The Benefits of System

Affiliationfor

Independent Rural HospitalsPresented by:

Donna Russell-Cook, FACHEPresident

St. Elizabeth HospitalFranciscan Health System

Sue Reiter, RN, BSNBoard Member

Franciscan Health System

St. Elizabeth HospitalFranciscan Health System

Affiliation—May 2007

Enumclaw, WA

St. Elizabeth HospitalService Area

(Southeast King and Northeast Pierce Counties)

• Population of 36,000

• Medicare/Medicaid payer mix is 58.1%

• 40,000 annual outpatient visits

• 75% of primary care providers are FMG

• 13,300 ER visits

• 300 births

• 1,500 admissions

• 16 – average daily census

Number of Hospitals in Health Systems,(1) 2002 – 2012

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2012, for community hospitals. (1) Hospitals that are part of a corporate body that may own and/or manage health provider facilities or health-related subsidiaries

as well as non-health-related facilities including freestanding and/or subsidiary corporations.

Many are doing it…does it make

sense for YOUR organization?

What synergies exist with potential partners?

ACCESS TO CAPITAL

Prior to Affiliation

AfterAffiliation

Enumclaw Regional Hospital

St. Elizabeth Hospital

FACILITIESUpdates, expansion, and new construction

ACCESS TO CAPITALINFORMATION TECHNOLOGY

Implementation/advancement of EHR, new equipment

OUR EHR JOURNEY

MEANINGFUL USESTAGE 2

ECONOMIES OF SCALE

NEGOTIATING POWER

SYSTEM CHARGE MASTER

One contract was non-negotiable for the past 20 years, upon affiliation, it was

renegotiated, bringing Enumclaw into FHS payer agreements

Increased Charges = Increased RevenueIt’s critical to monitor not just the impact on the

organization, but also on the patient and communityKNOW YOUR COMMUNITY

Supplies as a % of revenues decreased from7.3% pre-affiliation to 2.8% post-affiliationdespite increase in total patient services revenue of over 200% during same period

Affiliation

FINANCIAL VIABILITY

ACCESS TO HUMAN RESOURCES AND SYSTEM

PROGRAMS

• End of Health Services Consortium (90’s)• Virginia Mason was providing advice/assistance during that time

• No connection to larger resource (early 2000’s)• Led to affiliation talks with Franciscan Health System

• Great platform for guidance and structure• Integration of system policies for admin, clinical, and HR

• Shift from “home grown” practices to best practices• Access to talent, expertise, structure, procedures, and practices

COMMUNITYRELEVANCE

ADMISSIONS

43%

BIRTHS

38%

ER VISITS

13%

• Immediate assurance of ongoing existence of hospital• Community• Employees

• Community Relations• Health Care Coalition• Shifting perception (positive) with increased involvement• System (FHS) and parent (CHI) financial support

• Marketing• Grants/Sponsorships• FHS Foundation• Volunteer Services/Community Integration FTE’s

PERMANENT HEALTHCARE FOR COMMUNITY

CONTINUUM OF CARE

POPULATIONHEALTH

The new facility is symbolic of the

greater benefit of the organization supporting the

increased resources for community and patients

EVOLUTION

GROWTH

PROFESSIONAL RESOURCES

“It can get a bit lonely out in the country.”

-Dennis Popp, Administrator, Enumclaw Regional Hospital

Now able to interact with…MANAGERS

DIRECTORS

SENIORLEADERS

Additional

STAFF

MEDICAL STAFF CONNECTION

“ Recruiting and retaining talented physicians, providers, nurses, ancillary professionals, and

other positions is the single biggest challenge in ensuring a competent and quality delivery

service in a rural community.”-James Diegel, president and CEO, St. Charles Health System Inc., Bend, OR

Pre-affiliation >50% of referrals were from FMG

VISIBILITY AND PRESTIGE

ST. ELIZABETHHOSPITAL

CATHOLIC HEALTHINITIATIVES

FRANCISCAN HEALTHSYSTEM

1- CAH Hospital

282* Employees

Local Community

8 – Hospital System

Franciscan Medical Group

Hospice/Palliative Care

12,440 Employees

Regional Network

18 – States

86 – Hospitals

2 – Academic Med. Ctrs.

3rd Largest Faith-BasedHealth System

85,500 Employees

$12B in Revenue

National Network

Thank You