BOARD FINANCE COMMITTEE MEETING · 7/30/2012 · 2012-06-25 board finance minutes.doc 2 . b oard f inance c ommittee – m eeting m inutes – m onday, j une 25, 2012 1. a genda

BOARD FINANCE COMMITTEE MEETING

* MONDAY, JULY 30, 2012 6:00 p.m. 456 E. Grand Avenue, Escondido, CA (Buffet Dinner available at 5:30 for Committee Members & Invited Guests Only) 1st Floor Conference Room ∗

Time Page Target CALL TO ORDER 6:00 ADJOURNMENT TO CLOSED SESSION ....................................................................... ............ ...................... 6:00 ~ pursuant to California Government Code §54954.5(h)

REPORT INVOLVING TRADE SECRET Discussion will concern proposed new facility and service Estimated date of public disclosure: September 30, 2012 ........ 20 ...................... 6:20

RESUMPTION OF OPEN SESSION ............................................................................... Immediately following end of

closed session Action Resulting From Closed Session Discussion – IF ANY ................................... .......... 5 ...................... 6:25 Public Comments ............................................................................................................ .......... 5 .................... 6:30

5 minutes allowed per speaker with a cumulative total of 15 minutes per group For further details & policy, see Request for Public Comment notices available in meeting room

Information Item(s) .......................................................................................................... .......... 5 ...................... 6:40

1. * Approval: Minutes – Monday, June 25, 2012 (ADD A-Pp9-18) ...................................... .......... 2 .................... 2 6:42 2. Review: Fourth Quarterly Update – FY2012 Initiatives (ADD B-Pp19-22) ........................ ........ 15 .................... 3 6:57 3. * Approval: General Obligation Bonds – Tax Levy 2012-2013 (ADD C – Pp23-26) ......... ........ 10 .................... 4 7:07 4. * Approval: Establishment of Appropriations Limit for FY2013 (ADD D – Pp27-31) ......... ........ 10 .................... 5 7:17 5. * Approval: Policy – Annual Adoption of Statement of Investment (ADD E – Pp32-34) ... .......... 3 .................... 6 7:20 6. * Approval: Summary of Prior Month’s Approved Budgeted Routine Physician

Agreements (ADD F – Pp35-53) ........................................................................................ .......... 5 ....................... 7 7:25 7. * Approval: June 2012 & YTD FY2012 Financial Report ................................................... ........ 20 .................... 8 7:45 ADJOURNMENT ................................................................................................................... ............ ........................ 7:45

NOTE: If you have a disability, please notify us 72 hours prior to the event so that we may provide reasonable accommodations.

∗ Asterisks indicate anticipated action. Action is not limited to those designated items. 1

Minutes Finance Committee – Monday, June 25, 2012

Form A - Minutes.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Tanya Howell, Secretary BY: Robert A. Hemker, CFO Background: The minutes of the Board Finance Committee meeting held on Monday, June 25, 2012, are respectfully submitted for approval (Addendum A).

Budget Impact: N/A

Staff Recommendation: Staff recommends approval of the Monday, June 25, 2012, Board Finance Committee minutes.

Committee Questions:

COMMITTEE RECOMMENDATION: Motion: Individual Action: Information: Required Time:

2

Fourth Quarterly Update – FY2012 Initiatives

Form A - Initiatives.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Bob Hemker, CFO Background: Pursuant to direction of the Board upon adoption of the FY2012 Initiatives, we will be reviewing those associated with Finance Committee oversight.

• 1.1(a) – Grow Volume in Key Areas • 1.1(b) – Grow Net Primary Care Base • 1.2(b) – Implement Infrastructure to Support an ACO (On HOLD) • 1.3(a) – Realize Year 4 Capital Campaign

This will be the Fourth and final quarterly review by the Finance Committee of the FY2012 Initiatives (Addendum B). Budget Impact: N/A

Staff Recommendation: Information only



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General Obligation Bonds – Tax Levy 2012-2013

Form A - GO Bonds - Tax Levy.doc

TO: Board Finance Committee DATE: Monday, July 30, 2012 FROM: Robert A. Hemker, CFO Background: In July 2005, the first tranche of General Obligation (“GO”) Bonds was issued. The Series was priced in a negotiated sale on June 22, 2005, for $80 million PAR in Bonds. The Bond transaction closed on July 7, 2005.

In December 2007, the second tranche of GO Bonds was issued. The Series was priced in a negotiated sale on December 4, 2007, for $241.08 million PAR in Bonds. The Bond transaction closed on December 20, 2007.

In March 2009, the third tranche of GO Bonds was issued. The Series was priced in a negotiated sale on March 11, 2009, for $110 million PAR in Bonds. The Bond transaction closed on March 18, 2009.

In November 2010, the fourth and final tranche of GO Bonds was issued. The Series was priced in a negotiated sale on November 9, 2010, for $64,916,678.80 PAR in Bonds. The Bond transaction closed on November 18, 2010.

On an annual basis, Palomar Health has requested that the County of San Diego levy and collect the taxes necessary to pay the debt service on the GO Bonds. Palomar Health calculates the tax amount to levy based upon the debt service amortization and the assessed value of the District. The assessed value is provided by the County. The County then puts the required tax onto the tax roll, collects the taxes, and remits the collected amounts to the Paying Agent, Wells Fargo, on a monthly basis. The Paying Agent makes the required principal and interest payments on a semi-annual basis.

The resolution included in Addendum C will authorize the County of San Diego to levy and collect the required ad valorem taxes for the 2012-2013 tax roll.

Budget Impact: N/A

Staff Recommendation: Management will make a recommendation at the meeting.



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Approval: Establishment of Appropriations Limit for Fiscal Year 2013

COMMITTEE RECOMMENDATION: Motion:

Individual Action:

Information:

Required Time:

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Robert A. Hemker, CFO BACKGROUND: The Board of Directors of Palomar Health annually adopts the Appropriations Limit for the district, pursuant to Article XIIIB of the California Constitution. This action requests approval of the County’s Appropriations Limit for Fiscal Year 2013. This limit applies only to unrestricted appropriations and is not related to any appropriations that are restricted for the General Obligation Bonds. The Appropriations Limit is calculated to be $73,218,397 for Fiscal Year 2013 (See Addendum D). The District is substantially under that limit and is expected to receive approximately $13,300,000 in unrestricted property tax revenues in Fiscal Year 2013. BUDGET IMPACT: None STAFF RECOMMENDATION: Approval of Appropriations Limit for Palomar Health. COMMITTEE QUESTIONS:

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Board Policy Annual Adoption of Statement of Investment

Form A - Statement of Investment.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Bob Hemker, CFO Background: In concert with the Legal Office, the Board Policy for Annual Adoption of Statement of Investment has been reviewed. Other than correcting references to reflect the new name of the District and a minor typographical correction (as noted in the redline version attached as Addendum E), no changes are being recommended.

Budget Impact: N/A

Staff Recommendations: Staff recommends adoption of the Policy, with above-referenced changes, and with a recommendation for approval by the Board Governance Committee.


COMMITTEE RECOMMENDATION: Motion:

Individual Action:

Information:

Required Time:

6

Budgeted Routine Physician Agreements Board Summary Report

Form A - Physician Agreements.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 BY: Robert A. Hemker, CFO

Background: The following Budgeted Routine Physician Agreements became effective during the month of June 2012. The standard Form A and Abstract Table1

for each signed Agreement are attached as Addendum F.

COMMITTEE RECOMMENDATION:

Motion:

Individual Action:

Information:

Required Time:

1 Short extension due to transition to new campus – no Form A or Abstract Table required

PHYSICIAN AND/OR GROUP TYPE OF AGREEMENT

• Arch Health Partners Agreement for Management and Related Services For Behavioral Health Services

• Jeffrey Chen, MD • Keyvan Esmaeili, MD • Bassem Georgy, MD • Jeffrey Schiffman, MD • Mark Stern, MD

ActivCentre Provider Panel Agreements

• Ronald Feldman, MD Agreement for Items – Contract for Purchase of Medical Imaging Pill Cam

• FunctionMD Medical Center Physician Advisor Agreement – ActivCentre • Mission Infectious Disease & Infusion

Consultants, Inc. Agreement for Services – Consultations

• Poway Women’s Care, Inc. and Victoria Young, MD Physician Recruitment Agreement – OB/GYN

• Southern California Permanente Medical Group – George Moore, MD

Independent Contractor Agreement – Information Systems Services

• Anesthesia Consultants of California, Inc.1 Professional Services & Medical Director Agreement – Anesthesiology Services

• Escondido Pulmonary1 Medical Directorship – Critical Care, Respiratory Therapy, Pulmonary Rehab, Sleep Lab and Pulmonary Services

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June 2012 & YTD FY2012 Financial Report

Form A - Financial Report.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Robert A. Hemker, CFO Background: As the June 2012 financial close has been extended to assure all FY2012 business transactions are recorded in the pre-audit financial statements, and consistent with prior year year-end closings, financial statements may not be available. If available, financial information will be presented at the meeting.

Budget Impact: N/A

Staff Recommendation: Staff recommendation will be provided at the meeting.



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ADDENDUM A

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2012-06-25 Board Finance Minutes.doc 1

B O A R D F I N A N C E C O M M I T T E E M E E T I N G A T T E N D A N C E R O S T E R & M E E T I N G M I N U T E S C A L E N D A R Y E A R 2 0 1 2

MEETING DATES:

MEMBERS 2/6/12 2/27/12 3/26/12 5/7/12 6/4/12 6/25/12 7/30/12 8/27/12 9/24/12 10/29/12 11/26/12

DIRECTOR LINDA GREER, RN – CHAIR P P P P P E DIRECTOR JERRY KAUFMAN, PT MA P P E E E E DIRECTOR STEVE YERXA P P P P P P MICHAEL COVERT, FACHE P P P P P P RICHARD C. ENGEL, MD P P P P P P ROGER ACHEATEL, MD E P P E P P MARCELO RIVERA, MD – ALTERNATE P P P – 2ND ALTERNATE – 3RD ALTERNATE – 4TH ALTERNATE STAFF ATTENDEES BOB HEMKER P P P P P P GERALD BRACHT P P P P P E DAVID TAM, MD P P E P P P LORIE SHOEMAKER, RN E E E E P TANYA HOWELL – SECRETARY P P P P P P INVITED GUESTS SEE TEXT OF MINUTES FOR NAMES OF GUEST PRESENTERS

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BOARD FINANCE COMMITTEE – MEETING MINUTES – MONDAY, JUNE 25, 2012

1. AGENDA ITEM

• DISCUSSION CONCLUSION/ACTION FOLLOW UP/RESPONSIBLE PARTY FINAL?

CALL TO ORDER

• In the absence of Chair Linda Greer, the meeting – held in the first floor conference room at 456 E. Grand Avenue, Escondido, CA – was called to order at 6:08 p.m. by Acting Chair Steve Yerxa

ESTABLISHMENT OF QUORUM • See roster • As Director Greer was not yet in attendance, Acting Chair Yerxa postponed the Closed Session to await her arrival

PUBLIC COMMENTS

• There were no public comments

INFORMATION ITEM(S)

• Mr. Hemker stated that by requirement of the auditing firm, effective with the July financials, there would be a formal consolidation of the financials of Palomar Health and Arch o Will continue to provide separate, regular and ongoing presentations of where we are

with the financial performance of the respective organizations o Palomar Health’s close cycle is more accelerated than that of Arch

Options are to lag the Arch monthly reports (e.g., would see December numbers in January); or report quarterly instead of monthly, with a fast close for the final month of each quarter

o Recommended that Palomar Health’s financials continue to be reported on the regular monthly schedule, incorporating the Arch presentation on a quarterly basis

Information only The Board Finance Committee stated their agreement with the recommended presentation schedule

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1. MINUTES – MONDAY, JUNE 4, 2012

• No discussion MOTION: By Michael Covert, seconded by Director Rivera and carried to approve the minutes of the June 4, 2012, Board Finance Committee meeting. All in favor, none opposed, and Director Rivera abstained as he was not at the meeting.

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2. PROGRAM REVIEW – ARCH HEALTH PARTNERS BUSINESS REVIEW

• Utilizing the presentation included in the agenda packet as Addendum B, Vicky Lister, Executive Director of Arch Health Partners, provided a report covering the second year of operations

• Grow Primary Care (P20) o There is still interest in acquiring practices, but negotiations are not yet finalized with

interested parties o Working on signage for San Marcos, and will likely be adding that topic for review at

and upcoming Board Facilities & Grounds meeting o 4-S Ranch has been delayed by 2-3 months due to developers’ problems

Primary care physicians are currently working out of family medicine in Poway, awaiting relocation to 4S Ranch

Information only Forwarded to the July 9, 2012, Board of Directors meeting as information

• Vicky Lister will share the Thomson Reuters practice assessment, which includes an executive summary, SWOT analysis and top 10 priorities, with the Finance Committee and the Board

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1. AGENDA ITEM


In addition, they anticipate moving one physician for Peds to the 4S Ranch location

• Patient Centered Medical Home (PCMH) (P22) o Intent was to become National Committee for Quality Assurance (NCQA) certified

Certification is very costly, with no corresponding increase in reimbursement Continuing down the path, just not requesting the accreditation

o Overall Press Ganey score increased significantly over last year • Robust IT Infrastructure (P23)

o NextGen is the installed EMR system Have had numerous problems since moving to off-site hosting with Dell in Dallas Will bring servers back in-house for at least 3 years, either at Arch or at the new

data center at PMC-West • Physician Profile (P25)

o Total number increased from 37 to 51 (a 37% increase) • Arch Profile (P27)

o 10 office locations provide their own challenges in terms of IT and Supply Chain Services consistencies

• Financial summary through March 2012 (P32) o Net loss was higher than budgeted

By the end of May it’s $300K lower than budgeted o Thomson Reuters did a practice assessment, which indicates that the Arch loss per

provider basis is lower than comparable foundations • Awards (Pp35-36)

o Named one of the top 45 medical groups in the State o Right Care Initiative was for reduction of deaths from stroke and heart disease in San

Diego County Blue is the target set by the Department of Managed Care, gray shows Arch’s

scores • Strengths

o Development of infrastructure to support Palomar Health o Physician compensation plan methodology o Growth in new providers/locations & quality programs o Nexus of primary care physicians is around POM, so they need to be able to have

affiliations or influence in other markets o P&L will always be an opportunity for improvement and challenges during growth

periods • Threats

o Competition for providers, physicians and patients

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1. AGENDA ITEM


• Top priorities o Update and develop a strategic financial and business plan

Need to do preplanning and project financial implications and growth of Arch into Palomar Health’s financial plan

o Determine & implement addition of physicians to Escondido hospitals o On-boarding of practice acquisitions

Maintain the basics for safety, compliance, HIPAA compliance Some practices must be shifted from paper medical records to electronic medical

records Needs an operations project manager that stays with a practice beyond day

one Not just for IT, but to educate and help adapt to Arch policies and

procedures, as well as to provide stability during change period o Implementation of coding & compliance training for physicians and staff o Develop shared governance models with physician groups

Agreed to create a joint operating committee, structured to report to the Arch Board

Would make decisions for new groups and Arch and where they should come together

o Marketing Getting the word out about the new practices Signage issue in San Marcos Addition of items to the Arch web site

• Ms. Lister will be participating in a strategic planning workshop with her team, one goal of which is to develop a quarterly review or Balanced Scorecard in order to hold initiative owners accountable

• The Thomson Reuters team did review staffing, noting that in some areas they are understaffed, and in some of the specialties they have more staff than current volumes warrant o The benchmark is MGMA, but that is not really an “apple to apple” comparison, as the

comparison needs to be how you need to manage for your practice, and they currently need more mid-level leaders

• Acting Chair Yerxa thanked Ms. Lister for her presentation

3. SUMMARY OF PRIOR MONTH’S APPROVED BUDGETED ROUTINE PHYSICIAN AGREEMENTS

• Referring to pages 4 and 39-43 of the agenda packet, Bob Hemker presented the agreements o The Committee was reminded that the process changed in 2011, with the documents

being finalized administratively, then reviewed and approvals requested after signature Recommendations move forward to the Board on the consent agenda

MOTION: By Director Rivera, seconded by Director Yerxa and carried to recommend approval of the physician agreements as presented. All in favor, none opposed.

Forwarded to the July 9, 2012, Board of Directors with a recommendation for approval

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1. AGENDA ITEM


o As noted on page 43, there are numerous agreements that will be executed via utilization of short extensions as we go through bridging to the new facility These agreements will ensure short-term continuation and coverage for services

until Management can determine what the actual needs will be at the new facility Most extensions are for 90-day terms The two short-term agreements for approval tonight are footnoted on page 4 in

red ink, and the names of the physicians/groups and agreement types will also be red-inked on future transmittals for further clarity

4. UPDATE ON FY2012 CAPITAL BUDGET

• Mr. Hemker stated that there are 5 days remaining before fiscal year end closes and the ability to use the remaining routine capital for FY2012 will be brought to a close o Routine capital, which includes Board-designated strategic capital, is allocated on a

fiscal basis, and it must be used during the fiscal year or it is no longer available The only way capital can be carried forward is by opening a Construction In

Process (CIP) account to bridge it forward o Steve Ellis, Director of Supply Chain Services, and his team are working to bring

assets that would qualify for use of routine capital to the loading dock by the June 30th deadline

• Utilizing the attached slide (Attachment 1), Mr. Hemker reviewed the balances in the pools of the FY2012 capital budget as of June 21, 2012 o The Equipment Pool of $2M has all been spent o The Facilities Pool of $1M still showed a balance of approximately $283K o The IT Pool of $5M had a balance of about $566K left o The Capital Reserve Pool of $5M per year toward a funding solution for the Facilities

Master Plan (FMP) had a full balance o The Board Capital Reserve Pool of $2M for discretionary activities has thus far had no

requests for use • Mr. Hemker presented information regarding a request for funding related to transitioning

the downtown campus to level 1 and 2 care and implementation of the urgent care strategy o OSHPD has determined that conversion from an Emergency Department (ED) to an

Urgent Care (UC) represents a change in use, thus triggering the need to upgrade the facility to meet current outpatient standards at a cost of approximately $856K The District committed to having UC capabilities on the day we open the

Downtown campus, and State rules are requiring the construction changes for accessibility, fire/life safety and HVAC

The ability to implement plans for the UC is dependent upon the scope of facilities renovations and approval of funding by the Board

If the remaining funds in the Facilities Renovation Pool were utilized, the use of about $600K from the Capital Reserve Pool would be required to complete the project

MOTION: By Director Rivera, seconded by Director Yerxa and carried to recommend approval for the use of up to $856K from FY2012 Board Strategic Capital for the facilities renovations required to implement plans for Urgent Care on the Palomar Downtown Campus. All in favor, none opposed.


• A CIP for $856K will be opened prior to June 30th, subject to final Board approval at the July meeting

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1. AGENDA ITEM


$2M in the Capital Reserve Pool is the source, but Management is only asking for release of approximately $600K, with just over $200K anticipated to be used out of the Facilities Renovation Pool (a) The balance of $238K shown in the Facilities Renovation Pool may not

reflect items purchased since June 21st (i) Request for approval would be for up to the $856K total, to come

from the Capital Reserve Pool, with any funds from the Facilities Renovation Pool to be utilized first

o The project fits within the context of strategic capital hold-backs o A CIP can be opened before the end of this week in order to reserve the dollars

Obviously work wouldn’t be begun until after the move in August o Would allow the use of FY2012 monies to complete an FY2013 project o Management recommended that the Committee recommend approval for the release

of up to $856K from FY2012 Board Strategic Capital for the facilities renovations required to implement plans for UC on the Palomar Downtown Campus

• Mr. Hemker further reported that Management is developing a list of identified but unfunded strategies that could find a funding solution when we close the FMP and/or out of the FY2013/FY2014 Routine Capital budgets, one of which is the creation of an Electrophysiology (EP) Lab o The FMP is due to close in late fall o If there are any dollars remaining in the FMP above and beyond the contingency hold-

back, then an EP lab would be prioritized on that list for funding That might also be another program appropriate for the use of Board Strategic

Capital o Funding for an EP lab could also come out of Routine FY2013 Capital, but its standing

with regard to items already prioritized for those dollars is unknown If funded from Routine Capital, a determination regarding from which bucket of

dollars funding would come would need to be made If routine capital were to be used, it would take funds away from already

prioritized capital items o Also need a funding solution for renovations of the Downtown Campus o Management does support development of an EP Lab

As the FMP is not anticipated to close until mid-fall, Mr. Hemker stated that committing to the opening of an EP Lab in early 2013 was probably a committable date, especially since the equipment must be ordered and received before a physician to operate the lab could be hired

5. MAY 12 AND YTD FY2012 FINANCIAL REPORT

• Utilizing select slides within the presentation included as Addendum D in the agenda packet, Bob Hemker reviewed the financial report

MOTION: By Director Rivera, seconded by Michael Covert and carried to recommend approval of the May 2012 & YTD FY2012


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1. AGENDA ITEM


• EXECUTIVE SUMMARY (P4) o YTD Admissions had a negative variance vs. budget of 3.3% o YTD Patient Days had a negative variance vs. budget of 1.9% o YTD Adjusted Discharges had a negative variance vs. budget of 2.9% o MTD Net Patient Revenue had a positive variance vs. budget of 1.9% o Trauma was up by 114 admissions, at 969 vs. 855 budgeted o YTD Births had a negative variance vs. budget of 5.4%

Admissions from births were down 30% o YTD ER to Admit rate had a negative variance vs. budget (15.1% vs. 15.5%) o YTD Surgeries had a negative variance vs. budget of 575

501 Outpatient, 61 Inpatient, 13 CV o MTD Net Income had a positive variance vs. budget of $98K o MTD Operating Income had a positive variance vs. budget of $132K o MTD Total Expenses had a negative variance vs. budget of $585K

Embedded in the Expense areas are a lot of transformation costs Supplies spend will be better known when the inventory is finalized

o YTD Net Income had a positive variance vs. budget of $146K o MTD Cash Collections was the highest this year, at $44M, which helped close the gap

YTD o Staff have done well to flex to volumes

• BALANCE SHEET (P9) o Cash plus Board-designated funds were at $206M, a positive variance of $18M vs.

prior year o Accounts Receivable were up $18M vs. prior year o Total Current Liabilities were down $37M vs. prior year, as we have been paying them

down o Construction in Process is up about $18M over prior month

There are about $15.8M left in bond proceeds in June, so those funds are lasting a couple of months longer than anticipated

Will not see a significant draw-down on cash in June, but cash balances will start showing a decline in July

• INCOME STATEMENT MONTH-TO-DATE (P10) o The month of May had the fourth highest Adjusted Discharges, the second highest Net

Revenues, and the second highest Expenses for the year o Supplies for the month had a negative variance vs. budget of $193K o Held OEBITDA margin percentage and were up vs. budget on dollars o Total Net Revenue/Adjusted Discharge had a positive variance vs. budget of $528.79,

or 4.2%

Financial Report as presented. All in favor, none opposed.

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1. AGENDA ITEM


Only up 3.9% on volume • INCOME STATEMENT YEAR-TO-DATE (P11)

o Supplies had a negative variance vs. budget of $2.2M There is some implantables revenue offset

o Non-Operating Income had a positive variance vs. budget of $2.5M Property tax revenues were up a little

• INCOME STATEMENT YEAR-ON-YEAR (P12) o Adjusted Discharges had a very slight negative variance vs. prior year of .4% o Net Revenue had a positive variance vs. prior year of 5.45% o Expenses were up vs. prior year by 5.67%

Due to one-time events sneaking into the variances o Property Tax Revenues had a positive variance vs. prior year of $300K, or almost 3%

year-on-year o Net Income had a positive variance of 3.4% year-on-year

• CASH COLLECTIONS (P51) o This was the highest month in the past 23, with $44.1M in collections

ADJOURNMENT TO CLOSED SESSION

• Quoting the following citation, Acting Chair Steve Yerxa adjourned the meeting to closed session at 7:12 p.m. o Pursuant to California Government Code §54954.5(h), Report Involving Trade Secret

RESUMPTION OF OPEN SESSION

• The open session was resumed by call to order at 7:37 p.m. by Acting Chair Steve Yerxa

ACTION RESULTING FROM CLOSED SESSION DISCUSSIONS, IF ANY

• No further discussion MOTION: By Michael Covert, seconded by Director Rivera and carried to support Management’s request to move forward and to authorize a 5% investment into the Rancho Bernardo Surgery Center


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FINAL ADJOURNMENT The meeting was adjourned at 8:43 p.m.

SIGNATURES:

ACTING COMMITTEE CHAIR

Steve Yerxa

COMMITTEE SECRETARY

Tanya Howell

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Page 1

CAP BUD FY2006\ FY12 Capital Budget as of 6.21.12.xls \ Capital dollars remaining

Activity A/U DESCRIPTIONBEGIN-DATE BEGIN BUDGET

BUDGET ALLOCATIONS TRANSFERS

BUDGET BALANCE

OTHER FUNDING SOURCES

AVAILABLE FUNDS211000 10-1000 1-EQUIPMENT POOL 7/1/2011 2,000,000.00 2,000,000.00 - 213000 10-1000 3-FACILITIES RENOVATION POOL 7/1/2011 1,000,000.00 716,807.00 283,193.00

3,000,000.00 2,716,807.00 283,193.00

COMMITTED FUNDS214000 10-1000 4-INFORMATION TECH POOL 7/1/2011 5,000,000.00 4,433,392.00 566,608.00 215000 10-1000 5-CAPITAL RESERVE-FMP 7/1/2011 5,000,000.00 - 5,000,000.00 215100 10-1000 5-1CAPITAL RESERVE-OTHER 7/1/2011 2,000,000.00 - 2,000,000.00

12,000,000.00 4,433,392.00 7,566,608.00 15,000,000.00 7,150,199.00 7,849,801.00

FOUNDATION FUNDING120489 268810 FMP-OCT 2011 11/1/2011 504,246.84120489 268810 FMP-DEC 2011 12/31/2011 195,188.86120489 268810 FMP-FEB 2012 2/29/2012 275,777.00226001 108610 SERVER FOR MIAA PROJECT 2/22/2012 19,469.00

994,681.70

ALPHA FUND0.00

5-YR IMAGING STRATEGIC PLAN (2004 to 2008)120250 207640 PHILIPS CT BIG BORE & CONSTRUCTION 12/2/2011 1,004,100.00

1,004,100.00

IT MULTI-YR STRATEGIC PLAN228100 108480 IT STRATEGIC PLAN POOL 4/2/2012 700,000.00

15,000,000.00 7,150,199.00 - 7,849,801.00 1,998,781.70

June 21, 2012

PALOMAR POMERADO HEALTHFY 2012 CAPITAL BUDGET YTD TRACKING REPORT

SUMMARY OF CAPITAL BUDGET ALLOCATIONS----FUND POOLS AND OTHER FUNDING SOURCES ONLY-----

ATTACHMENT 1

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ADDENDUM B

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FY12 Initiative: 1.1 (a) Grow volume in key areas

Outcome Measure: Contribution Margin Initiative Final Status: 1. Secured new medical staff specialists interested in using Palomar

Medical Center including CVT surgeon, Neurology Group 2. Business Plan in process and slated to complete by June 30 ASC

JV; Palliative Care completed and approved; Vascular Lab reviewed and rejected.

3. Secured Contracts with NAMM - October and Easy Choice-June 4. Clinical Trial participation results showed $440,000 in billings. 5. PPI Volumes in new JV at 3,700 encounters YTD thru May 6. ActivCentre Back and Neck achieved Year One Goals for CM 7. Areas of Focus progress as of end of May showed cm at 4.07 M

over target of $2.5M with greatest growth in Vascular Surgery, Spine, IR, Robotic Urology, Cardiology. Volume for Areas of Focus is at 1.0% of target. Final end of Year Data will be available in August.

Milestones: 1. Facilitate medical staff membership of specialists in

North County not presently on PPH medical staff with interest in utilizing Palomar Health

2. Prepare business plans and recommendations for Palliative Care Program, Vascular Lab JV, POM ASC JV.

3. Facilitate contracts with other IPAs, medical groups and health plans

4. Expand PPH and Medical Staff participation in clinical trials

5. Grow Outpatient Imaging at hospitals and new JV 6. Achieve Areas of Focus targets for FY12 (IP & OP) 7. Achieve Year one goals for the new Back and Neck

Center program

Report Date: July 16, 2012 Reporting Committees: Board Finance; EMT Finance

EMT Sponsor: Gerald Bracht Initiative Manager: Lisa Hudson

Initiative Risks:

6 Jul 11 Jun 12

Initiative Budget: Included in FY12 Operating Budget Budget Status: Within budget

Outcome Measure: FYTD Volume thru June +1.0% to target for 4.0% Growth overall and Contribution Margin $4.07M over Target of $2.5M=$6.6M thru May

Threshold – 2.0M or volume increase of 4% overall Target – 2.5M or volume increase of 5% Maximum – 3.0M or volume increase of 7%

Sept 11 Nov 11 Jan 12 Mar 12 May 12

1 5 4 7 2 3

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FY12 Initiative: 1.1 (b) Grow net primary care base

Outcome Measure: Number of new Primary Care Physicians (PCP)

Initiative Status: 1. Recruitment of a total of +11 primary care physicians net to the District with

Medical Staff and non-Medical Staff Palomar Health aligned physicians. 2. Completed assessment of the list of primary care physicians on medical staff and

those not on staff but employed by groups that refer to PPH and friendly to PPH for patients care choices. - completed

3. Arch Health Partners have approved the creation of two primary care sites. One in the SMACC building on Craven in San Marcos and the other in the 4S Ranch. Craven has gone live and operational and 4S has signed the lease and is proceeding to be opening July, 2012. This 4S site is off timeline by two months.

4. Narrow networks are being explored with the first one completed with PPH employees being placed within the Sharp Health Plan due to the exceptional diligence of Margie’s team. Update: PPH employees have rolled their choices into Sharp Healthplan and began January 1, 2012.

Milestones: 1. Continue recruitment of primary care physicians to

serve the community through new recruitment and affiliation with existing groups

2. Complete assessment of all PCPs in the service area and their affiliated health systems and outreach as appropriate along with clarification of group relationships.

3. Establish two new PC sites in the Primary Service Area

4. Explore participating in narrow networks as it relates to managed care membership growth

Report Date: July 16, 2012 Reporting Committees: Board Finance; EMT Finance

EMT Sponsor: Gerald Bracht Initiative Manager: Lisa Hudson, Robert Trifunovic,

Vicky Lister, Margie Drobatschewsky

Initiative Risks: • Economic conditions impacting retirement plans of PCPs • Site development is depending on construction schedules

3 Jul 11 Jun 12

Initiative Budget: Included in FY12 Operating Budget Budget Status: Within Budget

Outcome Measure: (FYTD at +11 Primaries) Threshold – 2 net core PCPs Target – 3 net core PCPs Maximum – 4 net core PCPs


4 2 1

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Report Date: July 16, 2012

Reporting Committees: Palomar Health Board Finance; Palomar Health Foundation Board; EMT Finance EMT Sponsor: Ann Braun Initiative Manager: Anita Fraley and Kurt Hinrichsen

FY12 Initiative: 1.3(a) Realize Capital Campaign Goals

Outcome Measure: Total Productivity

Initiative Status: 1. Completed. 2. Audit was completed during the first quarter. New procedures are being

developed to achieve greater efficiency. 3. Master plan and time line have been completed. The Donor event will take

place July 26 and the Community event will take place July 28. 4. One additional director was nominated and accepted on 4/26/12, which

brings the total to 19. Two additional candidates have been invited to join to board.

5. Over $100,468 was raised thru annual giving and ePhilanthropy exceeding the $100,000 goal.

6. Over $3.2 million raised exceeding the initial goal of $3 million with the ultimate goal being $5 million.

7. 375 face-to-face visits completed for FY12. 8. 135 major gift solicitations made for FY12. 9. Presentation hosted by Dr. Acheatel attended by 50 guest on June 27. 10. 72% employee participation exceeding the goal of 60%. 11. Raised $828,587 in revenue from the gala exceeding the goal of $700,000. 12. Ann Braun’s first day was 4/16/12. 191% Increase in cash and pledges and

153% increase in the number of gifts for April and May.

Milestones: 1. Establish a Planned Giving Council of Advisors. 2. Review and develop policies and procedures for database

systems and complete database audit and recommendations.

3. Create a master plan of opening fundraising events for PMC West in coordination with the Marketing Department.

4. Increase PPH Foundation board to 20-25 fully-engaged members.

5. Create mechanisms to attract greater community participation through Social Media, ePhilanthropy and direct mail to generate $100,000.

6. Complete the Medical Staff Campaign initial goal of $3 million, working towards the ultimate goal of $5 million.

7. Conduct a minimum of 500 face-to-face visits. 8. Complete a minimum of 100 major gift solicitations to

individuals, corporations, foundations and organizations. 9. Conduct four planned giving group presentations. 10. Increase employee giving participation to 60%. 11. Generate $700,000 in revenue from the gala.

Initiative Risks: 1. State of the economy 2. Competition for philanthropic dollars 3. Staff reductions

1

Jul 11 Jun 12

Initiative Budget: Included in FY12 Operating Budget Budget Status: Within FY12 Budget

Outcome Measure: Actual: $3,798,938 Threshold – $6,000,000 Target – $8,000,000 Maximum -$10,000,000


3 5, 6, 8,10,11

2, 4, 7, 9

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ADDENDUM C

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PALOMAR HEALTH

RESOLUTION NO. 08.13.12 (06) – 01

RESOLUTION OF THE BOARD OF DIRECTORS OF PALOMAR HEALTH CONCERNING THE LEVY AND COLLECTION OF TAXES BY THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO FOR FISCAL YEAR 2012-2013 TO PAY PRINCIPAL AND INTEREST ON GENERAL OBLIGATION BONDS AND AUTHORIZING THE TAKING OF ALL ACTIONS NECESSARY IN CONNECTION THEREWITH.

WHEREAS, as authorized by a ballot measure ("Measure BB"), approved by more than two-thirds of the votes cast on such ballot measure at an election held in Palomar Pomerado Health, now known as Palomar Health (the "District") on November 2, 2004, the Board of Directors of the District (the "Board of Directors") is authorized to issue $496,000,000 aggregate principal amount of general obligation bonds for the purpose of financing a portion of the hospital and health care facilities projects as referenced and described in Measure BB;

WHEREAS, in accordance with the provisions of The Local Health Care District Law of the State of California (constituting Division 23 of the California Health and Safety Code) (the "Local Health Care District Law"), the District issued:

(i) $80,000,000 aggregate principal amount of such general obligation bonds, designated as "Palomar Pomerado Health General Obligation Bonds, Election of 2004, Series 2005A" (the "Series 2005A Bonds") on July 7, 2005;

(ii) $241,083,318.80 aggregate principal amount of such general obligation bonds, designated as "Palomar Pomerado Health General Obligation Bonds, Election of 2004, Series 2007A" (the "Series 2007A Bonds") on December 20, 2007;

(iii) $110,000,000 aggregate principal amount of such general obligation bonds, designated as "Palomar Pomerado Health General Obligation Bonds, Election of 2004, Series 2009A" (the "Series 2009A Bonds") on March 18, 2009; and

(iv) $64,916,678.80 aggregate principal amount of such general obligation bonds, designated as "Palomar Pomerado Health General Obligation Bonds, Election of 2004, Series 2010A" (the "Series 2010A Bonds") on November 18, 2010;

WHEREAS, as provided by the Local Health Care District Law, principal and interest on the Series 2005A, 2007A, 2009A and 2010A Bonds as the same becomes due are payable from the levy and collection of ad valorem taxes within the District;

WHEREAS, pursuant to Section 32312 of the Local Health Care District Law, the Board of Supervisors of the County of San Diego (the "Board of Supervisors of the County") is required to levy and collect annually each year until the Series 2005A, 2007A, 2009A and 2010A Bonds are paid a tax sufficient to pay the principal of and interest on such Series 2005A, 2007A, 2009A and 2010A Bonds as the same becomes due and payable;

WHEREAS, in order to facilitate the levy and collection of such ad valorem taxes by the Board of Supervisors of the County as provided in Section 32312 of the Local Health Care District Law, the Board of Directors hereby notifies the Board of Supervisors of the County that principal and interest on the Bonds in the amount of $14,338,675 will become due and payable during the fiscal year commencing July 1, 2012, and ending June 30, 2013;

24

WHEREAS, the Board of Directors has been advised that the total net secured assessed valuation of the District is now estimated at $59,432,937,561 full value; and,

WHEREAS, also in order to facilitate the levy and collection of such ad valorem taxes by the Board of Supervisors of the County as provided in Section 32312 of the Local Health Care District Law, a rate of taxation of $23.50 on each one hundred thousand dollars' valuation of taxable property (full value) within the District for fiscal year commencing July 1, 2012, and ending June 30, 2013, is hereby established;

NOW, THEREFORE, BE IT RESOLVED THAT:

Section 1. Recitals. The foregoing recitals are true and correct, and this Board of Directors so finds and determines.

Section 2. Further Authorization; Ratification of Actions. The Chair of the Board of Directors, any member of the Board of Directors, the President and Chief Executive Officer of the District or any designee of the President and Chief Executive Officer of the District or the Chief Financial Officer of the District or any designee of the Chief Financial Officer of the District (each, an "Authorized District Representative") is hereby authorized and directed, for and in the name of and on behalf of the District, to do any and all things and to execute and deliver any and all documents, instruments and certificates, and to enter into any and all agreements, which such Authorized District Representative may deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this Resolution. All such actions heretofore taken by any such Authorized District Representative are hereby ratified, confirmed and approved.

Section 3. Effective Date. This Resolution shall take effect from the date of adoption hereof.

PASSED AND ADOPTED by the Board of Directors of Palomar Health on the 13th

AYES:

day of August, 2012, by the following vote:

NOES:

ABSENT:

ABSTAINING:

DATED: August 13, 2012

BY: ______________________________ T.E. Kleiter Chair, Board of Directors ATTESTED:

______________________________ Jerry Kaufman, PT MA Secretary, Board of Directors

25

STATE OF CALIFORNIA ) )ss COUNTY OF SAN DIEGO )

I, Jerry Kaufman, PT MA, the Secretary of Palomar Health (the "District"), do hereby certify that the foregoing is a true copy of a resolution adopted by the District on August 13, 2012, at the time and by the vote stated above, which resolution is on file in the office of the District.

DATED: August 13, 2012

______________________________ Jerry Kaufman, PT MA Secretary, Board of Directors

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ADDENDUM D

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RESOLUTION NO. 08.13.12 (07) - 02

RESOLUTION OF THE BOARD OF DIRECTORS OF PALOMAR HEALTH

ESTABLISHING APPROPRIATIONS LIMIT OF THE DISTRICT FOR THE FISCAL YEAR JULY 1, 2012 - JUNE 30, 2013

PURSUANT TO ARTICLE XIII(B) OF THE CALIFORNIA CONSTITUTION _____________________________________________________________________

WHEREAS, Government Code Section 7910 requires that each year the Board of

Directors of this District shall, by resolution, establish the District’s appropriations limit for the following fiscal year pursuant to Article XIII (B) of the California Constitution; and

WHEREAS, for not less than fifteen days prior to this meeting the documentation attached hereto as Exhibit “A” used in the determination of the appropriations limit has been available to the public in accordance with Government Code 7910.

NOW THEREFORE, IT IS HEREBY RESOLVED by the Board of Directors as follows:

Section 1. The appropriations limit of Palomar Health for fiscal year July 1, 2012 - June 30, 2013, pursuant to Article XIII(B) of the California Constitution is hereby established at $73,218,397.

Section 2. This resolution is effective immediately upon its adoption by the Board of Directors.

PASSED AND ADOPTED at the meeting of the Board of Directors of Palomar Health, held August 13, 2012, by the following votes:

AYES:

NOES:

ABSENT:

ABSTAINING: ATTEST: ________________________________ T.E. Kleiter Chair ______________________________ Jerry Kaufman, PT MA Secretary

29

2011/2012 APPROPRIATIONS LIMIT $64,397,770

PRICE FACTOR 3.77%

-- OR --

CHANGE IN LOCAL ASSESSMENT ROLL DUE TO NON-RESIDENTIAL NEW CONSTRUCTION 12.75% = 1.1275

-- AND --

POPULATION FACTOR 0.84% = 1.0084

CALCULATION OF FACTOR FOR FY 2012/2013 1.1275 x 1.008 = 1.1370

$64,397,770 x 1.1370 = $73,218,397

2012/2013 APPROPRIATIONS LIMIT $73,218,397

EXHIBIT "A"

PALOMAR HEALTHAPPROPRIATIONS LIMIT

2012/2013

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NARRATIVE ON THE RECENT HISTORY OF TAXATION

Palomar Health has two types of property taxes available as follows:

SPECIAL ASSESSMENT FOR GENERAL OBLIGATION BONDS

The taxes necessary to pay the interest and principal for Election of 2004, Series 2005A, 2007A,2009A and 2010A, Palomar Pomerado Health General Obligation Bonds that were approved by atwo thirds majority of the voters in November, 2004. These tax revenues are restricted for thespecific purpose of the election campaign of 2004.

OTHER PROPERTY TAXES

A tax equal to 1% of the full cash value of property is levied each fiscal year by the countyand distributed to governmental agencies within the county according to a formula mandatedby the state legislature. (California Constitution Article XIII(A); Revenue and Taxation CodeSection 97). The state legislature and the county place no restrictions on the tax moniesgranted to local government agencies, such as Palomar Health. (Part 0.5, Division1 of theRevenue and Taxation Code.) Since these tax revenues are unrestricted, it is not necessaryto inform the public regarding the intended use of the funds.

The following is a schedule reflecting our total tax revenues by fiscal year for the pastthirty-five years.

Total Restricted for Fiscal Received Bond Interest Increase (Decrease) Year Cash Basis & Principal Unrestricted $ %

1977/78 $2,460,384 $445,211 $2,015,173 ------- -------1978/79 1,513,554 518,736 994,818 (1,020,355) -50.63%1979/80 1,621,350 428,585 1,192,765 $197,947 19.90%1980/81 1,914,882 458,941 1,455,941 263,176 22.06%1981/82 2,157,298 425,948 1,731,350 275,409 18.92%1982/83 2,245,799 431,669 1,814,130 82,780 4.78%1983/84 2,453,236 454,544 1,998,692 184,562 10.17%1984/85 2,618,899 429,139 2,189,760 191,068 9.56%1985/86 2,922,025 400,336 2,521,689 331,929 15.16%1986/87 3,325,080 476,027 2,849,053 327,364 12.98%1987/88 3,590,335 415,348 3,174,987 325,934 11.44%1988/89 4,009,992 389,724 3,620,268 445,281 14.02%1989/90 4,644,106 451,969 4,192,137 571,869 15.80%1990/91 4,898,609 404,912 4,493,697 301,560 7.19%1991/92 5,305,810 435,226 4,870,584 376,887 8.39%1992/93 5,230,679 455,415 4,775,264 (95,320) -1.96%1993/94 5,405,901 429,917 4,975,984 200,720 4.20%1994/95 5,589,446 422,427 5,167,019 191,035 3.84%1995/96 5,604,306 452,813 5,151,493 (15,526) -0.30%1996/97 5,641,183 473,160 5,168,023 16,530 0.32%1997/98 5,862,721 358,706 5,504,015 335,992 6.50%1998/99 5,915,399 0 5,915,399 411,384 7.47%1999/00 6,432,482 0 6,432,482 517,083 8.74%2000/01 7,061,136 0 7,061,136 628,654 9.77%2001/02 7,693,200 0 7,693,200 632,064 8.95%2002/03 8,391,961 0 8,391,961 698,761 9.08%2003/04 9,077,863 0 9,077,863 685,902 8.17%2004/05 10,180,831 0 10,180,831 1,102,968 12.15%2005/06 20,853,221 9,303,843 11,549,378 1,368,547 13.44%2006/07 23,604,928 11,040,737 12,564,191 1,014,813 8.79%2007/08 25,130,428 11,730,239 13,400,189 835,998 6.65%2008/09 25,440,143 11,975,665 13,464,478 64,289 0.48%2009/10 24,580,410 11,621,467 12,958,943 (505,535) -3.75%2010/11 27,616,427 14,995,884 12,620,543 (338,400) -2.61%2011/12 28,028,448 15,345,381 12,683,067 62,524 0.50%

From Prior Year (Unrestricted)

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ADDENDUM E

32

I. PURPOSE: A. This Statement of Investment Policy sets forth the investment guidelines for all Palomar Pomerado Health ("PPH ") investments purchased after March 1, 1996. The purpose of this policy is to ensure that PPH's funds are prudently invested according to the Board of Director's objectives to preserve capital, provide necessary liquidity and to achieve a market-average rate of return through economic cycles.

B. PPH may invest any portion of surplus funds of its Treasury that is not required for the immediate needs of PPH ("Investable Funds"), subject to the requirements of the California Government Code and this policy. If the provisions of the Government Code are or become more restrictive than those contained herein, such provisions shall govern, and are deemed incorporated into this policy upon taking effect.

C. Government Code Section 53600 et seq., authorizes local agencies to make investments in specified vehicles with money in a sinking fund of, or surplus money in, its treasury not required for the immediate needs of the agency.

D. Palomar Pomerado Health is a "local agency" subject to the provision of Government Code Section 53600 et seq., which recommends that Palomar Pomerado Health Board of Directors to annually adopt a statement of its investment policy, and to consider any delegation of authority to make investments on its behalf of the Chief Financial Officer.

E. The Board of Directors of Palomar Pomerado Health now desires to formally adopt this statement of investment policy, and to re-delegate to the Chief Financial Officer responsibility for all decisions regarding the sale or purchase of individual investments on behalf of PPH.

II. DEFINITIONS: A. Safety of Principal. Safety of principal is the foremost objective of PPH. The safety and risk associated with an investment refers to the potential loss of principal, interest or a combination of these amounts. Each investment transaction shall seek to ensure that capital losses are avoided, whether from institutional default, broker-dealer default, or erosion of market value of securities. To attain this objective, diversification is required in order that potential losses on individual securities do not exceed the income generated from the remainder of the portfolio.

B. Liquidity. Liquidity is the second most important objective of PPH. Liquidity refers to the ability to "cash in" at any moment in time with a minimal chance of losing some portion of principal or interest. Liquidity is an important investment quality especially when the need for unexpected funds occasionally occurs. The investment portfolio shall remain sufficiently liquid to enable PPH to meet all operating requirements that might be reasonably anticipated.

C. Yield. Yield is the potential dollar earnings an investment can provide; it is sometimes described as the rate of return. Within the limits of safety and liquidity, PPH shall strive toward portfolio growth that exceeds the rate of inflation in order to preserve capital.

III. TEXT / STANDARDS OF PRACTICE:

A. Delegation Of Authority To Chief Financial Officer; Procedures To Implement Investment Policy 1. Delegation of authority to Chief Financial Officer: The PPH Chief Financial Officer is delegated responsibility for all

decisions regarding the sale or purchase of individual investments on behalf of PPH. This delegation shall be reviewed annually by the Board through the Finance Committee. Any re-delegation shall be recorded in the minutes of these meeting. No person may engage in an investment transaction except as provided under the terms of this policy and any other procedures established by the Chief Financial Officer. The Chief Financial Officer shall be responsible for all actions undertaken and shall establish a system of controls to regulate the activities of subordinate officials.

B. This policy will be reviewed and updated as required or at least every year. C. Document History:

1. Original Document Date: 7/14/95; Revision Number: 1 Dated: 6/06 2. Prior to 2006, this Policy was Board Policy 10-513

Policy

ANNUAL ADOPTION OF STATEMENT OF INVESTMENT 27092 Official (Rev: 3)

Source: Board of Directors

Applies to Facilities: Applies to Departments:

ANNUAL ADOPTION OF STATEMENT OF INVESTMENT

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IV. ADDENDUM:

V. PUBLICATION HISTORY:

VI. REFERENCES:

Paper copies of this document may not be current and should not be relied on for official purposes. The current version is in Lucidoc at .

https://www.lucidoc.com/cgi/doc-gw.pl?ref=pphealth:27092

Revision Number

Effective Date Document Owner at Publication Version Notes

3 (this version)

09/12/2011 Bob Hemker, Chief Financial Officer Annual review for Board of Directors - deletion of Section F under Purpose - redundancy with Section E; Signatory changed to current Board Chair T.E. Kleiter; Effective date of Board Governance Committee approval for previous revision was actually October 19, 2010 - final signature in Lucidoc makes it appear to have been approved in 2011

2 (Changes) 07/13/2011 Bob Hemker, Chief Financial Officer Clarification of language1 (Changes) 02/11/2008 Bob Hemker, Chief Financial Officer Effective date of Board approval of

this revision (2/11/08) was incorrectly entered as 11/14/07. [Reviewed on 9/1/2009 by Bob Hemker: Extended review to 9/1/2010]

0 (Changes) 11/14/2007 James Neal, Director of Corporate Integrity Updated by the board review

Authorized Signer(s): ( 09/09/2011 ) Bob Hemker, Chief Financial Officer ( 09/12/2011 ) Janine Sarti, General Counsel ( 09/12/2011 ) Ted Kleiter, Chairman, Board of Directors

Reference Type Title Notes

ANNUAL ADOPTION OF STATEMENT OF INVESTMENT

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ADDENDUM F

35

InInsert Subject Here

Form A – Amendment 2 to the Agreement for Management and Related Services – BH C-360-009044

PALOMAR HEALTH

MANAGEMENT AND RELATED SERVICES FOR BEHAVIORAL HEALTH SERVICES

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Sheila Brown, FACHE, Chief Clinical Outreach Officer

Susan Linback, R.N., M.B.A., Director, Behavioral Health BACKGROUND: This is a request to approve the Contract Amendment No. 2 to the Agreement for Management and Related Services for Behavioral Health Services Between Palomar Health and ARCH Health Partners effective date July 1, 2012. Arch Health Partners will continue to employ (through PIMG) and provide psychiatrists for On-Call and coverage for all Inpatient and Outpatient Behavioral Health Programs, Consultation services for the Acute Care Units at all Palomar Health Hospitals as well as Skilled Nursing Facilities. This Amendment revises the physician compensation, delineates the services and hours, adds a description of the responsibilities of the Palomar Health Psychiatrist as well as the Palomar Health Physician Code of Conduct. BUDGET IMPACT: Minimal Budget Impact STAFF RECOMMENDATION: Approval COMMITTEE QUESTIONS:


36

Agreement for Management and Related Services for Behavioral Health Services Abstract

PALOMAR HEALTH - AGREEMENT ABSTRACT Section

Reference

Term/Condition

Term/Condition Criteria TITLE Amendment 2 to the Agreement for Management and Related

Services for Behavioral Health Services between Palomar Health and ARCH Health Partners (AHP)

AGREEMENT DATE Amendment No. 2 – 07/1/2012 Amendment No. 1 06/07/12 Original Agreement 1/1/2012

PARTIES 1) Palomar Health 2) ARCH Health Partners

PURPOSE This Contract Amendment 2 revises the physician compensation, delineates the services and hours, and adds a description of the responsibilities of the Palomar Health Psychiatrist as well as the Palomar Health Physician Code of Conduct.

1.1. 1.1.6

SCOPE OF SERVICES ARCH Health Partners will continue to provide Palomar Health with the professional services of psychiatry. AHP will contract with or provide an employment vehicle thru PIMG for physicians to provide adequate coverage to Palomar Health’s Behavioral Health Services 24 hours a day 7 days a week, as defined by the Medical Director of the Service. In addition, AHP provides physician practice management, IT infrastructure, reporting, coding, claims management, billing and collections, and payroll for the services and physicians.

PROCUREMENT METHOD

Request for Proposal Discretionary

15.1.1.

TERM

Management Agreement: January 1, 2012 to December 31, 2012 Amendment 2: July 1, 2012 to December 31, 2012

15.1.1. RENEWAL Annual renewals at agreed upon rates on the anniversary date unless notice given to terminate the agreement by one of the parties.

15.1.2. TERMINATION a. Upon 90 days prior written notice 12.2.1. 12.2.2.

COMPENSATION METHODOLOGY

Monthly payment for the current month on the 5th day of the month. Payment for variable invoices within 15 business days of the receipt thereof.

BUDGETED YES NO - IMPACT: Minimal.

EXCLUSIVITY NO YES – EXPLAIN:

JUSTIFICATION

AGREEMENT NOTICED YES NO METHODOLOGY & RESPONSE:

ALTERNATIVES/IMPACT . Exhibit B DUTIES COMMENTS

APPROVALS REQUIRED Officer CFO CEO BOD Finance Committee BOD

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ActivCentre Panel Agreement Amendments

Form A - ActivCentre.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Natalie Bennett, Manager, Program Development Background: For a provider to serve on the ActivCentre panel he must sign a provider panel agreement. In June, the five provider panel agreements listed below expired, and the physicians decided to continue their participation on the panel through an amendment to their original agreement. The provider panel agreements focus on delivering a standard of care when patients are referred to a provider from the ActivCentre. There is no budgetary impact of these agreements, this is for information only.

• Jeffrey Chen, MD • Keyvan Esmaeili, MD • Bassem Georgy, MD • Jeffrey Schiffman, MD • Mark Stern, MD

Budget Impact: None

Staff Recommendation: Approval



38


Reference

Term/Condition

Term/Condition Criteria TITLE ActivCentre Provider Panel Agreement Amendment

AGREEMENT DATE 6-6-2012

PARTIES Palomar Health and Jeffrey Chen, MD

PURPOSE To serve as a panel physician for the outpatient spine center.

SCOPE OF SERVICES Provider agrees to meet certain program standards to participate. The standards are focused around access, triage, nurse navigation, outcomes tracking, quality and education/marketing.

PROCUREMENT METHOD

Request For Proposal x Discretionary

TERM 1-year

RENEWAL Automatic renewal unless otherwise terminated

TERMINATION 30-day written notice


N/A

BUDGETED YES NO – IMPACT: N/A

EXCLUSIVITY xNO YES – EXPLAIN:

JUSTIFICATION

AGREEMENT NOTICED YES xNO Methodology & Response: any new providers on the staff are given an opportunity to be on the panel for the ActivCentre

ALTERNATIVES/IMPACT

Duties Provision for Staff Education Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development

COMMENTS

APPROVALS REQUIRED VP CFO CEO BOD Committee ____________ BOD

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Reference

Term/Condition



PARTIES Palomar Health and Keyvan Esmaeili, MD



PROCUREMENT METHOD


TERM 1-year




N/A



JUSTIFICATION


ALTERNATIVES/IMPACT


COMMENTS


40


Reference

Term/Condition



PARTIES Palomar Health and Bassem Georgy, MD



PROCUREMENT METHOD


TERM 1-year




N/A



JUSTIFICATION


ALTERNATIVES/IMPACT


COMMENTS


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Reference

Term/Condition



PARTIES Palomar Health and Jeffrey Schiffman, MD



PROCUREMENT METHOD


TERM 1-year




N/A



JUSTIFICATION


ALTERNATIVES/IMPACT


COMMENTS


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Reference

Term/Condition



PARTIES Palomar Health and Mark Stern, MD



PROCUREMENT METHOD


TERM 1-year




N/A



JUSTIFICATION


ALTERNATIVES/IMPACT


COMMENTS


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Palomar Medical Center Agreement for Items

Form A - Dr Feldman 7-11-12.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Gerald Bracht, Chief Administrative Officer Palomar Medical Center Background: Dr. Feldman provides Gastroenterology services to his patients at Palomar Medical Center. Under certain situations Dr. Feldman uses a specific medical imaging Pill Cam that is not a stocked item at PMC. We have entered into an agreement with Dr. Feldman to reimburse the cost of the Medical Imaging Pill Cam. Appropriate invoices detailing the item provided to include a breakdown of charges are provided.

Budget Impact: None

Staff Recommendation: Approval



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Reference

Term/Condition

Term/Condition Criteria Preamble TITLE Physician Agreement for Items

Preamble AGREEMENT DATE June 6, 2012

Recital PARTIES 1) Ronald Feldman, M.D. Section 1 SCOPE OF SERVICES 1) Reimbursement for Medical Imaging Pill Cam PROCUREMENT

METHOD Request For Proposal Discretionary

Section 5 TERM One Year Effective June 6, 2012 thru June 11, 2013

Section 5 RENEWAL Term shall automatically roll-over for one additional year

Section 5.1

TERMINATION 1) As described under section 5.1

Section 2 COMPENSATION METHODOLOGY

Per Invoice, detailing the item provided

BUDGETED YES NO – IMPACT:

EXCLUSIVITY NO YES – EXPLAIN: JUSTIFICATION This is a non-stocked item that is used for patient care AGREEMENT NOTICED YES NO Methodology & Response: ALTERNATIVES/IMPACT N/A

Duties N/A COMMENTS None APPROVALS REQUIRED VP CFO CEO BOD Committee ____________ BOD

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Physician Advisor Agreement

Form A - FunctionMD.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Natalie Bennett, Manager Program Development Background: In April 2012, an ActivCentre Physician Advisor agreement was executed between Palomar Health and Jeffrey Chen, MD. That agreement was presented and approved at the March 2012 Board Finance Committee meeting. Dr. Chen has since requested that the agreement be entered into with his professional S Corporation. Therefore, in June 2012, the agreement between Palomar Health and Dr. Chen was terminated and replaced with an agreement between Palomar Health and FunctionMD Medical Center. The physician rendering services through this new Physician Advisor Agreement (Jeffrey Chen, MD) remains the same.

Enter into Budget Impact: The dollars are already included in the FY13 budget.

Staff Recommendation: This contract is already budgeted and approved, so this communication is for information only.



46


Reference

Term/Condition

Term/Condition Criteria TITLE Physician Advisor Agreement AGREEMENT DATE June 1, 2012 PARTIES (1) FunctionMD Medical Center

(2) Palomar Health PURPOSE To provide a comprehensive and integrated spine center program

that encompasses the evaluation, management and treatment of patients with back pain. The program focuses on outpatient services and the coordination of care across the continuum.

SCOPE OF SERVICES Management of care pathways and ongoing establishment of the outpatient spine center Partner with PH administration and medical staff regarding efficiency and service delivery Involvement in community education and marketing events promoting the benefits of the program- additional duties outlined in contract.

PROCUREMENT METHOD


TERM 1 year- June 1, 2012 – May 31, 2013 RENEWAL After renegotiation of contract between parties TERMINATION 1) Either party may terminate without cause or penalty with a

90-day notice. 2) Either party may terminate with material breach with a 30-

day notice. COMPENSATION

METHODOLOGY The hourly rate is based upon Fair Market Valuations for the delivery of this service by this specialty physician.

BUDGETED x YES NO – IMPACT:


JUSTIFICATION

AGREEMENT NOTICED x YES NO Methodology & Response: Original agreement was posted in the medical staff office.

ALTERNATIVES/IMPACT Duties x Provision for Staff Education

x Provision for Medical Staff Education Provision for participation in Quality Improvement x Provision for participation in budget process development

COMMENTS APPROVALS REQUIRED VP CFO CEO x BOD Committee Finance__ x BOD

47

Agreement For Services – Consultations

Form A - Mission Infectious Disease.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Shannon Brown R.N, M.S.N, Director of Clinical Resource

Management Background: Unfunded infectious disease patients who require follow up visits per county regulations will be seen by Mission Infectious Disease and Infusion Consultants Inc.

Budget Impact: None

Staff Recommendation: Approval of the Agreement for Services – Consultations, with Mission Infectious Disease and Infusion Consultants, Inc., and recommend approval by the full Board of Directors.



48

PALOMAR HEALTH – AGREEMENT ABSTRACT Section

Reference

Term/Condition

Term/Condition Criteria TITLE Mission Infectious Disease & Infusion Consultants, Inc. –

Agreement for Services – Consultation AGREEMENT DATE 6/19/12

PARTIES Mission Infectious Disease & Infusion Consultants, Inc.

PURPOSE Unfunded infectious disease patients who require follow up

visits per county regulations will be seen by Mission Infectious Disease and Infusion Consultants, Inc.

SCOPE OF SERVICES Unfunded patients

PROCUREMENT METHOD

Request For Proposal Discretionary

TERM One Year

RENEWAL Upon expiration of the Initial Term, the term shall automatically continue to roll over for additional one (1) year terms.

TERMINATION 30 days after written notice of termination is received by the other party.


Per Visit

BUDGETED YES NO – IMPACT:


JUSTIFICATION

AGREEMENT NOTICED YES NO Methodology & Response:

ALTERNATIVES/IMPACT


COMMENTS


49

Physician Recruitment Agreement

Form A - Dr Young.doc

TO: Board Finance Committee MEETING DATE: Monday, July 30, 2012 FROM: Lisa Hudson, Director, Physician & Business Development Background: The Palomar Health community lacks an adequate number of Obstetric/Gynecology physicians as verified by Medical Development Specialists, a national consulting firm that specializes in physician manpower studies. PPH has an established physician recruitment program and has allocated resources to attract additional OB/GYN’s to relocate to Inland North San Diego County. Poway Women’s Care, Inc., and Victoria Young, MD, have signed the Palomar Health Physician Recruitment Agreement, which provides a qualified physician, new to the service area, who established her practice in June of 2012.

Budget Impact: None

Staff Recommendation: Approval of the Physician Recruitment Agreement with Poway Women’s Care and recommend approval by the full Board of Directors.



50

PALOMAR HEALTH – AGREEMENT ABSTRACT Section

Reference

Term/Condition

Term/Condition Criteria TITLE Practice Recruitment Agreement Between Palomar Health,

Poway Women’s Care, Inc. and Victoria Young, M.D.

AGREEMENT DATE April 13, 2012

PARTIES Palomar Health, Poway Women’s Care, Inc. and Victoria Young, M.D.

Recitals PURPOSE Provide recruitment assistance to enable Dr. Young to establish a practice within Poway Women’s Care Group

Article 4 SCOPE OF SERVICES Dr. Young will establish a full-time OBGYN practice in Poway Women’s Care office and will participate in government-funded programs.

PROCUREMENT METHOD

N/A

Article 8 TERM 1 year of income assistance; two year repayment/forgiveness period

RENEWAL None Available

Article 2 TERMINATION Contract stipulates conditions for termination

Article 2 COMPENSATION METHODOLOGY

For monthly income guarantee physician will submit monthly report of expenses and collections. For relocation and start-up cost assistance physician will submit receipts.

5.1; 9.19 BUDGETED X YES NO – IMPACT:

EXCLUSIVITY X NO YES – EXPLAIN: : Government prohibits hospitals from requiring physician to exclusively have privileges or make referrals only to their hospital. The contract does include a non-compete clause.

JUSTIFICATION Medical Development Specialists, a national consulting firm who performed our Physician Manpower Study, completed an analysis which confirmed there is a justifiable community need for this recruitment

AGREEMENT NOTICED YES NO Methodology & Response:

ALTERNATIVES/IMPACT Duties Provision for Staff Education

Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development

COMMENTS

APPROVALS REQUIRED VP XCFO XCEO XBOD Committee ____________ X BOD

51

PALOMAR HEALTH PHYSICIAN INDEPENDENT CONTRACTOR AGREEMENT

INFORMATION SYSTEMS SERVICES

Form A - So Cal - Moore.doc

TO: Board of Directors MEETING DATE: Monday, July 30, 2012 FROM: Ben Kanter, MD, CMIO, Paul S. Peabody, CIO Background: Palomar Health requires the active involvement of physicians in many aspects of Information Systems programs. A Physician Advisor Council was active during the development phase of the Clarity Electronic Health Record. Now that Clarity has been implemented, the Physician Advisor Council will reconvene to assist Palomar Health in improving the efficient and effective use of Clarity. The physician(s) indicated below will be reimbursed for their work effort according to standard and customary manners and rates. This contract refers to this physician:

• Southern California Permanente Medical Group – George Moore, MD Budget Impact: After discussion with many different sites across the U.S., a fair market value was established for the mean value hourly reimbursement for such work. All fees payable to medical staff members have been budgeted within the IT projects listed above. Staff Recommendation: Approval. Committee Questions:


52

PALOMAR HEALTH - AGREEMENT ABSTRACT

Section Reference

Term/Condition

Term/Condition Criteria

TITLE Independent Contractor Agreement between Southern California Permanente Medical Group - George Moore, MD and Palomar Health

AGREEMENT DATE June 20, 2012

PARTIES Southern California Permanente Medical Group - George Moore, MD

PURPOSE To assist Palomar Health in improving the efficiency and effectiveness of the Clarity Electronic Health Record System particularly as it pertains to Physician Order Entry and documentation.

SCOPE OF SERVICES The physician will work as a subject matter expert providing information to Clarity development teams.

PROCUREMENT METHOD Request For Proposal Discretionary TERM 1 year

RENEWAL No automatic renewal

TERMINATION 10 day notice by either party without cause

COMPENSATION

METHODOLOGY Hourly

BUDGETED YES NO – IMPACT: None

EXCLUSIVITY NO

JUSTIFICATION Medical and IT subject matter expert required to assist in the planning and design of the electronic record. Fee is standard for this process and is based upon analysis from similar projects across the U.S.

AGREEMENT NOTICED YES NO Methodology & Response: ALTERNATIVES/IMPACT n/a Duties Provision for Staff Education

Provision for Medical Staff Education Provision for participation in Quality Improvement Provision for participation in budget process development

COMMENTS APPROVALS REQUIRED VP CFO CEO BOD Committee ____________

BOD

53

BOARD FINANCE COMMITTEE MEETING · 7/30/2012 · 2012-06-25 board finance minutes.doc 2 . b oard f inance c ommittee – m eeting m inutes – m onday, j une 25, 2012 1. a genda

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