SFMC MITIGATION PLAN

March 23, 2015

ITEM

NET REVENUE INCREASE

PROJECTED
FINANCIAL IMPACT
$2,413,320

Institute a hybrid ED hospitalist program with CDS

Increase FFS Mcare admissions via SNF relationships
Limit observation (reduce 6-8 down to 3-4 average per day)

OPERATING EXPENSE REDUCTIONS

OPERATING UNIT EFFICIENCY- SURGERY
Review operating margins of outpatient surgeries and GI procedures
Evaluate profitability of weekend cases and impact on LOS
LABOR COST REDUCTIONS
FTE reduction
29 FTEs future RIF
One time cash needs Severance $487,806 + PTO balances $150,707
19 FTE reduction due to recent attrition
Patient Care Services Reorganization (net of new positions)
11.5 net FTEs FLC Newborn Nursery staffing
Medicare GMLOS Improvement
UNAC agreement (average estimated annual savings)
Productivity/Premium Pay/Registry Improvement
Recommended market adjustments
Addition of 4 CDS positions
Contracted CDS oversight (Pathway Medical Group/ Dr. Alkhouli)
SUPPLIES
Supplies are 15% of net revenue excluding implants.
MD CONTRACTS
90-Day Notice for Medical Directors and Hospital Based Physician
Contracts/reduction
Medical Directors
Hospital Based Physician Contracts Emergency Department
Anesthesia, pathology and radiology
PURCHASED SERVICES
Touchpoint Nutrition Services, EVS and Transportation
Crimson (Advisory Board), Compspec, Happy Docs, Dr. Dadourian, White Stone,
catering reduction
SERVICE LINE/PROGRAM CLOSURE
Outpatient Clinics (PSA with SFMSG vs FQHC divestiture)
Grant funded outreach as funding cycles close programs will be phased out:
Health Benefit Resource Center/Partnership for Patients
HCI
Palliative Care
TOTAL

$2,413,320
$14,889,531
TBD
TBD
$13,758,243
$2,513,277
$2,291,001
$1,246,000
$1,060,495
$3,149,680
$4,007,500
$310,500
($120,210)
($600,000.00)
($100,000.00)
$130,288
$130,288
$705,000

$455,000.00
$250,000.00
TBD
$296,000
TBD
$296,000
$0
TBD
$0

$17,302,851

Mitigation Plan
Facility:
Prepared Date:

St Francis Medical Center

3/23/2015

Net Revenue Enhancements:

Managed Care Payers (1)
Observation Unit Impact/Mcare Documentation
Service Line/Program Closure (2)
Other Initiatives
Total: Net Revenue Enhancements

$
$
$
$
$

Operating Expenses:
Labor Costs
Reduction In Force, including Reoganization (3)
Productivity Improvement
Medicare GMLOS Improvement
UNAC Agreement
Service Line/Program Closures
Sub-Total- Labor

$ 6,390,563
$
310,500
$ 3,149,680
$ 4,007,500
$
$ 13,858,243

Non-Labor Costs
Supplies
Professional Fees- CDI Oversight
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs

$
$
$
$
$
$

Total: Operating Expenses

$ 14,889,531

2,413,320
2,413,320

130,288
(100,000)
705,000
296,000
1,031,288

Annualized EBIDA Improvement

$ 17,302,851
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings net of severance related costs. Detail listing to be provided for review.