1. Minnesota Health Action Group 9 th Annual Employer Leadership Summit April 22, 2016 Introducing the Employers Centers of Excellence Network Spine Care Program ECEN

2. 2 Bundled Payment Employers Centers of Excellence Network Maternity: Reducing Unnecessary C-Sections High Cost Patients Intensive Outpatient Care Program Oncology Webinar Series ACOs Employer ACO Audits Policy education and presence on the Hill Primary Care California Quality Collaborative Practice Transformation Initiative CHIPI Pacific Business Group on Health PVN

3.  Travel surgery model  Focus on elective procedures with high cost and quality variation  Negotiates direct contracts with a national network of centers of excellence  Employs prospective episode-based bundled payments What is the ECEN? 3

4. Program Value for All Stakeholders  Employers o Bundled payments address unwarranted cost variation o Fewer costly complications o Demonstrates a commitment to employee health and wellness  Employees o Access to nationally renowned centers o Waived cost sharing and covered travel expenses o Patient Advocate and Navigator support each step of the way  Centers of Excellence o Volume from outside typical service area o Recognition of exceptional quality o Collaboration to improve patient care and value based purchasing 4

5. ECEN in Action  Low startup burden for participating employers  PBGH leads center selection, CQI and employer collaboration  Health Design Plus (HDP) administers integrated services package: o Contracting o Employee and dependents customer service o Patient advocacy o Care management o Claims payment  100% carve out benefit doesn’t interfere with existing health plan relationships or benefit designs 5

6. Center Selection  Rigorous, multi-step evaluation process o Public Data o Invited RFI o Team Assessment Call o Comprehensive RFP o In-person site visit  Qualifies both center and the individual surgeons  Review of 20+ outcome metrics at evaluation and annually  Agree to share data, align with requirements and accept a bundled payment 6

7. CoE Evaluation Criteria 7 Employer NeedsQuality of CarePatient Experience o Location o Bundled payment design o Commitment to value o Travel surgery experience o Reporting on CoE performance o Outcomes data and rankings o Volume, training and experience o Patient safety and satisfaction scores o Application of evidence-based medicine o Registry participation o Shared decision making o Supportive resources o Patient Reported Outcomes (PROs) collection o Attention to the patient experience across the complete care continuum

8. Virginia Mason Medical Center Seattle, WA CoE Locations 8 Kaiser Permanente Irvine Medical Center Irvine, CA Mercy Hospital, Springfield Springfield, MO Johns Hopkins Bayview Medical Center Baltimore, MD Geisinger Medical Center Danville, PA St. Vincent’s Medical Center Cleveland, OH Joints Spines Bariatrics Scripps Mercy Hospital San Diego, CA

9.  Savings Opportunity o Fortune 500 spends >$500M/year on avoidable back surgeries o As much as $1.5B in indirect costs (missed work and lost productivity)  Appropriateness o Limited evidence base for invasive procedures o Surgery shown to help in as few as 1 in 100 cases of low back pain  Severe Consequences o Initial surgeries can lead to a series of future procedures o Post-surgical opioid addition on the rise Why Spines? 9

10.  Center Level o Volume ≥ 300 spine procedures in the past year o Quality outcomes such as SCIP, AHRQ PSIs, HCAHPS o Protocols for pain control o Patient education materials  Surgeon Level o Volume ≥ 75 spine procedures in the past year o Volume ≥ 20 of each type-specific procedure: laminectomies, cervical fusions and lumbar fusions o Education and Training o Quality outcomes such as rates of SSI, Dural tears, AHRQ PSIs Sample Spine Evaluation Criteria 10

11. 11 Spine procedures (4/1/2015 to 2/29/2016) Unique Inquiries: 384 Referrals to CoE: 232 Completed Cases: 134 11 ECEN In Action  Launched 2015  20-30% lower rates  In-person evaluation  Inpatient and ambulatory Covered Procedures Spinal Fusion (cervical and lumbar) Total Disk Arthroplasty (Artificial Disk) Removal Vertebral Body Spine Surgery Revisions Scoliosis Laminectomy Discectomy Other Inpatient Complex Spine Surgeries

12. 12 Spine Statistics Case TypeVolume (Percentage) Inpatient 55 cases (41%) Outpatient13 cases (10%) Nonsurgical66 cases (49%)

13. 13 Olivia Ross Associate Director, Employers Centers of Excellence Network (ECEN) Pacific Business Group on Health oross@pbgh.org 415-615-6311 For More Information:

14. 14 Appendix

15. 15 Employee learns about the ECEN via employer, flyers, direct mail pieces and patient testimonials Interested employee contacts HDP directly; HDP Member Advocates provide information and distributes information packet HDP requests information, handles confirmation of program eligibility, and HDP Nurses initiate patient referral to the CoE and offer additional support STEP 1STEP 2STEP 3 Employee Care: A Guided Experience

16. Employee Care: A Guided Experience (cont.) 16 CoE reviews patient, submits plan of care to HDP for evaluation or surgery as medically appropriate; HDP coordinates employee and caregiver travel STEP 4 In CoE city Patient Navigators provide 24/7 support; patient receives surgery; HDP and CoE partner to monitor patient care experience STEP 5 Transition home includes CoE and home provider handoff; HDP supports home carrier on discharge planning needs; employee returns home STEP 6

17. ECEN Versus other CoE Programs Required Characteristics Blue Distinction Centers Aetna Institutes of Quality Bridge Health Surgery Plus ECEN Facility accreditationYes Volume minimums for center & all surgeons No Yes Multi-institutional joint registry participation No Yes Bundled pricingNo Yes Patient reported outcomes (pain, function, quality of life) No Yes Cross provider collaboration and CQI No Yes Travel managementNo Yes 17

18. ECEN In Action 18 Joint replacements (1/1/2014 to 2/29/2016) Unique Inquiries: 3,323 Referrals to CoE: 1863 Completed Cases: 1120 18  Launched 2014  20-30% lower rates  Virtual Evaluation  All inpatient  Includes PT

19. Lowe’s 2014 Utilization 19 Total Joint Replacement Cases CarrierECEN 1/1/14 – 12/31/14350231 19

20. Lowe’s 2014 Outcomes 20 Quality Metric CarrierECEN Discharge to Skilled Nursing Facility9.1%0.0% Readmissions < 30 Days6.6%0.4% Revisions within 6 months1.1%0.0% 20

21. Lowe’s 2014 Appropriateness 21 Approved for surgery Pending o Need to reduce BMI o Need to stop nicotine use Not Appropriate (Avoided) o Most (92%) followed CoE recommendation o Needed to attempt conservative therapy o Previous misdiagnosis Not Appropriate (had surgery outside ECEN) o Subset (8%) had surgery against CoE recommendation of the CoE o Patients paid cost-share under traditional benefit Saved Lowe’s nearly $1M from avoided, inappropriate care