Lauchwood Dr., Laurinburg, North Carolina 28352

Contact: Karen Gainey, Marketing Coordinator
Phone: 910-291-7550 FAX: 910-291-7996

January 11, 2010
Community members, board members, staff, and volunteers gathered in the WR Dulin Conference Center on January 7th as Scotland Health Care System's representatives presented very favorable reports for the 2009 fiscal year.

Following a time of refreshment and interaction, Jim Mason, chairman of the Scotland Health Care System Board of Trustees, welcomed those who turned out on a very cold evening. He talked about the board's commitment to keep the community informed and receive input, as the system is proud to remain community owned. He then introduced Dr. Paul Rush, Chief of Staff.

"While change seemed to be the theme at both the local and national level in 2009, one thing that did not change was our commitment to continue to provide the highest quality care possible," stated Dr. Rush. "One of the things I am most proud of, both as the Chief of Staff and a member of the surgical team, is our performance in one of the four publicly reported measures - preventing surgical infections. We also worked on a major quality improvement project to reduce inpatient falls, and achieved a 50% reduction.

"This health care system has a track record of providing some of the newest technology so that our Medical Staff can continue to offer the latest advances in medicine," continued Dr. Rush. "Two examples are the upgrades to our MRI unit and the new, state-of-the-art linear accelerator in the Cancer Center."

Dr. Rush reported that the medical staff added five new physicians this year:
Dr. Cheryl Davis, Hospitalist
Dr. Scott Luneau, Hospitalist
Dr. Lorraine Berman, Vascular Surgeon
Dr. Muhammad Ghani, Internal medicine
Dr. Mark Hansman, Anesthesiologist
Two more physicians joined this January - Drs. Camille Gardner, Family Medicine, and John Atkins, Pulmonologist.

Treasurer's Report
Mr. Craig Ellis, Vice Chairman, presented the Treasurer's Report. "Scotland Health Care System had a positive financial operating margin performance for this past fiscal year, with an 11% growth in total funds collected. Inpatient discharges and deliveries grew by 5%; we delivered 781 babies; and for the third year in a row, we had a record number of Emergency Center visits, treating more than 35,000 patients."

Scotland Memorial's biggest payer is the Medicare program, making up approximately 38% of net patient revenue. Medicaid, the second largest payer, accounts for 16% of the net revenue. "Although the Medicare and Medicaid programs provide over 50% of the System's payments, the cost of delivering care to the program beneficiaries is higher than the payment, and we actually lose money on each Medicare and Medicaid patient we treat," continued Ellis. "We also had over 1,400 patients who qualified for our charity care program. The charity write-offs generated from the services provided to these patients totaled $7.2 million, an average of $5,100 per patient."

Looking forward, Ellis said, "The System will continue to expand and upgrade information systems hardware infrastructure and applications as it embarks on a new IS Plan. A new data center, in a separate building, will be created to house the main-hub of our network."

President's Report
Greg Wood, President and CEO, talked about the New Year's priorities. "We look to our physicians, management team, staff and our new Vice President, Lori Dove, to lead our primary reason for being here - providing the highest quality care and service possible."

Wood added that the System would invest in critical clinical technology, maintaining safe and aesthetically pleasing facilities, and expanding and marketing key service lines. "We will focus on our highly-regarded surgical services and Women's Services, begin developing our cardiovascular lab, and focus our efforts to better serve new territories as more than a third of the patients we care for come from outside Scotland County."

Regarding heath care reform, Wood commented, "We need reform to happen as our health care system is broken. Despite having Dr. Heim, one of our hospitalists and the head of the national American Academy of Family Medicine advocating for us in Washington, I fear we will not get enough of the enhancements and they will come slower, and that despite assurances to the contrary, we will get much of the financial downsides."

Chairman's Report
Mr. Jim Mason, Chairman of the Scotland Health Care System Board of Trustees, began his report with the reminder, "Last January, the worldwide financial crisis was taking its toll on us. We struggled financially through the end of 2008. We wrestled with the value of our independence as a hospital versus the advantages of joining a larger system. We also began to prepare for the H1N1 or Swine Flu pandemic and its predicted chaos. It looked like we were in for a tough year.

"Fortunately, we had an extraordinarily successful year, far beyond our expectations. Finishing the year in a solid position allowed us to improve critical clinical services and technology like our new Imaging equipment, our new Vascular and Wound Centers, and our new and improved Urgent Care Center and ICU. We also began a major project to improve the appearance of our patient rooms, along with our external and internal environments. Most importantly, our financial success allowed us to continue to recruit high quality staff and physicians."

Chairman Mason continued by recapping two key governance decisions made this year.

"After nearly a year of study, our board unanimously voted last January to sign a management partnership with Carolinas Health Care System (CHS). This decision immediately produced improvements in our care, service and operations.
"Secondly, as part of our strategic planning process, we knew we wanted to better serve out outlying areas to the east, west, and south, since more than one-third of our patients come from outside of Scotland County. So our board added seven new trustees, with the majority of those coming from those new areas: two to the east, James McDougald and Kyle Chavis; Jane Rogers and Donnie McDonald from the south; and David Harling, a native from Scotland County who has worked and been actively involved in Richmond County for most of his career.

Mason continued with brief comments on the System's subsidiaries.

"Hospice of Scotland County continues to be the premier hospice in our region, caring for more than 90% of all hospice patients in our community and with their recently opened McQueen Wing, they can increase and enhance their services.
"The Edwin Morgan Center remains the nursing home of choice for all in our region as well.
"Scotland Memorial Foundation truly hit their goal of taking their commitment to us to the next level as their Spring Festival and Ritz rose to unprecedented heights. With their extra funds raised, they created a new Breast Biopsy Fund for follow-up procedures from mammograms, and donated $20,000 to the Cancer Patient Assistance Fund for the purchase of wigs, creams, medications, and transportation. They continued their funding of many internal hospital grant requests including Wii gaming systems to help with Rehab therapy, new TVs for residents of Edwin Morgan Center, and upgraded clinical training mannikins.

Not resting on these accomplishments, the Health Care System Board approved a three-year Operating Plan with key goals and objectives. "With your support and input and the collective commitment of our volunteers, physicians, staff and Trustees, 2010 will be another wonderfully exciting year for us," Mason concluded.

Scotland Health Care System is a community owned, not-for-profit health care system located in Laurinburg, North Carolina. The 154-bed system is comprised of the 104-bed Scotland Memorial Hospital, The 50-bed Edwin Morgan Center, Scotland Memorial Foundation, and Hospice of Scotland County. The Health Care System also owns and operates four primary care facilities, a general surgery practice and an ob/gyn practice.

With more than 1,000 employees, Scotland Health Care System is Scotland County's largest, non-governmental, private employer. Its medical staff includes 70 physicians representing many medical specialties. Scotland Memorial Hospital is ranked in the top ten percent in North Carolina for Surgical Care. In 2008, the Health Care System contributed more than $8 million in charity care to the community.

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