An Update on the Baptist Health South Florida, Florida Blue,

1. An Update on the Baptist Health South Florida, Florida Blue, Advanced Medical Specialties Oncology-Specific ACO

2. Why Call Our Project an ACO? • We are pursuing the “triple aim” • improving the patient experience of care (both quality and satisfaction) • improving the health (“care”) of populations • reducing the per capita cost of healthcare (actual cost reduction or a “bending of the cost curve”) • We are focusing on a specific “attributed” population • The providers are being paid “fee for service” with a concomitant “shared savings” agreement

3. Why An Oncology-Specific ACO? • Because of the spend • U.S. healthcare spend $2.7 trillion • cancer spend about 5% of that or $125 billion • cancer spend about 10% of the total Medicare spend • adage that 20% of the patients spend 80% of the dollars (cancer patients within that 20%)

4. Why Was The Miami Market Ready? • Advanced Medical Specialties • key “trusting” personal relationships (breaking down “historic barriers”) • “sole” provider of medical oncology services throughout Baptist Health • buffeted by prevailing community oncology “market forces” • appetite to innovate and learn how to assume/share “risk” • Baptist Health • market/financial dominance, but a desire to “lead” change • looking ahead to controlling cancer care costs in their large CIN • Florida Blue • reduce cancer care costs or at least “bend the cost curve” (pre-project “cancer care” trend of 12.6 %) • encourage providers to “move down the road” • ultimately achieve an improved reimbursement position with Baptist Health

5. Why Was The Miami Market Ready? (cont'd) • All three parties agreed on some key assumptions and goals • the medical oncologist is the “primary care physician” for the cancer patient (and their practice their natural “oncology medical home”) • “adjuvant episode” • “metastases to end of life” • every (“most”) ACO/CIN (hospital system driven or physician initiated) is looking for an “oncology solution” • every managed care organization would encourage oncology providers (physicians and hospitals) to participate in such initiatives so as to speed the “move down the road” to value-based payment/”risk” assumption/sharing • medical oncologists view such initiatives as means to maintain “control” of their patients/“protect” their income

6. An Overview Of The Oncology-Specific ACO Contract • Fee for service would be maintained • We agreed to work together to improve the patient experience, improve the quality of care, and reduce spending/”bend the cost curve” • We agreed to share the savings that would (might) be derived from our mutual efforts

7. How Did We Do The Attribution Of Cancer Patients In Our Baseline Population? • We targeted patients with the most common cancers (breast, digestive system, leukemia and lymphoma, female reproductive, male reproductive, respiratory) • Any member with a claim (all claims for all services),dated 8/1/10 to 7/31/11 (the “baseline period”), in Miami-Dade, for one of the six targeted cancers, with 3 or more E&M services with AMS, was attributed • “total cost of care” (all “adjudicated” claims) (a few “excepted” DRG’s) • no “outliers” or “dollar caps” initially

8. The Oncology-Specific ACO Contract • Three “annual reconciliation periods” were defined • Reconciliation to be done annually ; reporting quarterly • Same attribution methodology in each subsequent “annual reconciliation period”

9. The Oncology-Specific ACO Contract (cont’d) • No payout of shared savings if certain “quality metrics” were not met • AMS (chemotherapy regimen compliance; QOPI certification; track “end of life” metrics) • Baptist Health (national thoracic; surgical care quality; CMS measures)

10. Breakdown of the Baseline Year Spend

11. Shared Savings Calculation Example • SAVINGS CALCULATION: • Baseline cost of care PMPY, adjusted by Medical CPI (A) $ 105,000 • Provider attributed total cost of care per member per year(B)$ (100,000)(.95) • Savings PMPY $ 5,000 • # of Members Year 1 200 • Savings to be Shared by the Three Parties $1,000,000 • SHARED SAVINGS ALLOCATION: • AMS 25% $ 250,000 • Baptist Health 15% $ 150,000 • Florida Blue 60% $ 600,000 100% $1,000,000

12. The Actual “Work” Of The Oncology-Specific ACO • We looked at the baseline year’s spend breakdown and prioritized • We made certain assumptions (general) • focusing on patient education and the patient experience (understanding one’s illness; appropriate setting of goals; a focus on symptom control and other needs; allying with key health care surrogates) are key elements for success • the chemotherapy spend is always important • 75-80% of cancer patients who go to the ER get admitted to the hospital • most hospital admissions for cancer patients occur in the last 90 days of life, and are for symptoms of progressive cancer, not cancer treatment • hospice or “hospice-like” services are underutilized • “aggressive” advance care planning and “innovative” application of “palliative care” would lead to “better” patient choices at the end of life

13. The Actual “Work” Of The Oncology-Specific ACO (cont’d) • More assumptions (market specific) • AMS had already embedded USON Level 1 pathways in their EMR • Baptist Health’s high allowables made “hospital admissions” and “length of stay” obvious “low hanging fruit” • the same true was potentially true for the “institutional surgery/anesthesia” spend

14. The “Care Process” “Work” Of The Oncology-Specific ACO • Chemotherapy and supportive care drugs • strict adherence to pathways • requires a well-defined, tightly managed approval process • both for chemotherapy and supportive care drugs • ferret out “leakage” to the higher cost hospital setting • began work on “palliative care” efforts that will lead to fewer lines of treatment

15. The “Care Process” “Work” Of The Oncology-Specific ACO (cont’d) • “Admission avoidance” measures • chemotherapy education • daytime practice “mid-level” FTE (in office; in ER [identifying the patients]) • “not yet” for nights and weekends • avoid re-admissions • “transition of care” work • an in-hospital practice “mid-level” FTE, “coordinated” with assets of the other parties • began work on “palliative care” efforts that will lead to fewer visits to the ER and fewer admissions

16. The "Care Process" “Work” of the Oncology-Specific ACO (cont’d) • Shorten “length of stay” • an in-hospital practice “mid-level” FTE “coordinated” with assets of the other parties • Surgery and anesthesia • broke down the spend in detail • High tech imaging and radiation therapy • third parties • need guidelines

17. AMS Practice Data

18. AMS Practice Data (cont’d)

19. The Oncology-Specific ACO Data EMERGENCY ROOM VISITS

20. The Oncology-Specific ACO Data (cont’d) AVERAGE LENGTH OF STAY (ALOS)

21. The Oncology-Specific ACO Data (cont’d)

22. Savings Calculation (First Contract Year)* • SAVINGS CALCULATION: Baseline cost of care PMPY, adjusted by Medical CPI (A) $ 108,141 Provider attributed total cost of care per member per year (B) $ (105,279)(.9735) Savings PMPY $ 2,862 # of Members Year 1 226 Savings to be Shared by the Three Parties $ 646,812 • SHARED SAVINGS ALLOCATION: AMS 25% $161,703 Baptist Health 15% $ 97,022 Florida Blue 60% $388,087 100% $646,812

23. Lessons Learned To Date • Pick committed partners • Designate a “go to person” from each party • deliverables and timelines • Streamline the early data exchange • terminology • in sequence • Should “bending the cost curve” be rewarded (albeit less) as well (as opposed to only rewarding an actual reduction of the spend)? • “Small numbers” of patients leads to “large variations” in data from reporting period to reporting period

24. Lessons Learned To Date (cont’d) • The managed care plan can proactively support the “process” • favorable contracting with the practice • including “special” codes for treatment management in lieu of drug “margin” • including co-insurance issues (hospital vs office) • reduce onerous pre-authorizations and other “third party” initiatives • support chemotherapy education, advance care planning, palliative care, and transition of care • forgive co-pays • waive “two in a day” exclusions • patient “rewards” • contribute to funding of necessary FTE’s

25. Next Steps For The Oncology-Specific ACO • What IT platform and what software and analytic tools will help us do this work faster/better? • better analytics • in real time • “cause and effect” • dashboard • Take a “deep dive” in each of the “spend” areas and look for other opportunities to appropriately reduce costs • All three parties need to discuss the “dive;” are there some areas where we have already maximized savings (do we need to consider “reverse” “site of care shift” [will it be acceptable]) • Consider mid-level FTE for nights and weekends; day time “triage” pathways

26. Next Steps For The Oncology-Specific ACO (cont’d) • Hire a palliative care physician (with the support of all three parties) • Develop (or buy) diagnostic radiology and radiation therapy guidelines and adapt (get buy-in from all three parties) • “Officially” become an “oncology medical home” so that the practice becomes “officially” responsible for total cost of care (and gets paid for it) • Focus on “high acuity” “at risk” outpatients (with mobile app?) • Work closely with our CIN to ultimately direct its cancer patients to our “oncology medical home”

27. Next Steps For The Oncology-Specific ACO (cont’d) • Tie these ACO efforts into the Baptist Health Cancer Institute • Modify contracting • change timing of attribution • only after practice assumes care • is a -2% target too aggressive • would a “cancer CPI” be more appropriate than a medical CPI • take into account certain outliers • transplants (dollar caps) • long, complicated admissions (dollar caps) • don’t let a few large spenders in a small category skew the numbers (lump the categories) • should surgery and anesthesia be counted • should allocation of savings between parties be altered

28. Next Steps For The Oncology-Specific ACO (cont’d) • Patient satisfaction surveys • Patient reported outcomes • Break-down data by disease type (as numbers get bigger) • Report on process measures • Report on quality measures • Report on patient outcomes (PFS; OS)