Advocate Physician Partners Clinical Integration Program

1. Mark Shields, M.D., MBA, Senior Medical Director Advocate Physician Partners� Clinical Integration Program

3. Presentation Overview Market Realities Strategic Plan Leading to Clinical Integration Structures Governance & Incentive Plan Clinical Integration Program Lessons Learned

7. Market Realities Risk Contracts Which Fund Care Management are Disappearing Large Multi-specialty Groups are the Exception 9 of 10 Americans Get Their Medical Care in a Solo or Small Practice* Infrastructure is Required to Drive Quality Outcomes Demonstrated by Multi-specialty Groups

8. Perspective on Health Care Reform �Reducing the skyrocketing cost of health care is the only way to create a health care system that works for all Americans; after all, what good is access to a system that we can�t afford?� John Rother AARP Director of Public Policy May 2009

9. A Clinically Integrated Group

10. Advocate Physician Partners Physician Membership 900 Primary Care Physicians 2,500 Specialist Physicians Total membership includes 800 Advocate-employed Physicians 10 Acute Care Hospitals and 2 Children�s Hospitals Central verification office certified by NCQA 230,000 Capitated Lives/700,000 PPO Lives Advocate physician partners is a very large and complex organization Advocate physician partners is a very large and complex organization

11. Structures: Governance & Incentive Plan

12. Physician Business Partners Help Drive Key Result Areas

13. Advocate Physician Partners

14. APP Board and Committee Structure

16. Collaboration Measures Depend on Performance by Groups PHOs Practice Group Hospital Specialty ED Physicians Surgeons

17. Incentives for Outcomes 230,000 Capitated Lives / 700,000 PPO Lives Unearned Funds Roll Over into Next Year Great Clinical Outcomes and Good Business

18. Advocate Physician Partners�Clinical Integration Program

19. Health Plan Commitments Includes All Major Plans in Market Risk and Fee-for-Service Contracts Base and Incentive Compensation Same Measures Across All Payers Common Procedures at Practice Level for All Contracted Plans

20. Clinical Integration: Definition

21. Expansion of Program Over Time

22. Joint Contracting & Non-Exclusivity Joint Contracting is Essential for APP to Achieve Its Great Results Same Measures Across All Payers Common Procedures at Practice Level for All Contracted Plans Same Network for All Payers Stable Networks Efficiency in Credentialing APP is Non-Exclusive

23. CI Measurement Development

24. Lessons Learned

25. Value for Hospitals Creates Business Partnership with Key Physicians Focuses Physicians on Hospital Goals Patient Safety Costs Strengthens Loyalty Physicians Drive Clinical Outcomes Positions for Health Care Reform Bundled Payments Payment Denials

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28. Value for Physicians Better Alignment with Hospital Marketplace Recognition Focus on Outcomes Incentives Compensate for Additional Work Interface with Multiple MCOs

29. Value for the Marketplace Focus on Clinical Outcomes Demonstration of Efficiencies Ongoing Improvement Stable/Cohesive Network Measure and Display Results Led by Physicians

30. Percent of PPO Claims by EDI

31. Critical Success Factors Physician Driven Same Metrics Across All Payers Minimize Additional Administrative Costs Additional Funds Recognize Extra Work by Physicians and Staff Infrastructure Necessary to Support Improvement Physician/Hospital Alignment

32. Obstacles Incomplete Data: Health Plans Technical Issues HIPAA Disease Management �Carve Outs� Health Plan Disintermediation Antitrust Review

33. Mechanisms to Increase Compliance APP QI/Credentials Committee Membership Criteria Peer Pressure/Local Medical Director Mandatory Provider Education/CME Physician�s Office Staff Training Financial Incentives/Report Cards Targeted Programs

34. Completed Asthma Action Plans

35. Asthma Outcomes 2009 Outcome Successfully Implemented Annual Asthma Action Plans for 83 Percent of Asthmatic Patients Compares to 35 Percent Nationally

36. Asthma Outcomes Direct and Indirect Medical Savings Exceed an Additional $16M Conservatively Calculated, Prevented an Additional 37,920 Lost Work Days

37. Generic Medication Prescribing

38. Generic Prescribing 2009 Outcome Increased Use of Generic Drugs to 71 Percent From 2005 to 2009 Generic Use Rate Increased by 20 Percent Increased Use of Generic Medications Savings Nearly $52M from 2004 to 2009

39. Radiology Report Turnaround Time Hospital Efforts 49% Decrease From 49 to 25 Hours Hospital w/APP Efforts Additional 65% Decrease From 23 to 8 Hours

40. CPOE Adoption Electronic Prescribing Systems Help Prevent Adverse Drug Events In 2007, Only 9.6 Percent of Hospitals Nationally had Implemented CPOE In 2009, CPOE Implemented in 5 Advocate Health Care Hospitals 1 Hospital >75% CPOE Med Orders In 2009, 95 Percent of APP Physicians Utilized CPOE Technology

41. Summary of Key Points Clinical Integration Creates Value Culture Evolves Over Time and Takes Effort CI Overcomes Barriers to Improvement Small Physician Practices Traditional Medical Staff Structure Joint Contracting Essential to Success Same CI Metrics Across All Payers Common Procedures at Practice Level

42. Summary of Key Points Incentives are a Catalyst Infrastructure/Support are Necessary and Drive Pay for Performance Infrastructure (Governance, etc) Program Development Report Cards Feedback/Coaching

43. Summary Clinical Integration Creates a �Group Without Walls�

44. 2010 Value Report