Clinical Integration: The Foundation for Accountable Care - Presentation delivered by Keynote Speaker Marvin O’Quinn, Senior Executive Vice President and Chief Operating Officer, Dignity Health at the National Healthcare CXO Summit held in Las Vegas Oct 19-21, 2014.

1. Clinical Integration:
The Foundation for Accountable Care
Marvin O’Quinn
Senior Executive Vice‐President and
Chief Operating Officer
October 20, 2014

2. Overview
• Introduction to Dignity Health
• Current State of the Industry
– What does reform mean?
• Clinical Integration (CI)
– What is it?
– Components of CI
– Organizational Structure
– Physician Interest & Responsibilities
– Opportunities & Benefits
• The Bridge to Accountable Care
– Clinical Integration as a strategy
2

3. Dignity Health Today
One of the largest health systems in the nation
56,000 39
Employees Acute Care
20 380+ 9,000
State
Care
Affiliated
Hospitals
Network
Sites
Physicians
Providing integrated, patient‐centered care to more than two million people annually
Diversified service offerings and partnerships supporting population health
Growing national footprint with U.S. HealthWorks
Hospitals in Arizona, California, and Nevada
3
p , ,

4. Dignity Health Horizon 2020 – Framework for the Future
QUALITY COST GROWTH
• Top decile quality
• Evidence‐based medicine
• Chronic disease
• Medicare performance
• Revenue services/CBO
Salar and • Return on assets
• Newly insured
• New management
• National patient safety goals
• Transformational care
• Patient experience
• Salary benefit costs
• Clinical resource
consumption
• Supply and purchased
services
INTEGRATION CONNECTIVITY
service areas
• Commercial volume
• Diversify non‐acute holdings
• Physicians
• Health plan partnerships
• Reimbursement models
• Clinical integration
• Clinical coding
• EHR Alliance
• Physician connectivity
• Patient connectivity
• Physician EMR
• Enterprise data A competitive cost structure,
LEADERSHIP
p
• Workforce competencies
• Community p ,
high quality, clinical integration,
a strong technology infrastructure
benefit
and continued growth
• Philanthropy
• Nursing leadership
• Employer of Choice
• Public policy and advocacy
are critical success factors
4

5. Dignity Health: Moving Towards Accountable Care
• Leveraging Horizon 2020 strategies to build a system poised to
address the demands of accountable care
Current
• Episodic Future
Care
• Population •Volume Driven/Fee‐For‐Service
Payment Systems
•Acute Care Provider
Management
• Bundled Payments/Pay‐For‐
Performance
•Diversified and Integrated
• IT Systems in Silos Delivery System
•Hospital‐Physician Centric
Interactions
• Integrated Information Systems
Across Multiple Care Delivery
Locations (Acute, Ambulatory,
Home Health, Retail)
Horizon 2020 Strategies
Growth, Cost, Quality, Integration, Connectivity, Leadership
Mission, Vision and Values
5

6. Burning Platform for Change in Healthcare Reform
West Health Policy Center
6

7. Average Annual Worker and Employer Contributions to Premiums
and Total Premiums for Family Coverage, 1999‐‐2011
$12,106*
$12,680*
$13,375*
$13,770*
$15,073*
$ 9,068*
$9,950*
$10,880*
$11,480*
$5 791
$6,438*
$7,061*
$8,003*
,
5,791
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.
7

8. The Move from Volume to Value
The overwhelming consensus is that volume based
reimbursement will be supplemented by or
replaced by quality and value based measures
Fee‐for‐Volume Fee‐for‐Value
8

9. Hospitals are Already Feeling the Pressures of Reform
1. Value Based Purchasing
2. Penalties for Re‐admissions
3. Reduced Medicare Margins
9

10. Physicians and Hospitals Are Being Driven Together
Hospital Physicians
1 Economic
Concerns
• Continued cost pressures
• Payer Mix shift
• Declining volumes
• Ancillary reimbursement cuts
f lf
2
Health
• Looming physician
shortage
• Increased accountability for
• Professional fee cuts
• Rise in practice costs
• Uncertainty around impact of new
Reform costs out outcomes d l
• Emphasis on care value
• Inpatient demand destruction
payment models, coverage
expansion
• Change in incentives
• Specialty demand destruction
10
©2011 THE ADVISORY BOARD COMPANY

11. Old Model of Stakeholders is Obsolete
The New Era Model is Joint Accountability!
HEALTH
SYSTEMS
DOCTORS
HEALTH
PLANS
CMS
11

12. The FTC’s Definition of CI
Clinical Integration is an arrangement in which physicians
modify practice patterns and create a high degree of
cooperation in order to control costs and ensure the quality
of services provided 1
The FTC also indicates Clinical Integration programs may
include the following:
Establishing
mechanisms to Selectively Significant investment
of capital both
1. 2. 3.
monitor and control
utilization of health
care services that are
designed to control
costs and assure
choosing
network physicians
who are likely to
further these efficiency
objectives
capital, monetary and human,
for the necessary
infrastructure and
capability to realize the
quality of care claimed efficiencies
The core of a CI program is a network of physicians, working collaboratively on a comprehensive set of quality and cost
improvement initiatives selected as clinically appropriate and matched to the needs of their local markets, and supported by a
robust information system that enables the delivery of higher value care.2
1) Adapted from FTC Opinions
2) Adapted from Southwind
12

13. Components of Clinical Integration
Care
coordination
Performance
management
Commitment to
infrastructure
system
Legal,
f l
standardized
care
meaningful
performance‐based
incentives
Selective Clinical Capability to
j i tl t t
membership
criteria
Integration jointly contract
with commercial
payors
13 Adapted from The Advisory Board, “Building the Performance‐Focused Physician Network.” 2010.

14. Why Clinical Integration?
1. Improve quality of care
2 Increase efficiency/reduce cost
Model
Reasonable
C
Includes
All
Joint
2. C i
3. Provide a structure for
independent and aligned
physicians Cost
Specialties
Contracting
to partner with
Employment ‐ + +
hospitals
4. Gives physicians opportunity to
g get be rewarded for their hard
Clinical
I t ti + + +
work via beneficial contracts
5. Facilitate physician buy‐in for
hospital quality and cost
Integration Co‐initiatives
Co
Management + ‐ ‐
14

15. Our only hope for the 21st Century
is to form a “mass thick network
of creative collaborators.””
Bill Clinton at California Association of Physician Groups Conference 6‐8‐13 15

16. Transition Between Payment Paradigms
100%
Fee For Value
enerated T
ntive Mod
Through
el
©2011 TH
HE ADVISORY BOARD
D COMPANY
Re
evenue Ge
Incen
Fee‐For‐Service
0%
Fee For 16
Time???

17. Dignity Health CI: If We Build It, Will They Come?
Is this
Heaven?
No,
Dignity
Health.
17

18. Physician Enrollment in Clinical Integration
3,601
4,000
2,651
2,955 2,945
3,500
3,000 2,800
1,536
2,140
2,267 2,365
2,500
2,000
,
1,500
1,000
500
0
Q1 2013 Q2 Q3 Q4 Q1 2014 Q2 Q3 Q4 Q1 2015
18

19. CI 14
Contracts to Date
12
10
8
6
Global Cap ‐ Duals
Exchange Product ‐ FFS
IFP* PPO ACO
4
PPO ACO
Medicare HMO
2
0
In Negotiations Fully Executed
19
*Individual and Family Plan products sold both on and off the Covered CA Insurance Exchange

20. CI Network Organizational Structure:
Physician Led & Physician Driven
Operating
Agreement
Management
MedProVidex CI Program Network
Services Agreement
Board of
Managers
Initiatives
Payer
Remediation
20
Committee
Committee
Committee

21. Physician Responsibilities for Membership
• Adopt and adhere to physician‐developed
standards to improve
quality and efficiency
• Collaborate with colleagues to
improve performance
3,601 participating
providers
p p
• Agree to be measured and to share
quality data with the network via
technology provided with the 33% of Dignity
Health’s total
program
• Be accountable for compliance with
network policies and procedures
medical staff
• Maintain medical staff privileges at
or referring relationship with the
local Dignity Health member hospital
Dignity Health’s CI
program has been
presented to the
FTC
21

22. Clinical Integration Data Flow
CI Portal and Dashboard (Clear DATA)
User
Provision
&
CI Data Store and
Calculation Engines
Acute Hospital Data
Tool
entication thorization
Dashboard
File
Admin Metrics
Ambulatory Claims
Data
Authe
Aut
Upload
Tool
Ambulatory
Sampled Quality
Data
Public & Private
Network
Web Pages
All data transmitted through
secure firewall and resides
OUTSIDE Dignity Health
22

23. Benefits for All Major Stakeholders
Dignity
Health Physicians
Payors
Employers Patients
Hospitals
Quality
Incentives for
Growth
I d
Improvement
Growth
(market share, payor
mix)
Quality
Improvement
Growth
(market share,
payor mix)
(market share, risk
distribution)
Cost
Improved
Employee
Health
Improved
Clinical
Outcomes
)
Platform for HCR
(e.g., bundled payments,
VBP, ACOs)
Physician
p y )
System
positioned for
HCR
Coordinated
Reduction
Marketable
Provider
N k
Coordinated
Care
y
Integration without
Employment
Financial
Improvement
Care System
Potential Higher
Reimbursement
from Payors
Network
Improved
Quality
Cost Control Cost Control
(reduction in
co‐pays)
23

24. Clinical Integration: The Bridge to Accountable Care
Accountable
Fee‐for‐
Care
Fee for
Service
24

25. Opportunities Shift Towards Population Health
Commercial
PPO
ACO Commercial
PPO
P4P
Direct to
Employer
Clinical Integration
Program
Medicare
Patient
Centered Medical Advantage
Homes
(Physician Network,
Quality & IT Infrastructure)
Medicare
ACO
CMS
Bundled
Managed
Medicaid /
Duals
Services
25

26. The Strategic Advantage of CI
• The new care delivery models of accountable care require
coordination across the continuum continuum, both inpatient and
ambulatory.
– ACOs
– Bundled payment programs
– Patient Centered Medical Homes
• Development of an aligned and coordinated physician network
is vital for optimal performance in population management and
to bring down the total cost of healthcare.
26

27. Clinical Integration Accountable Care Organizations
Clinical Integration (CI)
A led Accountable Care Organization (ACO)
A f id d li f
& – physician program that will
improve quality and efficiency, and
allow for new avenues for
reimbursement from commercial fee‐
– group of providers and suppliers of
services that will work together to
coordinate care for the patients they
serve.
for‐service payers.
– The CI Network of Physicians will work
collaboratively, share data, and hold
– The goal of an ACO is to deliver seamless,
high‐quality care, instead of the
fragmented care that often results from a
each other accountable for
performance against physician
developed and agreed upon clinical
performance and standards
fee‐for‐service payment system.
– When specific goals and benchmarks are
efficiency standards. met, an ACO has the opportunity to share
in the cost savings created by improved
care coordination.
27

28. Mechanics the Medicare Shared Savings Program
– Program began January 1, 2013,
contracts to last minimum of three
years
of – Physician groups and hospitals eligible
to participate, but primary care
physicians must be included in any
ACO group
– Participating ACO’s must serve at least
5,000 Medicare beneficiaries
– Bonus potential to depend on
Medicare cost savings and quality
metrics
– Two payment models available: one
with no downside risk, the second
with downside risk in all three years
28

29. Why ACOs Matter to Dignity Health
– We believe that everyone who walks through our doors should
be treated like a person not a patient
person, patient.
– We have been advocating for meaningful reform since our
founding, because we believe g, access to care is a right.
– The debate about health care is too narrowly focused on cost
and politics and not on whether the system works.
– We want to implement reform in a way that brings humanity
back into health care, which means understanding that human
connection – humankindness – helps people heal.
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30. 30

31. Thank You
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