FY 2015 PPA Funding Results

Higher effective interest rates due to HATFA legislation bring funded status to over 100% as of 10/1/2014 (legislation allows use of 6.4% discount rate and smoothed asset value)

Regulatory Update – Bipartisan Budget Act of 2015 Continued support of higher interest rates for funding purposes beyond 2017 Significant increases in PBGC premiums


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Overview Capital Market Update as of September 30, 2015


5

Bond rates have remained constant during 2015 Discount rate for expense is based on corporate

bond rates as of the measurement date

Towers Watson Pension Index tracks the performance of a hypothetical pension plan The benchmark plan discount rate increased 6

basis points since 9/30/2014

IRMC plan discount rate did not change

Benchmark portfolio return for a 60% / 40% allocation was lower than expected for FYE 2015

Pension Index Results

Bond YieldsSeptember

2015September

2014

- Benchmark Plan Discount Rate 4.36% 4.30% +6bp

- ML 10+ HQ 4.30% 4.29% +1bp

- Citigroup HG Credit 4.24% 4.26% -2bp

- IRMC Discount rate 4.50% 4.50% 0bp

Benchmark Portfolio ReturnsSeptember

2015Last 12 Months

- 40% Stocks/ 60% Fixed Income -0.9% 1.0%

- 60% Stocks/ 40% Fixed Income -1.7% 0.1%

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OverviewPlan Asset Experience ($000)


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2011 2012 2013 2014 2015Values at 9/30

- Fair Market Value1 $ 58,279 $ 67,630 $72,240 $75,037 $69,566

- Return 0.14% 16.49% 9.03% 9.12% (2.70%)

- Actuarial Value (Funding Only) $61,788 $66,022 $69,150 $74,240 TBD

- Return 3.67% 8.60% 10.33% 11.82% TBD1 Market value shown does not include any contributions receivable.

The (2.70)% return on market value of assets generated an asset loss of about $7.3M relative to the 7.25% expected return

Actuarial value of assets (using 2-year smoothing) as of 10/1/2015 will be determined with the 10/1/2015 valuation – for purposes of pension funding

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OverviewSummary of Plan Participant Data


7

10/1/2012 10/1/2013 10/1/2014Participating Employees

Frozen Active Participants 349 307 282

- Average Attained Age 53.7 years 54.3 years 54.8 years

Grandfathered Active Participants 3 1 n/a

- Average Attained Age 71.3 years 72.8 years n/a

Participants with Deferred Benefits- Number 562 562 540

- Average Age 54.4 years 55.1 years 55.9 years

- Average Annual Benefits $3,872 $3,772 $3,749

Participants Receiving Benefits- Number 663 679 722

- Average Age 70.4 years 70.3 years 70.6 years

- Average Annual Benefits $6,031 $6,214 $6,127

Total Participants 1,577 1,549 1,544

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Mortality Update


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Mortality Tables and Improvement Scale The Society of Actuaries issued new mortality tables in late October 2014, based on

industry experience through 2006 The auditors require that these be considered for corporate financial statements at

9/30/2015 IRMC elected to use a modification the new tables, reflecting a largely hourly workforce

and more current mortality experience Net impact of the selected table is to increase PBO liability of about 4.2%, or $3.6 The new tables have not yet been mandated by the IRS for either pension funding

calculations or Lump Sum payouts, but are expected to be mandated for 2017


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Pension Accounting


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Pension Accounting under GAAPYear-End Accounting Balance Sheet Impact ($000)


11

FYE 2014 Actual FYE 2015 Actual

Balance Sheet

Projected Benefit Obligation (PBO) $ (85,830) $ (89,270)

Fair Value of Assets 75,037 69,566

Net Balance Sheet (Liability)/ Asset $ (10,793) $ (19,704)

Funded Status 87.4% 77.9%

Unrestricted Net Assets

Net Prior Service Cost $ 0 $ 0

Net (Gain)/Loss 28,218 38,803

Total Unrestricted Net Assets $ 28,218 $ 38,803

- Change from Prior Year $ 2,130 $ 10,585Assumptions:- Discount Rate- Expected Return on Assets- Census Date- Measurement Date (Assets and Liabilities)- Mortality Table

4.50%7.50%

10/01/201309/30/2014

RP 2000, projected to 2020 with scale AA

4.50%7.25%

10/01/201409/30/2015

RP 2014 (blue collar), with MP-2015 scale

The PBO funded status decreased by $9M primarily due to negative asset performance and the change in the mortality table

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Pension Accounting under GAAPAnnual Expense ($000)


12

FYE 2014 Actual

FYE 2015 Actual

FYE 2016 Preliminary

Expense

Service Cost $ 0 $ 0 $ 0

Interest Cost 3,988 3,757 3,906

Expected Asset Return (5,270) (5,340) (4,697)

Amortization of Net Prior Service Cost - - -

Amortization of Net (Gain)/Loss 798 889 1,319

Total Expense $ (484) $ (694) $ 528Assumptions:- Discount Rate- Expected Return on Assets- Census Date- Measurement Date (Assets and Liabilities)- Mortality

5.00%7.50%

10/01/201209/30/2013


4.50%7.25%

10/01/201309/30/2014


4.50%7.00%

10/01/201409/30/2015

RP 2014 (blue collar), with MP-2015 scale

FYE 2016 expense increased due to the following: Higher amortization of net (gain)/loss (due to the change in mortality table and asset return)

Lower expected return on assets (due to lower fair value of assets and lower expected return assumption)

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Pension Accounting under GAAPPlan History: Annual Expense & Employer Contributions by Fiscal Year ($000)


13

FYE2007

FYE2008

FYE2009

FYE2010

FYE2011

FYE2012

FYE2013

FYE2014

FYE2015

FYE2016*

Pension Expense $24 $(1,249) $(150) $2,353 $2,222 $2,635 $(269) $(484) $(694) $528Cash Contribution $1,415 $0 $0 $0 $7,000 $3,569 $2,603 $653 $980 $0Discount Rate 6.25% 6.75% 6.25% 5.50% 5.40% 5.00% 4.00% 5.00% 4.50% 4.50%

($2,000)

($1,000)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Pension Expense in FYE 2013 and later is based on the amortization of gains and losses over the average life expectancy of plan participants.

* FYE 16 cash contribution is to be determined; preliminary estimated minimum requirement is $0.

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Pension Accounting under GAAPPlan History: Funded Status


14

9/30/07 9/30/08 9/30/09 9/30/10 9/30/11 9/30/12 9/30/13 9/30/14 9/30/15Market Value of Assets $68.3 $62.5 $54.1 $54.9 $58.3 $67.6 $72.2 $75.0 $69.6PBO $67.3 $64.6 $74.7 $76.6 $80.9 $91.5 $82.0 $85.8 $89.3Funded Status % 101.5% 96.7% 72.4% 71.7% 72.1% 73.9% 88.0% 87.4% 77.9%Funded Status $ $1.0 $(2.1) $(20.6) $(21.7) $(22.6) $(23.9) $(9.8) $(10.8) $(19.7)Interest Rate 6.25% 6.75% 5.50% 5.40% 5.00% 4.00% 5.00% 4.50% 4.50%

101.5%96.7%

72.4% 71.7% 72.1%

73.9% 88.0% 87.4% 77.9%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

$0

$20

$40

$60

$80

$100

$120

Perc

ent %

$ m

illio

ns

The plan’s funded status had been improving over the last several years due to favorable asset returns, disciplined cash funding, and an increase in interest rates; however at FYE 2015 the new mortality assumption, negative asset return, and a decrease in actual cash contributions all caused a decline in funded status.

PBO funded status as of 10/31/2015 estimated to be about 82%, based on 10/31 assets and a 4.50% discount rate

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Funding Results


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Funding Results


16

Plan Year Beginning 10/110/1/2013

Actual 10/1/2014

Actual

Pension Funding

Target Liability $71,289 $70,814

Fair Value of Assets $72,240 $75,998

Actuarial Value of Assets $69,150 $74,240

Underfunded Amount (based on Actuarial Value) $2,351 $(3,194)

Adjusted Funding Target Attainment Percentage 96.7% 104.8%

Minimum Contribution $1,314 $0

Effective Interest Rate 6.27% 6.43%

Reflects post-HATFA effective interest rates Rates must be within a corridor around the 25 year average rate

The plan is less than $15 million underfunded; therefore, no PBGC 4010 filing is anticipated for the 2015 Plan Year The plan must either be less than $15 million underfunded on a post HATFA basis or over

80% funded on a pre MAP-21 basis*

The plan is currently 83% funded as of 10/1/2014 on a pre MAP-21 basis

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*PBGC issued proposed regulations to eliminate the $15 million underfunding exemption.

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Regulatory Update


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0.9%

1.4%

2.4%

3.0%3.4%

3.9%4.4%

$42$49 $57 $64 $69 $74 $…

0%

1%

2%

3%

4%

5%

6%

$0

$30

$60

$90

$120

$150

$180

2013 2015 2017 2019 2021 2023 2025

Variable Rate Prem

ium(%

of unfunded vested benefits)Per P

artic

ipan

t Pre

miu

m

Variable Rate Premium Flat Rate Premium

2013 Bipartisan Budget Act increased per-head premiums by 25% and variable premiums by 50%.

Bipartisan Budget Act of 2015 calls for further increases Flat-rate Premiums. Under the amendment, the statutory premiums will increase to $69 in 2017, then $74 in 2018 and $80 in 2019;

Premiums would index for inflation after 2019.

Variable Premium rate as a percentage of underfunding is increased to 3.4% in 2017, 3.9% in 2018 and 4.4% in 2019; Premiums would index for inflation after 2019. Continued $500 per participant cap (indexed) on variable rate premium.

Accelerated Due Date - Moves the premium due date to the 15th day of the ninth calendar month (i.e., a one-month acceleration) for plan years beginning in 2025

Pension Provisions in the Bipartisan Budget Act of 2015Ongoing PBGC Premium Increases

2015 Changes

Indexed with wage inflation

Future increases


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Forecasts


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Forecasts – Annual Expense & Minimum Required Contributions ($000 by fiscal year)


20

FYE 2016 FYE 2017 FYE 2018 FYE 2019 FYE 2020 FYE 2021Pension Expense $528 $553 $533 $344 $66 $(148)Cash Contribution $0 $153 $2,600 $4,921 $3,813 $3,923Discount Rate 4.50% 4.50% 4.50% 4.50% 4.50% 4.50%

($500)

$500

$1,500

$2,500

$3,500

$4,500

$5,500

The estimated 10/1/2015 results reflect data as of 10/1/2014, rolled forward and adjusted for the changes in assumptions; these results will change based on the actual 10/1/2015 valuation results

Assumes an actual return on assets equal to expected for all fiscal years (7.00%)

Reflects the RP-2014 blue collar mortality table with MP-2015 projection scale as of 9/30/2015

Reflects contributions of $0 for FYE 2016; minimum thereaftertowerswatson.com

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Forecasts – Funding Ratios


21

10/1/14 10/1/15 10/1/16 10/1/17 10/1/18 10/1/19Target Liability $70.8 $72.6 $73.8 $82.3 $83.7 $84.7Actuarial Value of Assets $74.2 $73.4 $70.9 $68.8 $70.8 $73.0Funding Target Attainment Percentage 104.8% 101.1% 95.0% 83.6% 84.6% 86.2%Plan Year Minimum Contribution $0.0 $0.1 $1.4 $3.3 $3.5 $3.7Effective Interest Rate 6.43% 6.23% 6.04% 5.85% 5.67% 5.51%

104.8% 101.1%95.0%

83.6% 84.6% 86.2%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

$0

$20

$40

$60

$80

$100

$120

Perc

ent %

$ m

illio

ns

The estimated 10/1/2015 results reflect data as of 10/1/2014, rolled forward and adjusted for the changes in assumptions; these results will change based on the actual 10/1/2015 valuation results

Reflects post-MAP-21, post HATFA, post Bipartisan Budget Act of 2015 effective interest rates, projected using current rates

Assumes an actual return on assets equal to expected for all fiscal years (7.00%)

Reflects the RP-2014 mortality table with MP-2014 projection scale as of 10/1/2017

Reflects contributions of $0 for FYE 2016; minimum thereafter

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Pension De-risking


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PBGC Premiums Mortality Update Society of Actuaries released new base

tables and improvement factors based on broad experience

Increased average PBOs by approximately 5%, still to be reflected in funding

Estimated to increase cost of lump sums and funding target by 5% - 8% if/when adopted by IRS

Regulatory Interest

Increased interest from GAO, DOL, and IRS may lead to regulatory changes or negative publicity for de-risking actions

2013 Bipartisan Budget Act increased per-head premiums by 25% and variable premiums by 50%

Additional increases in the 2015 Budget Act Premiums will continue to increase with

inflation

De-Risking MarketplaceRegulatory Forces Continue to Impact Activity

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Potential Advantages and Disadvantages of Lump Sum Offer- Assessment of 2016 vs Delayed Window

Lock-in cost to provide benefits at corporate bonds rates

• 2016: lump sum values already known leading to more certainty of financial impact

Significant long-term savings from PBGC/ administration fees• 2016: Saves an additional $64/head in

PBGC premiums plus administrative costs plus $515/head beginning in 2017

Advantages+Expected to increase ongoing pension cost (about $100k) due to loss of EROA arbitrage and required one-time charge (dependent on design & take-rates)

Reduction in volatility means upside potential not as significant

Disadvantages-

• 2016: Regret risk if rates rise in near-term

Cost-effectively reduce plan size and transfer mortality and demographic risk

• 2016: mortality basis already known and expected to be more favorable than 2017+ basis

Increased regulatory / media scrutiny of lump sum windows• 2016: Potential additional disclosuresAccelerated administrative effort required to implement• 2016: Process must start soon in order to

complete by September 30, 2016

• 2016: Non-cash acceleration of unamortized losses

© 2015 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.towerswatson.com24

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Appendix


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Overview - Actuarial Assumptions


26

10/1/2013 - 9/30/2014Valuation

10/1/2014 - 9/30/2015Valuation

10/1/2015 - 9/30/2016Valuation

IRS Funding: 10/1/2013 10/1/2014 10/1/2015

- Effective Interest Rate 6.27% 6.43% TBD

- Mortality PPA Static PPA Static PPA Static

ASC 715-30 Expense: FY 2014 FY 2015 FY 2016

- Discount Rate 5.00% 4.50% 4.50%

- Expected Asset Return 7.50% 7.25% 7.00%

- Mortality RP 2000, projected to 2020 with scale AA


RP 2014 with blue collar adjustment, back to

2006, and generational projection using Scale

MP-2015

Both Funding & Expense:

Assumed Retirement Age 55-65 graded 55-65 graded 55-65 graded

Employee Turnover Rates by age Rates by age Rates by age

The September 30, 2015 mortality for GAAP purposes which generated a liability increase of about $3.6 million

Expected return on assets assumption was decreased another 25 basis points for FY 2016

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Forecasts – Minimum required contributions ($000)


27

While $0 is required for FYE 2016-FYE2017, IRMC may want to consider making additional contributions to smooth out longer-term funding

2013-2014 Plan Year

Preliminary 2014-2015

Plan Year

Estimated 2015-2016 Plan Year






FYE Total FYE Due Date9/30/2015 980.9$ 10/15/2014 $217.5

1/15/2015 $381.7 $0.04/15/2015 $381.7 $0.06/15/20157/15/2015 $0.0

9/30/2016 $0.0 10/15/2015 $0.01/15/2016 $0.04/15/2016 $0.06/15/2016 $0.07/15/2016 $0.0

9/30/2017 $153.1 10/15/2016 $0.01/15/2017 $0.04/15/2017 $0.06/15/2017 $153.17/15/2017 $0.0

9/30/2018 2,599.7$ 10/15/2017 $0.01/15/2018 $350.34/15/2018 $350.36/15/2018 $1,548.77/15/2018 $350.3

9/30/2019 4,921.4$ 10/15/2018 $350.31/15/2019 $796.94/15/2019 $796.96/15/2019 $2,180.47/15/2019 $796.9

9/30/2020 3,813.4$ 10/15/2019 $796.91/15/2020 $833.94/15/2020 $833.96/15/2020 $514.77/15/2020 $833.9

9/30/2021 3,922.9$ 10/15/2020 $833.91/15/2021 $851.84/15/2021 $851.86/15/2021 $533.77/15/2021 $851.8

9/30/2022 4,201.6$ 10/15/2021 $851.81/15/20224/15/20226/15/2022 $541.37/15/2022

Total Plan Year Contributions $980.9 $0.0 $153.1 $1,548.7 $3,581.7 $3,702.4 $3,869.4 $3,948.3

Estimated Minimum Contribution Schedule

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Actuarial Certification

In preparing the information detailed in this presentation, we have relied upon information regarding plan provisions and plan participants provided by IRMC and other persons or organizations designated by IRMC which is documented in our fiscal year 2015 Disclosure provided in November 2015. Therefore, such information including the reliances and limitations of the reports use should be considered part of this report.

The information contained in this presentation was prepared for the internal use of IRMC only. It is not intended for and may not be used for other purposes, and we accept no responsibility or liability in this regard. IRMC may distribute this presentation to the appropriate authorities who have the legal right to require IRMC to provide them this presentation, in which case IRMC will use best efforts to notify Towers Watson in advance of this distribution, and will include the non-reliance notice included at the end of the upcoming valuation report. Further distribution to, or use by, other parties of all or part of this presentation is expressly prohibited without Towers Watson’s prior written consent. In the absence of such consent and an express assumption of responsibility, we accept no responsibility whatsoever for any consequences arising from any third party relying on this report or any advice relating to its contents. There are no intended third-party beneficiaries of this report or the work underlying it.

The undersigned consulting actuaries are members of the Society of Actuaries and meet the “Qualification Standards for Actuaries Issuing Statements of Actuarial Opinion in the United States” relating to pension plans. Our objectivity is not impaired by any relationship between IRMC and our employer, Towers Watson Pennsylvania Inc.

28

Note: This presentation was developed for the internal use of IRMC in connection with its analysis of its plans. It is not intended nor necessarily suitable for other purposes. Further distribution or use of all or part of this material is prohibited without prior written consent.

Robert W. Bruechert, F.C.A., A.S.A., E.A. Senior Consulting Actuary

Lori Wolfersberger, F.S.A., E.A. Consulting Actuary

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