An Honest Conversation about Cost Drivers Paul Fletcher, M.D. Group Health September 12, 2013

BIG Drivers: We all have a part U.S. funds R&D for equipment and pharmaceuticals: we pay retail We like new equipment and procedures: arms race Historically most patients not sensitive to costs We spend a lot at end of life; not so much on public health We boomers spend a lot to maintain our lifestyle We eat a lot, we smoke, we don’t get enough exercise 2

In Variation We Can Find Hope There is variation across the developed world There is variation across the country There is variation across the state There is variation between cities 3

A Tale of Two Cities from Atul Gawande, M.D. 4 El Paso, TX: 2006: $7,504 per capita Medicare spend McAllen, TX: 2006: $15,000 per capita Medicare spend

All Health Care is Local Variation across the state in: –Quality –Cost –Integration 5

Care in the Wrong Place 6 Seattle vs. Spokane Emergency Room Visits: 70/1000 Vs. 120/1000

Too much Care? 7 Spokane procedures vs. statewide: Repair pelvic prolapse: 179% Laparoscopic hysterectomy:159% Knee replacement: 148% Arthroscopy: 147% Back surgery: 145% Hip replacement: 129% Laparoscopic cholecystectomy:125%

Quality is Variable as Well 8 Central line and ventilator infections Number of infections per 1,000 central line/ventilator days

More like El Paso, Less like McAllen 9  True patient-centered care: Informed activated patients  Collaboration: Working across organizations to align financial interests with social interests  Integration: Working across disciplines to give the best care in the right place  Efficiency: Working everywhere to eliminate wasteful steps, procedures and complications

A Collaborative Clinical Integration Model Group Health/Providence Integrated Provider Organization - Company formed (LLC), with shared governance - Includes nearly 400 physicians in Spokane Short term objectives: Design and implementation Working committees: Physician management Information technology Finance Marketing & communication

Clinical Integration: Long-term Vision Bending the cost curve Improved integration of primary and specialty care Improved access to the right care at the right time Lower hospital costs through improved outcomes and payment methodologies Creating a better patient experience Care is seamless and coordinated through the continuum Patients have a medical home and neighborhood and are engaged in their care Clinical outcomes show care is better Creation of tiered networks with linked products