2011 — A Year in Review Cottage Health System Our Not-for-Profit Mission   Cottage Health System is a private, not-for-profit community organization. Our sole purpose is to provide outstanding medical care to the communities we serve.   Together our hospitals—in Santa Barbara, Goleta, and the Santa Ynez Valley—provide a range and quality of services rarely found in communities of our size, and are consistently among the most efficiently managed healthcare providers in California.   A volunteer board of directors from the community oversees the operations and fiscal management of the System. These women and men serve without remuneration of any kind and are, in fact, a significant source of philanthropic financial support for our hospitals.   Because there is no Santa Barbara County public hospital, Cottage Health System also provides the great majority of acute care to our region’s financially vulnerable population, for which reimbursement does not cover our costs. These programs go beyond the legal requirements for providing emergency care and include our growing commitment to provide medically necessary but non-emergent services to patients who can’t afford to pay for the hospital attention they need. This Community Service Program last year provided free or reduced-cost care to 343 patients. We thank not only the volunteer physicians who review these needed cases but also those who provide their services to these patients, again at no or reduced charges. Moreover, physicians in our graduate medical education program help staff the ambulatory care facility at the Santa Barbara County Public Health Department, providing a valuable service to some of the more vulnerable members of our community.     Cottage By The Numbers — 2011 - Licensed beds 643 - Patients admitted 20,152     • Medicare (including HMOs for seniors)      43.4%     • HMO/PPO 36.2%     • Medi-Cal 15.8%     • Charity and Self-Pay 4.5% - Days of inpatient care 101,965 - Number of surgeries 14,569 - Babies delivered 2,384 - Emergency department visits 66,739 - Outpatient visits (e.g., lab, X ray) 130,620 - Employees (full-time equivalents) 2,845 - Volunteers 1,047 - Volunteer hours  135,645 - Medical staff physicians 673 - Physicians in residency programs 53     Financial Responsibility Figures For January Through December, 2010 (In Millions) - Revenue     $ 600 - Expenses    - 555 - Operating Margin = 45 - Net Investment Income + 5 - Total Available For Reinvestment $ 50   Net revenues of $50 million were reinvested in our hospitals for technology, equipment, construction, and community benefit enhancements: - New hospital construction and equipment  $ 30 - Maintaining and enhancing state-of-the-art equipment 14 - New technology, including electronic health information 4 - Community program enhancements and increasing funds for charity care 2   Cottage provides the majority of acute care to our region’s financially vulnerable population, and reimbursements do not cover the costs of this care.

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