1. Phillip L. Polakoff, MD,MPH,MEnv.Sc. January, 2015

2. “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” 2

3. In Our Nation: A Tale of Healthcare “It is the best of times… Unprecedented advances in medical technology, treatments, and pharmaceuticals can improve population health “It is the worst of times…” The state of public health, unsustainable health care costs, the quality of medical care delivered and access to services challenge clinical care and overall health Sources: Sam Nussbaum, MD, “Advancing Health Care Quality, Access, and Affordability Through Innovation”; Charles Dickens “A Tale of Two Cities”. 3

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5. Key Challenges in U.S. Health Care System Source: Sam Nussbaum, MD, “Advancing Health Care Quality, Access, and Affordability Through Innovation” U NSUSTAINABLE C OST V ARIATION IN Q UALITY L ACK OF C OORDINATION 20% OF GDP BY 2021 $700B WASTE ACROSS U.S. SYSTEM 2X COST PER CAPITA VERSUS OECD NATIONS 45% CARE INCONSISTENT WITH RECOMMENDED GUIDELINES $210B UNNECCESARY SERVICES 3X VARIATION IN HOSPITAL DAYS IN LAST 6 MONTHS OF LIFE 19.6% MEDICARE HOSPITAL READMISSIONS $45B ANNUAL COSTS FOR AVOIDABLE COMPLICATIONS $91B REDUNDANT ADMINISTRATIVE PRACTICES 5

6. Source: Centers for Disease Control and Prevention Smallest Impact Largest Impact Examples Counseling & Education Clinical Interventions Long-lasting Protective Interventions Changing the Context to make individuals’ default decisions healthy Socioeconomic Factors Eat healthy, be physically active Rx for high blood pressure, high cholesterol, diabetes Immunizations, brief intervention, cessation treatment, colonoscopy Fluoridation, trans fat, smoke-free laws, tobacco tax Poverty, education, housing, inequality Health Impact Pyramid Factors that Affect Health 6

7. What’s the Return on $2.9 Trillion? Source: The Way to Wellville Challenge; www.HICCup.co 7

8. The Triple Aim U.S. health care system is the most costly in the world Yet, we get the worst outcomes of nearly any industrialized country, even when adjusting for age and income The Institute for Healthcare Improvement http://www.ihi.org/Engage/Initiatives/TripleAim/pages/default.aspx Population Health Per Capita Cost Experience of Care 8

9. Provider Network Home Self-care Technology Information 9 Sick-Care  Healthcare  Health

10. An Epidemic Explosion of Lifestyle Related Chronic Conditions 70% of US deaths are tied to cardiovascular condition, cancer and diabetes 75% of healthcare expenditures are tied to cardiovascular condition, cancer and diabetes >50% of Americans are likely to be obese by 2030 costing $66B in treatment 10 D.O.D.

11. Our Nation: Nutrition, Physical Activity, and Obesity 11

12. Our Nation: Tobacco Use 12

13. We Need a New Model 13 Source: The Way to Wellville Challenge; www.HICCup.co

14. Macro Challenges 14 Consumer Directed Healthcare Affordable Care Act Physician Shortages Regulation Role of the Physician Lifestyle Factors Patient Dynamics Social Media

15. The Healthcare Landscape The Market Is Complex And Evolving... The U.S. health market requires greater flexibility and insight than ever before. Leaders increasingly need expert advise to make sound decisions in today’s climate. Regulatory Environment Aging Population Evolving Payment Models State Budget Crises Unprecedented Environmental Change Consumerism Comparative Transparency Workforce Challenges Emerging Technologies Quest for Value 15

16. DemographicsHealthcare Reform Population Growth Population Ageing Chronic Conditions Economic Pressure Governments Employers Market Competition PPACA (US) Other global reform (e.g., GER) ARRA, HITECH for EHR Aggregation, Storage and Analytics Pooling/Open Data Data Center Capacity Telemedicine Wireless Sensors Remote Patient Monitoring Apps/Social Media Genomics Targeted Therapeutics Personalized Treatments Pharma Firms Competing to ‘Own The Disease’ Payer-Provider Integration Incentive Alignment Risk Shifting Consumer Engagement Value Based Benefits Wellness/Preventative Programs Population Models (e.g., PCMHs, ACOs) Condition Oriented Models (COEs, DM programs) Key Drivers Business Model Enablers ConvergenceCare Model RedesignConsumerism Technological Enablers ‘Big Data’Personalized MedicineMobility Various economic, technological, regulatory and social factors are pushing the industry in new directions, creating problems that never before existed. The Healthcare Landscape Drivers and Enablers of Change 16

17. The Past Employers, payers Risk Reimbursement Service/volume-based 2000201020152020 Delivery Hospital-based, expert/specialist driven Community/retail-based, team driven Information Siloed, static, paper-based Treatment One-size-fits-all, volume-based 2005 Personalized, value-based Networked, dynamic, digitally-based Performance/value-based Providers, patients The Future Physicians are in the unique position to help shape the industry’s future Healthcare transformation has afforded physicians unprecedented opportunities to shop their medical degrees to firms tasked with solving today’s issues. The Healthcare Landscape Where is the Industry Going? 17

18. In 5 Years, Overall Forecast … Source: Rich Umbdenstock, President of the American Hospital Association, “Transforming Healthcare Delivery” Nationally Your Market & Organization More hospitals in health systems More physician affiliation with hospitals More providers owning health plans More value based payments More fixed/capitated payments Decreasing total revenue Increasing outpatient revenue Split view on costs increasing or decreasing Providing more primary care, urgent, health/wellness and home health services; less so in nursing home, and social/human services Same or fewer inpatient beds Half planning to repurpose inpatient beds or inpatient space to outpatient/ambulatory, rehab, observation, psych, hospice Most patients will have primarily electronic healthcare interactions More retail clinic visits through mostly independent clinics Significantly fewer use of medical resources Implementing multidisciplinary teams Conducting telephonic outreach of discharged patients Half are implementing predictive analytics to identify high risk patients in some areas Primary talent gaps are population health management, data analytics, change management and non traditional health partnerships Many organizations are seeking Partner or Experiment path, but varies by hospital type 18

19. The goal of population health management is to keep a patient population as healthy as possible, minimizing the need for expensive interventions. Proactive preventive and chronic care to all of a patients during and between encounters Manage high-risk patients to prevent them from becoming unhealthier and developing complications Use of evidence-based protocols to diagnose and treat in a consistent, cost-effective manner Population Health Accountable Care Patient Registries Care Teams Disease Mgmt Patient- Centered Medical Home Coordinated Care 19 Population Health The First Line of Defense

20. CURRENT VIEW: 30 Patients per Day 14 have Chronic Conditions Unknown Health Risks Office Visits too short for coaching NEW POPULATION VIEW: 2500 Patient Population 900 have Chronic Conditions 1100-1250 have Moderate/High Health Risk Care Teams leveraged by HIT Volume-Based/Episodic Care Value-Based/Continuous Care 20 Population Health Transitioning to Value Is a Huge Change

21. 21 Population Health A Model

22. Functional Status Morbidity Rate Mortality Rate Clinical Quality Improvement Three Core Metric Objectives 22

23. Designing Triple Aim Solutions Characteristics of a System: Process for Design: Source: Georgia Department of Public Health Identification of target populations Definition of system aims and measures Development of a portfolio of project work that is sufficiently strong to move system- level results Rapid testing and scale up that is adapted to local needs and conditions Focus on individuals and families Redesign of primary care services and structures Population health management Cost control platform System integration and execution 23

24. Source: Truman Medical Centers 24 Population Health Dynamics

25. Policy Makers/ Advocates Patients/ Community Politicians Clinical Providers Pharma/ Medical Devices/ Vendors Patient/ Community Advocates Public Health Agencies Educational Systems Purchasers Payers Health Systems 25 Population Health Interactive Stakeholders

26. Micro Challenges 26 Local Politics Transitions Payer Mix Local Workforce Issues Competitive Environment Geography Access to Care 26

27. Seven Core Health Transformation Principles to Achieve Success 27

28. Doing Care Differently: Journey to a Healthier Nation 28

29. Discussion 29

30. Contact Information: Phillip L. Polakoff, MD,MPH, MEnv.Sc. Health Transformation Leader plp@sbcglobal.net 510-508-9216 30