Annual Report Fiscal Year 2018

3 | MemorialCare

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Leaders in Value-Based CareA message from Barry Arbuckle, President & CEOToday’s savvy consumers and employers want healthcare plans that provide quality, affordability and exceptional service. So MemorialCare is expanding our network of care with convenient locations across Southern California.

As the healthcare landscape transforms, we offer simply better care to a new generation of patients.

• This year, MemorialCare continued our steadfast commitment to a value-based ambulatory strategy, including new physician locations, imaging, surgical and urgent care centers.

• We tripled our ambulatory imaging sites from 10 to 35, with more coming. We offer convenient service at eight surgical centers and 13 community-based dialysis sites.

• We launched a new Clinically Integrated Network with leading physicians to focus on improving quality and reducing costs.

• MemorialCare Medical Group continues to take a collaborative approach to treating and preventing chronic conditions and now offers rapid response care to patients with anxiety and depression.

• Miller Children’s & Women’s Hospital Long Beach has opened pediatric locations across the region, with specialty centers in Irvine, Fountain Valley and Torrance. Plus, in strategic partnership with UCLA Mattel Children’s Hospital, we are enhancing children’s services across Southern California.

Through our innovative Accountable Care Organizations (ACOs), including direct-to-employer options, we’re improving the health of our patients, offering a great experience and reducing the overall cost of care. As employers puzzle over the economics of providing the best quality, affordable plans to their employees, MemorialCare is proud to offer high-value solutions.

Barry Arbuckle, Ph.D.

President & Chief Executive Officer MemorialCare

4 | MemorialCare

Steps to Being Simply BetterCalifornia’s leaders in patient satisfactionExcellent physicians are at the heart of great care, so we’re especially proud that doctors with MemorialCare Medical Group and Greater Newport Physicians were ranked first and second in Orange County in the 2018 annual patient satisfaction survey. Statewide, patients rated doctors with both MemorialCare Medical Group and Greater Newport Physicians in the 98th percentile. That’s simply better care!

We’re always improvingIn our hospital environments, clinical excellence is always top of mind, and so too is patient experience. Using HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) —the national standard for reporting — MemorialCare achieves high standards for how many patients rate their experience a 9 or 10.

Tammie Brailsford, RN Executive Vice President and Chief Operating Officer MemorialCare

“A patient’s experience is made up of hundreds of different moments, from scheduling your appointment, to being guided through treatment with skill and care, to understanding your bill. We’re passionate about making every single step in healthcare simply better.”

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What Our Patients Say

“Thank you MemorialCare for

taking such great care of me and

my family. And I really appreciate

how you taught me to take care

of myself.”

– Aidan, 18-year-old patient

transitioning from pediatric care

at Miller Children’s & Women’s

Hospital to adult care.

“I’m back to running and swimming

and I’m so thankful to the doctors

and nurses who helped me so I can

go the distance and achieve all my

life goals.”

– Javier, cardiac care.

“All the nurses were amazing –

super kind, super professional.

Thanks to them, we knew exactly

what was going on during every

minute of labor.”

– Tori, new mom.

“It’s much easier to head off a

medical problem early. Don’t

ignore symptoms, go see your

doctor. Without the support of my

family, doctors and nurses, I might

not be here.”

– Bill, cancer care.

Counting on Our Care

9,320 babies delivered

1,353 licensed beds

267,000 patients in value-based plans

298,000 patient days (including newborns)

570,000 medical group visits

246,000 emergency department visits

65,100 patient discharges

59,000 ambulatory surgeries

42,000 hospital-based surgeries

767 average daily census

150,000 home health visits

6 | MemorialCare

Revolutionizing Value in HealthcareLeading best practice healthcareOur dedicated care teams set and achieve bold goals for excellence. As a result, our patient outcomes are constantly improving. In addition to the everyday work of delivering great healthcare, we have positively touched more than 137,166 lives since 2007 with our efforts.

With bold goals for excellence in 2018, we have achieved:

• 27% reduction in C-section rates

• 60% improvement in sepsis survival

• 20% higher childhood immunizations rates than the state average

• 18% higher optimal diabetes care than the state average

Collaborative care for behavioral healthOur primary care providers and behavioral health specialists take a collaborative approach to caring for patients with depression and anxiety. This year MemorialCare Medical Group added integrated behavioral healthcare at three sites in Fountain Valley, Irvine and San Juan Capistrano, with more locations to follow. Next steps include the addition of tele-health options so physicians and patients at different offices can consult remotely and receive faster, integrated interventions.

Investing in surgical precisionSignificant investments in surgical innovation allow us to offer patients the highest level of precision and a minimally invasive approach whenever possible.

• The Mako® robotic-assisted arm for joint replacement surgery provides a new level of precision for optimal patient outcomes.

• Our expert surgeons offer smaller incisions and faster healing with the groundbreaking da Vinci® Surgical System.

“In 1997, a group of physicians with a passion for delivering integrated healthcare launched MemorialCare. This year, we took integration one step further by launching the MemorialCare Clinically Integrated Network and focusing on evidence-based care, improving quality, efficiency and coordination.”

Helen Macfie, Pharm.D.Chief Transformation OfficerMemorialCare

Southern California’s Leader in Value-Based CareMemorialCare offers more value-based products than any other health system in Southern California. Our Accountable Care Organizations (ACO) include a customized, direct contract between MemorialCare and Boeing called the MemorialCare Health Alliance, as well as other innovative plans like Aetna Whole Health, and Vivity offered by Anthem Blue Cross.

Between 2017 and 2018:MemorialCare Health Alliance• Grew enrollment by 28 percent

• Reduced total cost of care by four percent for plan members who opted for the ACO and participated for the entire year

• Exceeded patient satisfaction targets

• Scored number one in quality for all Boeing ACOs

Aetna Whole Health• Reduced avoidable emergency department visits by 15 percent

• Achieved 100 percent performance on all quality measures for cancer and diabetes screenings

• Beat the market in managed population costs by nearly three percent

• Achieved 30 percent increase in wellness testing and screening

In addition, our Anthem and Vivity ACOs continue to deliver excellent and affordable healthcare.

Marcia MankerChief Executive Officer Orange Coast Medical CenterSaddleback Medical Center

“In value-based health plans, MemorialCare takes responsibility for the total cost of care, we collaborate with plans to constantly lower costs, and we improve quality. We are transparent about our performance in quality, service and cost measures. We’re accountable because that’s the way we believe it should be.”

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8 | MemorialCare

Caring for Families Across the RegionNew neighborhood health centersWe’re making it easier for patients to find the best quality care wherever they live or work. This year MemorialCare Medical Group added more convenient locations:

• Our new health center in downtown Anaheim offers primary care, pediatric care and a Coumadin® Clinic.

• Our new 9,400 square foot health center in Laguna Hills includes an on-site laboratory, ultrasound and X-ray, and convenient access to family medicine, pediatric, gastroenterology and rheumatology services.

• MemorialCare Medical Group’s new site in the Sendero Marketplace, Rancho Mission Viejo serves families in this high growth community while we build a brand-new location.

Mark Schafer, M.D. Chief Executive Officer MemorialCare Medical Foundation

“Our goal is to offer convenient access to quality healthcare, so we’re growing our primary care services, ambulatory surgical locations and outpatient imaging. Now, through MemorialCare’s joint venture with RadNet launched in January 2018, we have created the largest outpatient imaging network in Southern California.“

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It takes a villageMiller Children’s & Women’s Hospital Long Beach is one of only eight free-standing children’s hospitals in California. We treat more than 14,000 children each year, and we’re a regional pediatric destination for more than 84,000 children who need specialized care in our outpatient locations. Our new 80,000 square foot Children’s Village, when complete in 2021, will bring 36 pediatric specialties under one roof, allowing families to receive all the care they need in one easy-to-access location.

Regional pediatric careThrough strategic partnerships like Miller Children’s affiliation with UCLA Mattel Children’s Hospital, we’re improving access to complex care and extending leading edge research.

Our newly launched joint operations and joint physician advisory committees are guiding our efforts. Leading specialists from both children’s hospitals are collaborating on the advancement of care and treatment for childhood cancer and endocrine care, with plans to expand the collaboration to include neuroscience and cardiovascular services.

John Bishop Chief Executive Officer Long Beach Medical Center Miller Children’s & Women’s Hospital Long Beach

“Because many pediatric illnesses are rarely seen in adults or they impact children differently, kids with complex or chronic conditions need access to the specialized care that only children’s hospitals provide. In addition to offering our patients leading specialty care, Miller Children’s has the distinction of being part of a fully integrated health system, MemorialCare.”

Rancho Mission ViejoMemorialCare Medical Group is now open, Monday – Saturday, in the Sendero Marketplace. Our convenient location offers primary care and walk-in services and serves as a temporary space until Fall 2019 when our new 26,000 square foot health center opens, offering primary and specialty care.

Laguna HillsLocated on the corner of Moulton Parkway and La Paz, our beautiful, new 9,400 square foot health center offers primary and pediatric care with access to an on-site laboratory, ultrasound and X-ray services.

TorranceMemorialCare Medical Group opened a new health center in the heart of Torrance on Hawthorne Boulevard and Sepulveda Boulevard offering primary and pediatric care with on-site laboratory and basic X-ray services.

Huntington BeachConveniently located in Huntington Beach on Beach Boulevard near Talbert, our health center offers primary and pediatric care, urgent care, sports medicine, occupational medicine and advanced imaging services – all under one roof.

Expanding Access to Convenient Care

Laguna CoastWilderness Park

Aliso and

Wood Canyons

Regional Park

Long Beach

Anaheim

Yorba Linda

Dana PointSan Clemente

Torrance

FountainValley

HuntingtonBeach

NewportBeach

MissionViejo

LagunaNiguel

LagunaHills

Irvine

Westminster5

5

5

15

605

405

105

110

710 91

57

22

55

73

241

241

133

261

1

1

1

Los Angeles County

OrangeCounty

UCI UCI

UCI

UCI

Communty-Based Imaging Centers

Hospital-Based Imaging Centers

Children’s Specialty Care Centers

MemorialCare Surgical Centers

Breast Centers

Dialysis Centers

A�liated Physician Groups(Includes Greater Newport Physicians)

UCI A�liated PhysiciansUCI

Urgent Care Centers

MemorialCare Medical Group

UCI UC Irvine Medical Center

MemorialCare Shared Services

Miller Children’s & Women’s Hospital Long Beach

MemorialCare Medical Centers

2018 Financial Summary of Our Fiscal Health

Fiscal Year Results Total Assets $3,626,603,000

Other non-operatingrevenue

1%

Net investment income

3%

Other operating revenue

6%

Capitation Revenue

16%

Revenue

Net revenue from patient services $1,717,556,000

Capitation revenue $383,513,000

Other operating revenue $131,037,000

Net investment income $92,803,000

Other non-operating revenue $6,028,000

Total revenue $2,330,937,000

Expenses

Salaries, wages and benefits $947,051,000

Food, drugs, other medical supplies/services

$950,968,000

Capitation claims expense $184,274,000

Depreciation and amortization $111,927,000

Interest expense $13,724,000

All of these operating expenses totaled

$2,207,944,000

Community Benefit

Charity Care $7,335,000

Unpaid costs of Medi-Cal $133,507,000

Unpaid costs of Medicare $69,715,000

Others for economically disadvantaged

$337,000

Education and research $14,714,000

Others for broader community $5,557,000

Total quantifiable community benefit with Medicare and Seaside Health Plan included

$231,165,000

$2,330,937,000 Net revenue from patient services74%

Salaries, wages and benefits43%

Food, drugs, other medical supplies/services43%

Interestexpense

1%

Depreciation and amortization

5%

Capitation claims expense

8%

$2,207,944,000

Unpaid costs of Medi-Cal58%

Unpaid costs of Medicare30%

Charity Care3%

Others for broader

community2%

Education and research

6%

Others for economically

disadvantaged1%

$231,165,000

12 | MemorialCare

Our Philanthropic SupportLong Beach Medical Center Foundation and Miller Children’s & Women’s Hospital Long Beach Foundation Fiscal Year Results Total Assets - $190,523,000

Saddleback Medical Center Foundation Fiscal Year Results Total Assets - $145,825,000 

Orange Coast Medical Center Foundation Fiscal Year Results Total Assets - $980,000 

Combined total philanthropic income growth and contributions back to the community across all foundations: Income/Growth Philanthropic Gifts - $13,497,000 Support Groups - $638,000 

Contributions back to the community Education, Research, Community Benefit Programs - $3,138,000 Capital and Equipment - $2,102,000

Our Physicians and Employees

10,838 Total employees

3,150 Medical staff physicians

558 Resident and fellow physicians

456 Medical students

1,644 Volunteers

146,999 Volunteer hours

Senior Executives and Board of Directors FY 2018MemorialCare Senior ExecutivesBarry Arbuckle, Ph.D., President and Chief Executive Officer

John Bishop, Chief Executive Officer, Long Beach Medical Center, Miller Children’s & Women’s Hospital Long Beach

Lorraine Booth, Chief Human Resources Officer

Tammie McMann Brailsford, RN, Executive Vice President, Chief Operating Officer

Rick Graniere, Chief Investment Officer

Scott Joslyn, Pharm.D., Chief Information Officer

Tom Leary, Chief Legal Officer

Helen Macfie, Pharm.D., Chief Transformation Officer

Marcia Manker, Chief Executive Officer, Orange Coast Medical Center, Saddleback Medical Center

Mark Schafer, M.D., Chief Executive Officer, MemorialCare Medical Foundation

Karen Testman, Chief Financial Officer

MemorialCare Board of DirectorsBarry Arbuckle, Ph.D.

Sharon Cheever

Mark D. Cianciola, M.D.

Thomas Collins, Ed.D., Chair

Eric Feldman, M.D.

James Gauss

Russell Hill

Jim Leo, M.D.

Thomas Rogers

Robert Schack

Samuel Tang

Seaside Health Plan Board of DirectorsBarry Arbuckle, Ph.D., Chair

John Bishop

Maribel Ferrer

Patrick Kapsner

Larry Lambert

MemorialCare Medical Foundation Board of DirectorsBarry Arbuckle, Ph.D.

Barry Behrstock, M.D.

Mark Cianciola, M.D., Chair

Thomas Collins, Ed.D

Laura Crocitto, M.D.

Steve Geidt

James O. Hillman

Larry Lambert

Frank Marino, M.D.

Keith Nelson

14 | MemorialCare

Long Beach Medical Center and Miller Children’s & Women’s Hospital Long Beach Board of DirectorsBarry Arbuckle, Ph.D.

Sathya Chey

Jane Close Conoley

Leslie Edrich, M.D.

John Fielder

Clifford Hancock, M.D.

Cynthia Herzog, M.D.

Russell Hill, Chair

Stephen Hryniewicki, M.D.

Lorna McFarland, M.D.

Robert Schack

William Webster, M.D.

James Wells, M.D.

Susan Anderson Wise

Orange Coast Medical Center and Saddleback Medical Center Board of DirectorsBarry Arbuckle, Ph.D.

Sharon Cheever

Patrick Donahue

Resa Evans

James Gauss

Tim Helgeson

Lalita M. Komanapalli, M.D.

Larry Lambert

Joel Lautenschleger

Richard McAuley

Thomas Rogers, Chair

Jaci Songstad

Donna Rane-Szostak, Ed.D.

Lawrence Tran, M.D.

Myron Wacholder, M.D.

MemorialCare Physician Society Board of DirectorsWilliam (Kurt) Armstrong, M.D.

Marnie Baker, M.D.

Gregory Bush, M.D.

Karen Don, M.D.

David Law, M.D.

Jim Leo, M.D., Chair

Glenn Levine, M.D.

Frank Marino, M.D.

Chirag Patel, M.D.

Hiren Patel, D.O.

Michael Schneider, M.D.

Adam Solomon, M.D.

Graham Tse, M.D.

William Wallace, M.D.

Paul Weber, M.D.

James Wells, M.D.

Andrew Wittenberg, M.D.

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Recognizing Our AchievementsKnown for performance and quality• Becker’s Hospital Review’s 52 Great Health Systems to Know in the

United States

• American Heart Association Get with the Guidelines Gold Plus – Stroke and Honor Roll Elite Plus award: Long Beach Medical Center, Saddleback Medical Center

• U.S. News & World Report Best Hospitals: Long Beach Medical Center, Orange Coast Medical Center

• Orange County Register’s Best of Orange County: Orange Coast Medical Center, Saddleback Medical Center, MemorialCare Medical Group

• Top Workplace Award by Workplace Dynamics: Orange Coast Medical Center, MemorialCare Medical Group, MemorialCare Shared Services

• Magnet® Designation: Long Beach Medical Center, Miller Children’s & Women’s Hospital Long Beach, Orange Coast Medical Center, Saddleback Medical Center

• Certified Primary Stroke Center and Thrombectomy Capable Stroke Center: Saddleback Medical Center

• Joint Commission Certified Comprehensive Stroke Center: Long Beach Medical Center

• Standard of Excellence Elite Status by APG: MemorialCare Medical Group, Greater Newport Physicians, Edinger Medical Group

• Recognized as top performing medical groups in California by SCAN Health Plan: MemorialCare Medical Group, Greater Newport Physicians

• Perioperative nurses given CNOR® Strong Designation for third Consecutive Year: Long Beach Medical Center

16 | MemorialCare

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Long Beach Medical Center

2801 Atlantic Ave., Long Beach, CA 90806 (562) 933-2000

Miller Children’s & Women’s Hospital Long Beach

2801 Atlantic Ave., Long Beach, CA 90806 (562) 933-2000

Orange Coast Medical Center

18111 Brookhurst St., Fountain Valley, CA 92708 (714) 378-7000

Saddleback Medical Center

24451 Health Center Drive, Laguna Hills, CA 92653 (949) 837-4500

MemorialCare Medical Group

Locations Throughout Los Angeles and Orange Counties (657) 241-3680

Greater Newport Physicians

Locations Throughout Los Angeles and Orange Counties (949) 574-4575

Seaside Health Plan

17360 Brookhurst St., Fountain Valley, CA 92708 (855) 833-7747

Shared Services/MemorialCare Medical Foundation

17360 Brookhurst St., Fountain Valley, CA 92708 (714) 377-2900

memorialcare.org