1. Steven M. Berkowitz, MD SMB Health Consulting Austin, TX steve@smbhealthconsulting.com 512-415-6095 This is NOT what I signed up for !!

2. So What’s New in Health Care Reform? Same old wine in a brand new bottle?

3. You can always count on Americans to do the right thing… …after they’ve exhausted all the other possibilities !!” Winston Churchill

4. People do not change until the pain of staying the same… … exceeds the pain of changing. Anonymous

5. What Does the Model Look Like? Form Follows Function

6. What Does the Model Look Like? Form Follows Function Decreased payments: VALUE vs volume Some risk-sharing Increased demand: Greater volume Aging, chronic More regulation Transparency of VALUE: Clinical Outcomes Patient Satisfaction Cost Effectiveness Healthier Population Minimal Variation !! Some Variation !! Considerable Variation !!

7. ALL MARKETS ARE UNIQUE !!  What are the needs of the community that you serve?  Quality, accessible, cost-effective care  What are the needs of the physicians?  Quality medical care  Practice/ economic stability  What are the needs of the hospitals?  Quality, accessible, cost-effective care  Partnership relationship with the medical staff What Does the Model Look Like? Form Follows Function

8. Shared Infrastructure and Governance Financial Integration Clinical Integration Fundamental Requirements to be a Winner

9. Shared Infrastructure and Governance Financial Integration Clinical Integration X- ABC Community Hospital X X X Fundamental Requirements to be a Winner

10.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance ◦ Enterprise-wide cost reduction ◦ Successful Management of Risk ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

11. Clinical Integration The Road to Population Management Common Quality Goals Common IT Platform Best Practice Implementation Population Management Clinical Integration

12.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance ◦ Enterprise-wide cost reduction ◦ Successful management of risk ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

13. 1. Embrace Data Transparency 2. Implement Evidence-based practices 3. Excel at Pay for Performance Clinical Integration Imperatives

14. 1. Embrace Data Transparency 2. Implement Evidence-based practices 3. Excel at Pay for Performance Clinical Integration Imperatives

15. The increasingly informed consumer will make health care decisions on the basis of VALUE Value Based Purchasing VALUE = Outcomes + Pt Experience Cost

16. “What we concluded was that even when hospitals know their performance is not good, that's not sufficient motivation for them to do something. Making it public made a big difference in motivating them to improve.” Judith Hibbard, Health Affairs 2003 Data Transparency That which is measured, tends to improve. That which is measured publicly, tends to improve faster.

17. Kaiser Family Foundation, October 2008 Exposure to and Use of Quality Information 2012

18. Transparency is the best thing that’s happened to quality since antibiotics... …by decreasing variance and improving results As transparency matures, it will rewrite the book on: Who is your competitor? Data Transparency and Accountability

19. Stage I The “other guy” Stage III The entire nation ? Stage IV Medical Tourism ?? Increasing Transparency Stage II All hospitals in the state System Strategic Planning Who is Your Competitor…. The role of Transparency

20.  Step 1- Demographic need  Step 2- Financial feasibility  Step 3- Build it and they will come ! Strategic Planning- The Old Way The Impact of Transparency

21.  Step 1- Demographic need  Step 2- Financial feasibility  Step 3- The need to excel in public data ◦ Outcomes ◦ Pt Experience ◦ Cost  Step 4- Only then, will they continue to come !! Strategic Planning- The New Way The Impact of Transparency

22.  Step 1- Demographic need  Step 2- Financial feasibility  Step 3- The need to excel in public data ◦ Outcomes ◦ Pt Experience ◦ Cost  Step 4- Only then, will they come !! Strategic Planning- The New Way The Impact of Transparency Can you keep the care HERE ?

23. Challenge #1 Can you keep the care in your community?

24. 1. Embrace Data Transparency 2. Implement Evidence-based practices 3. Excel at Pay for Performance Clinical Integration Imperatives

25. Implementing Evidence-Based Medicine What Can we Learn from the Airline Industry ?

26. Where Do We Find the Best Practices ? Examine Your Own Specialty Literature

27. There will be MORE guidelines in clinical medicine Guidelines were NEVER intended to apply to all patients and do NOT take the place of individual physician judgment Expect physicians to occasionally deviate from guidelines in the daily practice of prudent medical care When so… … DOCUMENT In the medical record that: The patient was seen and evaluated The options were thoughtfully considered The best clinical judgment was used Discussed with the patient Guidelines for Guidelines Don’t DEVIATE from the guidelines !!

28. Challenge #2 Does your hospital implement best practices in every service line you offer where best practices are available?

29. 1. Embrace Data Transparency 2. Implement Evidence-based practices 3. Excel at Pay for Performance Clinical Integration Imperatives

30. CMS Pay for Performance Core Measures HCAHPS Re-admissions Hospital Acquired Conditions Meaningful Use By FY 2017: 5 – 10 % of Total Medicare… Or more !!

31. The Evolution of CMS Value Based Purchasing From Process  Outcomes and Efficiency

32. Challenge #3 Will your hospital excel at pay for performance, even if your current reimbursement is not at stake??

33. Health Care Information Systems-- We are so far behind !!! 1 Zettabyte = 1,000,000,000,000,000,000,000 bytes = 1000 7 bytes = 10 21 bytes The Role of Information Systems

34. EMR and Evidence Based Order Sets are not just another IT initiative…. …. it is a Clinical Transformation to how we will be practicing better medicine in the future. The Role of Information Systems

35. The EMR will do for health care What the assembly line did for manufacturing The Role of Information Systems

36. Challenge #4 Will your hospital’s information system be state of the art ?

37.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance ◦ Enterprise-wide cost reduction ◦ Successful Management of Risk ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

38.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance ◦ Enterprise-wide cost reduction ◦ Successful Management of Risk ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

39. FFS Common IT Platform FFS + Incentives Bundled ProductsGlobal CapGlobal Cap + IncentivesFull Premium Financial Integration The Continuum towards Management of Risk Financial Integration

40. There will be a focus on Cost Control like we have NEVER seen before in our careers Enterprise Wide Cost Reduction Job One !!

41. Health Care Costs Per Capita OECD

42. Physician Hospital Other Rx Admin Today’s Health Care Costs ???? ? Post- Reform Health Care Costs Cost Reductions Enterprise Wide Cost Reduction Job One !!

43. Physician Hospital Other Rx Admin Today’s Health Care Costs ???? ? Post- Reform Health Care Costs Cost Reductions Any decrease in health care expenditures is a pay cut for somebody in health care !! Enterprise Wide Cost Reduction Job One !!

44. Maximum opportunity ! Minimal Opportunity More Opportunity Total Cost of Care- Hospitals

45. Challenge #5 Can your hospital reduce 20% of your cost basis and be cost-neutral in Medicare?

46. Hospital Physician Hospital Other Rx Physician Hospital Other Rx Admin Total Health Care Costs Physician Hospital Other Rx 1. Global 2. Bundling 3. Global with Incentives 4. Full Risk Cap The Successful Management of Risk Types of Risk Products

47. Risk = Exclusivity Levels of Coordinated Systems of Care

48. Risk = Exclusivity The greater the risk… …the greater the reward Levels of Coordinated Systems of Care

49. New Roles for the Hospitals

50. Compensation Reform Payment Reform Public Sector Private Sector Clinical ReformStructural Reform

51. Challenge #6 Can your hospital be able to handle some risk in the market; are you strategically thinking about financing and managing as well as delivery of care?

52. Clinical Integration Fundamental Requirements to be a Winner Integrating the Components of Health Care Delivery Financial Integration

53. Clinical Integration Governance/ Infrastructure Fundamental Requirements to be a Winner Integrating the Components of Health Care Delivery Financial Integration

54. Shared Infrastructure and Governance Financial Integration Clinical/ Operational Integration Fundamental Requirements to be a Winner

55.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance ◦ Enterprise-wide cost reduction ◦ Management of risk ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

56. System Community Hospital Patients ! Tertiary Services Specialists IT Capabilities Mgmt Services Branding Capital Infrastructure- With Whom do you Partner ? Other Hospital Systems

57. AffiliationIndependentJoint VentureMerge Close Down Infrastructure- With Whom do you Partner ? Other Hospital Systems

58. System Community Hospital Patients ! Tertiary Services Specialists IT Capabilities Mgmt Services Branding Capital Infrastructure- With Whom do you Partner ? Other Hospital Systems What is the LEAST disruptive solution that will accomplish your needs

59. Challenge #7 Are you able to execute on the “least disruptive” option regarding partnerships that best meet your needs?

60. AffiliationIndependentJoint VentureEmploy Physician Network - With Whom do you Partner ? Physician Strategy Primary Care Specialty Care

61. Physician Compensation 2012 MGMA Mean Compensation If you are smart enough to get into medical school… … you are smart enough to understand this slide.

62. Challenge #8 Are you strategically addressing your present and future physician needs, particularly primary care?

63. A Final Thought…. 1620- Somewhere in the Atlantic.…

64. Challenge #9 Do you view your community healthcare (hospital, physicians) as a fragile Mayflower that other people would like to see go away?

65. Opportunity is overlooked by most people because it is dressed in overalls and looks like work. Thomas Edison

66.  Clinical Integration ◦ Embracing data transparency ◦ Implementing best practices ◦ Excel at Pay for Performance  Financial Integration ◦ Enterprise-wide cost reduction  Hospital Physician Partnership ◦ An aligned, long term collaborative relationship Clinical Integration Financial Integration Shared Infrastructure and Governance Engaging Hospitals and Physicians Insights and Actions for Results

67.  1. Keeping the care in your community  2. Implementing best practices  3. Excelling at pay for performance  4. State of the art information system  5. Enterprise-wide cost control  6. Ability to handle some risk in the market  7. Implement a “least disruptive” strategy for Partnership  8. Address your present and future physician needs  9. Implement and protect your “community” health model

68.  1. Keeping the care in your community  2. Implementing best practices  3. Excelling at pay for performance  4. State of the art information system  5. Enterprise-wide cost control  6. Ability to handle some risk in the market  7. Implement a “least disruptive” strategy for Partnership  8. Address your present and future physician needs  9. Implement and protect your “community” health model Challenge #10 Can you meet these in 3-5 years?

69. When you're finished changing, you're finished. Ben Franklin

70. To the world you may be just one person, But to one person you may just be the world. Unknown