Integrating Mayo Clinic in the Midwest to Improve Value

1. Integrating Mayo Clinic in the Midwestto Improve Value Robert E. Nesse MD CEO- Mayo Clinic Health System nesse.robert@mayo.edu

2. New Models of Care are Here!(Background) • 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. E. Fisher 2011 • 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. • Primary Care Base • At least 5000 enrollees • Lots of measures and lots of rules

3. Where are we Headed? • We must increase the value of our services • We will have fewer dollars for health care services with an expansion • of the population needing care • Reimbursement will shift to payment for episodes and outcomes • Providers of care will assume risk • Success will depend on greater integration of systems, coordination of care, • shared services and efficiencies, and aligned financial models Integrated Group Practices Will Grow

4. The Changing Health Care Market Opposite Trends: Commercial vs. Public Coverage The size of Wisconsin’s publicly insured population surpassed the commercially insured population in 2004 and the gap between the two appears to be growing In 2020 70% of the population of the United States will have government sponsored health insurance The Advisory Board

5. CBO estimates of required investments to cover projected program growth by 2026 and beyond Total federal receipts will need to grow by one-third If all the increase in federal spending comes from payroll-based taxes, the tax rate would have to double Health Care Costs 2025

6. Conclusion Current reality shows us that we don’t have a viable business model for our health care system

7. The Inconvenient Truth about Health Care and Health Reform Harvard Business Review2008. 86:5,99-106.

8. Selected Characteristics of a Wicked Problem • A wicked problem involves many stakeholders who all will have different ideas about what the problem really is and what its causes are • A wicked problem does not have a “right” answer. • Every wicked problem can be considered to be a symptom of another problem • Wicked problems have no stopping rule Harvard Business Review2008. 86:5,99-106.

9. Regardless of whether the country embraces Federal ACOs or the Supreme Court supports the ACA, we must change to be relevant and competent in delivering accountable care to our patients

10. UnitedHealth Group Inc. (UNH) is set to make changes to the way it compensates doctors and medical providers following similar measures by other industry peers. The new plan reportedly aims to focus on quality and efficiency of healthcare services, rather than volume of services Wall Street Journal 2/09/2012

11. A New Approach to Health Care Reform: A Third Way? • The Regulators • The best way to slow increasing costs is to control the total resources going into the health care system • The Marketers • Competing health plans and information-empowered ..consumers would drive down costs, especially if insurance were restructured to give people the right incentives • Systems Reformers. • The best way to bend the cost curve is from the inside out, by creating a smarter health care system with the information base, new delivery models and payment incentives that will improve quality and lower costs. “The "Third School" for Controlling Health Care Costs". Drew Altman. KFF. 2009

12. Complex Care Intermediate Care Mayo Health System Mayo Health System Mayo ClinicPrimaryCare Integration andPatient Demand:Alignment ofthe System Referral Practice ContractsACOs, insurers,& others Affiliation Ownership

13. Population Health Resource Relationship2010 data from Mayo Clinic COST Chronic Disease Services % of Medicare 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

14. A More Precise Approach for High Value Care • There are 3 types of patients in most systems • Majority are healthy (or pre-symptomatic) • Wellness programs, Risk Screening, Proactive Mgmt • Healthy living education & shared decision making • Office and outreach services + acute care • Minority have 1-2 chronic conditions • Medical home • Rx management and utilization education • Plus all of the above • Small Group have multiple chronic conditions • Medical home • Multidisciplinary care team • Home monitoring and case management What are the Essentials? What is the Framework?

15. What are the fundamental requirements for success ? • A network of providers • Physical or virtual • Alignment of purpose • Coordinated care delivery • Aligned financial model • Practice Analytics

16. Physicians & Scientists >4700 Total Employees > 57,000 Hospitals 22 Sites 85 Revenue $7.7 b The Mayo Clinic in the Midwest 2012 • Mayo Health System • 900 physicians • 18 hospitals • 73 sites

17. Mayo Clinic Care for a Lifetime Community-based care has been partof Mayo Clinic since the beginning Community care providers deliverthe Mayo Clinic Model of Care Our patients deserve a system that can… Unifyas a single practice Embracea culture committedto integration Inventnew practice models Improvecare by using collective resources 3050920-17

18. The Core Business Essential strategic requirement Core Business Essential organizational requirement

19. 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

20. Mayo Clinic in the Midwest Network

21. Mayo Clinic Hospital Market Share

22. Ownership and Affiliation ALTRU APN Member CentraCare APN Member MCHS

23. 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: What does this mean for Providers? R. Scott Gorman. Mayo Clinic Az. 2011

24. System integration and the Baldrige Criteria MCHS Strengths MCHS Opportunities • The organization has a systematic approach to strategic planning. The process has been improved, • The plan currently has six strategic goals aligned with vision, values, and key patient and customer requirements • MHS has a system in place to prepare and develop the next generation of leaders • A common vision and set of values is integrated throughout MHS in all locations. • Although MHS has made improvements to the strategic planning process, these improvements are not based on a systematic evaluation process. • The organization has not fully developed and deployed a systematic process for identifying short and long-term timetables for accomplishing key strategic objectives • Some notable opportunities include fully deploying many recently-implemented processes throughout the organization. MHS has not yet fully deployed systematic and improvement throughout the System.. Minnesota Council For Quality 2008

25. The Essentials of Accountable Careand the Baldrige Criteria What is your workforce profile? What are your workforce or staff groups and segments ? P.1 (3) What is your competitive position? What are your relative size and growth in the health care industry? P.2 a(1) How do you prepare your workforce for changing capability and capacity needs? 5.1 a (4) How do you deploy action plans throughout the organization? 2.2 a (2) How do you ensure that financial and other resources are available to support the accomplishment of your action plans? 2.2 a (3) How do you select, collect, align, and integrate data and information for tracking daily operations and overall organizational performance? 4.1 a (1) A network of Providers Alignment of Purpose Coordination of Care Aligned Financial Model Practice Analytics

26. Changing the Future of Health Care 3 principles for value based health care systems The goal is value for patients Care delivery is organized around medical conditions and care cycles Results are measured How value based care delivery could change medicine Pursuit of excellence in service lines Collaboration of medical providers and teams Fewer malpractice suits More supportive payers New reimbursement base Porter, M. and Tiesberg, E. JAMA 297 (10). 2007

27. Health Policy Development WorkEtheredge, L. Technology of Health Policy. Health Affairs 26(6):1537-8. 2007 • “Partisan ideologies do not explain the adoption of major health policy changes over the past 25 years.” • Four factors came together to bring about previous national health policy changes • Previous policies were no longer satisfactory • Urgent feeling of need for change • New policy prescriptions were proposed • Pragmatic judgments were made as to whether the promising idea could be implemented on a national scale For their adoption, new national health policies must be developed into implementable measures by the time decision makers demand the new approach”