Performance Outcome Goals FY 2014 Recap 2015 Executive

Performance Outcome Goals FY 2014 Recap & 2015 Executive Bonus Plan

FY 2014 Bonus Results

Total Operating Margin FY 2012 FY 2013 FY 2014 Target Plus Achieved 2% 4% 5. 3% 60 days 70. 5 days 3. 6% 4. 2% 0. 3% 60 days 58 days 2. 4% 4. 0% 3. 83% 60 days 118 days Hit Target

Quality Target Plus Achieved FY 2012 33. 6 46. 7 41. 1 FY 2013 47. 2 57. 8 44. 0 FY 2014 48. 33 50. 1 11. 0 Missed Target

Customer Service Target Plus Achieved FY 2012 46 61 32 FY 2013 46 61 47 FY 2014 48 50. 0 40 Missed Target

Outcomes Measure FY 2014 Target Plus Achieved 22. 10 35 56. 7 Hit Target Plus

Physician Satisfaction Target Plus Achieved FY 2012 64. 6 66. 1 75. 6 FY 2013 N/A N/A FY 2014 3. 208 3. 2278 ?

Employee Satisfaction Target Plus Achieved FY 2012 71. 4 72. 1 FY 2013 N/A N/A FY 2014 3. 208 3. 227 ?

Culture of Safety Target Plus Achieved FY 2012 63. 7 68 58. 7 FY 2013 63. 7 68 61. 4 FY 2014 63. 7 68 60. 3 Missed Target

FY 2014 Results Ø Stewardship Ø Quality Ø VBP (outcome score) Ø Customer Service Ø Employee Satisfaction Ø Physician Satisfaction Ø Culture of Safety Target Achieved Missed Target Plus Achieved Missed

FY 2014 Payout Helen Wheeler Frank Hilbert Kim Stout Chris Whybrew Darryl Linnington David Keith Total: $76, 487 $ 5, 400 $ 9, 900 $ 7, 800 $ 2, 800 $18, 151 $32, 436

FY 2015 Bonus Plan

Executive Leadership Team Who’s involved in bonus Ø Administrator, Physician Services Ø CNO Ø CIO Ø COO Ø CFO Ø President/CEO

Bonus Structure Goals align to three primary MRHC initiatives: Ø Stewardship Ø Quality Ø Customer Service

Bonus Structure Achievement Defined Ø Target is to be challenging and achievable Ø Target-plus is to be true stretch goals and remarkable Ø Metric has to be met or exceeded Ø No credit for partial metric completion Ø Achievement validated by the data source There are three types of statistics: lies, darn-lies, and statistics

Bonus Structure Performance based Weighted in favor of stewardship Payout is different by position Percentages apply to base salary Stewardship is the trigger Ø No payout unless we achieve a favorable EBIDA

Stewardship – the trigger EBITDA Margin % of 11. 1% Ø Ø Ø Defined as: (Net Operating Income + Depreciation) / Net Operating Revenues. Source : Audited financials Baseline: FY 13 @ 7. 1%, FY 14 @ 9. 1%, BY 15 Target 11. 1% Net Revenue Collection Ratio (NRCR%) Ø Ø Ø Defined as: Cash Receipts / Net Operating Revenues Source : Audited financials Baseline: FY 13 @ 104%, FY 14 @ 108%, BY 15 Target 102% Target: EBITDA Margin 11. 1%, NRCR% 102% Target Plus: EBITDA Margin 12. 0%, NRCR% 103%

Quality Clinical Process of Care SCIP – Inf – 2 Definition: Patients Prophylactic Antibiotic Selection for Surgical Ø Source: CMS Reporting and VHA Value Analyzer. Ø Baseline: The MRHC most current published results to CMS as of 2 Q 2013 is 96. 2%. Target: 99 (Moving from 96 to 99 is when MRHC begins to achieve monetary award) Target Plus: 100 (Moving from 99 to 100% MRHC achieves the greatest monetary opportunity of all clinical process of care measures. )

SCIP – Inf - 2 FY 2015 Target Plus 99% 100% Current score as of 2 Q 2013 as published by CMS is 96. 2% Achieved

Quality Outcomes Measure AMI 30 Day Survival Rate The 30 day mortality measures assess deaths that occur within 30 days after admission, which, depending on the length of stay, may occur post-discharge. Ø Source : Centers for Medicare & Medicaid Services, & VHA Analyzer Ø Baseline: The MRHC most current published results to CMS as of 2 Q 2013 is 76%. Target: 77% (Moving from 76 to 77% is when MRHC begins to receive monetary award) Target Plus: 79% (by moving from 76 to 79% is when MRHC receives the greatest monetary award within this area)

AMI 30 Day Survival Rate FY 2015 Target Plus 77% 79% • Current score as of 2 Q 2013 as published by CMS is 76% Achieved

Customer Service Patient Experience of Care Measure Clean and Quiet Indicator Definition: During this hospital stay, how often were your room and bathroom kept clean? During this hospital stay, how often was the area around your room quiet at night? Ø Source: HCAHPS Survey Data submission & VHA Value Analyzer. Ø Baseline: Results as of 2 Q 2013 are: Clean 72%, Quiet 54% Target: Clean 74%, Quiet 56% (Moving from 72 to 74% Clean and 54 to 56 Quiet is when MRHC begins to receive a monetary award ) Target Plus: Clean 80%, Quiet 60% (Moving from 72 to 80% Clean and 54 to 60% quiet is when MRHC potential $3000 monetary award)

Clean and Quiet Target Plus FY 2015 Clean 74% 80% Quiet 56% 60% • Current score as of 2 Q 2013 as published by CMS: Clean 72% Quiet 54% Achieved

RN Communication Patient Experience of Care Measure RN Communication v Indicator Definition q q During this hospital stay, how often did nurses treat you with courtesy and respect? During this hospital stay, how often did nurses listen carefully to you? During this hospital stay, how often did nurses explain things in a way you could understand? During this hospital stay, after you pressed the call button, how often did you get help as soon as you wanted it? Ø Source: CMS Reporting and VHA Value Analyzer Ø Baseline: MRHCs most current published results to CMS as of 2 Q 2013 are 74% Target: 78 (Moving from 74 to 78% is when MRHC begins to achieve monetary award) Target Plus: 80 (by moving from 78 to 82% is when MRHC potential of $6000 monetary award)

RN Communication FY 2015 Target Plus 78% 80% • Current score as of 2 Q 2013 as published by CMS: 74% Achieved

Discharge Instructions • Patient Experience of Care Measure • Discharge Instructions v Indicator Definition: o o o After you left the hospital, did you go directly to your own home, to someone else’s home, or to another health facility? During this hospital stay, did doctors, nurses or other hospital staff talk with you about whether you would have the help you needed when you left the hospital? During this hospital stay, did you get information in writing about what symptoms or health problems to look out for after you left the hospital? Ø Source: CMS Reporting and HVA Value Analyzer Ø Baseline: The MRHC most current published results to CMS as of 2 Q 2013 is 76%. Target: 79 (Moving from 76 to 79% is when MRHC begins to achieve monetary award) Target Plus: 84 (Moving from 76 to 84% is when the MRHC potential $6000 monetary award)

Discharge Planning FY 2015 DC Planning Target Plus 79 84 • Current score as of 2 Q 2013 as published by CMS: 76% Achieved

Target Grid OUTCOME GOAL TARGET PLUS 11. 1% 102% 12. 0% 103% SCIP-Inf-2 99% 100% AMI 30 Day Survival Rate 77% 79% 74%, 56% 80%. 60% RN Communication 78% 80& DC Planning 79% 84% Stewardship EBIDA Margin NRCR Clean & Quiet

Scoring Grid OUTCOME GOAL Stewardship EBIDA (Trigger) Days Cash on Hand SCIP-Inf-2 AMI 30 Day Survival Rate Clean & Quiet RN Communication DC Planning Total Percentage - AET TARGET PLUS 10 15 2 3 2 3 2 3 20% 30%

Bonus Cost Potential Trigger not achieved: $0 Trigger achieved: Ø Target for all outcome goals: $98, 030 $147, 047 $196, 061 Ø Target Plus for all outcome goals: $294, 091 Ø Target Plus: