M&A Perspective from Cox Medical Center Branson a subsidiary of CoxHealth (Formerly Skaggs Regional Medical Center) William Mahoney, FACHE Cox Medical Center Branson President/CEO Missouri Office of Rural Health Conference Columbia, Missouri June 5, 2013

Independent or Relevant? “By the way, being independent Is not a strategy”

Pressures We Face  National Issues (Economy, PPACA, etc.)  Our Hospital (Aging Facilities, Poor Payor Mix, Instability, Competition, no built-in economies of scale, seasonal fluctuations, etc.)  Board and 107 Trustees Extremely Independent

What does Relevant look like? Improved ability to recruit providers Access to needed Capital Enhanced healthcare in our community Economies of scale Jobs in Community

The Search Process 7-8 Months  Hired PYA (Pershing Yoakley & Associates, PC)  Sent out self-directed RFPs  Interviewed 5 organizations  Shared visits and evaluation  Chose 2 finalists (visited their hospitals, hosted them at our hospital) 5

End Result Chose CoxHealth from Springfield o Economies of Scale o Solid Culture o Regional Focus o Good Financial offer, but not the best one o Seats at the table – long-term thinking

Key Takeaways Hire a good attorney, good M&A firm and good PR firm Due Diligence will uncover holes in your system – review yourself Protect senior team from the onset Over communicate to all stakeholders Keep whole board engaged Be prepared – Operations will suffer Deal Points: Begin with the end in mind.

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