Strategic Initiative with

Confidential. This presentation is provided for the recipient only and cannot be reproduced or shared without Health Management Associates, Inc.’s express consent.

© 2011 Health Management Associates, Inc. 1

Strategic Initiative with

and

© 2011 Health Management Associates, Inc. Confidential.2

• Health Management’s Mission of Enabling America’s Best Local Healthcare – Our focus is supporting South East Volusia communities

• Health Management’s state wide presence in Florida and locally on the East Coast connecting physicians and hospitals systems like Bayfront, Shands, and Orlando Health

• Health Management’s results for being a leader in both quality driven health care and healthy operations

Partnership Benefits for Bert Fish Medical Center and South East Volusia County


Bert Fish Medical Center Proposal Highlights

• Health Management leases assets and operations of Bert Fish Medical Center for $50,000,000 in cash, spends at least $40 million in capital spending and offers Joint Venture option which includes 50/50 Governance

• Pay annual property taxes like all other businesses and end community health care tax after 7 years

• All staff employees stay at same title and pay • Bert Fish Medical Center keeps its charity care policy

and mission to serve the poor• Clinical Affiliation with Orlando Health


Mission and Vision

• About Health Management• Mission, Vision, and Values• Quality

Gary Newsome President and Chief Executive Officer

Enabling America’s Best Local Health Care


Guiding Principles

PEOPLE

SERVICE

QUALITY

INNOVATION

FINANCE

GROWTH

MISSION:ENABLING AMERICA’S BEST LOCAL HEALTH CARE.

We are servant leaders. We do the right thing. We don’t

settle.


•One of world’s most admired companies in Health Care

•No. 1 company in Quality of Products / Services

•No. 1 in Social Responsibility

States with Health Management PresenceNot-for-profit Joint Ventures / Affiliations

• 70 facilities in 15 states• +40,000 Associates• +10,000 Physicians• A focus on mid-sized

communities • Located primarily in

the Southeastern U.S. including 22 hospitals in Florida

• Strong presence in markets with high retirement populations

About Health Management


Shands: Lake Shore, Live Oak, Starke

Wuesthoff - RockledgeWuesthoff - Melbourne

Sebastian River

St. Cloud RMC /Orlando Health

Bayfront Medical Center

Bert Fish Medical Center

Health Management

Hospitals (FY 2011)22 (FL)

Total Beds 2,998Admissions 132,00

0Surgeries 116,00

0ER Visits 575,00

0Net Revenue $2.08B

Florida Network of Hospitals


Health Management AssociatesLocal Hospitals, National Recognition

• 58 hospitals/health systems are Joint Commission accredited and have received The Gold Seal of ApprovalTM.

• 41 hospitals/health systems were recognized as 2011 Top Performers on Key Quality MeasuresTM by The Joint Commission.

• 7 hospitals/health systems are certified as Primary Stroke Centers by The Joint Commission.

• 18 hospitals/health systems have received chest pain center accreditation by the Society of Cardiovascular Patient Care (formerly known as the Society of Chest Pain Centers).


Vision for Nursing:Perspective from Six Pillars at Health Management

• People» Clinical Leader Program» Development of ACNO Program» CNE Orientation and Development» CNE Annual Conference» National Nursing Leadership Group

• Service and Quality» Alignment with disciplines throughout the company to enhance quality

outcomes Nursing leads Corporate Patient Safety Committee Nursing Sensitive Scorecard Patient Safety Scorecard Disseminate best practices through various mechanisms Development of local collaborative interdisciplinary team model


Information Technology Integration

• Information Technology Integration » Base system integrates with existing platforms

including Meditech• Hospital

» Base system integrates with other ancillary, billing,and financial systems with minimal disruption

• Physician Clinics» Athena Health for EMR and practice management

systems• Meaningful Use – Fully implemented in

2012


Bert Fish Medical Center Strategy

• HMA East Coast Network• Market Share Opportunity• Quality Outcomes• Managed Care and Accountable

Care• Business Plan

Kathy BurkeDivision CEO South Florida



Florida Recognition•Six hospitals/health systems (seven locations) are certified as Primary Stroke Centers by AHCA (Agency for Health Care Administration).•Five hospitals are certified as Primary Stroke Centers by The Joint Commission.•Three hospitals/health systems (three locations) have received chest pain center accreditation by the Society of Cardiovascular Patient Care; one hospital with chest pain accreditation by AHCA•13 hospitals were recognized as 2011 Top Performers on Key Quality MeasuresTM by The Joint Commission.



Florida Medical Quality Assurance Inc. - Patient Safety Award 2008-2011

First and only Certification Gynecological Surgical Center of Excellence in Florida; Only comprehensive stroke center in SW Florida

HealthGrades: America’s Best 100 Hospitals, 2012 Distinguished Hospital Award for Clinical Excellence 2010, 2011, 2012

Blue Distinction for Hips and Knees by Florida Blue (2012); Breast Imaging Center of Excellence by the American College of Radiology (2012)

Get With the Guidelines Stroke Gold Plus Award and Heart Failure Silver Award


Health Management in Florida’s East Coast

MelbourneRockledge

Sebastian

Health Management Hospitals Admissions Surgeries ER Visits Net Revenue

Wuesthoff - Rockledge 12,707 7,926 37,348 $206.4M

Wuesthoff - Melbourne 5,318 6,115 21,231 $114.8M

Sebastian Regional 4,660 5,591 19,281 $ 81.6M

© 2009 Health Management, Inc. Confidential.15

Health Management East Coast Physician Network

•A Different Business with Different Metrics requiring Different Leadership

•Provide physicians with viable bestpractice options

•Over 1,500 medical staff physicians•113 physician & midlevel associates •More than 375 associates•64 locations throughout

Space Coast•350,000 annual patient

encounters•$59.2 Million Net Revenue


Patient Egress from South East Volusia

Hospital PSA/SSA

Bert Fish Medical Center

31.7

Halifax Health Med Ctr 34.5Florida Hospital Memorial

11.9

Halifax Health Port Orange

8.7

All Others 13.2

Source: Florida inpatient data Jan 2011-Dec 2011The Nielsen Company & Thomson Reuters

Nearly 70% of patients from South East Volusia county leave the area for patient care services


Health Care Quality Data Opportunities for Improvement

Risk-Adj Mortality Composite%*

Core Measures Mean Percent* HCAHPS Score % Top Box**

Sources: * Whynotthebest.org 2-21-13 ** Hospitalcompare.com 2/21/13


Improving Quality and Customer Satisfaction at Bert Fish Medical Center

• Bench mark quality and operations results for hospital and medical staff with 70 other hospitals and 10,000 physicians

• Collaborate with Health Management’s Florida hospitals for best practices in quality and operations

• Adopt advanced Clinical Protocols from Orlando Health and Shands Healthcare in Chest Pain and Stroke to expand facility services


Managed Care –Keeping Bert Fish Independent and Connected

Strategic Responses to New Payment Methodologies

Value Based Purchasing

Hospital-Physician Bundling

Shared-Savings Model

Degree of Management

Challenge

• Engage physicians• Standardize care processes• Engage patients• Track and analyze performance• Leverage physician incentives

• Standardize devices

• Implement care maps

• Reduce orders and consults

• Implement evidence base guidelines

• Disease Registries

• Care Managers

• Partner with PCPs

• Deliver preventive & chronic disease management

• Reduce utilization

Actions needed under all payment reforms

Provider Cost Accountability

Pay-for-Performance

Source: Advisory Board


Bert Fish Medical Center Business Strategy

•Adding Bert Fish to Health Management’s Statewide and Local Insurance Plan Networks including future ACOs with Orlando Health and Shands Healthcare•Establish large network of Primary Care Physicians including private and employed physicians and free standing ERs North and South of Bert Fish Medical Center•Enhance Service Lines – Capital Spending and Physician Recruitment

» Cardiology – Expand and Market Chest Pain Center» Stroke – Expand and Market Stroke Center» Surgery – Add robotics services for Orthopedics and daVinci


Partnership Proposal

• Business Terms• Joint Venture Option• Governance

Pete LawsonExecutive Vice President

Enabling America’s Best Local Health Care


Bert Fish Medical Center Proposal Highlights

• Health Management leases assets and operations of Bert Fish Medical Center for $50,000,000 in cash, spends at least $40 million in capital spending and offers Joint Venture option which includes 50/50 Governance

• Pay annual property taxes like all other businesses and end community health care tax after 7 years

• All staff employees stay at same title and pay • Bert Fish Medical Center keeps its charity care policy

and mission to serve the poor• Clinical Affiliation with Orlando Health


Estimated Flow of Funds to SE Volusia Hospital District

Cash From Lease Payment $50,000,000Plus Inventory and Pre-Paids 2,600,000 Total Cash From HMA $52,600,000

+Plus Current Assets 23,200,000+Plus Limited and Other Assets 8,500,000

Less Current Liabilities (12,600,000)Long Term Debt (21,500,000)

Net Proceeds Following Transaction $50,200,000

Notes: August 31, 2012 unaudited balance sheet Pension obligation not required to be paid off at closing


Bert Fish Medical Center Governance• Advisory Board permanent seats include

designated:» One (1) Southeast Hospital District Member» One (1) Bert Fish Foundation Member


Bert Fish Medical Center Advisory Board

• Comprised of Local Community Leaders, Physician Representatives and Hospital CEO» Typically comprised of 9-13 members: 60% lay members and 40%

physicians» One (1) permanent member of the District and one (1) from the

Bert Fish Foundation

• Establishes strategic direction• Oversight for regulatory compliance (JCAHO, State, CMS)

and patient safety• Ensures quality of care and Medical Staff credentials• Collaborates on operational objectives• Serves as community liaisons and communication

champions


Clinical Component•Access to Teaching Center Physicians•Disease Management Protocols•Clinical Trials•Clinical Care Guidelines •Telemedicine

Business Component• Common Branding and Shared

Logo• Physician Recruitment• Service Expansion• Capital Spending• Network Platform

Health Management Not-for-Profit Partnerships


Health Manageme

nt Associates

BFMC, LLC

Joint Venture Option – 80/20 Ownership and Equal Governance

» SEVHD receives accelerated lease payment and new NFP holds 20% interest of BFMC, LLC

» SEVHD maintains equal governance with Health Management of BFMC, LLC

» Creates BFMC, LLC which holds assets and operations of BFMC

» Health Management contributes cash and receives 80% interest of BFMC, LLC

» Health Management manages LLC LLC Ownersh

ipGovernan

ceHMA 80% 50SEVHD

20% 50

Equal Governance

SEVHD receives cash and leases BFMC assets and operations to HMA and New Not For Profit holds 20%

SEVHD – New Not For Profit


Bert Fish Medical Center, LLC Board of Directors Governance

• Comprised of 4 Health Management and 4 SE Volusia Hospital District Members governing jointly

• Major, Majority, and Unanimous Decision Rights detailed in Operating Agreement including:» Annual Operating and Capital Budgets» Acquisition of other businesses» Capital calls» Debt defeasement or addition» Distribution amounts» New Member additions» Dissolution and Unwinds» Puts and Calls


Estimated Partnership Flow of Funds to SE Volusia Hospital District

Cash From Lease Payment $50,000,000Plus Inventory and Pre-Paids 2,600,000 Total Cash From HMA $52,600,000

+Plus Current Assets 23,200,000+Plus Limited and Other Assets 8,500,000

Less Current Liabilities (12,600,000)Long Term Debt (21,500,000)

-Less 20% ownership of Joint Venture (10,500,000)

Net Proceeds Following Transaction $39,7000,000

Notes: August 31, 2012 unaudited balance sheet Pension obligation not required to be paid off at closing


Ending Health Care Tax (HMA) v. Keeping Tax (Halifax)


• Health Management’s Mission of Enabling America’s Best Local Healthcare – Our focus is supporting South East Volusia communities

• Health Management’s state wide presence in Florida and locally on the East Coast connecting physicians and hospitals systems like Bayfront, Shands and Orlando Health

• Health Management’s results for being a leader in both quality driven health care and healthy operations

Partnership Benefits for Bert Fish Medical Center and South East Volusia County


Discussion and Feedback


Sherrie Sitarik – CEOOrlando Health

Orlando, FL (407) 841-5203

Tim Goldfarb – CEOShands Healthcare

Gainesville, FL(352) 265-8000

James Keaton, MD - Vice-Chancellor

University of MississippiMedical Center

(601) 984-1010

David Knowiski – VP of Finance

Catholic Health PartnersCincinnati, OH

(513) 639-2722

Bruce Lawrence – CEOIntegris Health

Oklahoma City, OK(405) 949-3177

Steve Dupre – Vice ChairmanBayfront Medical Center

St. Petersburg(727) 824-0017

Partnership References


Case Study:University of Florida / Shands Healthcare Partnership

• Health Management Invested Capital in Yr 1: $6M

» Public Hospital Authority contributed additional $2M for renovations

» Renovated ICU» Renovated first floor» da Vinci robotic surgery» Open MRI

• New Services» Recruited 16 new physicians» Live Oak - Cardiology» Starke – General Surgery, Gyn» Lake Shore – Interventional

Radiology, Neurology, Orthopedics

• Health Management acquired 60% ownership in 2010

» Shands Lake Shore, Live Oak, and Starke» Both organizations share governance

equally» Health Management manages the

partnership» State wide Chest Pain and Stroke

programs

Shands Lake Shore Regional Medical Center


Case Study:St. Cloud Regional Partnership

• Capital Invested ($16M since ‘06)» Land Acquisition for MOB (4.56

acres)» GE 64-slice CT Scanner» OR Expansion: 4 MIS ORs » ER Renovation/New Fast Track» Digital Mammography» Da’Vinci Robotic Surgery

• New Services» Recruited 24 new physicians (‘09-12)» Wound Care w/ HBOT» ENT, Ophthalmology & Uro-

gynecology» Partnerships with Jewett Orthopaedic

Clinic & Orlando Heart Institute» Developing Outpatient Center in

Lake Nona including ASC, Urgent Care, Imaging Center and Physician Offices

• 84 bed hospital formerly part of the Orlando Regional Health System

• Health Management acquired 80% majority interest in 2006

• Current Projects under development: Build New 24 Bed ED and Cardiac Cath Lab


Case Study:Wuesthoff Health System – Rockledge & Melbourne, FL

• Vertical Integration» Assisted Living Centers» Nursing Homes» Skilled Nursing Facilities» Home Care» Hospice & Palliative Care» Acute Care» Surgery and Imaging Centers» Home Medical Equipment» Regional Reference Lab• Physician Relationships» Focus on “splitter” physicians» 83 employed physicians» Recruited Osler Medical Group

» 47 multi-specialty physicians

Wuesthoff Rockledge

Melbourne Total

Beds 298 115 413FTEs 1,850 750 2,600Discharges 12,830 5,320 18,15

0Births 600 420 1,020Surgeries 7,690 5,470 13,16

0ER Visits 35,650 21,075 56,72

5Net Revenue

$226M $92M $318M

Wuesthoff Health System – Rockledge

Fiscal Year 2011

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