Lakeview Health SystemBoard of Directors Annual Letter to the EmployeesLakeview Health Systems is a nonprofit integrated health care system that has been providing quality care for our community for over thirty years. The health care field has never been as dynamic with marketplace reforms pushing the industry to change. Yet, at the same time government budget cuts have reduced net revenue that we have come to depend on throughout our history. Here at Lakeview Health Systems, we have adapted our organization to adjust to these environmental changes. Thanks to the efforts of our Board of Directors, management at our various facilities and especially our dedicated employees, we have accepted the challenge of our times and are positioning ourselves to proceed through the 21st Century with confidence.The hub of our system, Lakeview Memorial Hospital, is one of the best health facilities in our community. At 199 beds, it is considered full service and has made us proud with its competitiveadvantage. Even though we are not quite the size of our neighboring tertiary facility, we believe that our nonprofit commitment to the community sets us apart. The centers of excellence we now offer include medical/surgical service, maternity care, pediatrics, rehabilitation and home health. Even with the changes in reimbursement, the hospital has maintained a positive position allowing us to supplement other areas of our total system.The hospital has a very supportive medical staff that is helping us to address the entry of managed care into our area. We are investigating ways that we can partner with our physicians in a method that aligns our intents and supports our continuing efforts to improve upon our services. Our Medical Staff has been an integral part of our advancement and we welcome their active participation. In our community, there are many hospitals for which the doctors can make their referrals. We want the medical staff to choose our facility for their admissions and we will work with them so that their decision will be an easy one.The hospital has developed a continuum of care by adding services, which complements the range of services already provided at the hospital level. Recently, we have added to our system Lakeview Skilled Nursing Facility, reaching out to our elderly and chronically ill population. Being only ten miles away from our hospital, it is a vital component to our developing a vertically integrated delivery system. At 80 beds and independently licensed, we have worked hard this last year to improve their standing in the community. We are currently cooperating with the Department of Health Services to develop a plan of action that addresses completely the deficiencies from their last survey. We are confident that through the dedicated efforts of the Skilled Nursing Facility management team, our nursing home division will be back on track and provide that very important link to our other healthcare services. Lakeview Skilled Nursing Facility is under an enormous challenge with the advent of a prospective payment system for our government patients. Our financial projections show that this breakeven facility will be in the red next year if measures are not taken rapidly to reduce costs.Lakeview Health SystemWe are also pleased to have added our own satellite outpatient clinic, Lakeview Clinic, only five miles away from Lakeview Memorial. This multi-specialty medical office is licensed through the hospital and thus falls under all the same accreditation requirements.The physician group we have contracted with for professional services works closely with our clinic management team to assure that patients can receive the best possible medical services in a noninstitutional setting. At 2200 square feet, this clinic is not very large, but services over 3000 active patients. We tend to draw a young population with maternity and pediatrics being the biggest percentage of the patients. We believe with our state's new emphasis on programs that support additional care for maternity and pediatrics, that Lakeview Clinic has a unique opportunity. We have always considered our clinic as a loss leader but with these new programs, it may come into its own.Many environment factors are influencing the Board of Directors to assess Lakeview Health Systems current mission statement and overall objectives. The mission has remained the same for over the last ten years: To provide quality health care services in a cost efficient manner that recognizes the importance of the individual patient. We are looking to go beyond the conventional way of providing care and examining how best to serve our 65,000 residents. We see the socioeconomic changes taking place in our community. The solid middle class population from the past is evolving into one that is more dependent on governmental assistance programs. We can work with this populationand still keep our operations running if we recognize that things must be done differently.We must know what our costs are so we can focus on how to improve our financial position. We must know what they are so we can properly negotiate managed care contracts. We must know what they are so we can determine who our partners need to bein the future. Without each and every one of you helping to gather this information, we will not be able to move forward.Many other variables may come into play this next year. The nursing shortage has affected all of our various facilities. We understand that Human Resources is taking active measures to try to not only recruit new clinical staff but also to make sure that we retain the nurses we currently have on board. Also, so far we have not had union representation at any of our associated facilities. The Board is anxious to continue in this fashion and will entertain through management any ideas to keep our employees satisfied. We hear of the possibility of union activity occurring in our area and want to make sure that our commitment to our workers remain the same as it has for over thirty years, to be an important part of your family. Together with proper communication, we can continue to work as partners and secure our place in the future.Wilma WelbourneBoard