1. Environmental Scan 2015 TRENDS IN COLORADO’S HEALTH CARE MARKET AUGUST 2015

2. Integrated Care is the New Normal T REND 1

3. State Innovation Model ◦$65M to integrate behavioral and physical health ◦Statewide impact: goal to reach 80 percent of state’s population in four years ◦Bellwether of future multi-payer investment and coordination Workforce Implications ◦The right kind of workers to treat changing populations and care goals ◦Managing maldistribution and ensuring access to care, particularly in rural areas Payment Implications ◦Will value-based payments cover costs of new care delivery models? Integration: At the Heart of New Dynamics

4. Member Impact: Build A Strategy to Lead Integration

5. New Competitors are Narrowing Service Line Margins T REND 2

6. New Competitors Changing Delivery National Walmart Lowe’s Local New market entrants DaVita Walgreens Regional Urban “Centers of Excellence” United Healthcare

7. Keys to Success o Determine profitability on a service line-by-service-line basis. o Offer services only where you can effectively compete. o Explore partnerships with unconventional providers. Member Impact: Your Bottom Line

8. It’s All About Maintaining Loyalty T REND 3

9. Report Card Confusion Complicated and Underused Transparency Tools Limited Effectiveness of Value-Based Insurance Design Consumers Are (Still) Reluctant Participants In Health Care Decisions

10. Strengthen Patient and Community Loyalty Through Partnerships Expand Community Benefit Strategies to Include Prevention and Community Engagement Member Impact: Opportunity to Build Loyalty

11. Technology Promises New Solutions… At a Price T REND 4

12. The Allure of New Technologies ◦Offer a competitive advantage ◦Expand reach of the delivery system ◦Provide access to new direct-to- consumer markets The Danger of Tech ◦Large cost drivers ◦May not be tied to improved quality or outcomes Mainstream Adoption Of Technology Is Near

13. Member Impact: Choose Wisely!

14. Regional Capacity is the Next Frontier T REND 5

15. Five Dominant Health Systems Colorado Medicaid’s Commitment to Regional Approach Rural Hospitals Face New Challenges The “Regionalization” of Colorado

16. Member Impact: Network Dynamics Essential to Strategic Directions Hospital Primary Care Specialists In-house Services Referral of Services Purchasing Power Home & Community Services Urban/ Rural Partners

17. Risk is Here to Stay. Get in the Game. T REND 6

18. Public Payers Moving Away from Fee-For-Service ◦Medicare ACO results are underwhelming, but improving ◦Medicare adopting goals for alternative payment models ◦Colorado Medicaid exploring sub-capitation and global payments Private Payers Likely to be Game-Changers ◦Importance of multi-payer buy-in on reform models ◦Major payer mergers likely to drive success or failure of innovations Risk Has Been Looming For A Long Time

19. Member Impact: Dual Realities

20. Are Hospitals in the Hot Seat? T REND 7

21. Expect Greater Scrutiny of Costs With More People Insured ◦40 percent of Coloradans are covered by Medicare or Medicaid/CHP+ ◦Colorado Commission on Affordable Health Care Scrutiny May Be Misplaced ◦Recent upticks in spending largely due to increased prescription drug costs Hospitals Face Public Scrutiny

22. Important to Share the Stories of… ◦Community benefit and investing in population health ◦Changing business models to improve value of dollars spent on care ◦Readiness to respond in times of individual or community crisis Member Impact: Managing Market Perception

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