Presentation to the Scottsdale Institute on how hospitals can improve their bottom line.

1. Improving the Bottom Line Kent Giles, MPPM

3. Healthcare Imperatives

6. Price Elasticity of Demand for Hospital Services As cost increases, purchases decrease beyond a certain point. In 2009 we saw a decline in hospital services purchased due to costs.

8. Margin Improvement as a Strategic Imperative

9. Comparison of MIP to “Turn Around” MIP vs. Traditional Turn around Approaches Comparison of Margin Improvement vs. Classic Turn Around Methodology Evaluation Criteria: MIP Turn Around Timing Used proactively before financial threat emerges and while leadership is in tact; turn over is low; outside expertise is used to provide objectivity and supplement expertise Used reactively after losses threaten survival; generally leadership is replaced or terminated; turn around management is brought in; focus is short term; long term results are sometimes hurt by large scale RIF Buyer CEO Board or Authority Leadership Impact C-levels rewarded for foresight and vision C-levels fired Message to Staff We are proactive ly addressing our major issues; Leadership is capable; we have a positive future; this will remain a great place to work; top performers are attracted We have failed and many of us will lose our jobs; morale is low; recruiting position is damaged; “don’t work here, there is no commitment to employees”; our future is in question; top performers leave for greener pastures Message to MDs Leadership is progressive and responsible; this is an opportunity to improve our practice and partner Leadership failed and was not competent; Turn around leadership only cares about money Results Positive Operating Margin; best practices implemented; improved patient service; improved or maintained recruiting position; enhanced reputation for leadership and institution; positive place to work Rapid deployment of RIFs; leadership terminations; benchmarking w/o reason to justify cost cutting; rapid reactionary style of management; negative place to work; top talent exits; long term harm to reputation occurs

11. Margin Improvement Success Story

13. MIP Roadmap Overview Implement Initiatives Evaluate, Measure, Refine Quantification and Assignment of Road Map Initiatives Prioritize Target Areas Tracking Phase II Road Map Development 4 weeks ‘ Quick Hits’ Phase III Validate, Design, Implement 16 months Phase I Case for Change Construct 4 - 6 weeks Benchmarks & Assessments 3 Yr Financial Forecast (UHS) Draft Charter

14. MIP Roadmap Overview Initiatives and Workflows Emergency Dept Access & Flow Case Management Patient Flow Peri-operative Improvement Other Areas Nursing Services Administration Services Supply Chain Other Services Pharmaceuticals Medical/Surgical Revenue Enhancement Contracts Rate Adjustment Revenue Cycle Practice Improvement Service Line Continuum Access Productivity Volume Growth Specialty Services Primary Care Out Referral Capture Length of Stay Operational Improvements Referral Management 340 B Medical Mall Indigent Care Road Map

17. The UHS Path to Success…

18. Patient Access and Flow

21. Perioperative Services

24. Supply Chain

27. MIP Financial Tracking MIP Initiative MIP Goal for Annual Financial Improvement Realized Savings To Date (Jul FY 2007- August, 2009) Operational Improvement $20,000,000 $4,908,139 (Adult - $3,787,057) (Peds - $1,121,082) Supply Chain $8,000,000 $10,200,000 Revenue Cycle $ 6,000,000 $125,400,000 Revenue Enhancement $10,000,000 $4,083,333 Volume Growth $19,696,471 $3,523,784 Indigent Care $2,000,000 $1,800,000 Critical Access Hospitals $2,000,000 $4,200,000 Total $67,696,471 $154,115,256

28. Sage Advice and Scar Tissue

30. Questions and Answers