Lessons from Healthcare Transformation August 5, 2014

The Six Campuses of NYP Weill Cornell Medical Center Morgan Stanley Children’s Hospital Columbia University Medical Center Payne Whitney WestchesterThe Allen HospitalLower Manhattan Hospital 1

NYP Snapshot Centers of Excellence CHILDREN’S CARDIAC DIGESTIVE NEUROSCIENCES ONCOLOGY TRANSPLANT *2011 Data 2

Affiliation with Two Premier Medical Schools 1771 – New York Hospital 1898 – Cornell University Medical College (Now Weill Cornell) 1927 – Affiliation Agreement 1868 – Presbyterian Hospital 1767 – Columbia University College of Physicians & Surgeons 1911 – Affiliation Agreement 1998: NewYork-Presbyterian Hospital Over 1,600 residents 120 ACGME-accredited programs Single-site GME provider Both highly ranked by U.S. News 3

NewYork-Presbyterian Healthcare System Facilities30 Discharges500,000+ Physicians10,000 Care for NY Metro Area 21% of Discharges *Facilities include hospitals, nursing homes, & specialty institutions **NY Metro Area includes 5 boroughs of NY, Westchester, Rockland, Orange, Nassau; Fairfield and Litchfield, CT; Bergen and Hudson City, NJ 4

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 5

College Tuition Has Outpaced Medical Inflation 6

And is Projected to Continue to Rise Significantly 7

Healthcare Spending Continues to Rise, and is Consuming More of the Economy Source: CMS (2012) 8 Actual Projected

The US Healthcare System in Context Source: CIA World Fact Book Nominal GDP USA$15.7 Trillion CHINA$8.3 Trillion JAPAN$6.0 Trillion GERMANY$3.4 Trillion US Healthcare System$2.9 Trillion FRANCE$2.6 Trillion UK$2.4 Trillion BRAZIL$2.4 Trillion

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 10

11 Healthcare Spending Has a Large Opportunity Cost

12 Education & Healthcare Consumed Almost 2/3 of the 2014 NYS Budget

Projected Financial Impact of Reform on NYP 13

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 14

Is a College Education Delivering Value? 15

16 High Prices, Poor Outcomes Source: OECD data

$750 Billion in Waste Unnecessary Services Inefficient Care Delivery Excess Administrative Costs Inflated Prices Prevention Failures Fraud 7% 10% 28% 17% 25% 14% Source: Institute of Medicine Report 2012 What Health Care Services Really Make a Difference? 17

Healthcare Perception or Reality 18 “Well Bob, It looks like a paper cut, but just to be sure let’s do lots of tests.”

Source: Bipartisan Policy Center, “F” as in Fat: How Obesity Threatens America’s Future (TFAH/RWJF, Aug. 2013) Are We Spending Money on the Right Things?

Healthcare Costs Are Concentrated 23 Million Beneficiaries Spending $1,130 each Total Spending = 5% ($26 B) 23 Million Beneficiaries Spending $1,130 each Total Spending = 5% ($26 B) 16.1 Million Beneficiaries Spending $6,150 each Total Spending = 20% ($104 B) 16.1 Million Beneficiaries Spending $6,150 each Total Spending = 20% ($104 B) 7 Million Beneficiaries Spending $55,000 each Total Spending = 75% ($391 B) 7 Million Beneficiaries Spending $55,000 each Total Spending = 75% ($391 B)

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 21

Defining Quality 22

Proposed Quality Measures for Higher Education  Student loan repayment and default rates  Student progression and completion  Institutional cost per degree  Employment of graduates  Student learning 23

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 24

Regulatory Overhead 25 Higher EducationHealthcare Reporting: Clery Act, military & veteran complaints, etc Reporting: sentinel events, patient complaints AccreditationAccreditation (Joint Commission) Anti-trust Student disclosuresPatient disclosures Internal audit & compliance Higher Education Act (900 pages)Affordable Care Act (906 pages)

Unfunded Mandates in Healthcare  EMTALA  HIPAA  Transition to ICD-10 coding  MRSA testing for patients  Quality & readmission penalties 26

Common Problems: Higher Education & Healthcare  Cost  Declining government support  Public perception / rankings  Defining and measuring quality  Regulation  Business model disruption 27

Disruption in Education 28

New Entrants in Healthcare Delivery 29

Consumer Expectations Changing Markets

New Entrants in Healthcare 31

The Traditional Fee-For-Service Model is Changing P4P / Penalties Bundled Payments ACOs/ Shared Savings Capitation Fee-for- Service 32 Insurance Product Increasing Risk

Population Health: Developing a Comprehensive Delivery System 33

The (R)evolution of Personalized Medicine Past Present Future Human Genome Project - first human genome sequenced in 2003 Targeted therapy around: $2.7 billion Breast, lung & colon cancer BMT Rare diseases Warfarin Genomes done infrequently $2-4,000+ /test $15,000+ /genome $1,000 /genome “Inexpensive” sequencing means: More discovery Earlier diagnosis More targeted therapy

U.S. Healthcare Delivery System Challenges  Procedure-based reimbursement  Fragmented care transitions  Undifferentiated quality  Immature information technology  Demographics: aging population, chronic disease  Innovation  Cost shifting  Lack of transparency 35

NYP Market Challenges  Declining overall and commercial utilization  Increasing pressure on payer mix and pricing  Increasing level of hospital consolidation  Consolidation and restructuring of the physician landscape, threatening existing informal referral relationships –Aggressive physician alignment by large healthcare systems in the NYC metropolitan area –Rapid growth of large suburban physician organizations 36

Change in Commercial Discharges from NYC 5-Borough & Westchester 37 Source: Truven

Demand Model: NYP’s Projected Discharges Demand Model assumes that NYP will maintain constant share of the NY 5- Borough and Westchester market 38

Projected Financial Impact of Reform on NYP 39

NYC Key Competitors NYP Hackensack Montefiore Mount Sinai Health System NYU NSLIJ MSKCC

Strategic Tension: Clinical Demand vs Business Profitability 41

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Two Choices

To Achieve Our Vision, NYP’s Business Model Is Built Around 6 Strategic Initiatives 44

Strengthening Health and Wellbeing at NYP * 2017 represents when programs will be fully operational and mature - National - International HEALTH IT …of all health statuses…  Healthy  Acute Illness  Chronic Illness …to deliver comprehensive care  Primary prevention  Acute episode  Tertiary prevention Reaching multiple populations…  Employees  Corporate  Regional Health Collaborative  National  International

Health and Wellbeing at NYP  Primary Prevention –To protect individuals from developing disease  Tertiary Prevention –To manage complicated, long- term health problems and prevent disease progression Care Coordination Patient Engagement Program Evaluation & Outcomes

Staff, Patient & Family Engagement Patient Care Environment of Care Culture Goal: To develop staff programs and practices that align with NYP’s values Goal: To improve quality of care and the patient experience by involving patients and families in policies, programs, and changes in care delivery Goal: To enable patients to become more involved in their care by providing them with education and other necessary tools Community Goal: To enhance population health by partnering with community based organizations Staff, Patient & Family Engagement Engage Staff & Patients

Making Care Better 48 A comprehensive, interdisciplinary redesign of clinical systems and processes to deliver greater value across the care continuum Key Concepts Promote integrated, team-based care Align people, process and technology Results Measurably improve quality Reduce waste, variation and duplication

DOCUMENT PCP & referring MD (external) NYP Care team Admitting diagnosis Initial screening by care coordinator UTILIZE Daily interdisciplinary rounds Discharge bundle DETERMINE Availability & appropriateness of clinical pathway Eligibility for hospital ambulation Eligibility for palliative care EDUCATE NQF Teachback on patients for self-management skills Patients regarding portals (mynyp.org) COMMUNICATE Communication about errors Communication openness MAKING CARE BETTER: Standardize and Coordinate Care & Practice within a Safe and Highly Reliable Culture Provide Highly Reliable Innovative Care Deliver & Demonstrate Value 49

ACO Governance Corporate Members NewYork-Presbyterian Hospital Weill Cornell Columbia ACO Board of Managers Participant NYP Columbia Weill Cornell Participant

Network Development Manhattan Improve & Expand Access 51

Large Scale Ambulatory Strategies are Needed to Address Geographic Coverage Needs 52  Source: Truven Geographic area necessary to reach ~50,000 lives

Management Services The Future State is an Evolutionary/Hybrid Process Organizational construct to support an evolutionary model. Rapid change that doesn’t impact the quality/standards of NYPH. Functions may be at various stages of evolution, resulting in a hybrid model. 53

HERCULES Clinical Resource Optimization Supply Utilization Operational Excellence Making Care Better Benchmarking Consolidation potential Slowing growth rate Ancillary utilization Duplicative testing Practice variability LOS Standardize Care Care Coordination Supply alternatives Recycling opportunities Reduce waste HERCULES is a key hospital-wide initiative to cut costs & increase efficiencies while providing the highest-quality, most compassionate care & service to our patients Goal: Remove $150M of Cost in 3 Years 54

Information Technology and Innovation 55  Information Technology Innovation Center

Data Analytics Framework IT Identify solutions to meet future unmet needs Deliver & Demonstrate Value 56

Data Analytics: Physician Reporting Flow of Information and Accountability CMO / Associate CMOs Department Chair Division Chiefs Attendings Residents Department, Division, Physician Deliver & Demonstrate Value 57

Data Analytics: Nursing Unit Provide Highly Reliable Innovative Care Deliver & Demonstrate Value

HERCULES Status as of July 22,

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