Managing Transformational Change in Healthcare: The Integration of Mayo Clinic

1. Managing Transformational Change in Healthcare: The Integration of Mayo Clinic Robert E. Nesse MD Chief Executive Officer Mayo Clinic Health System Associate Professor of Family Medicine Mayo School of Medicine nesse.robert@mayo.edu

2. What Will Happen??

3. An Imperative for Integration • THEORY: ACOs consist of providers who are jointly held accountable for achieving measured quality improvements [note that “measured quality improvements” is synonymous with report cards] and reductions in the rate of spending growth. • PRACTICE: In process at a location near you.

4. Top 3 St. Paul, Minnesota Dubuque, Iowa Rochester, Minnesota

5. The Midwest Challenge

6. Red Wing Zumbrota

7. Upper Midwest Competition H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H Clinic/Other H H H H H H Hospital H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H Rochester H H H H H H H H H H H H H H H H 2 10 H H H H H H H 7 H H H H H H H H H H H H H H H H 28 H H 2 H H H Gundersen Lutheran Fairview Allina H H H H H H H H 2 H • Competition as of April 2011

8. Hospital Intensity Index-Medicare Total CostLast 24 months of life- 2008 • St Mary’s Hospital- Rochester .76 $59,000 • Abbott Northwestern Hospital .98 $56,000 • Fairview-Southdale .84 $57,000 • Fairview-University .96 $81,000 • MCHS Austin .69 $47,000 Total Medicare Cost Hospital Intensity Note: Hospital Intensity reflects patient inpatient days plus # of visits and services Dartmouth Atlas 2012

9. Business Disruption in referrals Increased financial risk New model Contracts with commercial insurers Cost sensitivity will heighten expectations of “consumers” Government policies still in development and vague Practice In depth knowledgeof cost, patient outcomes of service lines Rapid application of best practices Cultural acceptanceof best practice models Population health management tools, expertise Efficient, seamless care across organizations Accountable Care and Integrated SystemsImplications R. Scott Gorman. Mayo Clinic Az. 2011

10. The Statements of Mayo Clinic • Primary Value • The needs of the patient come first. • Mission • To inspire hope and contribute to health and well being by providing the best care to every patient through integrated clinical practice, education, and research. • Vision • Mayo Clinic will provide an unparalleled experience as the most trusted partner for health care. • Core Business • Create, connect and apply integrated knowledge to deliver the best health care, health guidance and health information. • Value Proposition/Differentiation Statement • Mayo Clinic combines knowledge, integrity, and teamwork into a uniquely effective, integrated model of care

11. What are the fundamental requirements for success ? • A network of providers • virtual? • Alignment of purpose • Coordinated care delivery • Practice Analytics • Financial alignment

12. Population Health Resource Relationship2010 data from Mayo Clinic HSER COST Chronic Disease Services % of Spending Multi-disciplinary Care Teams, Home Monitoring + “Medical Home” Utilization Education Community Support + Wellness, Risk Screening Shared Decision Making Health Education 50% 5% 3+ 45% 45% 1-2 5% 50% 0 Population % of community

13. Changes for the MCHS • Integration • One Mayo Clinic strategic and operational plan • Regionalization and System model for MCHS. A “union of forces” • Shared Services and a Mayo Model of Community Care for our system • “Pain, Gain, Explain” • Accountability for high value care • Expanded capability for translational research and education in new models of care • Implications of the Mayo Clinic plan • Knowledge to delivery. • Transform the outpatient practice • Increased services and service lines to support the region • Maintain/improve quality and lower cost over time

14. Why us? Why now? • “Somebody has to do something and it is just incredibly pathetic it has to be us” Jerry Garcia