Cost Management & Financial Performance December 14-15, 2015 Letters of reference are not required at this time.

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Source: CHST Patient and Financial data; Scenario model CHST OPERATING MARGIN RANGE WITHOUT INTERVENING ACTION (ASSUMES NO ACTIONS BY CHST/UTSW) ForecastActual 2013 op margin: ~12% Why are we here? 2

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH We offer programs in: Asthma Management Weight Management Injury Prevention Behavioral Health The Health and Wellness Alliance $65 million in direct charity care We offer programs in: Asthma Management Weight Management Injury Prevention Behavioral Health The Health and Wellness Alliance $65 million in direct charity care 3 Large, Growing Market 1 of 9 children in U.S. live in Texas Significant Community Needs 29% of Dallas County children live in poverty 2 of 3 children need financial assistance 7 out of every 10 public school children in Dallas County eligible for free and reduced-price meals 18% of Dallas County children are uninsured Only 31% of TX physicians accept new Medicaid patients (Down from 42% in 2010) Significant Pediatric Medical Needs 50,000 children in N. Texas with asthma 36% of Dallas County kids are overweight or obese 28% of Dallas County children are malnourished 30% of toddlers not fully immunized Invest for the future: To extend care into our community

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Privileged and Confidential Benchmarking

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Why Benchmark? 5Privileged and Confidential If you cannot measure it, you cannot improve it - Lord Kelvin Objectively identify opportunities: –staffing improvements –operational efficiencies –cost reduction opportunities Systematically develop and communicate: –business case for change –quantitative baseline analysis of existing processes, technology and KPIs –reference point for implementing and managing change

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Why Truven / ActionOI? 1.Scale: Largest healthcare network Database of more than 750 healthcare organizations Over 300 departments, ranging from Nursing and Surgery to Supply Chain and Community Outreach 2.Scope: Opportunities for population health, physician/clinic services 3.Timeliness: Quarterly data submissions & reports 4.Economy: History of quantifiable impact on performance improvement/ROI Advantage Community provides access to network of 22,000 professional to help identify best practices 5.Integrity: Robust data analysis & normalization Independent reviews & audits 6Privileged and Confidential

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Understanding and Using Cost Information 7Privileged and Confidential Organizational view –Global, directional –Indirect expense Departmental view –Focused –Direct expense Foundational view –Value of balance –Opportunity for forecasting –Underscore our mission OrganizationalDepartmentalFoundational

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH The Budgeting Process 8Privileged and Confidential Volume Projections Revenue Challenges Expense Management Flexibility & Speed Challenges and Future Goals

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Establish Methodology and Build Reports Collaborate to Test Establish Feedback loop and timelines Continuous Review Cycle Flexible Budget Reports

Dallas, TexasPEOPLE QUALITY EFFICIENCY GROWTH Conclusion