MITIGATION PLAN

March 20, 2015

ITEM

PROJECTED
FINANCIAL IMPACT
-$4,952,000
$TBD

REVENUE INCREASE
Discussions with Managed Care Payers
Renegotiate Health Plan of San Mateo Medi-Cal Managed Care contract
Net Revenue Loss due to service line closures, OB,NICU,Card Rehab, UC
Observation Unit Practice Change

$TBD
-$4,952,000
$TBD

SURGERY
All scheduled surgeries need financial approval
Clinical documentation to work with top active surgeons to improve clinical
documentation
No elective surgeries are to be scheduled on the weekends
SUPPLIES
Supplies are reduced by 10%

$0.00
$0.00
$0.00
$3,900,000
$3,900,000

Implants cannot exceed 50% of Medicare DRG

MD CONTRACTS
90-Day Notice for Medical Directors and Hospital Based Physician
Contracts/reduction
Medical Directors (Unit and Service Line Directorships)
Hospital Based Physician Contracts (ED, Radiology, Pathology, Anesthesia)
Eliminated Service Line Contracts (OB/NICU/ER Call)
Hospitalists program

$TBD
$2,715,201

$250,000
$700,000
$1,165,201
$600,000
$20,540,793

LABOR COST REDUCTIONS

FTE reduction of management and associates

20 FTEs non-contractual and recent resignations
25 FTEs contractual (Dietary/RT/Rad Onc/Diag/ASC)
5 FTEs Cardiac Rehab
26 FTEs OB/Level 2 Nursery
4 FTEs New Life Center
Interim CFO position
Benefits Reduction due to RIFs- Estimated at 30%
Medicare GMLOS Improvement

$3,467,580
$1,339,416
$419,515
$2,635,546
$227,736
S564,000
$2,426,000
$9,461,000
$2,430,000
$678,000
$1,752,000
Savings Included
Above

PRODUCTIVITY
Productivity Improvements
Reduction of Overtime, Double time and Registry use
SERVICE LINE/PROGRAM CLOSURE
Obstetrics/GYN and NICU
Level 2 Nursery Unit
New Life Center
Cardiac Rehab Unit
Observation Unit
Express Care
TOTAL

$24,633,994

Mitigation Plan
Facility: Seton Medical Center/Seton Coastside
Prepared Date:
3/20/2015
Net Revenue Enhancements:
Managed Care Payers (1)
Observation Unit Impact
Service Line/Program Closure (2)
Other Initiatives
Total: Net Revenue Enhancements

$
$
$ (4,952,000)
$
$ (4,952,000)

Operating Expenses:
Labor Costs
Reduction In Force (3)
Productivity Improvement
Medicare GMLOS Improvement
Other LOS Reduction Initiatives
Premium Pay Reductions
Service Line/Program Closures
Sub-Total- Labor

$ 6,248,662
$
678,000
$ 9,461,000
$
$ 1,752,000
$ 4,267,131
$ 22,406,793

Non-Labor Costs
Supplies
Professional Fees
Medical Directorships/Stipends
Purchased Services
All Other Items
Sub-Total- Non-Labor Costs

$
$
$
$
$
$

Total: Operating Expenses

$ 29,585,994

3,900,000
564,000
2,715,201
7,179,201

Annualized EBIDA Improvement

$ 24,633,994
Notes:
(1) Projected Net Revenue Improvement based on Managed Care negotiations
(2) Reduction in Net Revenue due to Service Line/Program Closure, if any.
(3) Savings net of severance related costs. Detail listing to be provided for review.