The speech that Ms Betsey Bayless gave at the March 3, 2007 induction ball.

Good Evening,

My name is Betsey Bayless and it is a pleasure to be here.

I would like to thank Dr. Campbell for that wonderful introduction. It has been a pleasure getting to know him since I came to Maricopa Integrated Health System.

I have been privileged to serve the people of Arizona as a public servant most of my adult life.

I am currently the Chief Executive Officer of Maricopa.

When I was preparing for my time with you this evening I came across a quote from French 17th Century playwright Voltaire.

He said," Nothing is more estimable than a physician who, having studied nature from his youth, knows the properties of the human body, the diseases which assail it, the remedies which will benefit it, exercises his art with caution, and pays equal attention to the rich and the poor."

This quote speaks volumes about the important role physician’s play in health care. Too often, in this age of managed care, HMOs, and emphasis on the bottom line, we forget that the relationship between patient and physician is, in fact, at the core of what each of you has trained diligently for years to do: practice medicine.

As the CEO of Arizona's only public health system, I can tell you that since beginning my duties in September of 2005, I have become acutely aware of the importance of the patient/physician relationship.

Understanding this relationship is what makes all of you excellent physicians.

* * * * * *

You know I do not come from a health care background, so my comments tonight come from a lay person tapping into the health care community.

Let me tell you some things that are important to me; then I will talk about some things I think are important to you.

While I am sure most of you are well aware of Maricopa Integrated Health System, I would like to give you some recent history about the health system.

In November of 2003, the voters of Maricopa County overwhelming by approved Proposition 414. As a result, a Special Health Care District was created to govern MIHS. The district — which receives roughly $40 million annually in property taxes — consists of five elected officials each of whom represents a geographical region within Maricopa County.

Together, the Special Health Care District Board and I have worked hard to help put Maricopa Integrated Health System on firm financial footing. Seventeen months ago, MIHS had less than $5 million in the bank. Today, we have a cash balance of about $60 million. According to industry standards, we should have about $120 million but we are getting there.

Our flagship, Maricopa Medical Center, is a 450-bed facility equipped with a Level One trauma center and the Arizona Burn Center, the second largest burn center in the country by volume.

MIHS has 11 Family Health Centers located throughout the Valley and two inpatient psychiatric facilities.

Daily, I tell my employees, “It is a new day at Maricopa”. We, as an organization, are working to clearly define our mission, vision and values.

We have placed a laser focus on quality and will continue to pursue excellence for our patients.

And, we need to replace our hospital.

Built in the early 1970’s from a 1950’s military hospital design, Maricopa Medical Center no longer meets the needs of 21st century medicine.

Our community deserves and needs a new hospital. I am committed to making it happen.

* * * * * *

We are a teaching hospital and we strive to improve our residencies and we are looking to establish several new ones. MIHS has been receiving a lot of press lately regarding our efforts to be the primary affiliate with the University of Arizona's new College of Medicine in downtown Phoenix.

We are still interested in partnering with the University of Arizona. It only makes sense. After all, MIHS has been training physicians for 50 years. I believe, as does my board, that it is in the best interest of taxpayers to build on this existing relationship. After all, why should taxpayers be asked to pay twice for services MIHS has been providing for years?

Now I want to talk about things of interest to you.

Let me talk about some things I hear repeatedly from physicians around MIHS.

• Medical Malpractice

• Physician Workforce

• Uninsured/Underinsured

Medical Malpractice

We know from National data that insurance claims against

medical professionals have stabilized for the first time in years;

the overall frequency of malpractice claims has not increased for a second straight year; and that the average size (severity) of claim increasing at rate of 6 %. It used to be about 30%.

There is national Legislation that would limit pain and suffering payouts at $250,000, cap attorney fees, and require courts to reduce compensation awards for expenses already covered by health insurance and the like.

In Arizona the malpractice insurance market is extremely concentrated. There are few companies offering coverage but actually rates are stabilizing and the Incurred loss ratios have improved. The use of alternative markets has increased with on-shore and off-shore trusts.

There is also legislation in Arizona. Last year a bill was vetoed by Governor Napolitano which would have raised the burden of proof from a preponderance of the evidence to clear and convincing evidence for malpractice claims against medical professionals and hospitals who deliver emergency services required under EMTALA or following a disaster.

This year, a new bill has been introduced that would raise the burden of proof from preponderance of evidence to clear and convincing evidence in cases against medical professionals and hospitals who deliver emergency services.

The Governor says she will sign this bill.

Physician Workforce

The number of Arizona physicians in active practice has increased by 50% from 1994 to 2004. (8,026 to 12,024). This is an increase in the physician to population ratio from 190/100,000 to 207/100,000; however, Arizona is still below the national average of 283/100,000.

From 1992 to 2004, the physician workforce increased in every Arizona County. Approximately 75% of Arizona physicians are in private practice, and 41% are in primary care specialties (2004 data).

Since 1992, the number of primary care physicians, hospital-based physicians and surgeons has increased; however, we lag in the number of physicians in allergy, cardiovascular disease, endocrinology, gastroenterology, hematology and infectious disease.

Approximately 90% of Arizona’s allopathic physicians graduated from medical schools outside the state. I don’t have the percentage for osteopathic physicians, but it probably is about the same.

We are stepping up our medical school education and not a minute to soon. The numbers of aging baby boomers demanding medical care will grow with the increase in the older population.

The Emergency Medical Services Access Task Force was formed by the Governor in May 2006, and has developed the following recommendations to increase the overall supply of primary and specialty physicians in Arizona:

1. Increase Funding for Graduate Medical Education

2. Expand the Capacity of the Downtown Phoenix Campus of the

University of Arizona Medical School.

3. Attract and Retain Physicians from Out of State.

4. Reduce Obstacles to Medical Practice in Arizona

5. Better Utilize Retired and Part-time Physician Workforce.

6. Implement Strategies to Improve Access to Primary Care

Providers to Reduce the Need for Physician Services in the State.

Now, a topic of concern to all of us…

The Uninsured

National Data indicates that about 16% of Americans are uninsured and the number is growing. According to Arizona Data, in both 2004 and 2005, an average of about 19 % of Arizonans did not have health insurance coverage.

There has been much discussion lately about change in national policy to provide health care to more Americans. I came across an interesting projection recently. Experts estimate that the physician workforce would need to increase by 95% if the 45 million uninsured Americans had health insurance due to changes in national policy.

I don’t know where this whole discussion of national policy change is going, but it certainly is more prevalent than 8 years ago or even 4 years ago.

The uncompensated care costs for Arizona hospitals is high. It is at least $250 million. At MIHS, fiscal year ’05 was $83 million; ’07 is projected at $120 million.

You all know about uninsured cost shifting. Annual premium increases cause small businesses to drop coverage or to elect not to provide health care coverage to employees. Then the number of uninsured increases which results in uncompensated care to medical providers. The cost of uncompensated care is absorbed by hospitals, physicians, etc. Providers pass along the cost to insurance carriers during reimbursement negotiations. Insurance carriers increase

premiums to offset the increase in provider payments. And then businesses elect to drop coverage which increases the number of uninsured. It is a complete circle and a vicious cycle.

In summary, we do know that with increasing population more physicians are needed in Arizona. In order to increase that work force, we need to: encourage reform, increase medical education and training to provide more physicians and address the uninsured/underinsured.

* * * * * *

I want to thank you for inviting me to be here tonight. Thank you for coming to Arizona and thank you for the integral role each of you plays in delivering health care to the people who need it.