Improving Cash Flow and Compliance Through the Assistance of External Partners

Michael BernsteinSenior Vice President/CFO

Table of Contents

Reasons for Partnering Expected Outcomes Evaluation Process Performance Indicators Actual VMC Performance Common Myths

Reasons For Partnering Staffing Issues – Shortages and Qualifications Enhance Staff Training and Education Increase Cash Flow/Capital Needs Enhance Compliance and Regulatory

Standards Reduce Operating Costs Billing and Coding Complexities Streamline Revenue Cycle Processes Improved Patient Satisfaction Improved A/R = Improved Operating Income

Expected Outcomes Sustainable Results Access to Professional Qualified Staff Increased Cash Reduction in A/R Days Avoid Losses From Aging Receivables Reduction in Bad Debts Reduce Operating Cost Access to Enhanced Technology Improved Customer Satisfaction

Evaluation Process Study What a Partnership Means to

Your Organization Ask Yourself – Is Your Current

Process Achieving Your Goals? Understand Your Data Communicate, Communicate,

Communicate, Etc! – With Senior and Middle Management and Board

Evaluation - Continued

Identify Potential Partners Prepare an RFI (Request for

Information) Oh Yeah! Did I Mention

Communicate? Conduct Due Diligence

Site Visits – Partner and Clients Reference Checks

Evaluation - Continued

Don’t Expect What You’re Not Willing to Inspect

Don’t Rush the Process Partner Culture Fit Don’t Be Afraid to Succeed Oh Yeah! Did I Mention

Communicate?

Performance Indicators Cash Collections DNFB % A/R Over 90 Days Patient Satisfaction Compliance There Is No Limit As To What You

Should Ask For Weight Them As You Deem Appropriate

to Achieve Your Goals Incentives As Well As Penalties

Common Myths You Lose Control You’re Admitting to Failing The Most Important Factor Is Selecting The

Lowest Priced Partner Only a Few Need to Make the Decision You Can Expect a Seamless Transition Specific Performance Standards Are Not

Needed Termination Is An Easy Process The Hospital Is Indemnified Against Claims

Actual VMC PerformanceFirst 10 Months (June, 2007-March, 2008)

Pre Post Collection Percentage of

Net Collectible Patient Revenue 96% 104.7% Days Outstanding in A/R 52 44 A/R % Over 90 Days 20% 14.5% DNFB Days 10 7.2 Cost of Collections 2.5% 3.4%/2.4%*

This Equals An Additional $17.7 Million Over Our Historical Collection Rate As These Indicators Improve, Your Contractual Allowances and Bad Debts Will Decrease Over Time

* Excludes 1st year implementation and incentive costs

Questions?