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OCH MITIGATION PLAN

March 23, 2015


ITEM

PROJECTED
FINANCIAL IMPACT

NET REVENUE INCREASE


Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
Closure of Peds & NICU - OCH
Closure of OP PT services
Closure of OB -SLRH
Closure of Peds - SLRH
Impact of change in Transfer Policy
Total: Net Revenue Enhancements

$
$
$
$

7,336
(5,029)
6,100

$
$
$
$
$
$

(6,543)
(900)
964

$
$
$
$
$
$

9,528
2,580
4,066
8,876
-

$
$
$
$
$

7,281
1,527
33,858

$
$

91
3,126

$
$

142
25

OPERATING EXPENSE REDUCTIONS


Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Closure of Peds & NICU - OCH
Closure of OP PT services
Closure of OB -SLRH
Closure of Peds - SLRH
Sub-Total- Labor
Non-Labor Expenses Impact
General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Closure of Peds & NICU - OCH Supplies
Closure of OP PT services -OCH Supplies
Closure of OB -SLRH Supplies

Closure of Peds - SLRH Supplies


Total Supplies Impact
Impact of SCFHP/VHP Termination-Other Exp
Service Line/Program Closures
Closure of Peds & NICU - OCH Other Exp
Closure of OP PT services -OCH Other Exp
Closure of OB -SLRH Other Exp
Closure of Peds - SLRH Other Exp
Total Other Exp Impact
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs

3,384
0.6

$
$

125
247

$
$
$
$
$
$

373
1,003
4,760

Total: Operating Expenses

38,618

Annualized EBIDA Improvement

39,581

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

OCH reviewed OP Reference Lab and OP MRI and determined they currently have a positive
contribution
margin. These programs are dependent on volumes from the Medical Foundation. If the Medical
Foundation situation eliminates referral volumes, these services would be adjusted or terminated
based
upon remaining volumes.

Mitigation Plan
Facility:
Prepared Date:

O'Connor
3/23/2015

$(000)s
Net Revenue Impact
Managed Care Payers (1)
Impact of conversion of Obs to Inpatient
Impact of SCFHP/VHP Termination
Provider Fee Incremental Impact
Service Line Closures
Impact of change in Transfer Policy
Total: Net Revenue Enhancements

$
$
$
$
$
$
$

7,336
(5,029)
6,100
(7,443)
964

Operating Expenses Impact


Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Impact of SCFHP/VHP Termination
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Sub-Total- Labor

$
$
$
$
$
$
$
$

9,528
2,580
4,066
8,876
8,808
33,858

Non-Labor Expenses Impact


General Supply Savings
Impact of SCFHP/VHP Termination-Supplies
Service Line/Program Closures
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs

$
$
$
$
$
$
$
$

91
3,126
540
1,003
4,760

Total: Operating Expenses

38,618

Annualized EBIDA Improvement


$
39,581
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings excluding severance related costs. Detail listing to be provided for review.

OCH reviewed OP Reference Lab and OP MRI and determined they currently have a positive contribution
margin. These programs are dependent on volumes from the Medical Foundation. If the Medical
Foundation situation eliminates referral volumes, these services would be adjusted or terminated based
upon remaining volumes.

OCH