Innovations in Reducing Cost and Improving Quality of Health Care:

1. Innovations in Reducing Cost and Improving Quality of Health Care: Geisinger Health System Example Ronald A. Paulus, MD EVP, Clinical Operations and Chief Innovation Officer

2. Geisinger Health System Last updated 07/09/09 Careworks Convenient Healthcare Non-Geisinger Physicians With EHR Geisinger ProvenHealth Navigator SitesContracted ProvenHealth Navigator Sites Geisinger Medical Groups Geisinger Specialty Clinics Geisinger Inpatient FacilitiesAmbulatory Care Facility Geisinger Health System Hub and Spoke Market AreaGeisinger Health Plan Service Area

3. Geisinger Transformation Infrastructure

4. OtherInputs Decision Support EBM Guidelines Patient Preferences Formulary/Economics … Empirical Norms Real-time Clinical Status Effectors Population Trends … Alerts EHR Prompts/Reminders CDIS Order Sets Automated care plans Clinical, Schedule … Patient messages Information Rx … Claims Finance Ops Normalization, Transformation, Analytic Application Clinical Decision Intelligence System (CDIS) …

5. Creating Real Value: Geisinger’s Core Care Transformation Initiatives Population Health Optimization Geisinger Medical Home ProvenHealth NavigatorSM Chronic Disease Care Optimization ProvenCare - Chronic® Acute Episodic Care Optimization ProvenCare - Acute® (aka the “surgical warranty”) Transitions of Care Optimization ProvenTransitionsSM Patient engagement and activation throughout all initiatives ProvenEngagementSM (dealing with “non compliance” Delivering a “System of Care” focused on the right things… Optimizing high, cost, capital intensive care (bundling with a “warranty”…) Incentivizing Quality – eliminating rework Incentivize engagement and self-care

6. ProvenHealth Navigator® Geisinger’s Value-based Patient-Centered Medical Home

7. Functional Components Team-based, patient-centered primary care (including embedded care management nurse) Joint payor-provider population management High quality, efficient specialist identification and referral Quality Outcomes Program Value-based Reimbursement Program Baseline FFS Practice transformation stipends Quality-gated gain sharing

8. Acute Admissions Show Improvement Risk-adjusted acute admits/1000 (Medicare)

9. Readmissions Show Improvement Medicare Readmissions/1000

10. Spending Decreased Compared to Expected Trend Spending (-8%)

11. ProvenCare - Chronic® Chronic Disease Optimization

12. DM Best Practice Alert/Order Set

13. MyGeisingerPatient Reminder View

14. Patient Education Letter

15. Patient Trend Report Most recent values displayed Therapeutic goals are stated Clinical consequences are stated

16. Diabetes Bundle Primary Care Average (n=23,404)

17. CAD Bundle Primary Care Average (n=14,714)

18. Adult Preventive Care (n=209,090)

19. ProvenCare Acute® Geisinger’s Bundled Episodic Care

20. GHS Receives “All In” Global Fee • One fee for the ENTIRE 90-day period including all surgery-related care: • ALL surgery-related pre-admission care • ALL inpatient physician and hospital services, including cardiologists, cardiac surgeons, anesthesia, consultants, etc • ALL surgery-related post-operative care • ALL care for any related complications or readmissions • Aligns incentives across provider, patient and payor

21. Process Redesign: Work Flow

22. Process Redesign: Hardwiring

23. ProvenCare®CABG: Reliability

24. CABG Clinical Outcomes Before ProvenCare® ProvenCare® % Improvement (n=132) (n=321) In-hospital mortality 1.5 % 0.3 % 80 % Patients with any complication (STS) 38 % 33 % 13 % Patients with >1 complication 8.4 % 5.9 % 30 % Atrial fibrillation 24 % 21 % 13 % Neurologic complication 1.5 % 0.9 % 40 % Any pulmonary complication 7 % 5 % 29 % Re-intubation 2.3 % 0.9 % 61 % Blood products used 24 % 22 % 8 % Re-operation for bleeding 3.8 % 2.8 % 26 % Deep sternal wound infection 0.8 % 0.3 % 63 % Readmission within 30 days 6.9 % 5.6 % 20 %

25. Hospital Financial Outcomes

26. Other ProvenCare Acute Programs

27. ProvenEngagement®

28. The Real Caregivers… “People with chronic conditions are the principal care-givers. Each day, patients decide what they are going to eat, whether they will exercise and to what extent they will consume prescribed medicines.” Bodenheimer et al, JAMA 2002

29. Population by Activation Level 12% of the population 29% of the population 37% of the population 22% of the population Source: J.Hibbard, University of Oregon

30. HTN Patients Who Engage in Self-management Behaviors Source: J.Hibbard, University of Oregon

31. Give patient a voice Structured data Higher Quality Actionable Real time analytics Guideline based evaluation Guide patient-physician dialogue Real time display of advice Save time and money Patient Data Capture Tools • Why are you here? • What do you have? • What do you want? • How are you doing? • What are you taking? • How is your medicine working? • What are your risk factors? • What are your barriers to improving outcomes? • … and the list goes on.

36. Summary • Quality and efficiency are inextricably linked together • Efficiency originates from the same place as quality – fundamental care model redesign • At Geisinger, we are trying to reinvent many aspects of the care process • Geisinger has many advantages due to our integrated delivery system and its “Sweet Spot”

37. Thank You.

38. ProvenTransitions® Care Hand-off Optimization

39. A Major Medicare Issue… • “Potentially Preventable” admissions account for $12+ billion in Medicare spending (>8% of $146B total Part A spend in 2006)

40. Drivers to Reduce Readmissions GOAL DRIVERS KEY TACTICS Early identification of readmission risk Screening Target interventions based on risk level Early DC needs assessment of high risk pts DC Planning – choose best next care setting Care Mgmt: Inpatient/ Outpatient Readmissions Outreach to OP Care Mgmt based on risk level Seamless transition between IP & OP Care Mgt Consistent documentation (location, content) Team Communi-cations (IDTs) Multi-disciplinary care coordination Ready the patient for successful self-care Multidisciplinary Teaching - patient and family Patient Education/ Med Rec Teach Who-What-When-Where if help needed IP Pharmacist consult on high risk pts/meds Post-DC Follow-up appt for EVERY patient Post-Transition Care Instant communication of hospital course and follow-up needs to post-DC providers/agencies MH with tele-monitoring, follow up phone calls, SNF management Social issues addressed (non-compliance, ability to buy meds, advanced directives) 40

41. GWV % Readmissions 6/2008 – 8/2008 ED Screening Instrument Based upon combination of literature review, expert interviews, Geisinger data and clinician experience

42. Patients Screened

43. FY 09 Final Results: GWV 30 Day Readmission Rate

44. Next Up: Bundled Readmission Payment • Bundle proportion of historical readmission rate/payment into up-front DRG rate • Step down the % of historical over a 3-5 year period (say, 95% to 60%) • Key Advantages: • Provides a direct incentive to reduce rates • Enables hospitals to earn “windfall profits” during early years • Avoid abrupt change with negative impact • Sets a high bar, that can be reconsidered • Even 60% is higher than best performing Medical Home sites, so not unrealistic • Administratively simple