1. Will County Center for Economic Development Report on Healthcare A.J. Wilhelmi, President & CEO, IHA April 7, 2016

2. 2 Today’s Agenda Opportunities and challenges with healthcare transformation Implications of State budget challenges on access and transformation Economic impact of hospitals and healthcare sector in Will County and Illinois

3. Healthcare Transformation – Opportunities and Challenges

4. Goals of Healthcare Transformation and the Move to Value-based Care Better health – keeping people well Better healthcare ‒ Greater access ‒ Improved quality and outcomes ‒ Integrated care ‒ Enhanced patient satisfaction Better value – bending the cost curve 4

5. Drivers of Healthcare Transformation and the Move to Value-based Care Employers – healthy workforce; lower costs Payers – better value for the care they’re purchasing Consumers – looking for best deal; convenience Affordable Care Act (ACA) – improved access and federal budget relief 5

6. 6 From Pay for procedures Fee-for-service More facilities/capacity Physicians/Hospitals acting independently Physicians and other clinicians and Hospitals working in parallel Hospital centric Treat disease/episode of care To Pay for value Case rates/budgets/capitation Better access to appropriate settings Physicians/Hospitals collaboration: global risk Physicians and other clinicians and Hospitals working in a highly integrated manner Continuum of Care (Population centric) Maintain health 6

7. Traditional FFS Value-Based (Link to Quality) Hospital VBP Physician VM Readmissions HACs Quality Reporting Alternative Delivery Models ACOs Medical homes Bundled payment Comprehensive Primary Care initiative Comprehensive ESRD Oncology care model Population Health/ At Risk Pioneer and Next Generation ACOs VolumeValue 7

8. 8 New Delivery and Payment Models Medical Home stresses the importance of a physician providing primary care and coordinating all care - right care, right time, right place. Bundled Payment model establishes one all-inclusive price and payment focusing on a patient’s total episode of care. Medication Room X-Ray Physician

9. 9 Transformation Challenges Creating networks of care and getting providers aligned Aligning financial incentives as providers and payers assume more risk (reward quality, better outcomes) Improving level of trust between health plans and providers – focus on value, not just price Investing in health information technology to track performance and do population health

10. 10 Transformation Challenges Health Insurance Exchanges ‒ Fewer provider choices (narrow networks) ‒ Higher deductibles and co-pays ‒ Deferral of needed services ‒ Insurers losing big (and may opt out) Access to Behavioral Healthcare ‒ Integrating BH and Physical Health – treating the whole person ‒ 52 Illinois counties have no psychiatrist ‒ 74 Illinois counties have no inpatient mental health beds ‒ Budget cuts to community services ‒ People turn to their hospital Emergency Departments

11. State Budget – Implications on Access and Transformation

12. 12 The Standoff Continues…

13. 13 Epic Battle – will there be a budget resolution? Governor pushing reforms first, new revenue second Democrats rejecting reforms as unrelated to budget and harmful to working families Few pressure points leading to compromise ‒ 90% of state spending authorized via court orders, consent decrees, continuing appropriations ‒ Social services and higher education NOT being funded Election season presents complications…

14. What’s At Stake 14 1 in 2 children in Illinois are covered by Medicaid 1 in 4 people in Illinois are covered by Medicaid About 41% of hospitals operating in red or slim margins Community-based services at risk Need stable and predictable healthcare funding to care for people today -- and to invest in the delivery system of tomorrow

15. Economic Impact of Hospitals and Healthcare Sector

16. Economic Impact of Illinois Hospitals by Geographic Region 16

17. Economic Impact in Will County 17 Will County Hospitals Employ 4,100 people Account for 10,000 direct/indirect jobs Drive nearly $2B in economic activity Will County Healthcare / Social Assistance Sector 11.6% of all jobs 5.1% job growth from 2015 to 2016 ‒ 1,242 jobs created (more than any other industry) Nurse average wage = $68,500/year Experienced nurse wage = $92,200/year

18. Estimated Impact of Illinois Hospitals’ Spending and Employment = $88.8 Billion 18

19. Healthcare & Social Assistance: #1 in New Illinois Jobs Created January 2000 – October 2015 19 Source: Illinois Department of Employment Security Current Employment Statistics Program

20. Projected Percent Change in Illinois Employment in Selected Industries by 2022 20 Source: Illinois Department of Employment Security 2012-2022 Projections

21. Quality Starts at Home 21 Adventist Bolingbrook Hospital “A” Hospital Safety Score – Leapfrog Group Gold Seal of Approval – The Joint Commission Edward Hospital “A” Hospital Safety Score – Leapfrog Group Magnet Recognition for Nursing Excellence – American Nurses Credentialing Center Presence Saint Joseph Medical Center First designated Primary Stroke Center in Will County “Top Hospital” – Chicago Magazine Silver Cross Hospital “A” Hospital Safety Score – Leapfrog Group Top 100 Hospital (national) – Truven Health Analytics