UW Hospital & Clinics

Watertown Regional Medical CenterPediatric Funding Proposal

Mike Buhl, Senior Vice President and

Chief Financial Officer

April 7, 2010

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Background

Watertown Regional Medical Center (WRMC) has been a UW Health Partner since February 2008. Over the last 2 years, UW Health has developed many service, program and physician services with WRMC.

– pulmonary/sleep, telestroke, Johnson Creek clinics, cardiology, neurology and orthopedics.

Desire to continue relationship and build upon areas that will benefit both organizations.

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ProposalWith the AFCH brand and service quality, it is anticipated that both WRMC and AFCH will capture increased market share with this association.The Pediatric/AFCH business plan strategy for growth is to develop relationships in the region. WRMC’s desire is to increase their capability to provide pediatric services. An AFCH branded pediatric inpatient unit at WRMC could accomplish both objectives. AFCH would provide a clinical nurse manager, training of WRMC’s nursing staff and Medical Directorship through Dr. Chris Green.

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Business Plan / InvestmentWRMC will require an initial investment for their inpatient pediatric unit for demolition and rebuild of new patient/family rooms. This investment is approximately $570,000. The proposal for sharing in both the startup and on-going operating gains/losses is 50/50 between WRMC and AFCH. This would require an upfront investment of $280,000 and a potential year one share of the loss of $278,000.Achieving positive net income by year 5.

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Rio

Portage

HartfordColumbus

Juneau

Whitewater

Cambria

Milton

Verona

Waupun

Mayville

Edgerton

Poynette

Stoughton

Evansville

Beaver Dam

Pardeeville

Watertown

Fort Atkinson

OconomowocMarshall

Oregon

Randolph

Jefferson

Belleville

Brooklyn

Campbellsport

Waterloo

Dane

Albany

Eagle

East Troy

BurnettKewaskum

West Bend

Adell

Sun Prairie

Ixonia

Fall River

De Forest

Waterford

Fredonia

Franksville

Waunakee

Mukwonago

Hartland

Dousman

ArlingtonReeseville

Cambridge

Madison

Franklin

Lake Mills

Waukesha

Union Grove

Fox Lake

Neosho

BelgiumAllenton

Palmyra Muskego

Sullivan

Saukville

Waldo

Deerfield

Sussex

Middleton

Helenville

Iron Ridge

GraftonCedarburgRubicon

Brownsville

Mequon

Cascade

Pewaukee

Theresa

Horicon

Slinger

Lomira

Jackson

Oak Creek

Random Lake

Richfield

Sturtevant

GermantownColgate

Cottage Grove

Big Bend

Thiensville

Menomonee Falls

Johnson Creek

Caledonia

Cedar Grove

Mc FarlandNew Berlin

Port Washington

Brookfield

Delafield

Milwaukee

Hubertus

Lowell

Cudahy

Nashotah

Greendale

Wales

Windsor

Elm Grove

North PrairieSouth Milwaukee

Saint Francis

Butler

OCONOMOWOC

PRIMARYSECONDARYTERTIARY

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Recommendation

The Finance Committee recommends to the UWHC Authority Board that UWHC partner with WRMC in the AFCH Pediatric brand and share in the funding as outlined above.