Nate Kaufman

We just heard Nathan Kaufman speak at our leadership group this morning. A very powerful speaker
that I wish all the care coordinators in the system could have heard. He spoke about the upcoming
changes in Medicare and Managed Care reimbursement, changes required to maintain a positive
financial and quality bottom line, and the importance of aggressive case management in achieving both
these goals. Jim is going to email his presentation to our leadership group. I would like to share it with
you. I don’t easily get impressed with speakers but this guy had a message that everyone should hear.

We just finished our meeting with the finance committee. They are in favor of agreeing to the rates.
They were very surprised at the negotiations coming about so quickly. I really think that BCBS realizes
that it would be very unfavorable to lose a provider at this time, as well as the risk of losing physician
providers. Our goal was to get 35% increase in overall payments. After modeling the rates, our
calculations show that we would get a 30% increase. On a rate basis, t puts us at 174% of Medicare
(we stared out at 133% of Medicare). Thank you for your help.

Nate, we’re putting the finishing touches on a 5% budgeted net income for our FY starting July 1. We
just started eICU, have two critical care docs starting in July, a hospitalist program will start in August,
and many other items including projecting about 350 surgeries by our CV surgeon (~210-225 hearts).
Much of this is due to your retreat last summer. . . .

The retreat went very well. They really felt that your presentation was great –very intense, but, it gave
them a real feel for how difficult this stuff is and gave us a sense of a direction-all in all—most
comments were that it was the best retreat yet. Thanks.