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October 13, 2010 3:15 – 4:15 pm Insights on Accountable Care Organizations

October 13, 2010 3:15 – 4:15 pm Insights on Accountable Care Organizations Jack Friedman , Chief Executive Officer, Providence Health Plans John Fletcher , Senior Vice President/Chief Executive, WA/MT Region, Providence Health & Services Lead Sponsors Cogdell Spencer ERDMAN and

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October 13, 2010 3:15 – 4:15 pm Insights on Accountable Care Organizations

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  1. October 13, 2010 3:15 – 4:15 pm Insights on Accountable Care Organizations Jack Friedman, Chief Executive Officer, Providence Health Plans John Fletcher, Senior Vice President/Chief Executive, WA/MT Region, Providence Health & Services Lead Sponsors Cogdell Spencer ERDMAN and Davis Wright Tremaine LLP

  2. CEO Lessons for ACOs

  3. The Road to ACO WSHA Annual Meeting October 13, 2010 Jack Friedman Chief Executive Officer Providence Health Plans

  4. PHP at a Glance • 25 years old • Part of PH&S • 380K members/800K customers • $1.2 billion • Commercial, ASO, Individual, Medicare, Medicaid, PPO Network, Work Comp • HMO for Govt programs • EPO/POS for commercial markets • Proprietary network in Oregon/SWW

  5. Traditional Medicare Badly Broken • Poor primary care access • Runaway utilization in unmanaged market • Significant regional cost variation (Dartmouth, Gawande) • Declining reimbursement • Boomers looming • Quality largely unknown

  6. Why is Providence Looking at ACO’s? • FFS Medicare dying • FFS Medicaid untenable • Risk for population better $ than government FFS • All payors reducing hospital days & ED visits • Global budgets coming • Prepare for commercial insurance exchange

  7. Essential Elements of Successful ACO • Strong primary care base • Aligned incentives • Kick ass medical director • Predictive modeling software • Disease and case management • Enlightened MD leaders

  8. Transformation work is central to our system’s strategy Where we are headed … “… a connected experience of care, built on a foundation of clinical excellence.” Clinical Transformation Physician Integration New Financing Models Single Information. Platform Your Division’s Priorities … Medical Home How we will get there … Innovate (Change the way we work) Standardize (Elim. unnecessary variation) Connect (Systems & Structures) • Epic Implementation • Single customer contact center business plan • Integrated data reporting capability • Your work to innovate, standardize and connect … • Advanced Access • Behav. Health integration • Care Transitions • Chronic disease mgmt • Specialty & primary • care collaboration • Ministry-wide financial reporting • PH&S population- based financing pilot • CMS ACO demonstration site • New pymt. models with other payors • New models of care: joint & lower back pain, palliative care • Appropriate use criteria: coronary revascularization, spine surgery, • ‘Triple Aim’ measures • MDs into decision making structures • Physician leadership dvlpmt • Common clinical outcome metrics • Grow employed primary care A few specific initiatives S t r a t e g y M a p Improve Health i.e. Evidence based chronic care mgmt i.e. Patient perception of health i.e. Mortality / 30 day readmissions More Affordable i.e. Premium increase at CPI + 2% i.e. % of Fee for Service declining i.e. % decrease in Type 1 & 2 ED visits Best Experience i.e. Patient activation measures i.e. Levels of shared decision making i.e. Measure across continuum How we’ll measure success …

  9. Beneficiary Premiums Stable Over Time

  10. Physicians Rewarded for Quality and Effectiveness • Physician base pay is 115% of Medicare  • Quality and performance incentives have increased payment to average 137%. • Hospitals base pay is 100% of Medicare with incentives around 105%.

  11. Skate to Where the Puck is Going to Be • Vertically integrated systems best prepared for future • FFS gives way to population health management • Providers must be rewarded for waste elimination • Disease and Case management win the day • Paid by accountable lives, not units of service • MDs lead the new organizations

  12. “Expect to take on more financial risk and to be held accountable, clinically and economically, for what happens across the continuum of care—whether we ‘own’ the continuum or not.” —Michael Sachs, Chairman and CEO, Sg2

  13. Reflections from Mike Leavitt • Do You (Read: Us) Understand the Scope and Intensity of these Reforms? • Can You Live on Medicare Rates? • Are You Preparing for Medicaid expansion • What Markets Will You Serve (Busses, Taxis, Limos) • What is Your Insurance Exchange Strategy

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