1. Transforming Fairview’s Business Model to Accept Risk and Manage the Health of Populations Cornell University’s International Health Care Conference May 11 th – 12 th, 2010

2. Fairview Overview Large integrated health system Not-for-profit, established in 1906 Headquartered in Minneapolis, MN Partnership with University of Minnesota 22,000+ employees 2,500 aligned physicians Comprehensive continuum of services 8 hospitals/medical centers 42 primary care clinics 55+ specialty clinics 28 retail pharmacies 20+ rehabilitation centers 26 senior housing locations Home care and hospice 2009 data 4.8 million outpatient encounters 80,314 inpatient admissions $333.6 million community contributions Total assets of $2.4 billion $2.7 billion total revenue 1

3. We are being asked to deliver greater value. –Improved clinical outcomes –Lower cost –Improved experience We will be asked to care for the health of a population. Payment systems and methodologies will change, rewarding those who deliver value. Change is coming…Change is here 2

4. The market is changing… Payment Methodologies Care Delivery Population/ Global Payment Individual / Discount Fee For Service Encounter Episode/Lifetime X Today Transition Market Relevance Global Adoption Volume Value 3

5. Requiring a new “value chain”… Change Experience Change Care Change Payment Consumer Employer/ Plan Provider Creating Value and Outcomes “Global Payment” Enables Performance Rewards Value Patient Activation and Consumer Engagement Value 4

6. And a repositioning of our business model Multi- Specialty Group Practice Outpatient Ancillaries Sub-Acute Care Acute Care Care Management Maximize Utilization/ Revenue Growth Minimize Utilization/ Manage Margin Incentive to reduce utilization TODAY (fee for service) FUTURE (global payment) Integrated Delivery System Internet Retail Clinics Employer Clinics Virtual Clinics Physician Clinics Urgent Care ER Multiple Points of Access (Health Home) Population 5

7. To deliver on today’s and tomorrow’s definition of “value” TodayTomorrow ProcessesHealth & OutcomesStatus EncounterCustomer SatisfactionLoyaltyCost/ CaseMemberShare of EncountersCovered Lives 6

8. Creating capabilities and capacity to manage the health of populations 2009201020112012 Fee-for-ServiceShared SavingsPartial CapitationGlobal Payment Care Delivery Innovation Fairview Medical Group Reorganization Medical Home Care Packages Payer Contracting Methodologies Epic Install Physician Compensation Fairview Population VolumeValue Episode Payment Network Development Population Health Operating Model/ Infrastructure Virtual Care Sensor Technology Accountable Care Organization Integrated Business Intelligence 7

9. Today…care for the sick is physician centric 8

10. Tomorrow…keeping patients healthy with team-based care 9

11. Improved quality Increased access and capacity o promoted virtual care (phone, email, webcam) o created new visit types (nurse only, team visits – n clinicians to one patient) o asked patients for input on length of appointment required when scheduling Increased patient satisfaction o Migraine example o A real person answered the phone o... who knows you 2009 CMI results… 10

12. Improved quality in CMI clinics 11

13. MD Capacity Increase Improved Access Northeast Clinic Call Abandonment Rate Date Abandonment Rate 6/1-6/522% 6/8-6/1233% 6/15-6/1934% 6/22-6/2631% 6/29-7/334% 7/6-7/1031% 7/13-7/1735% 7/20-7/2433% 8/5/2009GO LIVE 8/10-8/1414% 8/17-08/2113% Improved access and capacity… 12

14. Successfully shifting care to lower cost & more patient-friendly interactions… Team-Based Care 2008 2009 13

15. 49 visits (0 paid extensions) 21 coupons used 1057 enrolled consumers (4.3% with visits) 32 providers (75% with visits) Time of Day 0% Phone Only 100% Web 0 Disconnects 0 Provider Cancelled/ Provider Declined 49 Completed Visit Details 94% MD 4% Physician Asst 2% Nurse Practitioner Provider Types 1.Skin disorders and redness 2.Behavioral Health 3.Insomnia 4.Migraines and other headaches 5.Hypertension Top Diagnoses/Disease Areas Online Care Rooms 2133 Total Card Swipes1503 Main 525 RP 105 Virginia Average Satisfaction with Online Care By Consumer: 4.69/5 stars By Provider: 4.31/5 stars 4.63/5 stars Satisfaction with Provider Virtual care prototype with BCBSM: Fairview providers care for BCBSM employees & family members using web cams in employer clinics and homes Model and understand virtual care operations Design for consumerism Virtual care prototype with BCBSM: Fairview providers care for BCBSM employees & family members using web cams in employer clinics and homes Model and understand virtual care operations Design for consumerism Visit Demographics 69.4% Female 30.6% Male 18 prescriptions written. No additional detail available 28.6% 21-34 26.5% 35-44 32.7% 45-54 12.2% 55-64 Age Top Rx Virtual care…Care Anywhere ( November 30, 2009 - January 25, 2010) 14

16. Payer revenue at risk 15 Revenue at risk with 3 major commercial payers Various models Clinical quality Clinical quality & total cost of care Total cost of care 2010 Revenue at risk $40+M

17. Challenges Changes in the care models are moving faster than payment & growth models Living in two worlds is difficult Change roles 16

18. 17 Our work requires transformational change in organization focus… Global Business Services Creating enabling expertise Clinical Enterprise Realize value Care Model Innovation Creating new value Member Acquisition Connecting to Members Business Model Innovation Recognizing Economic Value Design Operations

19. 18 Our work requires transformational change in organization focus… Operations Realize value Multi-Specialty Group Outpatient Care Sub-acute Care Acute Care Care Management Design Creating new value Care Model Innovation Business Model Innovation Member Acquisition Global Business Services Goals and Strategies

20. Business model shift 19 IndividualsEmployers Payers Providers Disease Risk Selection Risk Perform- ance Risk Risk Mitigation Cash Management Sales Credentialing Network Management Medical Management Cash Mgmt. Risk Reserves Underwriting Cash Mgmt. Credentialing Network Management Medical Management New and changing roles will emerge as a “network of capability” forms to deliver on the promise of the new value chain. Product Development Member Services