PMC. Parish Management Consultants, LLC. 2006 Annual Report

PMC Parish Management Consultants, LLC 2006 Annual Report

a letter from our ceo Dear Customers, Board Members, physicians and stakeholders, it is with great pride that PMC shares this year s annual report with you. This report provides you an overview of our 2006 financial and operational achievements. Our company s primary goal today remains the same since our inception, the provision of quality management services. In this past year, our company has clearly demonstrated the ability to assist our client Groups and Facilities in attaining mutual success. This accomplishment was attested to this year by our clients decisions to renew all 2006 contracts which were due to term. Fundamental to PMC s retention and growth remains our dedication to sustaining and nurturing our customers trust. We believe that this trust is grounded in the manner in which PMC distinguishes itself in the market from other practice management companies. The foundation on which this differentiation is based is critical, making each one of the following principles important. It is our belief that first and foremost, the clinical dollars generated by each of our Groups should remain with that group. In other words, the financial integrity of each Group is honored and protected. Second, PMC continually strives to provide value above and beyond our customers expectations at a market competitive rate. It is our job to provide the very best practice services; it is our vision to assist you in meeting future challenges. Finally, all of our contractual and financial relationships with our customers are transparent. We demonstrate our honesty through our openness. In closing, I would like to thank our customers for the opportunity to serve them. We understand clearly that without the support of our Groups and Facilities we could not succeed. Together, we can deliver added value to our most important mutual customers, our patients. Sincerely, T. Steven Martin a letter from our ceo Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 01

PMC Parish Management Consultants, LLC pmc mission statement Parish Management Consultants (PMC) is a healthcare management company dedicated to the provision of world class services. The PMC team, comprised of anesthesiologists, nurse anesthetists, and healthcare managers, is driven to provide the best quality anesthesia as defined by national benchmarks, supported by results oriented and quantifiable management services. PMC will aggressively pursue growth, retention, and differentiation strategies that will result in PMC becoming the number one anesthesia company in the United States. In addition to providing anesthesia services, PMC will investigate and implement other healthcare management strategies that bring value to the company. pmc values 02pmc mission statement & values PMC differentiates itself from its competitors through development of its employees and services Guarantees performance Will be aggressive in implementing technology that results in dramatically improved quality service, increased efficiencies, and rapid return on investment Will strive to achieve 100% compliance in all aspects of management and healthcare delivery Will be open to risk sharing arrangements Will communicate with its employees and partners with candor and open communication Will relentlessly pursue true win/win relationships Will work to deliver to its customer's value above and beyond contractual obligations

pmc overview Parish Management Consultants is a practice management company created by anesthesiologists to assist them in addressing new market challenges in anesthesia. Over the past several years, the Parish Groups found themselves facing serious manpower shortages, complex facility negotiations and contracts, declining pay from their third-party payors, and more regulatory requirements than ever. In order to address these challenges the Parish leadership recognized the need to recruit professional managers with expertise in healthcare management, including contract negotiations, recruitment, human resources, and finance. The physicians wanted to create a management team that could interface and relate with the management team of their respective facilities. The physician leaders believed that their success today and into the future would rely heavily on their Groups ability to integrate their businesses with the operations of their facilities. In summary, PMC was designed to achieve that objective. PMC s success has resulted in it becoming the eleventh (11) largest anesthesia provider in the United States. In addition, PMC is an active founding member in the Anesthesia Business Group (ABG) which is a consortium of nine (9) of the largest privately owned groups in the country. the facilities we serve Louisiana Baton Rouge General Medical Center East Jefferson General Hospital East Jefferson Ambulatory Surgery Center Fairway Medical Center Greater New Orleans Surgery Center Houma Outpatient SurgeryPlex Lakeview Regional Medical Center Lafayette General Medical Center Ochsner Medical Center - Westbank Omega Hospital St. Francis Medical Center Touro Infirmary West Jefferson Medical Center West Jefferson Ambulatory Surgery Center Virginia Inova Alexandria Hospital Monroe LOUISIANA Lafayette Baton Rouge Metairie Marrero Alexandria VIRGINIA Covington Gretna pmc overview & the facilities we serve Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 03

pmc year in review 2006 Year in Review We would like to thank the medical staff and administration of each PMC partner facility for their confidence in our doctors, our nurses and our staff. Your faith in our ability to provide the highest quality patient care and anesthesia service encourages us to continue to strive to be the best at what we do. We worked diligently throughout 2006 to provide services and introduce new programs and processes to increase and enhance our value to you. Your patients are our patients, your success our success and we wish all of our valued partners much success in 2007. pmc year in review Anesthesia Department Leadership It s no surprise that a world class organization would have world class medical directors. Parish medical directors are clinicians as well as managers of their respective anesthesia departments. They participate in regular clinical rotations and assist in providing medical direction to our CRNAs. In addition, they all share in call rotations. When they are not in the operating room or on call, our medical directors attend M&M conferences, quality assurance and compliance reviews, and monthly divisional meetings. They also chair and participate in their own Perioperative Operations Committee (POC) meetings and work with PMC group practice managers on quality initiatives, contract performance and human resource issues. Our medical directors also attend PMC leadership conferences and participate in their facility s medical staff committees and development programs. The March 30, 2007 PMC Leadership Conference kicks off this year s management development efforts, featuring speakers and programs on: Chief CRNAs Leadership Quality Initiatives Electronic Anesthesia Record Systems Compliance Pay for Performance, and Human Resource topics PMC recognizes that our medical directors are key to the success of our efforts and we thank each of them for their continuing commitment to outstanding patient care. PMC believes that the team model approach to patient care is the centerpiece of the very best patient care. To this end PMC embraces the medically directed model, which means that each of our CRNAs play an essential role in the delivery of anesthesia care. PMC requires that each anesthesia department select a Chief CRNA, who plays a very important role in assisting the medical director in the management and development of the anesthesia department, and facilitates communication with the CRNA staff. This year as in years past Chief CRNAs and Co-Chief CRNAs will participate in the PMC Leadership Conferences. Congratulations and thank you for your commitment to leadership and patient care. 04

pmc year in review Human Resources & Recruitment PMC would like to welcome the doctors, nurses, managers and staff members who began their employment with us in 2006. In total we recruited 28 healthcare providers and 9 management professional staff members. Carolyn Wooton, Vice President of Human Resources, and her staff have done a phenomenal job of recruitment this past year. As noted in a recent Times-Picayune article, almost 60% of the New Orleans area physicians, nurses and other healthcare professionals left the city after Hurricane Katrina and the current environment has created a unique set of challenges that makes this past year s recruitment success that much more remarkable. While size and growth in employees is not a criterion for success, it speaks to our ability to meet the coverage needs of our facility partners. PMC doctors and nurses comprise over 88 percent of our employees, which is what matters to our customers. This brings our total provider network to over 205 anesthesia providers. More doctors and nurses allow us to provide more patient care. PMC has been very successful in building relationships with schools throughout the country. In 2006 we had two recruitment dinners, an information session for the LSU Student CRNA Juniors and Seniors and we expanded our clinical rotation commitments to all of our current participating sites. PMC is working closely with LSU, Texas Christian University, Texas Wesleyan University, Georgetown University, Virginia Commonwealth University and University of Alabama in Birmingham to continue to expand the clinical sites throughout the Parish network. This, we believe, is essential to a successful ongoing CRNA recruitment program. Finally, with the assistance of our Medical Directors and Chief CRNAs PMC developed a comprehensive orientation program for both doctors and nurses that includes education on company policies and procedures, quality initiatives and compliance. Our goal is to help all of our Medical Directors and Chief CRNAs be successful by making them excellent managers and effective change agents of our leadership team. Total Number of Employees 225 200 175 Parish Anesthesia Employee Growth 188 2004 2005 2006 pmc year in review 201 220 Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 05

2006 growth & achievements 2006 Goal Achievements Throughout 2006 PMC met and exceeded an array of goals we had set for ourselves, our partners and our customers. With concerted team efforts, new services were implemented and existing services were enhanced and improved. 90,000 60,000 Case Volume 77,419 63,896 66,547 2006 growth & achievements National Strategic Business Partners Strategic business partners help ensure every great company s success, and bring added value to our customers. The key is of course the right selection, character and teamwork of those partners. In short, pick the best and continue to challenge them to improve. This is the philosophy at PMC and it is what keeps us among the top companies in our industry. PMC and Anesthesia Business Consultants (ABC) continued its partnership last year with new and enhanced services. In 2006 PMC welcomed Chase Bank to our select team of primary partners. Working with each of these companies provides PMC and our customers with unparalleled services and support. In 2006, PMC and ABC improved and implemented new monthly billing and collection management reports for all Parish sites. We look forward to working with the very capable management and staff of this exceptional, national organization. It was also this past year that PMC and J.P. Morgan Chase Bank implemented a new banking relationship and lock box system for processing collections. Lock boxes maximize the security of collections and provide an invaluable audit trail. As PMC moves forward in 2007, our banking partner will continue to provide a whole host of valuable financial services to the organization, our doctors and nurses and the facilities we serve. In addition to the partnering strengths PMC made in 2006, PMC has been an important contributor in the planning and development of the Anesthesia Business Group (ABG) National Quality Initiative. Significant progress has also been made in the planning and development of a company wide Parish Quality Initiative. Currently, East Jefferson General Hospital is serving as the Beta site for the Parish program, which will then be expanded to other Parish sites in 2007. Finance Bridget Galatas, Chief Financial Officer, and her staff continue to provide excellent accounting and financial services for PMC. Accurate budgeting, constant monitoring and reporting, managed care contracting and strategic financial decision making are critical elements of our services that benefit our customers. Guaranteed billing and collection performance is also a hallmark of our value. In 2006 there was remarkable growth in charges overall as well as the number of cases and units of anesthesia. The goal, of course, is not to generate charges, but to deliver the necessary care while being faithful to accurately documenting the services provided so that the correct reimbursement is received. And, while patient care is first, foremost and the highest priority, PMC management is mindful that we must be financially responsible in both revenue generation and expense management. During the past year PMC successfully completed billing company conversions at our facilities in both Lafayette, Louisiana and Alexandria, Virginia. 30,000 0 $50M $40M 0 2004 2005 2006 Total Revenues 48.7 49.7 50.0 2004 2005 2006 06

2006 growth & achievements Business Operations Robert Wright, Chief Operating Officer, has assembled a top notch team of professionals to respond to the needs of our customers. Areas of operational excellence include but are not limited to practice management, quality initiatives, compliance, financial and billing operations, perioperative assessments and human resource support such as recruitment, credentialing, training and development and performance evaluations. Kathy Pratt, Vice President of Clinical Services, has been the most recent addition to the PMC senior management team. With over 20 years of perioperative operations management experience, she has been able to develop our quality initiatives, compliance and clinical operation assessments to a new level. Kathy has also been instrumental in starting up PMC s practice management services in the state of Virginia. Other PMC major achievements in 2006 included a comprehensive 2006 Disaster Plan. This plan was developed and created with its goal for PMC to be fully operational within 24 hours of a major hurricane landfall or other catastrophe. Electronic credentialing software was implemented to create improved efficiencies and accuracy. This software system has reduced the turnaround time for completing the credentialing application process by 75%. PMC developed and setup a managed care strategy to negotiate contracted rates to the highest level possible based on market conditions and our cost structure. A successful Leadership Conference for Parish Medical Directors and Chief CRNAs was planned and hosted by PMC. Compliance, quality and strategic planning were highlighted at the conference. PMC successfully renegotiated a five year contract with Baton Rouge General Medical Center and a new contract with Fairway Medical Center. Lastly, PMC implemented an improved orientation program for Parish Medical Directors and Chief CRNAs. New Clients Finalized a PMC contract to manage Anesthesia Associates in Alexandria, Virginia. This group is comprised of approximately 28 anesthesia providers. This contract gives PMC a multi-state presence and provides a base for future development. Our success in Virginia has allowed us to open a fullservice regional office. Negotiated a management consultant agreement with Touro Infirmary, which will lead to a management services agreement in 2007. Negotiated a management consultant agreement with Loudoun Anesthesia Associates in Virginia. Negotiated a management consultant agreement with Manassas Anesthesia Associates in Virginia. 2006 growth & achievements Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 07

pmc executive team T. Steven Martin President and CEO Steve is a co-founder of Parish Management Consultants and its President and CEO. Steve has been in healthcare for more than 30 years and during that time has worked in hospital administration, managed care, physician practice management, and clinical care. He has a masters degree in Healthcare Administration from the University of Alabama Birmingham. As president and CEO, Steve provides leadership and direction to the organization. His entrepreneurial spirit has been the driving force behind the remarkable growth and success of Parish Management Consultants. Robert Wright Chief Operating Officer Robert joined Parish Management Consultants in May 2004. His career in healthcare administration spans more than 20 years in executive positions at both not-for-profit and for-profit hospital systems. His extensive experience includes Administrator of Operations at Mercy Hospital of New Orleans, and Chief Operating Officer of Tenet Memorial Medical Center in New Orleans. As Chief Operating Officer, Robert is responsible for oversight of company operations and implementation of policies and procedures, as well as monitoring the achievement of the organization s goals and objectives. Seated from left: Kathy Pratt, T. Steven Martin, Carolyn Wooton Standing from left: Robert Wright, Bridget Galatas pmc executive team Bridget Galatas Chief Financial Officer Bridget has been with Parish Management Consultants since its inception in 2003. She has been working in the medical field since 1995 and has been involved in all aspects of healthcare financial management. Bridget came to Parish Management Consultants from the renowned Ochsner Clinic Foundation of New Orleans. Bridget has a masters degree in Healthcare Administration from the University of New Orleans. As Chief Financial Officer, Bridget oversees all aspects of PMC s accounting and financial functions, as well as oversight of each divisions operating budget and financial reporting. As a financial analyst, Bridget works closely with our partnering facilities operations and financial officers. Bridget s staff and audit team members monitor and manage PMC partner relationships with our billing and collections companies. 08

pmc executive team Kathy Bandhu, CRNA Kathy is the Chief CRNA for the East Jefferson General Hospital Division and a clinical advisor to the Parish Management consulting team. Kathy has been a CRNA for more than 20 years, and while Kathy is very involved in supporting the PMC management team, she still spends most of her time in the operating room with patients and her surgical team members. Kathy completed her CRNA training at Geisinger Medical Center in Danville, Pennsylvania. As Vice President of CRNA Management and Development, Kathy assists in the establishment and implementation of quality initiatives in the operating room and works with the chief CRNAs assigned throughout the company. Kathy Pratt, RN, BSN, MBA, CNOR Vice President of Clinical Services As Vice President Clinical Services, Kathy will provide advice and assistance to Parish Anesthesia Associates and Parish Management Consultants client hospitals and facilities with quality assurance, anesthesia and surgery department management and serve as the corporations Medical Compliance Officer. In addition to her clinical operations and management responsibilities Kathy will oversee the introduction and implementation of Parish Management Consultant's electronic anesthesia record (EAR) program. Most recently Kathy was the Surgery Department Director for the Ochsner Clinic Foundation of New Orleans where she was responsible for daily operations of the Ochsner Clinic Surgery Program as well as budget development, financial analysis and resource management. Kathy is a member of the American College of Healthcare Executives, the New Orleans Area Organization of Nurse Executives and the Association of Perioperative Nursing. She has been in healthcare management for over 20 years. Carolyn Wooton Vice President of Human Resources/Recruiting Carolyn has more than 20 years experience in directing human resource functions in the hospitality industry. Most recently, she was the corporate director of Human Resources for Expotel Hospitality Services where she was responsible for fourteen hotels. Hotel brands included Hilton, Hampton and Embassy. These hotels employed more than 1,200 employees around the United States. Her experience in this industry brings a customerfocused perspective to PMC and our customers. Carolyn has a bachelor of science from Louisiana State University in Baton Rouge, Louisiana. As Vice President of Human Resources/Recruiting, Carolyn is responsible for oversight of these departments, which focus on recruitment and retention of our employees, as well as development and implementation of policies and procedures. She also works on the refinement and maintenance of compensation packages for our provider network and monitors adherence to federal and state employment regulations, while overseeing training and continuing education programs for all Parish employees. pmc executive team Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 09

pmc board of directors Frank Rosinia, M.D. Dr. Rosinia is a co-founder, a member of the Board of Directors and a clinical advisor to Parish Management Consultants. In his role as clinical advisor, Dr. Rosinia works directly with the Parish Management Consultants Medical Directors on issues related to leadership and anesthesia department management was well as quality outcomes and operational efficiency. In addition to his responsibilities with PMC, Dr. Rosinia is Co-Medical Director of the anesthesia department at East Jefferson General Hospital and a practicing clinician. Dr. Rosinia is a graduate of Louisiana State University School of Medicine in New Orleans, completed his residency in anesthesiology at Ochsner Clinic in New Orleans, and completed his fellowship training in obstetric anesthesiology and regional anesthesia at Brigham and Woman s Hospital, Harvard Medical School, in Boston. Standing from left: Frank Rosinia, M.D., Neal G. Comarda, M.D. and Mark Henson, M.D. Seated: T. Steven Martin Neal G. Comarda, M.D. Dr. Comarda is a co-founder, a member of the Board of Directors and a clinical advisor to PMC. He is the Medical Director of West Jefferson Medical Center in Marrero and a practicing clinician. Dr. Comarda has been in practice since 1985, and in 1987 he co-founded Parish Anesthesia Associates, the parent company of PMC. A native of New Orleans, Dr. Comarda attended Louisiana State University School of Medicine in New Orleans and subsequently completed his Anesthesiology residency at Tulane University Medical Center in New Orleans. He is a Diplomate of the American Board of Anesthesiology. pmc board of directors Mark Henson, M.D. Dr. Henson is a co-founder, a member of the Board of Directors and a clinical advisor to PMC. Dr. Henson is Co-Medical Director of the anesthesia department at East Jefferson General Hospital and a practicing clinician. In addition to his responsibilities at East Jefferson General Hospital, Dr. Henson works with Parish Management Consultants' Medical Directors and Chief CRNAs on operational and organizational issues affecting the individual facilities and is a clinical mentor to the organizations executive team. A graduate of the Medical College of Virginia in Richmond, Virginia, Dr. Henson completed his residency in Internal Medicine in 1983 and his residency in Anesthesiology in 1986 at the Ochsner Clinic in New Orleans and is board certified in both Internal Medical and Anesthesiology. T. Steven Martin - PMC President and CEO Please see page 8 for Mr. Martin s bio. 10

2007 strategic goals Top Strategic Goals for 2007 Quality - PMC has invested a significant amount of time and money in planning and developing a computerized Parish Quality Initiative that will be implemented throughout the Parish system in 2007. Five major company quality performance goals have been approved by the PMC Board of Directors to be benchmarked against national standards. These quality indicators relate to anesthesia response times, reducing surgical patient risk, operating room efficiency, controlling patient temperature, and reducing surgical infection rates. In addition, the Quality Initiative prepares PMC to meet the federal Pay for Performance standards that are being finalized. Electronic Anesthesia Record Initiative - PMC plans to implement an electronic anesthesia record initiative within the Parish system. This will provide cutting edge technology to enhance pre-admission testing, anesthesia care in the surgical suite and in the post anesthesia care unit (PACU). The electronic anesthesia record system will assist in achieving 100% compliance in documentation of anesthesia care and increase net collections due to the accurate documentation. The information collected by the electronic anesthesia record will provide a more efficient system to measure quality care performance based on benchmarked standards. Growth - Growth is a critical success factor for any organization. PMC has doubled in size over the past three years and continued growth is projected for 2007. Although PMC is always on the look-out for new opportunities, its current partner facilities are guaranteed the same quality service that exceeds their expectations, and PMC is dedicated to increasing its value to its customers each and every year. New Ventures - Many PMC clients have requested us to consider managing their Hospitalist program. Because of this expressed need from various hospitals, PMC is investigating the resources, reporting, and operational needs required for entry into this new service line. Many of management resources for this new venture are already in place, and the relationship building model of service integration mirrors many of the processes and systems that PMC employs in its anesthesia group practices. We look forward to offering this new service in 2007. 2007 strategic goals Blending Excellent Management with Quality Anesthesia Services pmc 2006 annual report 11

in closing The Future While the future is bright, the challenges are immense. The doctors, nurses, managers and staff of PMC are committed to the goals of the company, the facilities we serve and most importantly our patients whose care is at the heart of everything we do. The initiatives outlined for 2007 and beyond will not only advance the delivery of anesthesia services at our partnering facilities, but will most certainly add value to the entire healthcare industry. in closing 12

Parish Medical Directors and Chief CRNAs East Jefferson General Hospital Dr. Frank Rosinia, Co-Medical Director Dr. Mark Henson, Co-Medical Director Kathy Bandhu, Chief CRNA West Jefferson Medical Center Dr. Neal Comarda, Medical Director Tadd May, Co-Chief CRNA Tom Smithers, Co-Chief CRNA Ochsner Medical Center - Westbank Dr. Louis Levin, Medical Director John Spera, Chief CRNA Lakeview Regional Medical Center Dr. Kenneth Levine, Medical Director Randy Provensal, Co-Chief CRNA Fred Green, Co-Chief CRNA Baton Rouge General Medical Center Dr. Son Dang, Medical Director Kyle Schnebelen, Chief CRNA Jeremy Jones, Assistant Chief CRNA St. Francis Medical Center Dr. R. Gary Madden, Medical Director Carolyn Gates, Chief CRNA Lafayette General Medical Center Dr. Todd Ackal, Medical Director Susan Landry, Chief CRNA Fairway Medical Center Dr. William Preau, Medical Director Touro Infirmary Dr. Scott Shows, Medical Director Dr. Rodrek Williams, Asst. Medical Director Denise Gernhauser, Chief CRNA Inova Alexandria Hospital Dr. Reed Underwood, Medical Director Suzanne DeVine, Chief CRNA

PMC Parish Management Consultants, LLC 3510 N. Causeway Blvd. Suite 404, Metairie, LA 70002 Tel: 504-779-5515 Toll Free: 1-866-528-9679 www.anesthesiapmc.com