Palo Alto Medical Foundation

“The affairs and management of Palo Alto Medical Foundation (PAMF) are supervised by the Executive Committee which has power to transact all regular business of PAMF during the period between meetings of the Board of Directors. THE EXECUTIVE COMMITTEE CONSISTS OF PAMFS CHAIR, CHAIR OF FINANCE AND PLANNING, PRESIDENT OF PAMF, THE COO OF THE GENERAL MEMBER, AND TWO ADDITIONAL DIRECTORS. FORM 990, PART VI, LINE 2 JOHN CUNNIFF, MD, RICHARD CARY HILL, MD, JOSEPH R. LACY, MD, HEATHER LINEBARGER, MD, ELIZABETH NEWSOM, MD, Noman Khan, MD and Sharon Tapper, MD HAVE A BUSINESS RELATIONSHIP. FORM 990, PART VI, LINE 4 BOARD COMPOSITION CHANGES FORMER: THE BOARD OF DIRECTORS SHALL CONSIST OF BETWEEN 9 AND 28 DIRECTORS. REVISED: THE BOARD OF DIRECTORS SHALL CONSIST OF BETWEEN 17 AND 25 DIRECTORS. FORMER: AT LEAST 3 PHYSICIANS SHALL BE MEMBERS OF THE BOARD. REVISED: BETWEEN 3 AND 8 PHYSICIANS SHALL BE MEMBERS OF THE BOARD. FORMER: A MAJORITY OF THE MEMBERS OF THE BOARD SHALL BE BROADLY REPRESENTATIVE OF THE AREAS SERVED BY THE CORPORATION. REVISED: BETWEEN 11 AND 14 INDIVIDUALS FROM THE COMMUNITY SHALL BE NOMINATED BY THE BOARD OF THE CORPORATION AND APPOINTED BY THE GENERAL MEMBER. THESE INDIVIDUALS SHOULD TOGETHER REFLECT A BREADTH OF DIVERSITY AND BE CHOSEN FOR THEIR WILLINGNESS AND ABILITY TO EFFECTIVELY CONTRIBUTE TO AND SUPPORT THE OBJECTIVES OF THE CORPORATION AND THE GENERAL MEMBER. REMOVED VICE CHAIR AS AN OFFICER POSITION AND ADDED ASSISTANT SECRETARY AS AN OFFICER POSITION.”

“This corporation is an affiliate of sutter health, a california nonprofit public benefit corporation. Sutter health is the sole member with the right to elect at least a majority of the members of the board of directors.”

“Sutter health as the sole member of the organization is entitled to exercise fully all rights and privileges of members of nonprofit corporations under the california nonprofit public benefit corporation law, and all other applicable laws. The member has the rights and powers to appoint (and remove) members of the corporation's board of directors, subject to the provisions of the bylaws. In addition, the member has the right to approve the following actions of the corporation's board of directors: (a) merger, consolidation, reorganization or dissolution of the corporation or any affiliated entity; (b) amendment or restatement of the articles of incorporation or the bylaws of the corporation or any affiliated entity; (c) adoption of operating budgets of the corporation or any affiliated entity, including consolidated or combined budgets of the corporation and all subsidiary organizations of the corporation; (d) adoption of capital budgets of the corporation or any affiliated entity; (e) aggregate operating or capital expenditures that either exceed previously approved operating or capital budgets, or are unbudgeted, if the amount in excess or the unbudgeted expenditure is higher than the signature authority of the president and ceo of the general member; (f) long-term or material agreements of the corporation or any affiliated entity including, but not limited to, borrowings, equity financings, capitalized leases and installment contracts; and purchase, sale, lease, disposition, hypothecation, exchange, gift, pledge, or encumbrance of any asset, real or personal, with a fair market value in excess of the signature authority of the president and ceo of the general member; (g) appointment of an independent auditor by the corporation or any affiliated entity; (h) the hiring of independent counsel by the corporation or any affiliated entity, unless at least two-thirds (2/3) of the board in office on the day of a vote determine that a material conflict of interest exists between the corporation and the general member and, therefore, the board must engage independent counsel to assist in exercising the boards fiduciary duties. To preserve the independence of counsel retained pursuant to this provision, the general member shall not claim that any communication between such independent counsel and any person acting on behalf of the corporation, even if that person is also an employee, officer or agent of the general member, constitutes a waiver of the attorney-client privilege or work-product protection; (i) the creation or acquisition of any subsidiary or affiliate as that term is defined in california corporations code section 150; (j) contracting with any third party for all or substantially all of the management of the assets or operations of the corporation or any affiliated entity; (k) approval of business plans to develop major programs and clinical services of the corporation or any affiliated entity. Major new programs and clinical services shall include, but not be limited to: (i) any new programs or services that require approval and/or additional licensure from any regulatory agency, or (ii) any other programs or services the general member deems major; (l) approval of strategic plans of the corporation or any affiliated entity; (m) adoption of quality improvement policies not in conformity with policies established by the general member; (n) any self-dealing transaction between a director of the corporation and the corporation or a subsidiary of the corporation; or (o) rehiring, contracting with, or otherwise compensating a sutter health executive, or any officer or member of management of the corporation or any affiliated entity after their employment has ended.”

“Sutter health, a related tax-exempt organization, has a centralized tax department responsible for the preparation of the form 990. Annually the tax department provides training and education to affiliate personnel who assist the tax department in collecting and reviewing data to be reported on the form 990. The preparation material is reviewed by various departments including tax, finance, legal, and human resources. A national accounting firm prepares and/or reviews the return. A completed return is then reviewed by the tax department, the affiliate, and the cfo before the return is filed.”

“Employees are educated on the conflict of interest policy and the need to make disclosure as part of annual compliance education. In addition, annually a disclosure statement is completed by all directors and officers that includes an acknowledgement that they have read the conflict of interest policy. On this statement the individual will list a wide range of information which includes business relationships, employment relationships, property interests, and those of related parties. The ceo and board chair will review the statements and monitor situations that may pose a potential conflict of interest. The ceo and board chair may consult with the office of the general counsel as necessary. If there is a potential conflict of interest related to a particular transaction, the interested individual must disclose the existence and nature of the relationship. The board chair may appoint a disinterested person or committee to investigate the conflict. Until the potential conflict is resolved, the board chair may request the individual to not participate during related presentations and discussions. In all circumstances involving an actual conflict, the interested individual shall refrain from voting on any matter related to the transaction.”

“The compensation committee of the sutter health board of directors retains ultimate discretionary authority over all elements of compensation to ensure that organizational purposes are appropriately being served. The compensation committee uses credible data sources and maintains an objective "arms length" decision-making process, ensuring the integrity of sutter's executive programs and consistency with the organization's overall mission. In order to ensure external competitiveness, national, california and local market area compensation data comparisons are reviewed. Competitive analysis includes: (a) base salary, (b) total cash (base salary + annual incentive) and (c) total remuneration (base salary + annual incentive + benefits and long term incentive). This analysis includes comparable organizations and geographic considerations. For the most senior executive positions, national comparisons for organizations similar in size, scope and complexity as sutter health are most appropriate since it is a national marketplace in which sutter competes for executive talent. On the other hand, because california's underlying compensation structure is higher than national data (especially in the bay area), regional pay comparisons and adjustments are made. Officers and key employees of this organization who are sutter health employees undergo a review and compensation committee approval, and such approval is recorded in the minutes. The compensation review process was last completed in december of 2015.”

“The sutter health system posts its current and past audited financial statements at sutterhealth.org. Other documents are also located at this website including the annual report, mission statement, history, and links to affiliate websites. The governing documents are not available to the public at this time.”

“We enhance the well-being of the people in our communities through compassion, excellence and innovation in health care service, research and education.”

“Program service accomplishments the palo alto medical foundation for health care, research and education (pamf) is a not-for-profit health care organization that is a pioneer in both multispecialty group practice of medicine and outpatient medicine. In 1993, pamf affiliated with sutter health, a family of not-for-profit hospitals and physician organizations that share resources and expertise to advance health care quality. In 2009, pamf, mills-peninsula health services (mphs), sutter maternity and surgery center and menlo park surgical hospital came together to form sutter healths peninsula coastal region. Serving communities throughout northern california, sutter health is a regional leader in cardiac care as well as care of women and children, and is a pioneer in advanced patient safety technology. In 2008, the physicians of the former camino medical group, palo alto medical clinic and santa cruz medical clinic merged into a single physician group called the palo alto foundation medical group (pafmg) to contract with pamf to provide physician services and in 2010, a new multispecialty physician group, peninsula medical clinic (pmc), was formed. In 2015, pamfs 1,450 affiliated physicians and 5,600 employees served 772,808 patients through 3,425,111 patients visits, 442,970 outpatient surgeries, and 243,604 urgent care visits. Pamfs mission is to enhance the well-being of the people in our communities through compassion, excellence and innovation in health care services, research and education. Pamf has three divisions: 1. Health care 2. Education 3. Research health care division pamf's health care division consists of five divisions: 1. Palo alto, serving alameda, san mateo and santa clara counties 2. Camino, serving santa clara county 3. Santa cruz, serving santa cruz county 4. Mills-peninsula, serving san mateo county 5. Alameda, serving alameda county these divisions offer more than 45 medical specialties, a full range of medical services, and state-of-the-art technology. This technology includes the most advanced diagnostic imaging and treatment devices, an electronic health record system, three licensed acute-care facilities, and one accredited home health agency. Pamfs advanced capabilities and emphasis on outpatient care allow physicians and staff to minimize hospitalization of patients, reducing the overall cost of medical care significantly while maintaining the highest quality of care for patients. As part of its commitment to serving its community, pamf provides care to medically indigent patients and those enrolled in medicare, medi-cal, and other government programs whose reimbursements fall short of covering the cost of providing care. Recent achievements - for over a decade now, the integrated healthcare association (iha) named pamf as one of the most outstanding physician groups in california based on its pay-for-performance (p4p) program. In overall performance, pamf ranked as a "top performer" in patient experience, information technology and clinical quality, such as cancer screenings, immunizations and diabetes care. - pamf received the highest recognition elite status of four stars from the california association of physician groups (capg) in its annual standards of excellence survey in june 2013. The voluntary survey assesses how well california medical groups meet the expectations of health care purchasers and patients. It focuses on tools and processes that improve affordability and patient experience. - pamf is currently rated four out of four stars for patient experience by the california office of the patient advocate (opa) in a statewide assessment of all medical groups. Medical groups are ranked in two categories: meeting national standards of care and patient ratings. The opa, an independent state office in conjunction with the department of managed health care, was created to represent the interests of health plan members to get the care they deserve and to promote transparency and quality healt”

“Research division pamfs research programs are nationally known and have made numerous discoveries leading to improvement of care for the entire community. In 2015, the work of pamf research institute (pamfri) and researchers was featured in 57 publications, 151 active clinical studies, and 53 active health services/health policy studies. The publications addressed issues such as asthma, cancer, and diabetes. The clinical studies pertained to a wide range of health issues with the majority focusing on oncology. The health services/health policy studies focused on issues from geriatrics, diabetes, breast cancer, and chronic pain while providing for collaboration with partners in the community. Pamfri has secure sponsorships and funding from numerous prominent organizations including: - national institute of diabetes and digestive and kidney diseases - national heart, lung, and blood institute - patient-centered outcomes research institute (pcori) - national institute on aging - national institute on minority health and health disparities - agency for healthcare research and quality (ahrq) - palo alto medical foundation (pamf) - sutter health - robert wood johnson foundation - american diabetes association - richard & susan levy family trust - gordon and betty moore foundation - the california endowment - california breast cancer research program - california healthcare foundation - john a. Hartford foundation - nutritionquest education division pamfs education division provides health education through health promotion classes, support groups and community outreach. It provides financial support to community organizations, projects related to health care, in-kind assistance through donations of medical equipment, and health fairs and programs. Pamfs health education programs focus on wellness, prenatal/postpartum care and disease management. Pamf also offers need-based scholarships for education classes. In addition, the education division offers free community lectures, health resource centers, support groups, and provides reliable health information to the public through pamfs website, pamf.org. Separate web sites for preteens, teens and parents offer medically accurate and age-appropriate information for those in the community and around the world. The teen and pre-teen sites have received millions of visits each from around the world since it launched in 2001 and 2004, respectively. Pamf is committed to being an active member of the communities it serves, and supports various community programs and services such as projects and educational activities with local school districts, and partnerships with community organizations, including close partnerships with community clinics in underserved areas. Pamfs physicians and staff members also donate hundreds of hours to community service. Community benefit in 2015, pamf provided over $26 million in services for the poor and underserved and nearly $13.8 million in community benefits for the broader community. In addition, each year pamf physicians and staff donate hundreds of hours to community service. Pamfs community benefit efforts include myriad programs and benefits for the broader community, including but not limited to: - monetary donations and in-kind support to local community groups and organizations - health education classes, lectures and presentation to the community - on-site clinical education programs and preceptorships for medical students, medical residents, medical fellows, nursing students, laboratory technologists, radiology technologists, pharmacy students - community organization board memberships - school-based health and wellness programs - childhood obesity programs - health education presentations in local organizations with at-risk populations, ethnically diverse populations, age-focused health and wellness - disease specific programs for requesting community organizations and on-site programs which are free and open to all community members - senior fai”

“Medical group compensation $ 655,825,037 professional fees physician $ 634,187 therapist and other medical $ 645,405 nurse registry $ 419,013 contract aides/orderlies $ 2,712 -------------- total $ 657,526,354 ==============”

“Equity transfers (net) $(182,622,455) interest income from k-1 (527) rental income from k-1 (29,766) ordinary income from k-1 (1,319,468) 1231 gain from k-1 (2,086) partnership income on books 1,429,437 annuity true-up (64,940) change in split interest 31,401 stock and other items 1,208 other changes (119,960) ------------- total $(182,697,156) ==============”

“Description:program service administration total fees:xxx-xx-xxxx”

“Description:therapists and other medical total fees:645405”

“Description:nurse registry total fees:419013”

“Description:medical director total fees:385710”

“Description:professional fees - physicians total fees:248478”

“Description:aides and orderlies total fees:2711”