1. 1 Elements Transforming the Delivery System Accountable Health Networks Receive payment for value not volume Drive quality and efficiency by providing coordinated care across the continuum Focus on management of chronic disease, not discreet institutional services Align with physicians to create clinical collaboration and continuity Reimbursed for volume Inpatient market share growth, service line development Ambulatory strategy to support inpatient growth Physician recruitment to support inpatient growth Strategic Response Hospital-Centric Organizations

2. 2 What is Clear: A Series of Bets 94% of the nation will have some form of health coverage by 2019 There is no more money to pay for this expanded coverage –All levels of government have budget shortfalls and infrastructure gaps –Employers cannot afford rising health costs We will have to care for more people at a lower cost per capita The way we deliver and manage care will have to change to accomplish this

3. Copyright 2010 Trinity Health – Novi, Michigan 3 Our Challenge Become...MORE INTEGRATED Position to...MANAGE RISK Performance that is...ACCOUNTABLE

4. Target 2015: Pursuit of Solutions Health Reform Payment Reform Hospital payment Physician payment Post-acute care payment Bundled payment, P4P Accountable Care Access Reform Innovations in care delivery Insurance coverage reforms Health insurance exchanges Accountability & Transparency Quality infrastructure and measures Public quality reporting Clinical informatics Community Benefit Reporting Community Benefit Innovation & research Validation of tax exemption Culture Change Training and development Leadership development Talent management Measurement Network Identity Network operations implications Affiliations Brand development Market collaborations

5. 5 5 A fully integrated care management organization Strategic Reform Imperatives for Providers Optimize Infrastructure Reform Response Align with physicians Cost of Capital Workforce Redesign Clinical Operations Supply Chain Outsourcing Asset Management Diversification Administrative ITAdministrative IT Clinical ITClinical IT Clinical Collaboration Medical Management Process Redesign Risk sharing Accountable Care Bundled Payments Medical homes Value-based Purchasing Comparative Effectiveness Operate at Medicare Levels Copyright  2010 Deloitte Development LLC. All Rights Reserved

6. Trinity Health: Circa 2001…

7. Health Information Technology Unification 2012…

8. Health IT: Quantified Benefits Quantified benefits over the full life of Health IT project expected to be $1.5 billion - $3.0 billion Clinical Benefit Areas Drug interaction avoidance Order management efficiencies Liability expense avoidance Reduction in Clinical Documentation time Reduced pharmaceutical expense Revenue Mgmt Benefit Areas Reduction in bad debt and operational write-offs Increased interest income through AR reductions Reduction in claims production error rates Improved charge capture Supply Chain Benefit Areas Supply cost savings Increased penetration of purchasing contracts Improved inventory management Increased rebates and discounts from vendors Reduced forms, paper, printing and postage costs

9. Electronic Health Records Nurses spend 8% more time at bedside rather than with paper records Emergent medications administered 40% faster Alerts prompt physicians to change medication orders, avoiding 14,000 potential adverse drug events per year Comparative effectiveness eliminates clinical variation: –31% reduction in patient falls with injury –45% reduction in pressure ulcers –80% reduction in excessive days due to Catheter Associated Urinary Tract Infections following elective surgeries –29% reduction in severity-adjusted mortality “Meaningful Use” – the bar providers must achieve to qualify for stimulus payments

10. Revenue capture/Cost management –adapt to a realigned payment system that rewards based on new incentives e.g. gainsharing, pay for performance, payment bundles –further flatten the cost curve through process excellence and redesign of care delivery IT advancement –increase provider value and consumer connection Clinical transparency, accountability, excellence –accelerate the value of clinical leadership and the culture of safety Network design, creation, operation –build out continuum –consolidate and integrate provider services Leadership Requirements in this New Era

11. Workforce development – Accelerate advances in training and support Leadership development –Accelerate change to integrate clinical and business infrastructure Leadership Imperatives in this New Era