Starting an ACO: IT Lessons Learned

1. Starting an ACO:IT Lessons Learned Robert Slepin, PMP, VP and CIO John C. Lincoln Health Network Nathan Anspach, SVP and CEO John C. Lincoln Accountable Care Organization John C. Lincoln Physician Network

2. John C. Lincoln Health Network Overview

3. John C. Lincoln Hospitals • North Mountain Hospital • 262 Beds • Trauma Center • Magnet Designation • Deer Valley Hospital • 203 Beds

4. Physician Network: At a Glance • 120 primary care providers • Additional planned growth • 20 specialists • 34 locations • NCQA PCMH Accreditation In-Process • Patient Visits • 2011 - 263,866 • 2012 - 323,144 • 2013 - 409,000 (projected)

5. Accountable Care Organization Approved by CMS July 2012 18,000 Medicare Shared Savings Program (MSSP) and Commercial members

6. JCL ACO Provider Distribution 401 Providers

7. Brief MSSP ACO Primer

8. Organization of Health Care Providers • Primary care and subspecialty physicians • Hospitals • Acute care • Rehabilitation • Post-acute providers • Home health organizations

9. Health Care Providers (cont.) • Disease management • Mental health • Health and wellness • Patient engagement

10. Reimbursement in a Medicare ACO All participating providers continue to be reimbursed by Medicare on a fee-for-service basis Patients attributed to an ACO can continue to seek care from any Medicare participating physician, hospital or provider If a Medicare ACO is able to reduce the cost of caring for assigned Medicare patients and meet required quality standards, a possibility of shared savings exists

11. Options for Medicare ACO Shared Savings In either risk model, all providers continue to bill Medicare fee-for-service using the normal Medicare fee schedule. • Tier 1 – Limited risk • Tier 2 – Risk-bearing

12. Calculate Shared SavingsStep One: Determine Base Spending Level 1. Determine the number of Medicare beneficiaries in the ACO. We will use 15,000 in our example. 2. Determine the average annual spend per beneficiary. In Phoenix, that figure is approximately $9,000. 3. Multiply 1 times 2 and the result is a very large number - $135M. This is the base spending level. 12

13. Calculate Shared SavingsStep Two: Reducing Cost 1. Hypothetical: average cost is reduced by 7.5% to $8,333 per beneficiary. 2. Multiply $8,333 times same number of members. Total Spend is now $125M. 3. Subtract $125M from $135M and savings are $10M. The ACO takes half, or $5M, up to a maximum amount. 13

14. Shared Savings Possible, Not Easy • Requires reporting performance on 33 quality measures • At least 50% of participating primary care physicians using an electronic health record • Costs of care have to be reduced, but beneficiaries are not limited to ACO partners 14

15. Four Domains of Quality Measures • Patient/Caregiver Experience of Care • 7 measures • Patient Safety/Care Coordination • 6 measures including electronic health record • At-Risk Population • 12 measures, focused on diabetes, heart failure, hypertension and coronary artery disease • Preventive Health • 8 measures, include a variety of screenings 15

16. ACO Start-Up 16

17. ACO Cycle CMS EHRs FAX 17

18. IT Challenge #1 CMS transmits attribution file to ACO ACO locates patient demographic information ACO sends prescribed letter to attributed patients Update to CMS with patient data sharing preferences Patients respond/don’t respond to letter 18

19. IT Challenge #2 Disease Registries Third Party Data Analysis Tool CMS Data Transmission High cost Beneficiaries High ER Utilizers 19

20. IT Challenge #3 PCP office visit Patient Information Create and file HCC DiseaseRegistry Support patient outreach, care management, and data collection workflow 20

21. IT Challenge #4Encounter data refreshed quarterly 21

22. IT Challenge #5 Clinical quality measure reporting Data Sources Numerator/denominatorcalculation GPRO web site data entry 22

23. Strategic IT Considerations

24. Core ACO IT Capabilities 24

25. Technology Platform? • Options • Integrated ACO platform: Optum, Aetna or other • Best-of-breed ACO platform: EHR, HIE and other pieces • Enterprise EHR • Our approach • Leverage enterprise EHR to fullest extent • Supplement with in-house development and third party software-as-a-service where needed • Claims data processing • Population health analytics

26. Single or Multiple EHRs? • Ideal: One EHR • Reality: Many EHRs and paper • Options • Require all participants to adopt single EHR • Two-three preferred EHRs • Any EHR, take your pick • Our approach • Single EHR for JCL hospitals and physician practices • Longer term – preferred EHRs and Health Information Exchange

27. FTE, Consultants or Outsource? • Existing IT staff likely fully committed • Significant IT resources needed • Options • FTE hiring/ramp-up time • Consultant costly, and you lose investment in know-how • Outsourcing – high risk • Our approach • Dedicated consultant project manager – rapid start • Leverage central IT organization for other skills

28. Patient Engagement? • Options • Personal Health Record (PHR) • Patient portal • Monitoring devices • Mobile apps or text • Our approach • Leverage EHR patient portal • Promote adoption at practices and via marketing • Improve value to encourage interactions and create value

29. Claims or Clinical Data? • Claims • Good picture of most but not all encounters • Time delay • Clinical • Richer data not available in claims • Real time • Our approach • Both sources of data are necessary for success

30. CMS Measure Reporting? • Options • Leverage core EHR • Third party reporting tool • Custom software • Manual workaround • Our approach • Extract data from core and legacy EHRs • Manual compilation of measures • Plan for automation for Year 2

31. Health Information Exchange (HIE)? • Options • Public • Private • Both • None • Our approach • Start without HIE • Next step – private HIE • Future – expand to public

32. IT Organization? • Options • Integrated with corporate IT • Separate IT • Our approach • Fully integrated – single CIO

33. Questions?