Population Health from a Board Perspective Lawrence B. Platt, JD Past Chair, Board of Directors Cedars-Sinai Health System GHA Annual Trustee Conference January 10, 2015

2 The faster you move, the more important your compass.

1902: Kaspare Cohn Hospital, 12 beds 3

2015: Cedars-Sinai Health System 4

Cedars ‑ Sinai by the Numbers JULY 1, 2013 – JUNE 30, LICENSED BEDS (as of November 2014) 234,271 PATIENT DAYS (approximately 642 per day) 662,055 OUTPATIENT VISITS (approximately 1,814 per day) 45,344 ADMISSIONS 85,082 EMERGENCY VISITS 180,916 PATIENTS CARED FOR BY CEDARS-SINAI MEDICAL NETWORK 1,283 RESEARCH PROJECTS 10,791 FULL-TIME EMPLOYEES 2,125 PHYSICIANS ON MEDICAL STAFF 560 MEDICAL RESIDENTS AND FELLOWS TRAINED 2,988 VOLUNTEERS $732,746,000 CONTRIBUTION FOR COMMUNITY BENEFIT

6 The Board’s leadership role should be a constant, not something that pops up only when there is an important issue.

o Conduct environmental assessment: Internal Trends External Trends (local/national) o Conduct strategy interviews with key shareholders to identify critical issues and strategic priorities o Develop preliminary goals o Finalize goals o Develop detailed strategies and tactics o Finalize strategies and tactics o Finalize volume and financial projections o Develop implementation plan with target dates o Present plan for approval o Environmental Assessment o SWOT Analysis o Summary of key strategic issues o Preliminary goals for Audience o Final Goals o Strategies/Tactics o Final Strategic Plan with Implementation Plan o Volume and financial projections as applicable Phase I Conduct Planning Research Phase II Define Global Direction Phase III Develop Strategies Phase IV Finalize the Plan Process Flow: Major Tasks: Deliverables: Strategic Planning Process

8 A clear-eyed assessment of the environment is crucial. 8 5 There is greater integration and interdependence between/among providers and payers. In some cases, traditional referral sources have become competition and previous competitors have become partners. There is a ‘land grab’ for physicians and their patients (i.e. lives) 6 Legislative changes are creating access while causing payer mix changes. In addition, there is flattening of reimbursement, redirection of previous payments (DSH) and penalties for lack of performance Population is aging and sicker resulting in more Medicare patients and the non-Medicare patients are more like Medicare complexity with multiple chronic conditions Exchange-based coverage and narrow/tiered networks diluting average reimbursement and steering patients to lowest-cost providers Employers restricting choice and shifting more costs to employees resulting in increased consumerism and shopping for greatest value Primary care shortage at a time when more PCPs are needed. Models require primary care for managing patients with multiple chronic conditions. 2 Source: Health Care Advisory Board interviews and analysis

9 The journey is as important as the destination.

10 Embrace the future, don’t fear it.

11 Over-reaction to change can be as bad as under-reaction.

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13 “Building a visionary company requires 1% vision, and 99% alignment.” -- Jim Collins (in "Built to Last”)

14 Focus on value (quality AND cost) Establish an ACO Grow the number of managed lives through affiliations and geographic expansion of our Medical Network Increase patient engagement Experiment with pilot projects and new types of partnerships in a rapidly changing marketplace Implementing the population health plan

15 Beyond population health

16 Beyond population health

17 A forward-looking, sound strategic plan was the essential foundation that enabled Cedars-Sinai to be ready to move quickly in the new population health environment. Board leadership and partnership with executive management was crucial in the development of the strategic plan. Engagement and alignment of all key stakeholders (especially medical staff) is crucial, and will require the most amount of time. Even with a sound strategic plan, health systems must be agile and adaptable in today’s ever-changing marketplace. Lessons Learned

18 In tranquillo esse quisque gubernator potest. -- Publilio Siro (1 st Century B.C.) In closing…