February 23, 2015 The Peterborough Health Coalition 304-136 Ware St. Peterborough, ON K9J 2B8 Attention: Mr. Roy Brady Thank you for your letter of Jan. 12 and for your presentation to our Jan. 28 meeting of the Board of Directors. This letter is intended to respond to both your letter and verbal presentation. We would first like to thank you for bringing forward to the Board a number of valuable insights and ideas. We appreciate you taking the time to share these thoughts on behalf of the Peterborough Health Coalition. Our Board of Directors, senior executive team, physicians, professionals and the entire hospital staff are here to serve the needs of our patients, in collaboration with our partners in the communities we serve. This commitment is reflected in the Mission, Vision and Values outlined in our 2014-2017 Strategic Plan:

• Mission: We are a regional hospital building healthy communities with our partners and

patients

• Vision: Exceeding your expectations, every day

• Values: Guided by You ♦ Doing it Right ♦ Depend on Us

Patients are at the centre of everything we do at PRHC. Our hospital leaders, physicians and staff members frequently involve patients and family members in care-focused events to share their unique insights and experiences as we continuously work to improve patient care. The hospital also has a Patient Relations department whose purpose is to assist in guiding people through their hospital experience, as well as dealing with any concerns that patients and their families may have regarding the care they receive. PRHC physicians, staff and leadership have earned patient satisfaction results in the 99th percentile, as first reported to media and the public in November 2014. As a result of this accomplishment, patient satisfaction research institute National Research Corporation Canada (NRC) Picker has identified PRHC as one of the top-performing hospitals in Canada and the U.S. We will continue to focus our attention on providing excellent patient care moving forward.

We understand that you are interested in receiving more information. We are enclosing with this letter a presentation provided to our local media representatives and posted on the hospital’s public website. This document outlines in more detail our actions taken to strengthen the hospital’s financial controls, as well as some of our key clinical achievements in recent months and years. We trust you will find this additional information helpful. You have used the following language in your letter: “…the $57 million accounting error…”. It is important to clarify that the $57 million amount referred to by the hospital resulted from a number of accounting errors, not one error. Please note that “accounting error” is a term used in professional accounting guidelines, and is defined as follows:

“An error in an accounting item that was not caused intentionally. An accounting error can include discrepancies in dollar figures, or might be an error in using accounting policy incorrectly (i.e. a compliance error). Accounting error should not be confused with fraud, which is an intentional error in an accounting item, usually to hide or alter data for personal gain.”

Your letter also referred to “misappropriated funds”. We assure you that following extensive internal and external reviews in consultation with various partners, we are satisfied there is no evidence of personal financial gain related to the accounting errors. We have kept the Central East LHIN informed throughout the review process. With respect to the hospital’s financial restatements, we have been transparent in making this information public and have taken accountability for the accounting errors and for strengthening the hospital’s accounting controls moving forward to ensure similar errors do not occur in the future. The Board takes its fiduciary accountability seriously, and is providing oversight to strengthen governance and processes. Your letter suggests that changes in hospital staffing would not have occurred had these accounting errors not been made. These errors would not have impacted decisions made in 2010. When staffing changes occurred in 2010 following the Peer Review and the implementation of the Hospital Improvement Plan, the hospital was in a vastly different financial state than it is today. The majority of the accounting errors identified occurred in the past three years. Changes in processes and staffing allocations in more recent years have resulted in part from significant shifts in the provincial funding mechanism for hospitals. Changes have also been made specifically to improve the quality of care we offer to our patients. These include, for example, shortening of wait times in the Emergency Department, for certain elective surgeries (e.g. hip & knee replacements) and reduction of length of stay. These changes have significantly strengthened the hospital’s position moving forward. The hospital’s Board of Directors is committed to collaboration with all of our partners, including broad community consultation when developing the hospital’s strategic plan. Our internal and external consultations throughout the upcoming CEO search process will include the Peterborough Health Coalition, among other community groups. We have also added two community members (who are not members of the Board or Board Community Members at Large) to the search committee.

We agree with you that trust and mutual respect are cornerstones to any successful partnership or collaboration. We have a skills-based Board in place, whose members represent and advocate for the community they serve, and not as representatives of particular stakeholder or advocacy groups. We will be considering additional opportunities to enhance our community engagement efforts, such as – but not limited to – community forums, advertising of meetings, open houses, and online surveys. We agree that these additional opportunities would be welcomed by our community, and we are committed to providing accessible alternatives that will allow the public to participate meaningfully in the hospital governance process. We are continually looking for ways to further engage with our leadership, staff and physicians. The hospital’s senior leadership team has recently launched an initiative to enhance internal communications throughout the organization, including weekly attendance by senior leadership team members at staff meetings to listen, learn and share information. The hospital is a collaborative working environment, and we welcome constructive feedback and suggestions for positive change. We would like to conclude by stating that most of our board members have been patients themselves, or have friends or family who have been patients at our hospital. Each and every one of us at PRHC has a personal stake in the care this organization provides, and we take our responsibility to our community and our patients very seriously. Again, on behalf of the Board, we thank you for your input and ideas. We trust that we can go forward together to continue providing high-quality of care for our patients. Sincerely, Alan Wotherspoon, Chair, PRHC Board of Directors Dr. Peter McLaughlin, Interim CEO, PRHC