Appendices Appendix 1 ETMC RHS Organizational … plus alameda...5 Appendix 1 ETMC Organizational...

Appendices

Appendix 1 ETMC RHS Organizational Chart. ............................................................................................5Appendix 2 Financials ..................................................................................................................................7 ETMC Audit Report FY 2006 and 2007 ............................................................................................7 ETMCRHS 2008 Audit Report..........................................................................................................39 System FY09 Financial Statements ...................................................................................................75 PPlus Full Financial Statements 10-31-07 .........................................................................................79 PPlus Financial Statements 10-31-08 ................................................................................................83 PPlus Financial Statements 10-31-09 ................................................................................................87 Unaudited Statements Letter from Byron Hale .................................................................................91Appendix 3 Letter of Guarantee from Byron Hale .......................................................................................93Appendix 4 Contract List 2009 .....................................................................................................................95Appendix 5 Standard of Care Suggestion Form ............................................................................................97Appendix 6 Examples of Time Management ................................................................................................99 Eastern Average Mission Time ..........................................................................................................99 OKC Hospital Drop Time Average ....................................................................................................101 OKC Transport Times ........................................................................................................................103Appendix 7 Best Practices Article - Materials Management Process ...........................................................105Appendix 8 Principles EMS Strategic Planning Blueprint ............................................................................107Appendix 9 CQI and Other Reports ..............................................................................................................109 SQC November 09 Summary ............................................................................................................109 OK CQI Report October 09 ...............................................................................................................157 Eastern Division No Haul % .............................................................................................................167 Personnel Injuries ..............................................................................................................................169 Vehicle Contact Report ......................................................................................................................171 OKC Off Late Shifts ..........................................................................................................................173 Transports by Priority ........................................................................................................................175 Western - Late Sign On/Crew Late ....................................................................................................177 Key Performance Data 2010 01 07 ....................................................................................................179 Western Late Start Mechanical ..........................................................................................................181Appendix 10 Sunstar Sterling Application 2009 ...........................................................................................183Appendix 11 Resumes ..................................................................................................................................257 Jeffrey S. Taylor Vitae 12.09 .............................................................................................................257 Senai Kidane M.D. Curriculum Vitae 2010.......................................................................................263 Marlene Rivers RN, MSN CV ...........................................................................................................267 Stephen Dean Resume .......................................................................................................................271Appendix 12 Sample Scorecards ..................................................................................................................275 Organizational Scorecard 2010..........................................................................................................275 Clinical Services Scorecard ...............................................................................................................277 EMS Operations Scorecard 2009 ......................................................................................................281 Support Services Scorecard 2009 Primary ........................................................................................287 Scorecard EMT ..................................................................................................................................291 Scorecard Medic ................................................................................................................................293

Appendix 13 Diversionary Tactics Article .....................................................................................................295Appenidx 14 Project Tracking Tool ...............................................................................................................303Appendix 15 EEO and Affirmative Action Policies ......................................................................................305Appendix 16 Alcohol and Drug Free Workplace ...........................................................................................405Appendix 17 Job Descriptions .......................................................................................................................409 Chief Operating Officer Job Description ...........................................................................................409 Director of Clinical and Education Services Job Description ...........................................................411 Clinical Field Supervisor Job Description .........................................................................................413 Field Operations Supervisor Job Description ....................................................................................415Appendix 18 Credentials and CE Reports ....................................................................................................419 Clinical Compliance Tracking by Ninth Brain ..................................................................................419 CME Tracking Report Sample ..........................................................................................................421Appendix 19 March Academy 09 ..................................................................................................................425Appendix 20 CISM ........................................................................................................................................427 PPlus CISM Plan TOC ......................................................................................................................427 CISM Policy ......................................................................................................................................429Appendix 21 Professional Conduct Policy 2006 ...........................................................................................431Appendix 22 Personal Appearance Policy 2009 ............................................................................................445Appendix 23 Requirements for Employment Policy 2009 ............................................................................447Appendix 24 Vehicle Specifics ......................................................................................................................449 2008 AEV Brochure-3D ....................................................................................................................449 Type III DR90-GM-2007. ..................................................................................................................457Appendix 25 Drug Box ..................................................................................................................................461Appendix 26 Stryker ......................................................................................................................................463 Stryker Stair Chair .............................................................................................................................463 Power Pro XT ....................................................................................................................................465Appendix 27 LIFEPAK-15 ............................................................................................................................473 LIFEPAK-15 Brochure ......................................................................................................................473 LIFEPAK-15 Specifications ..............................................................................................................493Appendix 28 LUCAS Brochure ....................................................................................................................507Appendix 29 Autovent 3000 .........................................................................................................................523Appendix 30 Approval Process for New Equipment ....................................................................................525Appendix 31 ExtraFleet Software .................................................................................................................527Appendix 32 Checklist ..................................................................................................................................533Appendix 33 Down Time Report Attachment ..............................................................................................537Appendix 34 Cost per Mile Report ...............................................................................................................539Appendix 35 Radio Specifics ........................................................................................................................543 APX7500 Mobile RC 1 2009A ..........................................................................................................543 APX7000 Portable Brochure .............................................................................................................551Appendix 36 OnBoard Mobile Gateway Datasheet ......................................................................................559Appendix 37 MARVLIS Brochure ...............................................................................................................561Appendix 38 Droid Cellphone Specifications ...............................................................................................565Appendix 39 FirstWatch ...............................................................................................................................567 FirstWatch CAD Interfaces ................................................................................................................567

FirstWatch Dashboard Description ....................................................................................................568Appendix 40 Sansio Corp - Alameda County 091123 Response ...................................................................571Appendix 41 Sample Clinical Reports ..........................................................................................................609 Clinical Inquiries Monthly Report .....................................................................................................609 QI Incident Summary ........................................................................................................................612 Trauma Report ...................................................................................................................................614Appendix 42 Sample Operational Reports ...................................................................................................615 Nov 09 Transports by Priority ...........................................................................................................615 Nov 09 Month End Mutual Aid Utilization .......................................................................................617 Nov 09 Exception Listing ..................................................................................................................619 Nov 09 Fine Report ...........................................................................................................................655Appendix 43 Sample Response Time Reports ..............................................................................................659 Nov 09 Compliance Report ...............................................................................................................659 Nov 09 Exclusion Report ..................................................................................................................661Appendix 44 Sample Personnel Report ........................................................................................................665Appendix 45 Sample Government Report ....................................................................................................667Appendix 46 Shift Schedule Alameda RFP ALS Unit Hour Proposal .........................................................671Appendix 47 Posting Locations Alameda County ALS ................................................................................675Appendix 48 Samples of Printed PCR ..........................................................................................................677 HEMS EMS Pre Hospital Care Report Example ..............................................................................677 HEMS FIRE Pre-Hospital Care Report Example ..............................................................................681 HEMS NFIRS Forms Screenshots ....................................................................................................685Appendix 49 Posting Maps ...........................................................................................................................697 Alameda County GIS - Central .........................................................................................................697 Alameda County GIS - East ..............................................................................................................699 Alameda County GIS - North ............................................................................................................701 Alameda County GIS - Overview .....................................................................................................703 Alameda County GIS - South ............................................................................................................705Appendix 50 Zoll Resource Planner .............................................................................................................707Appendix 51 PULSE Meeting Agenda .........................................................................................................709Appendix 52 Joint Notice of Privacy Practice ..............................................................................................711Appendix 53 HIPAA Disclosure Matrix .......................................................................................................715Appendix 54 Charity Care and Uninsured Patient Policy ............................................................................725Appendix 55 Evidence of Insurance .............................................................................................................741 09-10-PP-All Lines-As Evidence ......................................................................................................741 09-10-ETMC-Umbrella COI-As Evidence .......................................................................................743Appendix 56 Employee Health Information Confidentiality Agreement ......................................................745

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Appendix 1 ETMC Organizational Chart.

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Appendix 2 Financials

ETMC Audit Report FY 2006 and 2007

East Texas Medical Center Regional Healthcare System and Affiliates Consolidated Financial Statements and Supplementary Information with Report Of Independent Auditors For the Years Ended October 31, 2007 and 2006

8

East Texas Medical Center Regional Healthcare System and AffiliatesContents

Page(s)

Report of Independent Auditors ................................................................................................................ 1

Consolidated Balance Sheets....................................................................................................................... 2

Consolidated Statements of Operations ....................................................................................................... 3

Consolidated Statements of Changes in Net Assets .................................................................................... 4

Consolidated Statements of Cash Flows ...................................................................................................... 5

Notes to Consolidated Financial Statements.......................................................................................... 6–26

Supplemental Schedules

Report of Independent Auditors on Accompanying Consolidating Information .......................................... 27

Consolidating Balance Sheet ...................................................................................................................... 28

Consolidating Statement of Operations ...................................................................................................... 29

91

PricewaterhouseCoopers LLP2001 Ross Ave., Suite 1800 Dallas TX 75201-2997 Telephone (214) 999 1400

Report of Independent Auditors

To the Board of Directors East Texas Medical Center Regional Healthcare System and Affiliates:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in net assets, and cash flows present fairly, in all material respects, the financial position of East Texas Medical Center Regional Healthcare System and Affiliates (collectively the “System”) at October 31, 2007 and 2006, and the results of their operations, changes in their net assets and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the System’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

February 27, 2008

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East Texas Medical Center Regional Healthcare System and AffiliatesConsolidated Balance Sheets

The accompanying notes are an integral part of the consolidated financial statements.

2

(in thousands)2007 2006

AssetsCurrent assets:

Cash and cash equivalents 92,996$ 84,429$Current portion of assets limited as to use 8,480 18,625Patient accounts receivable, net of allowance for doubtful

accounts of $134,660 in 2007 and $100,028 in 2006 92,715 97,236Estimated third party settlements 1,009 -Inventory 13,153 12,348Prepaid expenses and other 18,558 12,445

Total current assets 226,911 225,083

Assets limited as to use, net of current portion 40,768 45,563Special reserve fund 51,925 52,043Long term investments 7,774 4,403Property and equipment, net 271,868 259,228Other assets 11,166 8,306

Total assets 610,412$ 594,626$

Liabilities and Net AssetsCurrent liabilities:

Accounts payable and accrued expenses 61,046$ 68,506$Current portion of long-term debt 16,476 16,517Current portion of estimated malpractice costs 5,035 5,523Estimated third party settlements - 2,449Deferred revenue 1,020 1,706

Total current liabilities 83,577 94,701

Estimated malpractice costs, net of current portion 3,306 10,013Long-term debt, net of current portion 232,631 249,794Other liabilities 9,046 2,029

Total liabilities 328,560 356,537

Net assets:Unrestricted 274,078 234,064Temporarily restricted 4,750 1,001Permanently restricted 3,024 3,024

Total net assets 281,852 238,089

Total liabilities and net assets 610,412$ 594,626$

October 31,

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East Texas Medical Center Regional Healthcare System and AffiliatesConsolidated Statements of Operations


3


Unrestricted revenue and other support:Net patient service revenue 715,234$ 706,799$Other revenue 112,659 94,140

Total revenue and other support 827,893 800,939

Expenses:Salaries and wages 313,337 302,095Employee benefits 53,337 64,601Professional fees 30,519 35,717Supplies and other expenses 161,027 167,477Purchased services 60,086 52,041Provision for bad debts 112,734 121,146Depreciation and amortization 36,352 33,794Interest 15,388 16,162Loss on bond defeasance 725 -

Total expenses 783,505 793,033

Excess of revenues and other support over expenses 44,388 7,906

Gain on discontinued operations - 13,706Adjustment to defined benefit plan minimum liability - 3,779Impact of adopting SFAS 158 (4,065) -Change in net unrealized gains and losses (309) 192

Increase in unrestricted net assets 40,014$ 25,583$

Years Ended October 31,

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East Texas Medical Center Regional Healthcare System and AffiliatesConsolidated Statements of Changes in Net Assets


4


Unrestricted net assets:Excess of revenue and other support over expenses 44,388$ 7,906$ Gain on discontinued operations - 13,706Adjustment to defined benefit plan minimum liability - 3,779Impact of adopting SFAS 158 (4,065) -Change in net unrealized gains and losses (309) 192

Increase in unrestricted net assets 40,014 25,583

Temporarily restricted net assets:Contributions and investment income 4,177 553Net assets released from restriction (428) (264)

Increase in temporarily restricted net assets 3,749 289

Change in net assets 43,763 25,872Net assets, beginning of year 238,089 212,217

Net assets, end of year 281,852$ 238,089$


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East Texas Medical Center Regional Healthcare System and AffiliatesConsolidated Statements of Cash Flows


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Cash flows from operating activities:Change in net assets 43,763$ 25,872$ Adjustments to reconcile change in net assets

to net cash provided by operating activities:Depreciation and amortization 36,352 33,794Provision for bad debts 112,734 121,146Net realized and unrealized gains on investments 68 (209)(Gain) loss on disposal of assets 141 (19,629)Loss on bond defeasance 725 -Adjustment to defined benefit plan minimum liability - (3,779)Adoption of SFAS 158 4,065 -Restricted contributions and investment income (4,177) (553)

Changes in operating assets and liabilities:Patient accounts receivable (108,213) (118,277)Inventory (805) (860)Prepaid expenses and other (6,189) (1,312)Accounts payable and accrued expenses (7,460) 2,510Deferred revenue (686) (39)Estimated malpractice costs (7,195) (35)Estimated third-party settlements (3,458) 1,425Other assets and liabilities (949) 3,927

Net cash provided by operating activities 58,716 43,981

Cash flows from investing activities:Capital expenditures (42,491) (22,256)Proceeds from sale of assets 825 24,924Purchases of investments and assets whose use is limited (9,636) (15,533)Proceeds from sale of investments and assets whose use

is limited 21,255 6,559- -Net cash used in investing activities (30,047) (6,306)

Cash flows from financing activities:Proceeds from issuance of notes and line of credit 3,499 10,102Principal payments on notes, bonds payable, line of credit

and capital lease obligations (27,778) (29,238)Restricted contributions and investment income 4,177 553

Net cash used in financing activities (20,102) (18,583)

Net increase in cash and cash equivalents 8,567 19,092Cash and cash equivalents at beginning of year 84,429 65,337

Cash and cash equivalents at end of year 92,996$ 84,429$

Supplemental disclosure of cash flow information:Interest paid, net of amounts capitalized 15,595$ 16,300$

Assets acquired through obligations under capital leases 7,075$ 7,030$


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East Texas Medical Center Regional Healthcare System and AffiliatesNotes to Consolidated Financial Statements October 31, 2007 and 2006

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1. Organization

East Texas Medical Center Regional Healthcare System (“System”) is a corporation organized pursuant to the provisions of the Texas Nonprofit Corporation Act, and is exempt from federal income tax under the provisions of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. The System operates as a central location for top management to support and guide the activities of the System’s subsidiaries. The System’s subsidiaries are as follows:

• East Texas Medical Center (“ETMC”) • East Texas Medical Center Athens (“Athens”) • East Texas Medical Center Cancer Institute (“Cancer Institute”) • East Texas Medical Center Carthage (“Carthage”) • East Texas Medical Center Clarksville (“Clarksville”) • East Texas Medical Center Crockett (“Crockett”) • East Texas Medical Center Fairfield (“Fairfield”) • East Texas Medical Center Foundation (“Foundation”) • East Texas Medical Center Gilmer (“Gilmer”) • East Texas Medical Center Healthcare Associates (“501a”) • East Texas Medical Center Home Services (“Home Services”) • East Texas Medical Center Jacksonville (“Jacksonville”)• East Texas Medical Center Management Services Organization (“MSO”) • East Texas Medical Center Mount Vernon (“Mount Vernon”) • East Texas Medical Center Pittsburg (“Pittsburg”) • East Texas Medical Center Quitman (“Quitman”) • East Texas Medical Center Regional Health Services, Inc. (“Services”) and Subsidiaries:

− Access Direct – A Preferred Provider Network, Inc. (“Access Direct”) − Centralized Credentialing Services, Inc. (“Centralized Credentialing”) − DRL Labs, Ltd. (“DRL”) (sold September 2006) − Healthfirst TPA, Inc. (“TPA”) − MM Solutions, Inc. (“MM Solutions”) − Paramedics Plus LLC (“Paramedics Plus”)

• East Texas Medical Center Rehabilitation Hospital (“Rehab”) • East Texas Medical Center Specialty Hospital (“Specialty”) • East Texas Medical Center Trinity (“Trinity”)

Each of the above entities is exempt from federal income tax under the provisions of section 501(c)(3) with the exception of Services and its subsidiaries.

The System has locations throughout 19 east Texas counties. The System’s purpose is to provide high quality healthcare services to the residents of the region.

2. Summary of Significant Accounting Policies

Principles of Consolidation The accompanying consolidated financial statements include the accounts of the System and its

wholly-owned subsidiaries. All significant intercompany transactions have been eliminated.

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Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates which subject the System to significant changes in the near term include contractual allowances and bad debts, estimated malpractice costs, and estimated third party settlements.

Cash and Cash Equivalents Cash and cash equivalents include investments in money market accounts with original maturities

of three months or less when purchased, excluding amounts whose use is limited by board designation or restricted under bond agreements.

Investments All investments (including investments classified as assets whose use is limited and the special

reserve fund) are presented in the financial statements at their fair value. Fair values are based on quoted market prices, if available, or estimated using quoted market prices for similar securities.

Realized and unrealized gains and losses on investments are determined by comparison of the actual cost to the proceeds at the time of disposition, or market values as of the end of the financial statement period.

Investment income or loss (including realized gains and losses on investments, interest and dividends) is included in the determination of excess of revenues and other support over expenses unless the income or loss is restricted by donor. Investment income restricted for specified purposes by donor is recorded as temporarily restricted in the consolidated statements of changes in net assets. Unrealized gains and losses on investments are excluded from the determination of the excess of revenue and other support over expenses unless the investments are trading securities.

Net Patient Service Revenue Net patient service revenue is reported at the estimated net realizable amounts from patients, third-

party payors, and others for services rendered, including estimated retroactive adjustments under reimbursement agreements with third-party payors. Retroactive adjustments are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods, as final settlements are determined. Management believes the amounts recorded are adequate to provide for any final adjustments.

The System participates in the Medicare and Medicaid programs. Laws and regulations governing these programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change by a material amount in the near future. The System’s management believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. While no such regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as significant regulatory action including fines, penalties, and exclusion from the Medicare and Medicaid programs.

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Charity Care The System provides care to patients who meet certain criteria under its charity care policy without

charge or at amounts less than its established rates. Because the System does not pursue collection of amounts determined to qualify as charity care, they are not reported as revenue.

Inventory Inventory is valued at the lower of cost or market on a first-in, first-out basis.

Property and Equipment Property and equipment acquisitions are recorded at cost. Maintenance and repairs are charged to

operations as incurred; major renewals and betterments are capitalized.

Depreciation is provided over the estimated useful life of each class of depreciable assets and is computed on the straight-line method. Equipment under capital leases is amortized over the lease term or the estimated useful life of the equipment, whichever is shorter. Charges for depreciation and amortization are included in the accompanying consolidated statements of operations. The estimated useful lives of the property and equipment held by the System ranges from 5 to 40 years.

During periods of construction, the System capitalizes interest costs, net of the related interest earnings, on certain assets constructed with the proceeds of the System’s borrowings. The capitalized interest is recorded as part of the asset to which it relates and is depreciated over the asset’s estimated useful life.

Upon sale or retirement of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the gain or loss is included in the statement of operations.

Impairment of Long-lived Assets Whenever events or changes in circumstances indicate that the carrying amount of property and

equipment, intangibles related to specifically acquired assets or other long-lived assets may not be recoverable, an evaluation of the recoverability of currently recorded costs is performed.Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No impairments were recorded in 2007 or 2006.

Intangible Assets Intangible assets consist of goodwill related to the purchase of the stock or net assets of various

entities and are included in other assets in the consolidated balance sheets. Effective November 1, 2002, Services adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”). This standard ceased the amortization of goodwill, but requires impairment tests on at least an annual basis.

Donor Restricted Gifts Unconditional promises to give cash and other assets to the System are reported at fair value at the date the promise is received. Conditional promises to give and indications of intentions to give are reported at fair value at the date the gift is received or the condition has been met. Gifts are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net

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assets are reclassified as unrestricted net assets and reported in the statements of changes in net assets as net assets released from restriction. Donor-restricted contributions whose restrictions are met within the same year as received are reported as unrestricted contributions in the accompanying consolidated statements of operations.

Unrestricted Net Assets Contributions and gifts which are received with no restrictions or specified uses identified by the grantors or donors are included as unrestricted revenue in the statement of operations of the System when received. Certain unrestricted net assets have been earmarked by the board of directors for future capital expansion and other long-term purposes.

Temporarily and Permanently Restricted Net Assets Temporarily restricted net assets are those whose use by the System has been limited by donors to a specific period or purpose. Temporarily restricted net assets are available for various healthcare activities and were approximately $4,750,000 and $1,001,000 at October 31, 2007 and 2006, respectively.

Permanently restricted net assets have been restricted by donors to be maintained by the System in perpetuity. Permanently restricted net assets are held for the following purposes at October 31, 2007 and 2006:

(in thousands) 2007 2006

Mobile Mammography 1,596$ 1,596$Nursing Education 1,230 1,230Johnnie D. Ragland-Brian Memorial 198 198

3,024$ 3,024$

Excess of Revenue and Other Support over Expenses The statement of operations includes excess of revenue and other support over expenses.

Changes in unrestricted net assets which are excluded from excess of revenue and other support over expenses, consistent with industry practice, include unrealized gains and losses on investments, changes in the defined benefit plan minimum liability, permanent transfers of assets to and from affiliates for other than goods and services, and contributions of long-lived assets (including assets acquired using contributions which by donor restriction were to be used for the purposes of acquiring such assets).

Deferred Financing Costs Financing costs associated with the issuance of the Hospital Revenue Bonds, Series 1997 have been capitalized and are being amortized over the period during which the debt is outstanding using the interest method. Deferred financing costs are included in other assets in the consolidated balance sheets.

Recognition of Professional Liability Expense As described in Note 8, the System has established a self-insurance trust for payment of professional liability losses and related costs. Professional liability expense is recognized based on an estimated accrual for known incidents and claims and an estimated accrual for incurred but not reported incidents.

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3. Charity Care

The System maintains records to identify and monitor the level of charity care it provides. These records include the amount of charges forgone for services under the System’s charity care policy. The System believes its hospitals are in compliance with state charity care requirements. The following information measures the level of charity care provided during the years ended October 31, 2007 and 2006:


Charges forgone, based on established rates 142,983$ 144,366$

4. Net Patient Service Revenue

Net patient service revenue is comprised of the following:


Gross patient service charges 2,300,877$ 2,162,750$Deductions from revenue

Contractual allowances:Governmental programs 1,129,525 1,029,385Other 456,118 426,566

715,234$ 706,799$

The System has agreements with third-party payors that provide for payments at amounts different from its established rates. The amounts by which the established rates exceed the amounts recoverable from these payors are accounted for as deductions from revenue. A summary of the System’s payment arrangements with major third-party payors follows:

• Medicare - Inpatient care services rendered to Medicare program beneficiaries are paid at prospectively determined rates per discharge (“PPS”). These rates vary according to a patient classification system that is based on clinical, diagnostic, and other factors. Outpatient services are reimbursed under a prospective payment methodology based on a system of ambulatory payment classifications (“APC”). The System is reimbursed for cost reimbursable items at a tentative rate with final settlement determined after submission of annual cost reports by the System and audits thereof by the Medicare fiscal intermediary. Any differences between final audited settlements and amounts accrued at the end of the prior reporting period are included currently in the statement of operations. Net patient service revenue for the year ended October 31, 2007 was increased by approximately $7,507,000 and for the year ended October 31, 2006 was decreased by approximately $2,391,000, related to changes in amounts previously estimated as a result of final settlements and revisions to cost reports estimates. Medicare cost reports have been audited by the fiscal intermediary through October 31, 2005 for ETMC, Athens, Carthage, Fairfield, Gilmer, Jacksonville, Mount Vernon, Pittsburg and Rehab; through October 31, 2006 for Clarksville, Crockett, Quitman, Trinity and Specialty. For the years ended October 31, 2007 and 2006, approximately 39% and 43%, respectively, of total net patient service revenue resulted from the Medicare program.

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• Medicaid - Inpatient acute care services are reimbursed under the Medicaid PPS system and outpatient services are reimbursed under a cost reimbursement methodology. The System’s outpatient services are reimbursed at a tentative rate with final settlement determined after submission of annual cost reports by the System and audits thereof by the Medicaid fiscal intermediary. Any differences between final audited settlements and amounts accrued at the end of the prior reporting period are included currently in the statement of operations. Medicaid cost reports have been audited by the fiscal intermediary through October 31, 2004 for Athens, Clarksville, Crockett, Pittsburg and Tyler; through October 31, 2005 for Carthage, Fairfield, Jacksonville, Mount Vernon, Quitman and Trinity. For the years ended October 31, 2007 and 2006, approximately 2% and 4%, respectively, of total net patient service revenue resulted from the Medicaid program.

• Other - The System has also entered into payment agreements with certain commercial insurance carriers and preferred provider organizations. The basis for payment to the System under these agreements includes prospectively determined rates per discharge, discounts from established charges, and prospectively determined daily rates. For the years ended October 31, 2007 and 2006, approximately 34% and 29%, respectively, of net patient service revenue resulted from commercial insurance carriers and preferred provider organizations.

• Self Pay -The System has an uninsured patient policy covering all System hospitals. Under the terms of this policy, a discount from hospital's established rates is made available to uninsured patients who do not qualify for charity care. For both years ended October 31, 2007 and 2006, the uninsured patient discount rate was 30% of established rates. The discounts given to uninsured patients are accounted for as deductions from revenue.

5. Investments

Assets Limited as to Use Under Indenture Agreements Assets limited as to use under indenture agreements are trust funds set up under the terms of bond

indentures. The System is required to maintain a debt service reserve fund at a minimum amount specified in the indenture agreement. Included in the debt service reserve fund is an option to put certain investments to an investment banking organization at a fixed amount or portion of the fixed amount at any time such funds would be required to be drawn upon under the indenture agreement. The purpose of such agreement is to limit the System’s risk of market declines in the investments held such that the debt service reserve fund value cannot decline below the required minimum. The System reports the put option and the related investment securities at fair value.

Internally Designated for Capital Acquisition Assets internally designated for capital acquisition represent funds set aside by the board of directors to fund future purchases of property and equipment.

Self-insurance Assets internally designated for self-insurance programs represent funds set aside by the board of

directors to fund the System’s self-insured programs, including professional liability claims and employee health benefits.

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The fair value and composition of assets limited as to use at October 31, 2007 and 2006 is set forth below:


Assets limited as to useInternally designated for capital acquisition:

Cash 2,270$ 8,699$

2,270 8,699

Held by trustees under indenture agreements:Cash and mutual funds 30,902 16,719Other governmental and municipal obligations 3,963 15,744Other 239 837

35,104 33,300

Held by trustees for self-insurance:Cash and mutual funds 1,403 10,045U.S. Treasury obligations 1,137 2,745Other governmental and municipal obligations 6,707 7,762Corporate bonds and notes 2,627 1,637

11,874 22,189

Total assets limited as to use 49,248 64,188Less assets limited as to use, required for

current liabilities 8,480 18,625

Assets limited as to use, net of current portion 40,768$ 45,563$

Special Reserve Fund The Special Reserve Fund is a cash account that was created by the System and established with the Bond Master Trustee, pursuant to the requirements of the Series 1997 Bond Indenture. In June 2004, a Second Supplement to the Amended and Restated Master Indenture was executed between the System and the Trustee. Under the terms of the Second Supplement, the System is required to maintain cash balances in the Special Reserve Fund of the lesser of $50 million or 50% of the outstanding principal balance of the Series 1997 Bonds.

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The fair values of the Special Reserve Fund at October 31, 2007 and 2006 are as follows:


Special reserve fund:Held by trustee under indenture agreement:

Cash 51,925$ 52,043$

Long Term Investments The fair values of investments at October 31, 2007 and 2006 are summarized as follows:


Investments:Short-term investments 4,495$ 1,320$Marketable debt securities 905 1,106Marketable equity securities 2,374 1,977

Total investments 7,774$ 4,403$

Short-term investments consist primarily of principal cash awaiting reinvestment and money market funds. Interest income and realized gains on the sale of investments, including assets limited as to use, are included in other revenue in the statement of operations and are comprised of the following for the years ended October 31, 2007 and 2006:


Income:Interest income 8,663$ 6,090$Net realized gains on the sale of securities 23 16

Investment income 8,686$ 6,106$

Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported on the consolidated balance sheets and statements of operations.

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6. Property and Equipment

Property and equipment at October 31, 2007 and 2006 are summarized as follows:


Land and land improvements 31,292$ 30,054$Buildings 298,279 291,079Leasehold improvements 6,642 6,902Major moveable equipment 271,412 242,306Equipment under capital leases 24,752 22,860Automobiles and trucks 7,651 6,432

640,028 599,633Less accumulated depreciation and amortization 382,718 353,127

257,310 246,506Equipment deposits and construction in progress 14,558 12,722

Property and equipment, net 271,868$ 259,228$

Interest costs capitalized, net of the related interest earnings, was approximately $469,000 for both years ended October 31, 2007 and 2006.

Depreciation and amortization expense for the years ended October 31, 2007 and 2006 was approximately $35,978,000 and $33,256,000, respectively. Accumulated amortization for facilities and equipment under capital lease obligations was approximately $10,576,000 and $9,169,000 at October 31, 2007 and 2006, respectively.

7. Other Assets

Other assets at October 31, 2007 and 2006 are summarized as follows:


Deferred financing costs, net of accumulated amortization of $3,105 and $2,807 in 2007 and 2006, respectively 6,080$ 6,259$

Long-term benefit plan asset 3,186 -Other assets 1,900 2,047

11,166$ 8,306$

8. Self-Insurance

The System is self-insured with respect to medical malpractice and general liability risk for claims. Losses from asserted and unasserted claims identified under the System’s incident reporting system are accrued based on estimates that incorporate the System’s past experience, as well as other considerations including the nature of each claim or incident and relevant trend factors.

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Accrued malpractice losses have been discounted at 3%. The amount of the discount was approximately $655,000 and $1,068,000, for the years ended October 31, 2007 and 2006, respectively.

The System has established a revocable trust fund for the payment of medical malpractice claim settlements. Professional insurance consultants have been retained to assist the System with determining amounts to be deposited in the trust fund. An actuarially determined accrual for possible losses attributable to incidents that may have occurred but have not been identified under the incident reporting system has been made. The ultimate cost to settle all the asserted and unasserted claims against the system may vary, perhaps substantially, from the amounts recorded.

The System is a non-subscriber to the Texas Worker Compensation program, and as such, it is not subject to the requirements for providing worker compensation insurance to its employees. The System does participate in a self-insurance program for the purpose of providing injury and lost-wage benefits to employees. The System administers the employee injury benefits plan and pays all claims out of operations. The System accrues an estimated liability for possible losses for claims incurred but not reported.

The System also participates in a self-insurance program for the purpose of providing group medical insurance to employees and their dependents. A third party administrator administers the plan and the amounts funded have been placed in a self-insurance fund. The System accrues an estimated liability for possible losses for claims incurred but not reported.

9. Benefit Plans

The System maintains four non-contributory, tax-qualified defined benefit pension plans. Benefits under two of the plans were frozen previously and benefits under the remaining two were frozen as of June 30, 2006, for nearly all participants except those that met certain age and years of service requirements. Effective June 30, 2006, no employee shall enter or become eligible to participate in any of the Plans. The plans’ benefit formulas generally base payments to retired employees upon their length of service and a percentage of qualifying compensation during the final years of employment. The System’s funding policy is to make annual contributions to satisfy the Internal Revenue Service’s funding standards. Contributions are intended to provide not only for benefits attributed to service to date, but also for those expected to be earned in the future.

In 2007, the Hospital adopted Statement of Financial Accounting Standards No. 158, “Employer’s Accounting for Defined Benefit Pension and Other Post Retirement Plans” (“SFAS 158”). For fiscal year 2007, SFAS 158 requires that the Hospital record the funded status of its Defined Benefit Plans; that is, the difference between the projected benefit obligations of the plans and the fair value of the plan assets at fiscal year end. The adoption of SFAS 158 resulted in a pension fund adjustment of approximately $4,000,000.

The System also maintains two non-contributory, non-qualified defined benefit pension plans for certain senior executives of the System (“SERP”). The purpose of the SERP is to provide additional retirement benefits to certain members of management. The SERP became effective January 1, 2003 and shall only apply to those participants who are employed on or after that date. The SERP is intended to be an unfunded deferred compensation plan under Section 457(f) of the Internal Revenue Code of 1986.

The System uses an October 31 measurement date for its plans.

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The combined employee pension plans’ obligations, plan assets and funded status as determined by the actuarial valuation at October 31, 2007 and 2006, are presented in the following table:


Change in benefit obligations:Benefit obligations at beginning of year 119,919$ 135,617$Service cost 2,250 7,093Interest cost 7,093 7,395Amendments - 2,051Actuarial loss 990 9,232Benefits paid (2,315) (8,538)Curtailments - (32,931)Settlements (9,957) -

Benefit obligations at end of year 117,980$ 119,919$

Pension Benefits

Change in plan assets:Fair value of plan assets at beginning of year 102,351$ 86,135$Actual return on plan assets 13,032 10,785Employer contributions 8,858 13,969Benefits paid (2,315) (8,538)Settlements (9,957) -

Fair value of plan assets at end of year 111,969$ 102,351$

Reconciliation of funded status:Accumulated benefit obligation at end of year 107,810$ 108,954$

Projected benefit obligation at end of year 117,980$ 119,919$Fair value of Plan assets 111,969 102,351

Funded status (6,011) (17,568)Unrecognized net actuarial loss (gain) (433) 2,295Unrecognized prior service cost 4,499 5,211

Accrued benefit cost (1,945)$ (10,062)$

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Amounts recognized in statement of financial positionPrepaid benefit cost -$ 2,267$Accrued benefit cost - (12,329)Intangible asset - -Non-current asset 3,186 -Current liability (151) -Non-current liability (9,046) -

(6,011)$ (10,062)$

Net periodic benefit costService cost 2,250$ 7,093$ Interest cost 7,093 7,395Expected return on plan assets (9,229) (7,940)Amortization of unrecognized:

Prior service cost 712 368Net loss 66 1,118Curtailments - 1,998Settlements (151) -

Net periodic benefit cost 741$ 10,032$

Additional informationChange in minimum liability included in unrestricted

net assets N/A (3,779)$

Amounts recognized in unrestricted net assetsexpected to be reflected in expense net fiscal year

Amortization of prior service cost 720$ N/AAmortization of net loss 23 N/A

Total 743$ N/A

Additional year-end information for plans withaccumulated benefit obligations in excess of planassets

Projected benefit obligation 9,197$ 117,287$

Accumulated benefit obligation 3,369$ 106,322$

Fair value of plan assets -$ 98,478$

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Weighted-average assumptions used to determine benefit obligation as of October 31:

2007 2006

Discount rates 6.20% 5.75%Rates of increase in compensation levels 4.00% 3.50%

Weighted-average assumptions used to determine net periodic benefit cost at October 31:

2007 2006

Discount rate 5.75% 6.00%Expected long-term return on plan assets 8.50% 8.50%Rate of compensation increase 3.70% 3.70%

The System employs a building block approach in determining the expected long-term rate on return on plan assets. Historical markets are studied and long-term historical relationships between equities and fixed-income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term market assumptions are determined. The long-term portfolio return in established via a building block approach with proper consideration of diversification and rebalancing. Peer data and historical returns are reviewed to check for reasonability and appropriateness.

Plan Assets The System’s pension plan weighted-average asset allocations at fair value at October 31, 2007 and 2006, by asset category are as follows:

2007 2006

Asset CategoryEquity securities 76.00% 74.00%Debt securities 21.00% 23.00%Other 3.00% 3.00%

100.00% 100.00%

The System employs a total return investment approach whereby a mix of equities and fixed-income investments are used to maximize the long-term return on plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value, and small and large capitalizations. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies.

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Contributions The System expects to contribute $0 and $151,000 to its qualified and non-qualified plans, respectively, during 2008.

Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected

to be paid:

(in thousands)

2008 6,187$2009 6,7752010 7,0442011 6,8942012 7,9482013 - 2017 51,486

Employee Defined Contribution Plan The System maintains a defined contribution retirement plan covering all employees with one or

more years of service. Employee contributions are allowed based on a percentage of the employee’s salary as defined by the plan document. Participants are fully vested in their voluntary contributions plus actual earnings thereon. Employee contributions are invested in various funds held for qualified participants. The System matches between 50% and 200% of employee contributions, depending on which plan the participant was first enrolled in, up to 5% of the employees' compensation. Participants are fully vested in matching contributions after three years. For the years ended October 31, 2007 and 2006, the System contributed approximately $2,428,500 and $1,851,000, respectively, to the plan.

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10. Notes, Bonds Payable and Obligations under Capital Leases

Long-term obligations of the System consist of the following at October 31, 2007 and 2006:


Series 1997 bonds payable, collateralized by pledgedrevenues, deed of trust and security agreement 153,455$ 168,640$

Series 1993 A/B bonds payable, collateralized by pledgedrevenues, deed of trust and security agreement 39,995 41,030

Notes payable with interest rates ranging from 5.5% to9.25%, maturing through January 2013, collateralized byequipment, buildings and land 6,096 4,330

Note payable, due September 2019, payable monthly plusinterest at 8.75%, collateralized by buildings and land 2,121 2,218

Note payable, due May 2021, payable monthly plus interestat 8.25%, collateralized by buildings and land 3,409 3,424

Note payable, due March 2018, payable monthly plusinterest at 8.75%, collateralized by buildings and land 3,245 3,453

Note payable, due December 2008, payable monthly plusinterest at 6.25%, collateralized by buildings and land 1,655 1,754

Note payable, due November 2009, payable monthly plusinterest at 9.25%, collateralized by equipment 2,969 4,242

Note payable, due November 2011, payable monthly plusinterest at 4.46%, collateralized by equipment 8,081 9,702

Note payable, due July 2019, payable monthly plusinterest at 5.5%, collateralized by buildings and land 2,544 2,702

Note payable, due November 2034, payable monthly plusinterest at 7.75%, collateralized by buildings and land 1,853 1,875

Obligations under capital leases 23,684 22,941

Total notes, bonds payable and obligations under capitalleases 249,107 266,311

Less current portion 16,476 16,517

Total notes, bonds payable and obligations under capitalleases, net of current portion 232,631$ 249,794$

Series 1997 A, B, C, D, and E Bonds The $186,805,000 principal amount of Series 1997 A, B, C, D, and E Bonds (“Series 1997 Bonds”)

were issued for the purpose of providing funds to a) advance refund the Series 1990 Henderson County Hospital Authority Revenue Bonds outstanding in the aggregate principal amount of $25,580,000, b) make provision for the redemption of the System's Series 1993 C Bonds outstanding in the aggregate principal amount of $47,300,000, c) make provision for the redemption of the System’s Series 1993 D Bonds outstanding in the aggregate principal amount of $11,800,000, d) make provision for the redemption of the System's Series 1994 Bonds outstanding in the aggregate principal amount of $9,145,000, e) finance the acquisition, construction, and improvement of facilities and equipment to be used by the System, and f) pay certain costs of

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issuance of the Bonds. A portion of the Series 1997 Bonds becomes due each November 1 through 2027. The interest rate on the 1997 Series A, B and C Bonds ranges from 5.50% to 5.60%. On February 3, 1999, the System completed a remarketing memorandum. As a result, on February 16, 1999, $61,450,000 of variable rate Series 1997 D Bonds and on February 17, 1999, $12,650,000 of variable rate Series 1997 E Bonds were remarketed as fixed rate bonds. As of these dates, the Bonds carried fixed rates of interest of 5.375% and 7.830%, respectively, until maturity.

The Series 1997 bonds are redeemable as follows:

RedemptionPrices

February 16, 2009 through February 16, 2010 102%February 17, 2010 through February 16, 2011 101%February 17, 2011 and thereafter 100%

Redemption Dates(Dates Inclusive)

On October 3, 2007, the System made provision for the defeasance of the Series 1997 E Bonds. As a result, the Series 1997 E bonds are considered legally defeased and the System is not primarily liable for these obligations. The System recorded a loss on the defeasance of approximately $725,000. At October 31, 2007, there was $10,650,000 of defeased Series 1997 E Bonds that remained outstanding.

Series 1993 A/B Bonds The $49,865,000 principal amount of Series 1993 A/B Bonds was issued to refinance the Series 1988A and Series 1989 Bond Issues. Interest rates range from 6.625% to 6.750% with the average rate approximating 6.712%. As a result of the advance refunding, the Series 1988A Bonds were considered legally defeased. On November 1, 1998, all remaining Series 1988A Bonds were called for redemption.

The Series 1993 A/B bonds are redeemable at par.

Debt Covenants The most restrictive debt covenants are under the provisions of the Series 1997 Bond agreement. The System is required to maintain a debt service coverage ratio above a required minimum, and may incur new debt only in accordance with the terms and conditions contained in the covenants.

Originally, the Series 1997 Bond covenants contained an additional requirement to maintain a minimum level of liquidity at each year-end, expressed as a days cash on hand requirement. A Second Supplement to the Amended and Restated Master Indenture was executed June 2004, which eliminated the days cash on hand requirement and replaced it with a requirement that specific balances be maintained in the Special Reserve Fund (see Footnote 5). The System issued a deed of trust and security agreement to the Bond Trustee as part of the Second Supplement, which created liens on and security interests in essentially all real property, plant and equipment owned by the System at the time of issuance.

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Long-Term Obligations Scheduled Repayments Maturities of long-term debt and capital lease obligations are as follows:

(in thousands)Capital

Year Ending Long-Term LeaseOctober 31, Debt Obligations

2008 10,873$ 6,776$2009 12,809 5,9482010 9,686 4,5462011 10,056 2,8372012 8,452 906Thereafter 173,547 5,576

Total long-term debt and capital lease obligations 225,423 26,589Less amount representing interest - (2,905)

Total capital lease obligations, net of interest 225,423 23,684Less current maturities 10,873 5,603

Total long-term debt and capital lease obligations,net of interest and current maturities 214,550$ 18,081$

11. Lease Commitments

The System leases helicopters, ambulances, radio communication systems and other equipment under operating leases expiring in various years.

Minimum rental commitments under operating leases having initial or remaining noncancelable terms of more than one year at October 31, 2007 are as follows:

(in thousands) OperatingLeases

2008 16,250$2009 11,6702010 6,7482011 6,1662012 5,928Thereafter 219

Total future minimum lease payments 46,981$

Total rental expense for the years ended October 31, 2007 and 2006, was approximately $22,053,000 and $20,959,000, respectively, and is included in purchased services in the consolidated statements of operations.

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12. Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets at October 31, 2007 and 2006 for cash and cash equivalents, assets limited as to use, patient accounts receivable, prepaid expenses and other, the Special Reserve Fund, long-term investments, accounts payable, accrued expenses and estimated third party settlements approximate their fair value.

The fair value of the System’s long-term debt at October 31, 2007 and 2006 is as follows:

(in thousands)Carrying Fair Carrying FairAmount Value Amount Value

Long-term debt 249,107$ 237,062$ 266,311$ 253,022$

2007 2006

The fair value of the System’s notes payable and long-term debt is estimated using discounted cash flow analyses, based on the current incremental borrowing rates for similar types of borrowing arrangements.

13. Income Taxes

The System has income from certain affiliated organizations and operations which are taxable for federal income tax purposes. These subsidiaries follow Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which requires an asset and liability approach for financial accounting and reporting of income taxes. At both October 31, 2007 and 2006, a deferred tax liability of $1,744,000 exists which is mainly attributable to the temporary differences in fixed assets and prepaid insurance.

14. Hospital Operating Agreements

The System leases the land and buildings operated by certain of its affiliated entities. Substantially all leased premises and improvements revert back to the lessors upon expiration of the leases. The net book value of the leased premises and improvements totaled approximately $36,622,000 and $29,693,000 at October 31, 2007 and 2006, respectively.

Capital Lease Agreements East Texas Medical Center Athens

On January 1, 1983, Athens leased all land, buildings, improvements and equipment from the Henderson County Hospital Authority (“HCHA”), who had leased it from Henderson County, Texas. The lease term is for thirty years expiring December 31, 2012, with a provision for six additional ten-year extension options which may be exercised by Athens by giving six-months notice prior to the initial lease term or any renewal term. Athens exercised three of the 10-year extension options in November 2005, extending the lease to December 31, 2042.

East Texas Medical Center Pittsburg On December 1, 1983, Pittsburg leased all land, buildings, improvements, and equipment from the

Camp County, City of Pittsburg, Texas, Hospital Board for an initial term of ten years which expired November 30, 1993. The lease includes a provision for two additional ten-year extensions that are automatic, giving a total lease term of thirty years expiring November 30, 2013.

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East Texas Medical Center Mount Vernon On November 1, 1988, Mount Vernon leased all land, buildings, improvements, and equipment

from Franklin County, Texas, for an initial term of three years, which expired October 31, 1991. A new lease was entered into on November 1, 1992, which was then replaced with a new lease entered into on May 1, 2002. The new lease had a five-year, six-month term that expired on October 31, 2007. The lease includes a provision for five-year extensions that are automatic unless 90 days written notice is given by Mount Vernon. The first automatic extension was effective as of October 31, 2007 extending the lease to October 31, 2012.

Under the terms of the lease agreement dated May 1, 2002, Franklin County has agreed to subsidize Mount Vernon in all its efforts and work under the lease agreement and for maintaining the emergency room in the Hospital. The County’s subsidy approximates $150,000 per year.

East Texas Medical Center Crockett On July 1, 1995, Crockett leased all land, buildings, improvements, and equipment from Houston

County Hospital District for an initial term of 20 years expiring June 30, 2015. The lease includes a provision for four additional five-year extensions that are automatic unless 180 days written notice is given by either party.

East Texas Medical Center Clarksville On April 1, 1996, Clarksville leased substantially all land, buildings and equipment from the Red

River General Hospital Authority for an initial term of ten years, expiring March 31, 2006. The lease includes a provision for five-year extensions that are automatic unless 90 days written notice is given by Clarksville. The first automatic extension was effective as of March 31, 2006 extending the lease to March 31, 2011. Such lease requires the performance of certain covenants including but not limited to the requirement of Clarksville to spend an average of $350,000 per year, effective April 1, 1998, to make upgrades and improvements to the hospital. Management believes all requirements have been met as of October 31, 2007.

East Texas Medical Center Fairfield On April 1, 1998, Fairfield leased substantially all land, buildings and equipment from Fairfield

Hospital District for an initial term of ten years, expiring March 31, 2008. The lease includes a provision for four additional ten-year extensions that are automatic unless 365 days written notice is given by Fairfield. As no written notice has been given, the first ten-year extension will commence on June 1, 2008.

East Texas Medical Center Quitman On June 1, 1998, Quitman leased substantially all land, buildings and equipment from Wood

County Central Hospital District for an initial term of ten years, expiring May 31, 2008. The lease includes a provision for four additional ten-year extensions that are automatic unless 180 days written notice is given by Quitman. As no written notice has been given, the first ten-year extension will commence on June 1, 2008.

Lease obligations related to these capital leases are included in obligations under capital leases disclosed in footnote 10.

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Operating Lease Agreements East Texas Medical Center Trinity

On August 1, 1997, Trinity leased substantially all land, buildings and equipment from the Trinity Memorial Hospital District for an initial term of ten years, expiring July 31, 2007. The lease includes provision for four additional ten-year extensions that are automatic unless 180 days written notice is given by Trinity. The first ten-year extension was exercised in May 2006, extending the lease to August 1, 2017.

East Texas Medical Center Carthage On December 1, 1997, Carthage leased substantially all land, buildings and equipment from Panola

County, Texas, for an initial term of ten years, that expired November 30, 2007. The lease includes provision for two additional ten-year extensions that are automatic unless 365 days written notice is given by Carthage. The first of the ten-year extensions became effective on December 1, 2007. Such lease requires the performance of certain covenants including but not limited to new purchases and upgrades at the hospital in the amount of approximately $250,000 per year. During fiscal year 2007 and 2006, new purchases and upgrades were approximately $2,215,000 and $377,000, respectively.

Lease obligations related to these operating leases are included in minimum rental commitments disclosed in footnote 11.

15. Commitments and Contingencies

LitigationMalpractice claims have been asserted against the System by various claimants. The claims are in various stages and some may ultimately be brought to trial. The System, with the assistance of its professional insurance consultants, has considered these claims in arriving at the accrual for self-insured malpractice and general liability claims asserted and incurred but not reported. This estimated liability is subject to change in future years as additional information becomes available prior to ultimate settlement.

The System is a defendant in various legal proceedings arising in the ordinary course of business. Although the results of litigation cannot be predicted with certainty, management believes that the outcome of the pending other litigation will not have a material adverse effect on the System’s consolidated financial statements.

Credit Risks Financial instruments that potentially subject the System to concentration of credit risk consist of

cash and cash equivalents and patient accounts receivable. Cash and cash equivalents used in operations consist primarily of cash in financial institution checking accounts and cash held by trustees under self insurance funding arrangements and indenture agreements. U.S. Treasury obligations and investments in money market mutual funds are also held by trustees under self insurance funding arrangements and indenture agreements.

At October 31, 2007 and 2006, the System had deposits in a major financial institution that exceeded Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal.

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The System is located in Tyler, Texas, and operates in the surrounding east Texas area. The System grants credits without collateral to its patients, most of whom are local residents and are insured under third-party payor agreements. The composition of net patient accounts receivable at October 31, 2007 and 2006 is as follows:

2007 2006

Medicare 38% 33%Medicaid 7% 3%Blue Cross 19% 12%Other third-party payors 36% 51%Self-pay 0% 1%

100% 100%

16. Related Party Transactions

The System maintains cash deposits and has debt outstanding with a financial institution. An officer of the financial institution is a director of the System.

17. Functional Expenses

The System provides general health care services to residents within its geographic location. Expenses related to providing these services are as follows:


Healthcare services 695,343$ 692,001$General and administrative 88,162 101,032

783,505$ 793,033$

18. Discontinued Operations

In September 2006, Services sold 100% of the outstanding stock of DRL Labs, Ltd., its wholly owned subsidiary. In conjunction with the sale, the System recorded a net gain on discontinued operations of approximately $13.7 million for the year ended October 31, 2006. The net gain includes the 2006 results of operations of DRL through the date of sale of approximately $900,000 and a gain on sale of approximately $19,600,000 offset by approximately $6,800,000 of federal income tax expense.

In conjunction with the sale, the System entered into a five year non-compete agreement and a six year exclusive provider agreement for laboratory services with the buyer.

19. Subsequent Events

On November 1, 2007, the System entered into a loan agreement for the issuance of $283,865,000 principal amount of Series 2007A Bonds for the purpose of providing funds for the redemption of the Series 1993 A/B Bonds and the Series 1997 Bonds. The redemption resulted in a loss on bond defeasance of approximately $10,500,000.

3527

PricewaterhouseCoopers LLP2001 Ross Ave., Suite 1800 Dallas TX 75201-2997 Telephone (214) 999 1400

Report of Independent Auditors On Accompanying Consolidating Information

To the Board of Directors East Texas Medical Center Regional Healthcare System and Affiliates:

The report on our audit of the consolidated financial statements of East Texas Medical Center Regional Healthcare System and Affiliates as of October 31, 2007, and for the year then ended appears on page 1 of this document. That audit was conducted for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The consolidating information is presented for purposes of additional analysis of the consolidated financial statements rather than to present the financial position and results of operations of the individual companies. Accordingly, we do not express an opinion on the financial position and results of operations of the individual companies. However, the consolidating information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the consolidated financial statements taken as a whole.

February 27, 2008

36

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-

-

-

8,48

0

N

et p

atie

nt re

ceiv

able

s-

47

,361

7,

754

3,

116

1,

670

2,

097

889

1,39

5

2,

491

43

0

2,

082

1,

303

2,43

2

1,62

4

54

0

92

8

26

6,20

7

-

1,

184

9,

266

-

(8

0)

92,7

15

Estim

ated

third

par

ty s

ettle

men

ts-

-

30

2

(4

4)

(3

56)

37

7

(389

)

49

6

302

44

853

165

-

-

(1)

-

-

-

-

-

-

(7

40)

1,

009

Inve

ntor

y-

7,

354

2,

027

40

0

25

9

61

1

186

472

27

3

21

1

40

3

42

5

133

142

14

5

-

-

-

-

93

19

13,1

53

Prep

aid

expe

nses

& o

ther

6,95

7

2,98

0

595

34

145

283

93

95

1,20

1

183

102

386

10

6

6

71

58

1,04

5

2,82

5

2

28

3,06

4

(1

,701

)

18,5

58

T

otal

cur

rent

ass

ets

15,0

89

95,2

64

25,7

68

5,19

6

5,64

3

4,76

1

2,

690

2,

439

4,55

5

860

5,52

8

3,35

3

9,

199

6,

565

1,17

8

4,63

6

94

6

8,

918

2,

801

4,

967

19

,076

(7

40)

(1

,781

)

226,

911

Asse

ts w

hose

use

is lt

d, n

et o

f cur

rent

37,7

57

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,

011

40,7

68

Spec

ial r

eser

ve fu

nd51

,925

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

51,9

25

Long

term

inve

stm

ents

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

7,

774

-

-

7,77

4

Pr

oper

ty, p

lant

& e

quip

men

t15

9,47

8

35

,392

13

,405

4,

342

1,

820

7,

036

2,76

6

4,47

2

25

,117

874

3,97

3

1,66

4

1,

001

32

2

742

611

2,

851

-

-

41

2

5,

590

271,

868

O

ther

ass

ets:

94,4

69

186,

724

6,39

6

105

-

26

1

-

3

55

55

4

1,

149

1

32

-

11

9,02

6

30

,894

-

-

-

31

(318

,545

)

11

,166

T

otal

ass

ets

358,

718

$

317,

380

$

45,5

69$

9,64

3$

7,46

3$

12,0

58$

5,45

6$

6,91

4$

29

,727

$

2,28

8$

10,6

50$

5,

018

$

10,2

32$

6,88

7$

1,

931

$

14

,273

$

34

,691

$

8,

918

$

10

,575

$

5,37

9$

27,7

08$

(740

)$

(320

,326

)$

61

0,41

2$

Acco

unts

pay

able

& A

ccru

ed e

xpen

ses

20,6

42$

19,1

32$

3,72

6$

940

$

499

$

829

$

41

8$

41

2$

1,97

1$

343

$

1,13

5$

704

$

87

6$

50

0$

340

$

243

$

22

9$

2,

722

$

-

$

578

$

6,58

8$

(1

,781

)$

61,0

46$

Cur

rent

por

tion

of L

ong-

Term

Deb

t12

,427

1,

601

82

7

47

2

-

385

10

6

10

-

22

29

8

31

5

-

-

13

-

-

-

-

-

-

16

,476

C

urre

nt p

ortio

n of

mal

prac

tice

cost

s5,

035

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,03

5

Es

timat

ed th

ird p

arty

set

tlem

ents

-

96

-

-

-

-

-

-

-

-

-

-

-

644

-

-

-

-

-

-

-

(740

)

-

Def

erre

d re

venu

e-

96

8

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

52

1,02

0

T

otal

cur

rent

liab

ilitie

s38

,104

21

,797

4,

553

1,

412

49

9

1,

214

524

422

1,

971

36

5

1,

433

1,

019

876

1,14

4

35

3

24

3

229

2,72

2

-

57

8

6,

640

(740

)

(1,7

81)

83

,577

Estim

ated

mal

prac

tice

cost

s3,

306

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,

306

Long

Ter

m D

ebt,

net o

f cur

rent

392,

501

4,30

5

26,4

45

8,63

4

3,02

0

12,2

61

2,46

2

15,6

50

44,0

02

5,

988

14

,363

9,88

3

(2

1,63

2)

(9

,679

)

4,62

7

99

42,5

26

12,3

22

4

258

20,0

68

(355

,476

)

23

2,63

1

Oth

er n

oncu

rren

t lia

bilit

ies

9,04

6

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

30,8

94

-

-

-

(30,

894)

9,

046

T

otal

liab

ilitie

s44

2,95

7

26

,102

30

,998

10

,046

3,

519

13

,475

2,

986

16

,072

45

,973

6,35

3

15,7

96

10

,902

(2

0,75

6)

(8

,535

)

4,98

0

342

42

,755

45

,938

4

83

6

26

,708

(7

40)

(3

88,1

51)

328,

560

Unr

estri

cted

fund

bal

ance

(84,

239)

291,

278

14,5

71

(403

)

3,

944

(1

,417

)

2,47

0

(9,1

58)

(16,

246)

(4

,065

)

(5,1

46)

(5,8

84)

30

,988

15

,422

(3

,049

)

13,9

31

(8,0

64)

(3

7,02

0)

2,

797

4,

543

1,

000

-

67

,825

27

4,07

8

Tem

pora

rily

rest

ricte

d fu

nd b

alan

ce-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

4,75

0

-

-

-

-

4,75

0

Pe

rman

ently

rest

ricte

d fu

nd b

alan

ce-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3,02

4

-

-

-

-

3,02

4

Tota

l net

ass

ets

(84,

239)

291,

278

14,5

71

(403

)

3,

944

(1

,417

)

2,47

0

(9,1

58)

(16,

246)

(4

,065

)

(5,1

46)

(5,8

84)

30

,988

15

,422

(3

,049

)

13,9

31

(8,0

64)

(3

7,02

0)

10

,571

4,54

3

1,00

0

-

67,8

25

281,

852

T

otal

liab

ilitie

s &

net a

sset

s35

8,71

8$

31

7,38

0$

45

,569

$

9,

643

$

7,

463

$

12

,058

$

5,

456

$

6,

914

$

29,7

27$

2,

288

$

10

,650

$

5,01

8$

10

,232

$

6,

887

$

1,93

1$

14,2

73$

34,6

91$

8,91

8$

10,5

75$

5,

379

$

27

,708

$

(7

40)

$

(3

20,3

26)

$

610,

412

$

37

East

Tex

as M

edic

al C

ente

r R

egio

nal H

ealth

care

Sys

tem

and

Affi

liate

sC

onso

lidat

ing

Stat

emen

t of O

pera

tions

O

ctob

er 3

1, 2

007

29

Reh

abC

ance

rH

ome

ETM

CR

HC

ombi

ned

Sy

stem

ETM

CA

then

sC

arth

age

Cla

rksv

ille

Cro

cket

tFa

irfie

ldG

ilmer

Jack

sonv

ille

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erno

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ttsbu

rgQ

uitm

anC

ente

rSp

ecia

ltyTr

inity

Inst

itute

MSO

591A

Foun

datio

nSe

rvic

esSe

rvic

esR

ecla

sses

Elim

inat

ions

Syst

emIn

com

e St

atem

ent

Unr

estri

cted

reve

nue

and

othe

r sup

port

Net

pat

ient

ser

vice

reve

nue

-$

372,

928

$

87

,794

$

23

,045

$

14

,515

$

20

,667

$

12

,951

$

15

,945

$

27

,447

$

5,

671

$

18,0

59$

17,2

32$

20,9

96$

12,8

04$

7,20

5$

6,

395

$

-$

39,5

76$

-$

12,0

04$

-$

-$

-$

715,

234

$

O

ther

reve

nue

65,0

59

13,7

28

798

25

2

291

27

0

503

84

547

22

7

187

47

6

2,91

6

2

794

23

9

5,02

8

24

,308

66

1

5

79

,423

(8

3,13

9)

112,

659

Tota

l rev

enue

s an

d ot

her s

uppo

rt65

,059

38

6,65

6

88,5

92

23,2

97

14,8

06

20,9

37

13,4

54

16,0

29

27,9

94

5,89

8

18

,246

17

,708

23

,912

12

,806

7,

999

6,63

4

5,

028

63,8

84

661

12

,009

79

,423

-

(8

3,13

9)

827,

893

Tota

l exp

ense

s74

,720

35

0,30

6

76,3

15

22,4

29

13,0

66

20,6

53

12,8

20

17,4

59

34,4

51

6,21

6

16

,845

17

,408

21

,826

11

,219

7,

639

5,25

1

5,

138

65,7

43

507

11

,718

74

,915

-

(8

3,13

9)

783,

505

Inco

me

(loss

) fro

m o

pera

tions

(9,6

61)

36,3

50

12,2

77

868

1,

740

284

63

4

(1,4

30)

(6,4

57)

(318

)

1,40

1

30

0

2,08

6

1,

587

360

1,

383

(110

)

(1,8

59)

154

29

1

4,50

8

-

-

44

,388

E

quity

in e

arni

ngs

12,1

99

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(12,

199)

-

Exc

ess

of re

venu

es a

nd o

ther

sup

port

ove

r exp

ense

s2,

538

$

36,3

50$

12,2

77$

868

$

1,

740

$

284

$

63

4$

(1,4

30)

$

(6

,457

)$

(3

18)

$

1,

401

$

300

$

2,

086

$

1,58

7$

36

0$

1,38

3$

(1

10)

$

(1,8

59)

$

15

4$

291

$

4,

508

$

-$

(12,

199)

$

44

,388

$

39

ETMCRHS 2008 Audit Report

75

System FY09 Financial Statements

79

PPlus Full Financial Statements 10-31-07

2007 2006AssetsCurrent Assets:

Cash and equivalents 3,510,326$ 2,034,580$ Accounts receivable 7,981,511 6,889,067 Prepaid expenses and other assets 2,908,326 3,273,849

Total current assets 14,400,163 12,197,496

Noncurrent limited assets 3,011,305 3,011,355 Property, plant, and equipment, net 5,316,939 4,439,937 Other assets 30,582 30,582

Total Assets 22,758,989$ 19,679,371$

Liabilities and EquityCurrent Liabilities:

Accounts payable 397,468$ 731,881$ Accrued liabilities 3,233,874 2,003,880

Total current liabilities 3,631,342 2,735,761

Due to affiliates 5,229,220 7,077,907

Total Liabilities 8,860,562 9,813,668

Retained earnings 13,898,427 9,865,704

Total Liabilities and Equity 22,758,989$ 19,679,371$

Paramedics Plus, LLCBalance Sheet

October 31

80

2007 2006Revenue

Patient service revenue 59,851,541$ 53,558,632$ Other operating revenue 3,335,238 1,059,930

Total Revenue 63,186,780 54,618,562

Operating ExpensesSalaries and Wages 34,100,887 31,280,857 Contract Labor 11,895 14,581 Employee Benefits 7,071,755 6,336,763 Professional Fees 678,276 776,042 Supplies 2,131,752 2,010,432 Utilities 234,406 212,482 Purchased Services 880,370 576,119 Other Operating Expenses 6,824,983 6,479,644 Insurance 3,114,432 3,267,160 Provision For Bad Debts - - Depreciation 1,791,781 1,454,846 Interest 366,863 412,859

Total Operating Expenses 57,207,400 52,821,785

Net Income from Operations 5,979,380 1,796,777

Non-operating Revenue 130,807 117,155

Net Income Before Income Taxes 6,110,187 1,913,932

Income Taxes 2,077,464 650,737

Net Income 4,032,723$ 1,263,195$

Paramedics Plus, LLCIncome Statement


81

2007 2006Cash flows from operating activities:

Net income 4,032,723$ 1,263,195$

Depreciation 1,791,781 1,454,846 Increase in accounts receivable (1,092,444) (492,898) Decrease in prepaid expenses & other assets 365,523 85,479 Decrease (Increase) in limited assets 50 (3,575) Increase in other assets - (30,582) Increase (Decrease) in account payable (334,413) 17,611 Increase in accrued liabilities 1,229,994 680,167

Net cash provided by operating activities 5,993,214 2,974,243

Cash flow from investing activities:

Investment in fixed assets (2,668,782) (59,237)

Net cash used by investing activities (2,668,782) (59,237)

Cash flow from financing activities

Decrease in amounts due affiliates (1,848,686) (1,416,300)

Net cash used by financing activities (1,848,686) (1,416,300)

Decrease in cash 1,475,746 1,498,706

Cash and cash equivalents at the beginning of the year 2,034,580 535,874

Cash and cash equivalents at the end of the year 3,510,326$ 2,034,580$

Adjustments to reconcile net income to net cash provided by operating activities

Paramedics Plus, LLCStatement of Cash Flows


83

PPlus Financial Statements 10-31-08

87

PPlus Financial Statements 10-31-09

91

Unaudited Statements Letter from Byron Hale

93

Appendix 3 Letter of Guarantee from Byron Hale3 Letter of Guarantee from Byron Hale.

95

Appendix 4 Contract List 2009

COMMUNITY COUNTY

PARAMEDICS PLUS CONTRACTS

Emergency Medical Services Authority Tulsa, Oklahoma Counties

Sunstar Paramedics Pinellas, FL

Three Rivers Ambulance Authority Allen, IN

ETMC-EMS

City of Alma, TX Ellis

City of Alto, TX Cherokee

City of Arp, TX Smith

City of Bardwell, TX Ellis

City of Big Sandy, TX Upshur

City of Carthage, TX Panola

City of Chandler, TX Smith

Cherokee County, TX Cherokee

City of Clarksville, TX Gregg

SE Collin County Coalition Collin

(Include Cities of:Lavon,

Lucas, St. Paul, Wylie,

Parker, Collin County )

City of Combine, TX Kaufman

City of Cottonwood, TX Kaufman

City of Crandall, TX Kaufman

City of Crockett, TX Houston

City of East Mountain, TX Upshur

Ellis County, TX Ellis

City of Ennis, TX Ellis

City of Forney,TX Kaufman

Franklin County, TX Franklin

City of Frankston, TX Anderson

City of Garrett, TX Ellis

City of Gladewater, TX Gregg/Upshur

City of Gilmer, TX Upshur

City of Gun Barrel, TX Henderson

97

Appendix 5 Standard of Care Suggestion Form

STANDARD OF CARE SUGGESTION

1. NAME OF PERSON INITIATING THE SUGGESTION.

2. SUGGESTED CHANGE IN THE STANDARD OF CARE.

3. POTENTIAL ADVANTAGES OF THE CHANGE.

4. TYPE OF CHANGE.

5. ORIGIN OF SUGGESTION.

6. OTHER EMS SYSTEMS CURRENTLY USING THE SUGGESTED STANDARD.

7. SUMMARY OF REFERENCES.

8. POSSIBLE OBJECTIONS TO THE SUGGESTED CHANGE IN STANDARD OF CARE

97

Appendix 6 Examples of Time Management

Eastern Average Mission Time

Spec

ial C

ause

(s) D

etec

ted

Cha

rt T

ype:

C

usto

mD

atab

ase

Col

umn

1C

urre

nt A

vera

ge0.

0424

7606

6A.

1 B

eyon

d C

ontro

l Lim

itE.

2 o

f 3 B

eyon

d 2

Sigm

aC

urre

nt M

edia

n0.

0426

8499

8B.

9 O

n O

ne S

ide

of A

vera

geF.

4 o

f 5 B

eyon

d 1

Sigm

aSi

gma

for L

imits

0.00

0628

732

C.

6 Tr

endi

ng U

p or

Dow

nG

. 15

With

in 1

Sig

ma

Bas

e fo

r Lim

itsAv

erag

e M

RD

. 14

Alte

rnat

ing

Up

& D

own

H.

8 O

utsi

de 1

Sig

ma

p(no

tren

d) =

0.0

00X.

Exc

lude

d or

Mis

sing

Dat

a

A

CEACEFFF

F

E

C

EF

0:54

:43

0:56

:10

0:57

:36

0:59

:02

1:00

:29

1:01

:55

1:03

:22

1:04

:48

1:06

:14

Jan-06Feb-06Mar-06Apr-06

May-06Jun-06Jul-06

Aug-06Sep-06Oct-06Nov-06Dec-06Jan-07Feb-07Mar-07Apr-07

May-07Jun-07Jul-07


May-08Jun-08Jul-08


May-09Jun-09Jul-09

Aug-09Sep-09Oct-09Nov-09Dec-09

Spec

ial C

ause

Fla

g

Perio

d

East

ern

Aver

age

Mis

sion

Tim

e

1/14

/201

0

98

Spec

ial C

ause

(s) D

etec

ted

Cha

rt T

ype:

C

usto

mD

atab

ase

Col

umn

1C

urre

nt A

vera

ge0.

0177

1132

7A.

1 B

eyon

d C

ontro

l Lim

itE.

2 o

f 3 B

eyon

d 2

Sigm

aC

urre

nt M

edia

n0.

0181

4814

8B.

9 O

n O

ne S

ide

of A

vera

geF.

4 o

f 5 B

eyon

d 1

Sigm

aSi

gma

for L

imits

0.00

0467

348

C.

6 Tr

endi

ng U

p or

Dow

nG

. 15

With

in 1

Sig

ma

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e fo

r Lim

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105

Appendix 7 Materials Management Process Article

107

Appendix 8 Principles EMS Strategic Planning BlueprintEMS STRATEGIC PLANNING BLUEPRINT

Guiding Principles

1. EMSsystemdesignisbasedonscientificmedicalandeconomicevidencepublishedinpeer-reviewedliteratureaswellasdeterminedbythesystem’scontinuousqualityimprovement.

2. EMSsystemdesignrecognizestheuniqueaspectsandessentialcontributionsofbothfirstresponseandtransportcomponents.Component-distinctmedicalassessmentsandtreatmentsarecombinedtoformtheessentialmedicalcaredeliveredtoa“singlepatient”intheEMSsystem.Therefore,success-fullytreatingthis“singlepatient”dependsuponcoordinatedandintegratedresponse,medicaltreat-mentprotocols,andcontinuingmedicaleducation.

3. Asthe“singlepatient”paradigmpredominatesthroughouttheEMSsystem’sdesignofresponse,medi-caltreatment,andcontinuingmedicaleducation,theEMSsystem’scontinuousqualityimprovementshouldbecoordinatedandintegrated.

4. EMScommunicationsoptimizestheEMSsystem’spatientcareabilitieswhenutilizingevidence-basedprioritydispatching.Successfulprioritydispatchingsendsnecessaryresource(s)tothepatient,withoutexcessiveandinappropriateutilizationoffirstresponseandtransportcomponents.

5. EMScommunicationsoptimizestheEMSsystem’spatientcareabilitieswhenutilizingintegratedEMSresourcelocatercapabilitiestoidentifyanddispatchtheclosestappropriateresponder(s).

6. Effective,coordinatedcontinuingeducation(CE)enablesadvancesinexcellentpatientcare.Relevant,engagingCEisbaseduponEMSCQIfindings,patientcarecapabilities,andtreatmentprotocols.

7. CollegialworkingrelationshipsamongallpersonnelinthisEMSsystempromoteoptimalpatientcareprovidedbymutuallyrespectedprofessionals.

8. MedicaltreatmentprotocolsarederivedutilizingprevailingEMSstandardsofcare,evidence-basedmedicine,andsystemdesignconsiderations.Medicaltreatmentprotocolsareformattedtorecognizetheessentialcontributionsfromcommunications,firstresponse,andtransportpersonnelandpromoteseamlesscaredelivery.Clinicalstaffingmustaffordthesafeimplementationofthesemedicaltreatmentprotocols.

108

9. ThisEMSsystemrecognizesandrespectseachcontractedcommunity’sdesireforhighqualityemergen-cymedicalservicesdeliveredinanaffordable,costeffectivedesign.Communications,firstresponse,andtransportcomponents/resourcesareintegrallylinkedanddependupontheeffectivenessandef-ficiencyofeachother.AdditionalsystemresourcesareaddedonlywhentheysupportthedesiredhighqualityofEMSinourcommunitiesanddosowithreasonablecosts.

10.MedicalcareprovidedbytheEMSprofessionalsinthissystemconstitutesadelegatedpracticeofmedi-cine.TheMedicalControlBoardandOfficeoftheMedicalDirectorphysiciansmustbeexperiencedandspecialtyboardcertified.Thesephysicianscommittoprovidingobjectiveandindependentmedicaloversight,withoutregardtoself-interestsandpoliticalpressures.

11.Responsetimestandardsfactorthepatient’sperceivedcondition.Responsetimestandardsareappro-priateforbothfirstresponseandtransportagencies.Strictcompliancewithinresponsetimestandardsisexpected.

12.Electronicpatientrecordsmustbeutilizedbybothfirstresponseandtransporttoallowforintegratedandseamlesspatientcaredocumentation.Thissystemismaximallyeffectiveforcontinuouspatientcareimprovementactivities,allowingfor100%criticalcareeventcompliancereview.

13.DisasterpreparednessandresponseconstituteessentialrolesofthisEMSsystem.Effectiveprepared-nessforandresponsetodisaster-relatedemergencymedicalneedsisdependentuponconcise,task-orientedmultiplecasualtyresponseprocedures,routinely-scheduledrealisticmultiplecasualtytrain-ing,fundingappropriateprotectiveandmedicalequipment,andachievingregion-widegovernmentaloperationalsupport.

14.EMSstrategicplanningbestenablesoptimalEMSsystemdesignandperformancewhenconductedcontinuously.

109

Appendix 9 CQI and Other Reports

SQC November 09 Summary

QUALITY STEERING COMMITTEE REPORT NOVEMBER 2009

110 3

August –Oct 2007 Power Pro Stretcher implemented to the system October 2007 Sent out first hospital satisfaction survey via email August 28, 2007 Baldrige/Sterling education April 19 & 20, 2007 Six Sigma Yellow Belt Class for Directors and Managers Sept 18 & 19, 2007 Six Sigma Green Class for 4 members of Leadership team October 1, 2007 New Schedule software September 2007 (?) New payroll system October 20, 2007(?) New double posting in SSM plan December 2007 Updated Key Customer requirements for 911 and non-911

patients. January 2008 April 1, 2008

New Patient Survey letter for 911 patients and added letter for non-911 patients. EZ-IO implemented into the system

April 2008 Upgrade ePCR to 5.02 May 2008 June 1, 2008 June 1, 2008

Submitted Malcolm Baldrige Application STA-BLOCK head immobilizers introduced into the system New stairchairs introduced into the system

Aug 4, 2008 Begin 12-Lead EKG transmission for STEMI patients Dec, 2008 Cardiac CME March 9-13 Sterling Site Visit January 2009 STAR and MVP program initiated April 2009 NIBP pulled from the life paks (manual BP only) April 2009 Central 911 begins doing EMD May 2009 Sunstar Paramedics Wins Governor’s Sterling Award June 2009 Sunstar obtains CAMTS reaccreditation

2

MAJOR SYSTEM ADDITION OR CHANGES February, 2002 Began STEMI protocol July, 2004 Fentanyl added to the system March, 2005 New Dynamic Post Plan initiated March, 2005 Began using MARVLIS April 1, 2005 Response Time Requirement changes from 90% to 92% November 2005 Began sending out satisfaction surveys to patients January 15, 2006 Second MHT added February, 2006 Began Capnography in the field June 2006 Initiated FISH Forms July 2005 Started Employee Satisfaction Survey October 1, 2006 Response Time Incentive initiated for 93% performance November 2006 Road Safety Monitoring began January 2007 New CPR Protocol and ResQPOD January 2007 Sunstar Location became a CPS fitting station January 15- April 15, 2007 Bed Delay Teams begin February 9, 2007 10 new ambulances deployed into the system April, 2007 CPAP initiated in the system June 2007 911 call routing in communication center (VESTA) Analogue to

digital phone upgrade with auto phone distribution July 2007 Mandatory in-house OSHA, HIPAA, Driving update and Mission

and Vision rollout to employees August 10, 2007 ePCR training commences and Paramedics begin to use on

their next shift. August 2007 Started coaching letter for Narcotics and CPAP issues before

TVF Form

111 3

August –Oct 2007 Power Pro Stretcher implemented to the system October 2007 Sent out first hospital satisfaction survey via email August 28, 2007 Baldrige/Sterling education April 19 & 20, 2007 Six Sigma Yellow Belt Class for Directors and Managers Sept 18 & 19, 2007 Six Sigma Green Class for 4 members of Leadership team October 1, 2007 New Schedule software September 2007 (?) New payroll system October 20, 2007(?) New double posting in SSM plan December 2007 Updated Key Customer requirements for 911 and non-911

patients. January 2008 April 1, 2008

New Patient Survey letter for 911 patients and added letter for non-911 patients. EZ-IO implemented into the system

April 2008 Upgrade ePCR to 5.02 May 2008 June 1, 2008 June 1, 2008

Submitted Malcolm Baldrige Application STA-BLOCK head immobilizers introduced into the system New stairchairs introduced into the system

Aug 4, 2008 Begin 12-Lead EKG transmission for STEMI patients Dec, 2008 Cardiac CME March 9-13 Sterling Site Visit January 2009 STAR and MVP program initiated April 2009 NIBP pulled from the life paks (manual BP only) April 2009 Central 911 begins doing EMD May 2009 Sunstar Paramedics Wins Governor’s Sterling Award June 2009 Sunstar obtains CAMTS reaccreditation

112 5

MONTHLY COMPLIANCE

91%

95%

Good

Good

4

July 2009 Sunstar obtains CAAS reaccreditation August 2009 Sunstar receives Pinnacle award August 2009 ResQPOD refresher training July/August 2009 In-House CME (using video segments) September 2009 Employee Off site Forums (Customer satisfaction, ee

engagement) October 2009 Started “Employee Engagement Social Director” program November 2009 Sterling Great Practices Open House

113 5

MONTHLY COMPLIANCE

91%

95%

Good

Good

4

July 2009 Sunstar obtains CAAS reaccreditation August 2009 Sunstar receives Pinnacle award August 2009 ResQPOD refresher training July/August 2009 In-House CME (using video segments) September 2009 Employee Off site Forums (Customer satisfaction, ee

engagement) October 2009 Started “Employee Engagement Social Director” program November 2009 Sterling Great Practices Open House

114 6

95%

Good

Good

115 7

Good

Good

116 8

EMS DISTRICT COMPLIANCE

90% Compliance required in each Fire District

Good

Good

117 9

Good

Good

118 10

Good

Good

119 11

Good

Good

120 12

Good

Good

Appendices Appendix 1 ETMC RHS Organizational … plus alameda...5 Appendix 1 ETMC Organizational...

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