1. New Faculty Orientation
UK HealthCare Strategy The Past - - The Present - - The Future -
New Faculty Orientation
Michael Karpf, MD
Executive Vice President for Health Affairs
September 29, 2015

2. - The Past -

3. FY 2004 Clinical Plan - Growing to Serve Kentucky
Advanced Subspecialty Care
Level 1 Trauma Center; Kentucky Children’s Hospital, Solid-Organ Transplantation, Markey Cancer Center, Advanced Neurosciences, Advanced Surgery, Cardiovascular Services
Regional Care – Preserving Rural Providers
Leverage community health care providers by augmenting specialty services and allowing patients to remain close to home and utilize local services
Efficiency, Quality and Patient Safety
Center for Enterprise Quality and Safety has been established to focus on the development of efficient processes aimed at optimizing clinical outcomes and the safety of patients
Privileged and Confidential. Draft working document, for discussion purposes only. 2

4. UK HealthCare Initial Drivers of Change – 2003
The mandate from the Kentucky General Assembly for the University of Kentucky to become a top 20 public research institution
The slow but steady decline in clinical activity within the organization that had to be addressed for us to maintain our relevance in the health care marketplace of the Commonwealth

5. UK HealthCare Developing a Vision - 2004
Board of Trustees |
University HealthCare Committee
President
EVPHA
Advisory Board
Financial
Planning
Facilities
Academic Planning
Strategic
Executive and Legislative
Branches of Government |

6. FY 2004 Clinical Plan - Growing to Serve Kentucky
Advanced Subspecialty Care
Level 1 Trauma Center; Kentucky Children’s Hospital, Solid-Organ Transplantation, Markey Cancer Center, Advanced Neurosciences, Advanced Surgery, Cardiovascular Services
Regional Care – Preserving Rural Providers
Leverage community health care providers by augmenting specialty services and allowing patients to remain close to home and utilize local services
Efficiency, Quality and Patient Safety
Center for Enterprise Quality and Safety has been established to focus on the development of efficient processes aimed at optimizing clinical outcomes and the safety of patients

7. Realization – We Must Expand the Footprint
Primary - 0.3M population
Secondary - 0.5M population
Tertiary - 1.0M population
Other - 2.5M population
Market Definition
Procedure
Estimated Incidence per One Million KY Residents
Aspirational Volume
Population Required to Achieve Aspirational Volume
Population Required to have 50% Market Share
Kidney & Kidney / Pancreas Transplants
34.34
110
3,204,000
6,408,000
Liver Transplant
16.82 60
3,567,000
7,134,000
Heart Transplant
5.30 25
4,717,000
9,434,000
Lung Transplant
8.07
3,100,000
6,200,000
Adult Bone Marrow Transplant
28.13
150
5,332,000
10,664,000
Brain Cancer Admissions
68.30
250
3,660,000
7,320,000

8. = Potential Partnering Organizations
Defining Market Space

9. Strategic Plan 2010 - 2015: Moving Forward
Advancing to serve the health care
needs of Kentucky and beyond
Continue to refine approach to subspecialty care
Continue to mature relationships with regional providers
Reemphasize efficiency, quality, safety, and patient satisfaction

10. - The Present -

11. Strategy: UK HealthCare Discharges
Annual discharges at UK HealthCare have grown at a CAGR of 5.7% from FY03 to FY15 – a total of 94% growth
Cumulative % Growth =
3.0%
16.6%
29.6%
42.9%
72.4%
66.3%
69.4%
70.5%
80.4%
85.9%
84.2%
94.0%
*FY13 forecasted based on data through February.

12. Case Mix Index - COTH Benchmark

13. Ambulatory Visits
The FY 2016 Budget is projected to have 46% higher ambulatory volume compared to FY 2010
Note: Includes both Clinic Visits and Outpatient Hospital Visits

14. Economic Impact – FTEs
11,592
109%
Increase
5,539

15. Economic Impact – Personnel Expenses

16. Cost of Becoming a Research Intensive Referral Center
Over $260M worth of approved major construction in progress based on Preliminary FY 2015 Financial  Statement
Approved Authority in FY2014: June 2014 FCR 11- $150M
Approved Authority in FY 2015: FCR 11-Phase 1G-$75M
Approved Authority in FY 2016: Continued KCH and Core service relocation-$37M $ $ $
$ 158.8
$ 165.2
$ 213.7
$ 267.1
$ 220.0
$ 157.8 $ $ $
$ 1,742.6
- 16 -

17. - The Future -

18. UKHC and other providers will need to respond to national trends
Responding to National Drivers of Change
UKHC and other providers will need to respond to national trends 1
Federal Deficit
Focus on Value 7
Medicaid Expansion State Cost 2
Future Drivers of Change in KY
State Budget Issues 6
Payer Consolidation 3 5 4
Uncompensated Care Payments
Teaching Costs (GME/IME)

19. Preparing for the Future
Fee
For
Service
Value
Based
Care
Quality
Cost Efficiency
Drivers:
Volume
Potential for
risk-based reimbursement

20. Create a system that rationalizes care, not rations care.
UK HealthCare Goal
Create a system that rationalizes care, not rations care.
Provides care in appropriate settings and develops a seamless continuum of care.
Will require partnerships with providers, insurers, and purchasers AND appropriate integrative systems – information systems and medical management tools.
System may be virtual, real or a combination.

21. UK HealthCare Strategy 2020

22. Service Line Growth Strategy
UKHC will focus on treating the most complex patients and partnering with community providers to keep lower acuity patients in their home community
Patient Care Distribution
High
Cost
Patients
(5%)
Rising Cost
(15%-35%)
Low Risk Patients
(60%-80%)
AMC
Mandate
Community Hospital
Focus
Primary Care

23. Service Line Operating Model
UKHC leadership has identified nine service lines as priorities for growth over the next five years, supported by growth accelerators.
High Risk OB/NICU
Gill Heart Center
Transplant
Kentucky Neuroscience Institute
Markey Cancer Center
Digestive Health
Musculoskeletal
Kentucky Children’s Hospital
Trauma / Acute Care General Surgery

24. Partnership Network 9

25. UK HealthCare Alliances
UK / Norton Alliance
Q U A L I T Y C O L L A B O R A T I V E
A network of providers who use data to monitor and improve their quality.
Objectives:
Improve overall population health through an efficient, balanced set of cooperative activities.
Agree on evidence-based practices that support quality healthcare across a coordinated network of sites.
Improve timeliness and communication across transitions in care.
Share usable data through cost-effective registries that provide standardized data elements, simple tools for data collection and submission, and transparent reports.
Focus on network-relevant, risk-adjusted quality indicators, including clinically-important delays in care, cost, patient experience, and immediate and long-term patient outcomes.
Stroke
Heart Failure
Cancer
Transplants

26. Looking Forward Extending efficiencies
Pharmacy
Lab/genetics/pathology
Telehealth
GPO
Standardizing protocols and devices

27. Our Vision: The Kentucky Health Collaborative

28. Market Regions

29. Potential Members of the Collaborative

30. Continuum of Care
Consumer / Patient 15

31. Enterprise Analytics – A Key Strategic Differentiator

32. Organization Implementation Standardization
Create Value through Medical Management Preparing to be responsible - Risk
Total Transparency
Value Proposition
Ready for Risk
Geographic Care
Connectivity-Utilization –Definition of Responsibilities
Continuum of Care
Pre-hospital - Hospital - Post Hospital
Services-Linkages
Basics- Requires Coordination-Standardization-Communication
Access – Coverage - Quality, Safety, & Efficiency Metrics, Etc.
Organization
Implementation
Standardization
Information Systems
Analytics
Applied Health Services Research
Best Practices
Learn from others-develop approaches others adopt
Must do less and better with less

33. Where We Need to Go 945 Inpatient Beds 45,000 Discharges
Continued expansion of ambulatory services and volume
Continued shaping of our patient population – pushing our CMI even higher
Operating Revenues in excess of $2 billion for the hospital system

34. Buildout of Pavilion A

35. Redevelopment of Pavilion H

36. Future Rendering of Pavilion B

37. What We Must Be
The preeminent academic medical center serving Kentucky and beyond – in all three missions
The provider of accessible advanced subspecialty care for Kentucky and beyond
The referral center for an extensive collaborative of healthcare providers across the state and beyond
An Organization focused on appropriate care in the appropriate setting – community first, ambulatory second, hospital third
An organization operating at the highest levels of quality, safety, efficiency and patient satisfaction
A major economic driver for the Bluegrass and beyond

38. We will need to invest $2 Billion over the next decade

39. What does the faculty and staff get: 1. SECURITY 2. PRIDE