This document provides an executive summary and analysis of key financial and operational metrics for various hospital peer groups. It analyzes metrics such as total profit margin, operating profit margin, labor costs, staffing levels, and accounts receivable collection rates for over 6 years of data across different hospital types. The metrics are stratified into quartiles to benchmark performance from poor to exceptional. Healthcare Management Partners collected this data to help hospitals assess their financial health and performance relative to peers.
Keppel Ltd. 1Q 2024 Business Update Presentation Slides
HMP Metrics™ Report October, 2010
1.
2. Table of Contents
Executive Summary 3-5
Financial and Operational Study 6 - 15
• Total Profit Margin 6
• Total Operating Profit Margin 7
• Days Net Patient Revenue in Accounts Receivable (AR) 8
• Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB) 9
• Total Labor Cost as a Percentage of Net Operating Revenues 10
• Average Age of Plant and Equipment 11
• Metric Trend by Peer Group 12 – 13
• Quartiles by Peer Group 14 - 15
Introduction to Healthcare Management Partners 16 - 20
Clients Our Professionals Have Served 21 - 22
Firm Leadership 23 - 26
Contact Information 27
October 2010 2
3. Executive Summary – Overview
Healthcare Management Partners (HMP) is a hospital and healthcare services management firm. For decades, all of its senior
executives have been building and operating thriving healthcare organizations, including CEO, COO and CFO assignments
across the spectrum of healthcare services providers. This knowledge base gives HMP a unique perspective on what tools are
necessary to handle the issues facing any healthcare provider organization, and is what prompted HMP to create HMP
MetricsTM. Our executives understand the value of being able to measure hospital performance relative to comparable
facilities and against “1st Quartile” or “High Performing” competitors.
Utilizing the last six years of publicly available hospital Medicare cost report data, HMP has conducted an extensive study
comparing performance within six hospital peer groups. We can easily create custom peer groups and metrics. These groups
selected include the following:
1. All General Acute Care Hospitals Regardless of Ownership or Sponsorship
2. All Investor Owned General Acute Care Hospitals
3. All Not-For-Profit General Acute Care Hospitals, including Institutions Sponsored by Religious Organizations
4. All State and Local Government Owned General Acute Care Hospitals
5. Free Standing Children’s Hospitals
6. All Non-Federal Major Teaching Hospitals
Using proprietary filters, data contained in the HMP Metrics database has been “scrubbed” to exclude partial period or
statistically aberrant data elements for individual hospitals or health systems. It also excludes Federal Government hospitals,
specialty hospitals (e.g., long-term acute care) and general acute care hospitals for which 30% or more of its total licensed
beds are comprised of sub-acute beds. This data validation process produces highly accurate and defensible peer group
comparisons for dozens of standard industry metrics.
This report measures several commonly used metrics to further stratify these hospital types into quartiles in order to illustrate
the benchmarks for poor to exceptional performance for each of the metrics. With this information, one can quickly assess the
relative financial well-being of any facility in any of these groups. HMP can easily create custom reports and mix or create
new peer groups and compare them to state, local or national benchmarks.
October 2010 3
4. Executive Summary – Key Terms
All hospitals: Represents over 3,000 short-term general acute care hospitals.
Investor Owned hospitals: Represents short-term general acute care hospitals owned a for-profit chain or owned
individually.
Not-for-profit hospitals: Represents short-term general acute care hospitals identified as ‘not-for profit’ (e.g.,
501c3).
State and Local owned hospitals: Represents short-term general acute care hospitals controlled by state or local
government.
Children’s hospitals: Represents Children’s hospitals regardless of ownership type.
Major Teaching hospitals: Represents hospital and health system members of the Association of American
Medical Colleges. For health system members, ‘flagship’ medical centers were included while smaller affiliate
community teaching hospitals were excluded.
Quartile Rankings: Quartile rankings were assigned based on the mean values calculated for the hospitals within
the peer groups. The first quartile contains the top 25% of the best performing hospitals in an applicable peer group,
the second quartile contains those hospitals falling in the 26% to 50% range, the third quartile contains those
hospitals falling in the 51% to 75% range, and finally the fourth quartile contains those hospitals falling below 76%.
Mean Value: The mean value is the average of all amounts within a defined group. For example, 8 would be the
mean value in an array of the numbers: 2, 4, 10, and 16.
October 2010 4
5. Executive Summary – Hospital Performance Metrics
A measure of overall hospital profitability presented as a percentage. A negative percentage
Total Profit Margin
indicates an overall loss, while a positive percentage indicates profitability.
A measure of operating profitability presented as a percentage. A negative percentage
Total Operating Profit Margin
indicates overall loss, while a positive percentage indicates profitability.
A measure of labor productivity. This metric divides labor costs by operating revenues. A
Total Labor Cost as a Percentage of
higher percentage compared to its peers indicates that a hospital uses more labor to produce its
Total Operating Revenues
revenue.
Measures the number of full-time equivalent (FTE) employees used for each occupied bed.
Full-Time Equivalent (FTE) Staff per
Similar to the previous ratio, a higher percentage compared to its peers indicates that a hospital
Adjusted Occupied Bed (AOB)
uses more labor to treat its patients.
Measures the number of days it typically takes to collect accounts receivable. A higher
Average Days Net Patient Revenue in
percentage compared to its peers indicates that the hospital's revenue cycle is not as efficient as
Accounts Receivable (AR)
its peers.
Measures the average age of the hospital including capital improvements and major equipment
Average Age of Plant purchases. A higher age compared to its peers indicates that the hospital has deferred the
replacement of its capital when compared to its peers, which can lead to further distress.
Source: Metrics are based on data extracted from Medicare cost reports filed each year with the Federal
Government. Accuracy of the data contained in the Medicare cost reports is certified by hospital management
when the report is filed. Any changes resulting from desk or field audits by Medicare and subsequently included in
the Hospital Cost Report Information System (HCRIS) database have also been reflected in the calculations.
Excludes partial-year Medicare cost reports, hospitals where 30% or more of total inpatient beds are non-acute, and
hospitals where the computed metric is more than 2 standard deviations from the mean.
October 2010 5
6. Total Profit Margin
6-Year Metric Trend
10.00%
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
20.00%
17.00%
14.00%
11.00%
8.00%
5.00%
2.00%
-1.00%
-4.00%
-7.00%
-10.00%
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 13.40% 19.16% 11.42% 9.94% 17.11% 12.03%
2nd Quartile 4.85% 10.43% 4.04% 3.56% 8.96% 5.65%
3rd Quartile 0.57% 4.30% 0.15% -0.03% 4.09% 1.54%
4th Quartile -6.80% -4.48% -7.04% -7.07% -5.18% -7.25%
October 2010 6
7. Total Operating Profit Margin
6-Year Metric Trend
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
-1.00%
-2.00%
-3.00%
-4.00%
-5.00%
-6.00%
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
-15.00%
-20.00%
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 12.32% 20.03% 9.60% 5.89% 13.11% 9.85%
2nd Quartile 2.24% 10.48% 1.71% -1.86% 3.60% 1.98%
3rd Quartile -2.91% 2.85% -2.54% -7.38% -3.56% -3.08%
4th Quartile -11.94% -7.79% -10.89% -16.15% -13.01% -12.77%
October 2010 7
8. Days Net Patient Revenue in Accounts Receivable (AR)
6-Year Metric Trend
63.00
61.00
59.00
57.00
55.00
53.00
51.00
49.00
47.00
45.00
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
80.00
75.00
70.00
65.00
60.00
55.00
50.00
45.00
40.00
35.00
30.00
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 33.71 35.31 32.36 36.74 36.30 34.74
2nd Quartile 44.91 45.42 43.26 49.30 46.34 44.70
3rd Quartile 53.16 53.21 50.64 59.47 53.29 51.48
4th Quartile 70.26 70.09 65.65 78.31 72.15 68.09
October 2010 8
9. Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
6-Year Metric Trend
7.00
6.50
6.00
5.50
5.00
4.50
4.00
3.50
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
8.00
7.50
7.00
6.50
6.00
5.50
5.00
4.50
4.00
3.50
3.00
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 3.45 3.21 3.61 3.42 3.79 4.59
2nd Quartile 4.37 3.93 4.55 4.44 5.32 5.39
3rd Quartile 5.12 4.51 5.27 5.28 6.99 6.03
4th Quartile 6.48 5.76 6.55 6.61 7.78 7.21
October 2010 9
10. Total Labor Cost as a Percentage of Net Operating Revenues
6-Year Metric Trend
55.00%
53.50%
52.00%
50.50%
49.00%
47.50%
46.00%
44.50%
43.00%
41.50%
40.00%
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
65.00%
60.00%
55.00%
50.00%
45.00%
40.00%
35.00%
30.00%
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 37.97% 34.05% 40.16% 41.26% 36.38% 41.26%
2nd Quartile 45.71% 39.04% 46.99% 49.08% 42.20% 47.39%
3rd Quartile 51.58% 44.26% 52.13% 54.76% 49.55% 52.08%
4th Quartile 59.40% 53.87% 59.19% 62.18% 58.19% 59.05%
October 2010 10
11. Average Age of Plant and Equipment
6-Year Metric Trend
11.50
11.00
10.50
10.00
9.50
9.00
8.50
8.00
7.50
7.00
6.50
6.00
5.50
5.00
2004 2005 2006 2007 2008 2009
All Investor Owned Not-For-Profit State and Local Govt. Owned Childrens Major Teaching
Peer Quartiles - FY 2009
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
State and Local
All Investor Owned Not-For-Profit Childrens Major Teaching
Govt. Owned
1st Quartile 3.63 2.12 4.90 4.55 4.55 6.11
2nd Quartile 7.70 4.83 8.65 8.31 6.85 9.02
Notes:3rd Quartile 10.59 8.23 11.28 10.99 8.30 11.25
• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).
• ExcludesQuartile
4th Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed 15.92 comprised of sub13.26beds.
15.39 12.96 15.75 beds are acute 15.57
October 2010 11
12. Metric Trend by Peer Group
Year 2009 2008 2007 2006 2005 2004
Total Profit Margin
All 2.98% 2.26% 4.56% 4.24% 3.86% 3.28%
Investor Owned 7.22% 6.20% 6.57% 6.46% 6.39% 5.79%
Not-For-Profit 2.11% 1.08% 4.31% 3.79% 3.45% 2.83%
State and Local Government Owned 1.53% 1.86% 3.40% 3.37% 2.64% 2.22%
Childrens 5.52% 3.81% 9.36% 7.28% 7.17% 6.46%
Major Teaching 2.83% 0.85% 5.20% 4.82% 3.75% 3.20%
Total Ope rating Profit Margin
All -0.10% -0.59% -0.21% -0.38% -0.29% -0.81%
Investor Owned 6.26% 5.67% 5.16% 4.87% 4.86% 4.43%
Not-For-Profit -0.54% -1.29% -0.79% -1.07% -0.76% -1.46%
State and Local Government Owned -4.97% -4.82% -4.02% -3.75% -4.16% -4.22%
Childrens -0.57% -0.51% 0.17% -1.60% 0.03% -1.91%
Major Teaching -1.21% -2.82% -2.17% -2.15% -2.88% -3.27%
Days Ne t Patie nt Re ve nue in Accounts Re ce ivable (AR)
All 50.52 53.55 54.66 55.28 54.62 56.31
Investor Owned 51.21 54.36 55.61 57.77 57.08 57.91
Not-For-Profit 48.04 51.18 52.08 52.45 51.95 53.89
State and Local Government Owned 56.15 59.44 61.10 60.88 59.92 61.77
Childrens 52.85 54.83 56.89 56.66 57.89 55.18
Major Teaching 49.98 52.89 52.44 52.88 52.94 54.40
Notes:
• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).
• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 12
13. Metric Trend by Peer Group
Year 2009 2008 2007 2006 2005 2004
Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)
All 4.86 4.86 4.82 4.82 4.77 4.78
Investor Owned 4.37 4.43 4.39 4.40 4.29 4.28
Not-For-Profit 5.00 4.97 4.93 4.94 4.88 4.89
State and Local Government Owned 4.95 4.97 4.93 4.92 4.94 4.99
Childrens 6.11 6.40 6.44 6.32 6.40 6.35
Major Teaching 5.83 5.78 5.71 5.75 5.70 5.66
Total Labor Cost as a Percentage of Net Operating Revenues
All 48.69% 49.54% 49.61% 49.67% 49.79% 50.45%
Investor Owned 42.93% 43.97% 44.17% 44.42% 44.85% 45.25%
Not-For-Profit 49.66% 50.47% 50.54% 50.59% 50.53% 51.44%
State and Local Government Owned 51.90% 52.59% 52.46% 52.36% 52.85% 52.88%
Childrens 47.25% 47.39% 47.10% 46.73% 48.21% 48.10%
Major Teaching 50.16% 51.31% 50.73% 50.82% 50.75% 51.45%
Average Age of Plant and Equipment
All 9.34 9.32 9.35 9.40 9.47 9.05
Investor Owned 7.11 6.42 6.29 6.06 6.18 5.58
Not-For-Profit 10.17 10.22 10.25 10.30 10.32 9.63
State and Local Government Owned 10.01 10.25 10.46 10.77 10.64 10.38
Childrens 8.55 8.57 9.24 9.01 8.45 8.75
Major Teaching 10.60 10.62 10.79 10.44 10.47 9.44
Notes:
• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).
• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 13
14. Quartiles by Peer Group
Peer Group Summary by Quartile (Quartile Grouping)
For the Year 2009
All Investor Owned Not-For-Profit
Metric
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th
Overall Profit Margin 13.40% 4.85% 0.57% (6.80%) 19.16% 10.43% 4.30% (4.48%) 11.42% 4.04% 0.15% (7.04%)
Operating Profit Margin 12.32% 2.24% (2.91%) (11.94%) 20.03% 10.48% 2.85% (7.79%) 9.60% 1.71% (2.54%) (10.89%)
Total Labor Cost as a % of Net Operating Rev. 37.97% 45.71% 51.58% 59.40% 34.05% 39.04% 44.26% 53.87% 40.16% 46.99% 52.13% 59.19%
Days Net Patient Revenue in AR 33.71 44.91 53.16 70.26 35.31 45.42 53.21 70.09 32.36 43.26 50.64 65.65
FTEs per AOB 3.45 4.37 5.12 6.48 3.21 3.93 4.51 5.76 3.61 4.55 5.27 6.55
Average Age of Plant and Equipment 3.63 7.70 10.59 15.39 2.12 4.83 8.23 12.96 4.90 8.65 11.28 15.75
State and Local Government Childrens Major Teaching
Metric
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th
Overall Profit Margin 9.94% 3.56% (0.03%) (7.07%) 17.11% 8.96% 4.09% (5.18%) 12.03% 5.65% 1.54% (7.25%)
Operating Profit Margin 5.89% (1.86%) (7.38%) (16.15%) 13.11% 3.60% (3.56%) (13.01%) 9.85% 1.98% (3.08%) (12.77%)
Total Labor Cost as a % of Net Operating Rev. 41.26% 49.08% 54.76% 62.18% 36.38% 42.20% 49.55% 58.19% 41.26% 47.39% 52.08% 59.05%
Days Net Patient Revenue in AR 36.74 49.30 59.47 78.31 36.30 46.34 53.29 72.15 34.74 44.70 51.48 68.09
FTEs per AOB 3.42 4.44 5.28 6.61 3.79 5.32 6.99 7.78 4.59 5.39 6.03 7.21
Average Age of Plant and Equipment 4.55 8.31 10.99 15.92 4.55 6.85 8.30 13.26 6.11 9.02 11.25 15.57
Notes:
• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).
• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 14
15. Quartiles by Peer Group
Peer Group Summary by Quartile (Peer Grouping)
For the Year 2009
1st Quartile 2nd Quartile
Metric Major Major
All IO NFP GSL Childrens All IO NFP GSL Childrens
Teaching Teaching
Overall Profit Margin 13.40% 19.16% 11.42% 9.94% 17.11% 12.03% 4.85% 10.43% 4.04% 3.56% 8.96% 5.65%
Operating Profit Margin 12.32% 20.03% 9.60% 5.89% 13.11% 9.85% 2.24% 10.48% 1.71% (1.86%) 3.60% 1.98%
Total Labor Cost as a % of Net Operating Rev. 37.97% 34.05% 40.16% 41.26% 36.38% 41.26% 45.71% 39.04% 46.99% 49.08% 42.20% 47.39%
Days Net Patient Revenue in AR 33.71 35.31 32.36 36.74 36.30 34.74 44.91 45.42 43.26 49.30 46.34 44.70
FTEs per AOB 3.45 3.21 3.61 3.42 3.79 4.59 4.37 3.93 4.55 4.44 5.32 5.39
Average Age of Plant and Equipment 3.63 2.12 4.90 4.55 4.55 6.11 7.70 4.83 8.65 8.31 6.85 9.02
3rd Quartile 4th Quartile
Metric Major Major
All IO NFP GSL Childrens All IO NFP GSL Childrens
Teaching Teaching
Overall Profit Margin 0.57% 4.30% 0.15% (0.03%) 4.09% 1.54% (6.80%) (4.48%) (7.04%) (7.07%) (5.18%) (7.25%)
Operating Profit Margin (2.91%) 2.85% (2.54%) (7.38%) (3.56%) (3.08%) (11.94%) (7.79%) (10.89%) (16.15%) (13.01%) (12.77%)
Total Labor Cost as a % of Net Operating Rev. 51.58% 44.26% 52.13% 54.76% 49.55% 52.08% 59.40% 53.87% 59.19% 62.18% 58.19% 59.05%
Days Net Patient Revenue in AR 53.16 53.21 50.64 59.47 53.29 51.48 70.26 70.09 65.65 78.31 72.15 68.09
FTEs per AOB 5.12 4.51 5.27 5.28 6.99 6.03 6.48 5.76 6.55 6.61 7.78 7.21
Average Age of Plant and Equipment 10.59 8.23 11.28 10.99 8.30 11.25 15.39 12.96 15.75 15.92 13.26 15.57
Notes:
• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).
• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds.
October 2010 15
16. Introduction to Healthcare Management Partners
Who We Are
HMP is a hospital and healthcare services management firm. All of its senior executives have decades of healthcare experience
including CEO, COO and CFO assignments across the spectrum of healthcare service providers. Our senior management has deep
experience in building and operating thriving healthcare organizations. Part of that experience includes taking decisive action in crises
or turnaround situations. This knowledge base gives HMP a unique perspective and all the tools necessary to handle the issues facing
any healthcare provider organization. HMP provides Hospital Contract Management, Turnaround Management and Interim or Crisis
Management services.
Our Approach
Our approach to every assignment is built upon the straightforward application of three simple steps or guiding principles.
Listen – We listen carefully to our clients, their key stakeholders and the marketplace throughout each assignment.
Evaluate – We employ detailed, fact-based analysis to evaluate and validate assumptions, findings and recommended actions.
Implement – We have a bias toward “getting it done.” We take decisive action to quickly convert opportunities or solve problems .
The HMP Difference
Total commitment to providing C-Level attention throughout each assignment by experienced healthcare executives
Small, dedicated teams of operating professionals for each assignment
Absolute integrity of our fact-based approach
Action-oriented diagnostic and business planning processes
Proven ability to drive positive outcomes in all sectors of healthcare
Depth of HMP network, providing critical access to key resources and people
Commitment to the highest professional standards
October 2010 16
17. Introduction to Healthcare Management Partners
Management Services
HMP is a hospital and healthcare services management firm. All of its senior executives have decades of healthcare experience
including CEO, COO and CFO assignments across the spectrum of health services. Examples of specific assignments include serving as
the Chief Executive Officer (CEO) of the following types of healthcare organizations:
Religious affiliated or sponsored multihospital systems
Free standing not-for-profit or government owned community hospitals
University and major teaching hospitals
Single site and multihospital regional operations for investor owned hospital management companies
De Novo organizations (start-up) planning, construction and operation of new general acute care hospitals, free-standing heart
and cancer hospitals, a continuing care retirement community and many other related facilities
Hospitals that are in bankruptcy or for sale
Financially distressed skilled nursing facilities
Home health, hospice and physician practices
“HMP’s senior staff members are professional healthcare service executives who also possess consulting skills,
not professional consultants. We understand and are committed to the provision of quality healthcare services
at every provider organization where we have a management role.”
October 2010 17
18. Introduction to Healthcare Management Partners
Hospital Contract Management
HMP is positioned to undertake the long-term (3 to 5 years) contract management of hospitals of all sizes and stages of
development. Our executives are experienced in leading the development of new or replacement general acute care or specialty
hospitals or the turnaround and repositioning of existing hospitals. They can effectively lead initiatives in the following areas:
Strategic Leadership Clinical Excellence Operational Excellence Financial Performance
Market Positioning Clinical Process Redesign Patient Throughput Revenue Cycle
Brand Development Evidence‐Based Care Emergency Department Clinical Business Office Consolidation
Efficiency
Service Line Development Resource Utilization and Cost of Surgical Services Clinical Managed Care Contracting
Quality Efficiency
Capital Planning and Investment Pay for Performance Inpatient Length of Stay and Level Risk Management and Insurance
of Care
Physician Relations Care and Case Management Human Resources Management Budgeting / Financial Planning
Processes
Physician Integration Quality and Safety Indicators Ambulatory Care Capital Programs
Continuum of Care Design and Implementation Hospice and Home Care Supply Chain
Strategic Plans
Corporate and Medical Staff Mission and Vision Best Practices and Operating Financial Reporting and Accounting
Governance Metrics
We will be directly accountable to the board of directors and will assume full responsibility to plan, organize, staff, direct and
control the successful and cost effective operations of the hospital.
Because HMP is not a management consulting firm, our contract management executives are free to always bring the best and most
cost-effective solution, from whatever source, to the hospital should outside assistance prove necessary to implement a given
strategic or tactical initiative.
October 2010 18
19. Introduction to Healthcare Management Partners
Turnaround Management
HMP’s executives have served as chief restructuring officers of healthcare companies through bankruptcies, crisis situations and in the
early stages of high-profile criminal and civil fraud investigations. In each of these situations, their leadership helped these
organizations bolster performance through discipline and carefully planned action.
Some consultants assess your problems and provide a recommended course of action. But HMP executives take the helm of failing
organizations and assume direct responsibility for transforming them. Time and again, they have succeeded in revitalizing providers of
all kinds, from a rural nursing home chain to a 1,000 bed teaching hospital or a 179 bed county owned community hospital.
There are no quick fixes in turnaround management, but HMP has developed a highly effective, streamlined approach for achieving
lasting improvements as soon as possible. We begin by developing a strong knowledge base of your organization. Individuals from
every level of the organization are interviewed: management, medical and nursing staff members, board of directors, employees,
patients and their families. Their input, combined with a depth of healthcare industry knowledge, allows HMP to:
Stabilize the crises,
Identify immediate opportunities and challenges,
Develop a strategic plan, including milestones and deadlines,
Define expected outcomes,
Build consensus with all constituents – medical and nursing staffs, management, unions, and the local community,
Change cultures, and
Optimize performance.
In all of its healthcare provider turnaround assignments, HMP has successfully designed and executed plans that simultaneously added
patient volume and revenues, reduced costs and improved profitability and cash flow.
From the outset, HMP builds on each organization’s strengths, working side‐by‐side with management, directors and other key
stakeholders to drive desired results. HMP also focuses on winning the support and active participation of the medical and nursing
staffs, which is fundamental for delivering quality healthcare services and improving financial results.
October 2010 19
20. Introduction to Healthcare Management Partners
Interim and Crisis Management
HMP serves in interim and crisis management roles when required to help guide providers through periods of crisis or change.
Companies that are underperforming and in crisis, or healthy but in transition, may need additional experienced healthcare industry
leaders to stabilize operations and improve financial performance or maintain continuity in the rapid implementation of critical strategic
initiatives.
Our professionals can offer critical advice or step into key leadership positions such as Chief Restructuring Officer, Chief Financial
Officer, or Chief Executive Officer to provide needed stability during periods of change. Our proven interim management capabilities
add valuable support in crisis situations. We immediately fill critical leadership vacancies and shorten the lead‐time for implementing
specific initiatives. HMP provides much needed leadership and speed to create value in executing crisis management and restructuring
plans.
Our crisis and interim management services include:
Immediate staffing of critical senior management positions
Reducing lead‐time for implementing strategic initiatives
Managing communications processes with Members of the medical and nursing staffs, board members, employees and regulators,
and if required
Bankruptcy process planning and administration
October 2010 20
21. Clients Our Professionals Have Served
Not-For-Profit or Governmental Hospitals or Systems
Baylor College of Medicine Hahnemann University New York United Hospital Southern Chester County
Hospital Medical Center Medical Center
The Brooklyn Hospital Center Health Alliance of Cincinnati Nyack Hospital St Vincent’s Catholic Medical
Centers, New York
Devereux Foundation National Health Service, Rahway Hospital Temple Health System
United Kingdom
Franciscan Health System Legacy Health System Raritan Bay Health System Tri‐Lakes Medical Center
General Health System Mercy Health System Robert Wood Johnson Health University Hospital
Network Consortium of Pennsylvania
Good Samaritan Hospital Natchez Regional Medical Sisters of Mercy Health System
Center
Investor Owned Hospitals or Health Systems
Ameris Health Systems Health South Corporation Integrated Healthcare Shasta Regional Medical
Holdings, Inc. Center
Doctors Hospital, Houston Hospital Corporation of Lakeside Hospital at Bastrop St. Joseph Hospital, Houston
America
Doctors Hospital, Los Angeles Hugh Chatham Memorial LifePoint Hospitals Tenet Healthcare Corporation
Hospital
HealthPlus Hughston Hospital and Clinic Monroe Hospital, LLC Vanguard Health Systems
Hospital Partners of America Integra Healthcare Promise Healthcare
October 2010 21
22. Clients Our Professionals Have Served
Senior Care and/or Continuing Care Retirement Communities
Grace Care of Texas Monarch Landing, Inc.
Jenner’s Pond Continuing Care Retirement Community National Senior Campuses (Erickson Retirement Communities)
Life Care Centers of America Sedgebrook, Inc.
Linden Ponds, Inc. St. Edward Mercy Health Systems (Ft. Smith, AR)
Mercy Hospitals of Texas St. Johns Nursing Home (St. Louis, MO)
Law and Accounting Firms
Bird Marella LLP Deloitte Kantrow, Spaht, Weaver & Blitzer Patton Boggs
Bradley Arant Boult Cummings Gearhiser, Peters, Lockaby, Cavett KPMG Ramirez International, Inc.
LLP & Elliott, PLLC
Brown McCarroll LLP Hogan & Hartson LLP Latham & Watkins Whiteford Taylor Preston, LLP
Fulbright & Jaworski LLP Hooper, Lundy & Bookman Mancuso & Franco PC Schiavetti, Corgan, Soscia,
DiEdwards and Nicholson, LLP
Decosimo Jones Day Milbank, Tweed, Hadley and Waller Lansden Dortch & Davis
McCloy LLP
Other Providers / Payors
Blue Cross of Tennessee Best Choice Home Health Community Behavioral Health Columbia Home Care
Network of PA
October 2010 22
23. Firm Leadership
Scott Phillips
Title Managing Director
Education B.S. from University of Florida
CPA
Boards & Organizations American Bankruptcy Institute Healthcare Subcommittee Chair
Telephone 267.207.2929
Mobile 267.804.3885
E-Mail sphillips@hcmpllc.com
Scott has more than 30 years of healthcare industry management and consulting experience. Prior to founding HMP in 1997, he served as the
president and chief executive officer of a 636-bed academic medical center, as national partner and regional healthcare practice director for Touche
Ross & Co., and as the chief financial officer of a faith-based multihospital system operating 12 hospitals across seven states.
Scott has significant management and consulting experience with government, tax-exempt and investor owned healthcare service providers. He
understands the organization and delivery of high-quality health services, including the role of corporate and medical staff governance during
difficult periods of transition. Scott has executive level experience with mergers, acquisitions and turnaround situations, including restructuring in
bankruptcy. In all of his many healthcare provider turnaround assignments, he has successfully designed and implemented plans that simultaneously
added patient volume and revenues while conserving cash and reducing unit costs. He understands this approach builds on the organization’s
strengths and attracts the support of the local community and medical and nursing staffs, which is essential for the long-term provision of quality
healthcare services.
Over the past several years, Scott has served as the chairman and CEO of an investor owned healthcare provider with operations in 15 states and
chief executive officer of a publicly traded medical staffing company with more than 2,000 employees. Both turnaround assignments included the
crises management of complex organizations in the early stages of high-profile criminal and civil fraud investigations by multiple federal agencies.
Scott has expert knowledge of the bankruptcy process as well as its implications and obligations on an operating provider of healthcare services. He
recently led the successful financial turnaround and Chapter 9 reorganization of a 179-bed county-owned hospital.
Recently he was the financial advisor to 18 tax-exempt continuing care retirement communities with more than 20,000 residents in twelve states,
affected by the bankruptcy and sale of Erickson Retirement Communities.
Scott graduated from the University of Florida with a Bachelor of Science in accounting. He is a licensed certified public accountant and member of
numerous professional organizations. He is currently serving Leader Special Projects, Healthcare Committee, American Bankruptcy Institute.
October 2010 23
24. Firm Leadership
Michael Morgan
Title Managing Director
Education MBA from University of Central Oklahoma
B.S. from University of Science and Arts of Oklahoma
Boards & Organizations Fellow of American College of Healthcare Executives
Telephone 713.968.6521
Mobile 214.701.9990
E-Mail mmorgan@hcmpllc.com
Michael is a former hospital chief executive officer with more than 30 years of experience in healthcare management. He brings expertise and talent
for turning around ailing healthcare providers and optimizing healthy organizations.
In his 25-year career at the Sisters of Mercy Health System, Michael was responsible for turning around five of the system’s 19 hospitals. He served
as president and chief executive officer for several Sisters of Mercy hospitals, including St. John’s Mercy Health Care, which has over $800 million
in operating revenues, employs more than 8,000 individuals and includes the system’s flagship 957-bed teaching hospital. As the CEO, he has set
successful new strategies, improved clinical and administrative operations and changed organizational cultures. His trademark is developing capable
management teams that in turn increase service quality, employee and medical staff satisfaction, patient volume, profitability and maximize cash
flow.
After leaving the Sisters of Mercy system, Michael served as the chief restructuring officer and CEO for a two-hospital, investor owned system in
Texas. In eight months, he led the successful turnaround, emergence from bankruptcy and recapitalization of the hospitals by a physician-led limited
partnership. He led the turnaround of a chain of five nursing homes in Texas and the bankruptcy turnaround of a two-campus, acute-care hospital in
Mississippi. He was the oversight Managing Director for a two-campus rehab and specialty hospital chapter 11 bankruptcy. He also recently served
as the CRO for three individual CCRC’s under a large CCRC management company bankruptcy, and provided financial advisory services for a large
investment banking group on a 500-bed hospital system.
Michael holds a Bachelor of Science in business administration from the University of Science and Arts of Oklahoma and a Master of Science in
business administration from the University of Central Oklahoma. He is a fellow of the American College of Healthcare Executives and has served
as an officer or director of numerous hospitals and business organizations, including a 280,000-member for-profit health insurance plan.
October 2010 24
25. Firm Leadership
Bruce Buchanan
Title Managing Director
Education MBA from George Mason University
MHSA from University of Michigan
B.A. from Princeton University
Boards & Organizations Fellow of American College of Healthcare Executives
Mobile 602.363.1140
Fax 866.794.9501
E-Mail bbuchanan@hcmpllc.com
Bruce has more than 30 years of experience in the healthcare field and is a senior healthcare executive with a successful track record in both the not-
for-profit and investor owned sectors. He possesses multimarket experience at the hospital and health system chief executive officer level. He has
deep experience and expertise in revenue growth, physician collaboration/integration, organizational development, productivity improvement and
quality enhancement.
Before joining HMP, Bruce served as CEO of Phoenix Baptist Hospital, where he turned around the distressed 236-bed teaching hospital by reducing
operating costs while enhancing the quality of care. Bruce led a similar turnaround of Northeast Baptist Hospital in San Antonio, including recruiting
new physicians, doubling the hospital’s physical space and growing market share. He also served as president and CEO of Atlanta Medical Center
and Mercy Health System Oklahoma and its Mercy Health Center in Oklahoma City. Bruce also held senior management positions with Hillcrest
Healthcare System and Saint Joseph Hospital and worked for Invalesco Group as an operations consultant to healthcare organizations.
Most recently with HMP, Bruce served as Chief Restructuring Officer for a rehabilitation hospital company with two facilities. He successfully led
the company through a Chapter 11 bankruptcy process and a Section 363 sale to a new, privately held owner. He also served as CEO of a county
hospital and guided it through a Chapter 9 bankruptcy, which resulted in all unsecured creditors receiving three year notes for full payment plus
interest.
Bruce has a Bachelor of Arts in sociology from Princeton University, a Master of Health Services Administration from University of Michigan, and a
Master of Business Administration from George Mason University. He is board-certified in healthcare management and a Fellow in the American
College of Healthcare Executives. He also is a member of the Turnaround Management Association.
October 2010 25
26. Firm Leadership
Derek Pierce
Title Managing Director
Education B.S. from Samford University
Telephone 205.202.0459
Mobile 615.584.0719
E-Mail dpierce@hcmpllc.com
Derek has over 20 years of professional experience focused solely in the healthcare industry, having served as chief financial officer, chief
restructuring officer, director of reimbursement, court-appointed examiner, Medicare auditor, Medicare cost report preparer, forensic accountant,
compliance consultant, financial auditor, and financial advisor. He has audited, managed and consulted with all types of healthcare providers,
including government owned, community not-for-profit, academic, and investor owned entities.
Most recently, Derek served as the restructuring chief financial officer of a two-campus, not-for-profit hospital in Chapter 11 bankruptcy. In addition
to his CFO responsibilities, he led the Section 363 sale process and conducted a forensic review into the circumstances that led to the hospital’s
bankruptcy filing. Throughout the project, Derek worked closely with senior lenders, debtor-in-possession lenders and the applicable federal loan
program to a successful plan of reorganization.
Starting his career with the Medicare fiscal intermediary as a Medicare auditor, Derek developed deep expert knowledge of the patient revenue cycle,
third-party contracting, and Medicare and Medicaid rules and regulations. He is expert in the areas of corporate and regulatory compliance and
forensic accounting in conjunction with the defense of civil and criminal fraud claims or allegations. He led teams conducting forensic analysis in
support of settlement negotiations with the government at both Hospital Corporation of America (HCA) and HealthSouth Corporation, two of the
largest and most complex civil fraud settlements in history.
In his career, Derek has led or participated in interim management and consulting assignments for more than 40 healthcare providers, including
Baptist Memorial Health Care, National Health Service (United Kingdom) Washington Hospital Center, Lifepoint Hospitals, Tampa General
Hospital, Legacy Health System and IASIS Healthcare.
Prior to joining HMP as a managing director, Derek was a Director with Alvarez & Marsal in its New York-based healthcare practice. Before that,
he was a senior manager with Arthur Andersen in its Atlanta-based healthcare consulting practice.
Derek is a graduate of Samford University with a Bachelor of Science in accounting and is a member of numerous professional associations.
October 2010 26
27. Contact Information
Philadelphia New York Houston
• Contact: Scott Phillips • Contact: Nihal Shah • Contact: Mike Morgan
Managing Director Director Managing Director
• Address: • Address: • Address:
One Liberty Place 1185 Avenue of the Americas 5100 Westheimer
1650 Market Street 30th Floor Suite 200
36th Floor New York, NY 10036 Houston, TX 77056
Philadelphia, PA 19103 • Phone: 212.461.4243 • Phone: 713.968.6521
• Phone: 267.804.3885 • Fax: 212.461.4252 • Fax: 866.422.6176
• Fax: 215.689.4386
Birmingham Phoenix London, UK
• Contact: Derek Pierce • Contact: Bruce Buchanan • Contact: Tim Bolot
Managing Director Managing Director Managing Director
• Address: • Address: • Address:
2001 Park Place, Suite 1400 243 E. Glenn Drive Bolt Partners LLP
Birmingham, AL 35203 Phoenix, AZ 85020 192 Haverstock Hill,
• Phone: 205.202.0459 • Mobile: 602.363.1140 Belsize Park,
• Fax: 615.523.1835 • Fax: 866.794.9501 London NW3 2AJ
• Phone: +44 (0)20 7435 7349
October 2010 27