Annual Report Fiscal Year 2018 3 | MemorialCare Leaders in Value-Based Care A message from Barry Arbuckle, President & CEO Through our innovative Accountable Care Organizations (ACOs), including direct-to-employer options, we’re improving the health of Today’s savvy consumers and employers want healthcare plans that our patients, offering a great experience and reducing the overall cost provide quality, affordability and exceptional service. So MemorialCare of care. As employers puzzle over the economics of providing the best is expanding our network of care with convenient locations across quality, affordable plans to their employees, MemorialCare is proud to Southern . offer high-value solutions. As the healthcare landscape transforms, we offer simply better care to a new generation of patients.

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

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

• We launched a new Clinically Integrated Network with leading physicians to focus on improving quality and reducing costs. President & • MemorialCare Medical Group continues to take a collaborative Chief Executive Officer approach to treating and preventing chronic conditions and now MemorialCare offers rapid response care to patients with anxiety and depression.

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

3 Steps to Being Simply Better California’s leaders in patient satisfaction Excellent physicians are at the heart of great care, so we’re especially proud that doctors with MemorialCare Medical Group and Greater Newport Physicians were ranked first and second in Orange County in the 2018 annual patient satisfaction survey. Statewide, patients rated doctors with both MemorialCare Medical Group and Greater Newport Physicians in the 98th percentile. That’s simply better care! We’re always improving In our hospital environments, clinical excellence is always top of mind, and so too is patient experience. Using HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) —the national standard for reporting — MemorialCare achieves high standards for how many patients rate their experience a 9 or 10.

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

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

4 | MemorialCare Counting on Our Care What Our Patients Say

9,320 babies delivered “Thank you MemorialCare for “All the nurses were amazing – taking such great care of me and super kind, super professional. 1,353 licensed beds my family. And I really appreciate Thanks to them, we knew exactly how you taught me to take care what was going on during every 267,000 patients in value-based plans of myself.” minute of labor.” – Aidan, 18-year-old patient – Tori, new mom.

298,000 patient days (including newborns) transitioning from pediatric care at Miller Children’s & Women’s “It’s much easier to head off a Hospital to adult care. 570,000 medical group visits medical problem early. Don’t ignore symptoms, go see your

246,000 emergency department visits “I’m back to running and swimming doctor. Without the support of my and I’m so thankful to the doctors family, doctors and nurses, I might not be here.” 65,100 patient discharges and nurses who helped me so I can go the distance and achieve all my – Bill, cancer care.

59,000 ambulatory surgeries life goals.” – Javier, cardiac care.

42,000 hospital-based surgeries

767 average daily census

150,000 home health visits

5 Revolutionizing Value in Healthcare Helen Macfie, Pharm.D. Leading best practice healthcare Chief Transformation Officer Our dedicated care teams set and achieve bold goals for excellence. MemorialCare As a result, our patient outcomes are constantly improving. In addition to the everyday work of delivering great healthcare, we have positively touched more than 137,166 lives since 2007 with our efforts. “In 1997, a group of physicians with a passion for delivering integrated healthcare launched MemorialCare. This year, we took With bold goals for excellence in 2018, we have achieved: integration one step further by launching the MemorialCare Clinically Integrated Network and focusing on evidence-based care, improving • 27% reduction in C-section rates quality, efficiency and coordination.” • 60% improvement in sepsis survival • 20% higher childhood immunizations rates than the state average • 18% higher optimal diabetes care than the state average Collaborative care for behavioral health Our primary care providers and behavioral health specialists take a collaborative approach to caring for patients with depression and anxiety. This year MemorialCare Medical Group added integrated behavioral healthcare at three sites in Fountain Valley, Irvine and San Juan Capistrano, with more locations to follow. Next steps include the addition of tele-health options so physicians and patients at different offices can consult remotely and receive faster, integrated interventions. Investing in surgical precision Significant investments in surgical innovation allow us to offer patients the highest level of precision and a minimally invasive approach whenever possible. • The Mako® robotic-assisted arm for joint replacement surgery provides a new level of precision for optimal patient outcomes. • Our expert surgeons offer smaller incisions and faster healing with the groundbreaking da Vinci® Surgical System.

6 | MemorialCare Southern California’s Leader in Aetna Whole Health • Reduced avoidable emergency department visits by 15 percent Value-Based Care • Achieved 100 percent performance on all quality measures for MemorialCare offers more value-based products than any other health cancer and diabetes screenings system in Southern California. Our Accountable Care Organizations (ACO) include a customized, direct contract between MemorialCare • Beat the market in managed population costs by nearly three percent and Boeing called the MemorialCare Health Alliance, as well as other • Achieved 30 percent increase in wellness testing and screening innovative plans like Aetna Whole Health, and Vivity offered by Anthem Blue Cross. In addition, our Anthem and Vivity ACOs continue to deliver excellent and affordable healthcare. Between 2017 and 2018: MemorialCare Health Alliance • Grew enrollment by 28 percent

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

• Exceeded patient satisfaction targets

• Scored number one in quality for all Boeing ACOs

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

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

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

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

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

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

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

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

8 | MemorialCare It takes a village Miller Children’s & Women’s Hospital Long Beach is one of only eight free-standing children’s hospitals in California. We treat more than 14,000 children each year, and we’re a regional pediatric destination for more than 84,000 children who need specialized care in our outpatient locations. Our new 80,000 square foot Children’s Village, when complete in 2021, will bring 36 pediatric specialties under one roof, allowing families to receive all the care they need in one easy-to-access location. Regional pediatric care Through strategic partnerships like Miller Children’s affiliation with UCLA Mattel Children’s Hospital, we’re improving access to complex care and extending leading edge research.

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

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

“Because many pediatric illnesses are rarely seen in adults or they impact children differently, kids with complex or chronic conditions need access to the specialized care that only children’s hospitals provide. In addition to offering our patients leading specialty care, Miller Children’s has the distinction of being part of a fully integrated health system, MemorialCare.” 9 Expanding Access to Convenient Care

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

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

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

Torrance MemorialCare Medical Group opened a new health center in the heart of Torrance on Hawthorne Boulevard and Sepulveda Boulevard offering primary and pediatric care with on-site laboratory and basic X-ray services. 105

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57 UCI 710 91 County 605 Yorba Linda 110 Anaheim 55 241 Torrance UCI 5 UCI 1 Westminster 22

Fountain UCI 261 Long Beach Valley Orange 5 Irvine County

133 1 405 Huntington 241 Beach MemorialCare Medical Centers Laguna Coast Wilderness Park 73 Mission Miller Children’s & Women’s Laguna Aliso and Hills Viejo Hospital Long Beach Wood Canyons Regional Park Dialysis Centers Newport Laguna MemorialCare Shared Services Beach 1 Niguel Breast Centers UCI UC Irvine Medical Center MemorialCare Surgical Centers 5 MemorialCare Medical Group Children’s Specialty Care Centers Urgent Care Centers

Hospital-Based Imaging Centers UCI UCI Aliated Physicians Dana Point Aliated Physician Groups Communty-Based Imaging Centers (Includes Greater Newport Physicians) San Clemente 2018 Financial Summary of Our Fiscal Health

Other non-operating revenue Interest Salaries, wages Charity Care Unpaid costs 1% expense and benefits 3% of Medi-Cal 1% 43% 58%

Net investment Others for income broader 3% Depreciation and community $2,330,937,000 Net revenue amortization $2,207,944,000 2% $231,165,000 from patient 5% services Education and Other operating 74% research revenue 6% 6% Capitation Food, drugs, Others for claims expense other medical economically Unpaid costs Capitation 8% supplies/services disadvantaged of Medicare Revenue 43% 1% 30% 16%

Revenue Expenses Community Benefit Net revenue from patient services $1,717,556,000 Salaries, wages and benefits $947,051,000 Charity Care $7,335,000 Food, drugs, other medical Capitation revenue $383,513,000 $950,968,000 Unpaid costs of Medi-Cal $133,507,000 supplies/services Other operating revenue $131,037,000 Unpaid costs of Medicare $69,715,000 Capitation claims expense $184,274,000 Others for economically Net investment income $92,803,000 $337,000 Depreciation and amortization $111,927,000 disadvantaged Other non-operating revenue $6,028,000 Interest expense $13,724,000 Education and research $14,714,000 Total revenue $2,330,937,000 All of these operating $2,207,944,000 Others for broader community $5,557,000 expenses totaled Total quantifiable community benefit with Medicare and $231,165,000 Seaside Health Plan included

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

12 | MemorialCare Our Philanthropic Support Long Beach Medical Center Foundation and Miller Children’s & Women’s Hospital Long Beach Foundation Fiscal Year Results Total Assets - $190,523,000 Saddleback Medical Center Foundation Fiscal Year Results Total Assets - $145,825,000

Orange Coast Medical Center Foundation Fiscal Year Results Total Assets - $980,000 Combined total philanthropic income growth and contributions back to the community across all foundations: Income/Growth Philanthropic Gifts - $13,497,000 Support Groups - $638,000

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

Our Physicians and Employees

10,838 3,150 558 456 1,644 146,999 Total employees Medical staff physicians Resident and fellow physicians Medical students Volunteers Volunteer hours Senior Executives and MemorialCare Board of Directors Barry Arbuckle, Ph.D. Board of Directors FY 2018 Sharon Cheever MemorialCare Senior Executives Mark D. Cianciola, M.D. Barry Arbuckle, Ph.D., President and Chief Executive Officer Thomas Collins, Ed.D., Chair Eric Feldman, M.D. John Bishop, Chief Executive Officer, Long Beach Medical Center, James Gauss Miller Children’s & Women’s Hospital Long Beach Russell Hill Jim Leo, M.D. Lorraine Booth, Chief Human Resources Officer Thomas Rogers Robert Schack Tammie McMann Brailsford, RN, Executive Vice President, Samuel Tang Chief Operating Officer Seaside Health Plan Board of Directors Barry Arbuckle, Ph.D., Chair Rick Graniere, Chief Investment Officer John Bishop Maribel Ferrer Scott Joslyn, Pharm.D., Chief Information Officer Patrick Kapsner Larry Lambert Tom Leary, Chief Legal Officer MemorialCare Medical Foundation Board of Directors Barry Arbuckle, Ph.D. Helen Macfie, Pharm.D., Chief Transformation Officer Barry Behrstock, M.D. Mark Cianciola, M.D., Chair Marcia Manker, Chief Executive Officer, Thomas Collins, Ed.D Orange Coast Medical Center, Saddleback Medical Center Laura Crocitto, M.D. Steve Geidt Mark Schafer, M.D., Chief Executive Officer, James O. Hillman MemorialCare Medical Foundation Larry Lambert Frank Marino, M.D. Karen Testman, Chief Financial Officer Keith Nelson

14 | MemorialCare Long Beach Medical Center and Miller Children’s & Women’s Joel Lautenschleger Hospital Long Beach Board of Directors Richard McAuley Barry Arbuckle, Ph.D. Thomas Rogers, Chair Sathya Chey Jaci Songstad Jane Close Conoley Donna Rane-Szostak, Ed.D. Leslie Edrich, M.D. Lawrence Tran, M.D. John Fielder Myron Wacholder, M.D. Clifford Hancock, M.D. MemorialCare Physician Society Board of Directors Cynthia Herzog, M.D. William (Kurt) Armstrong, M.D. Russell Hill, Chair Marnie Baker, M.D. Stephen Hryniewicki, M.D. Gregory Bush, M.D. Lorna McFarland, M.D. Karen Don, M.D. Robert Schack David Law, M.D. William Webster, M.D. Jim Leo, M.D., Chair James Wells, M.D. Glenn Levine, M.D. Susan Anderson Wise Frank Marino, M.D. Orange Coast Medical Center and Chirag Patel, M.D. Saddleback Medical Center Board of Directors Hiren Patel, D.O. Barry Arbuckle, Ph.D. Michael Schneider, M.D. Sharon Cheever Adam Solomon, M.D. Patrick Donahue Graham Tse, M.D. Resa Evans William Wallace, M.D. James Gauss Paul Weber, M.D. Tim Helgeson James Wells, M.D. Lalita M. Komanapalli, M.D. Andrew Wittenberg, M.D. Larry Lambert

15 Recognizing Our Achievements • Standard of Excellence Elite Status by APG: MemorialCare Medical Group, Greater Newport Physicians, Edinger Medical Group Known for performance and quality • Recognized as top performing medical groups in California • Becker’s Hospital Review’s 52 Great Health Systems to Know in the by SCAN Health Plan: MemorialCare Medical Group, United States Greater Newport Physicians

• American Heart Association Get with the Guidelines Gold Plus – • Perioperative nurses given CNOR® Strong Designation for third Stroke and Honor Roll Elite Plus award: Long Beach Medical Center, Consecutive Year: Long Beach Medical Center Saddleback Medical Center

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

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

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

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

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

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

16 | MemorialCare 3 Long Beach Medical Center MemorialCare Medical Group 2801 Atlantic Ave., Long Beach, CA 90806 Locations Throughout Los Angeles and Orange Counties (562) 933-2000 (657) 241-3680 Miller Children’s & Women’s Hospital Long Beach Greater Newport Physicians 2801 Atlantic Ave., Long Beach, CA 90806 Locations Throughout Los Angeles and Orange Counties (562) 933-2000 (949) 574-4575 Orange Coast Medical Center Seaside Health Plan 18111 Brookhurst St., Fountain Valley, CA 92708 17360 Brookhurst St., Fountain Valley, CA 92708 (714) 378-7000 (855) 833-7747 Saddleback Medical Center Shared Services/MemorialCare Medical Foundation 24451 Health Center Drive, Laguna Hills, CA 92653 17360 Brookhurst St., Fountain Valley, CA 92708 (949) 837-4500 (714) 377-2900

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