1. EPIP Fall Conference Banner Pioneer ACO and Patient-Centered Medical Home/ Alternatives to Admissions & Readmissions Chuck Lehn CEO Banner Health Network 11/4 and 11/5/2013

2. Objectives Understand the transition of the U.S. healthcare system from a transactional, episodic system to an integrated and continuum-based system Review the needs of individual, employer, and governmental purchasers of healthcare Discuss the value-based opportunities for the providers of emergency care within the care continuum Identify potential barriers to achieving enhanced value in emergency medicine and methods to overcome those barriers 2

3. 23 Acute Care Hospitals Banner Health Network Banner Medical Group with more than 900 doctors Banner Health Centers and Clinics Behavioral Hospital Outpatient Surgery Medical Education $4.9 billion in revenue, 2012 AA- bond rating $395 million in community benefit including $149 million in charity care, 2012 Banner Health Snapshot 3

4. Current Healthcare Environment 4

5. Health Care Spending per Capita & Life Expectancy Source: OECD Health Data, 2007 (data extracted 6.182.10) 5

6. Medicare / Medicare Advantage CommercialAHCCCS Exchange Products Other BHN at a Glance Banner Health Network (BHN) 12 Acute Care AZ Facilities Share = 50% Approx. 800 Physicians Share = 13.3% Approx. 900 Physicians Share = 13.3% Approx. 1,000 Physicians Share = 13.3% 6

7. Overview of Arizona Market 7

8. Focused on New Value-Based Models of Care 8

9. Medicare / Medicare Advantage BCBS Medicare Advantage HealthNetPioneerUnitedHumana Commercial Banner Choice Plus Banner Select/Other Aetna Attribution Aetna Whole Health HealthNet BCBS Alliance Cigna CAC AHCCCS Plans & Timing TBD Exchange Products AetnaBCBSAZHealth NetMeritus Cigna Self-Funded Employer Models TBD Bundled Payment (Global Services) 9

10. Payer Landscape 10

11. Provider Readiness 11

12. Plan, Coordinate, & Manage Care Triple Aim Population Health Prevention Disease Management Member Experience Access Care Coordination Navigation Total Cost of Care Resource Stewardship High Value Network ACO 33 Quality/Clinical Outcomes Disease specific (Diabetes, Cardio, Resp) Preventive care Care coordination (all cause readmission, admission for ambulatory sensitive conditions) Member experience Financial Outcomes Total medical PMPM Tools Goals Outcomes Disease Registry Quality Measure Case Managers Disease Managers Robust reporting tools and dashboards 12

13. Case Management Practice Settings Hospital-based case management SNF and Rehabilitation-based case management Acute & Sub- acute Case Management Telephonic case management Home-based case management Ambulatory Case Management Physician office-based case management Office-Based Case Management Maternity, Infertility, ESRD, Clinic without Walls, Palliative care Specialty- Based Case Management There is a single, standardized model for Case Management; the setting varies. A standardized process requires standardized assessment tools, action plans, and workflows. Supporting programs are developed that support and mimic the standardized approach to case management (IAC and Bundled Payment). 13

14. Pioneer ACO First-Year Results 14

15. Banner Health Network Current State Geographic coverage Integrated payment models Blend of employed and contracted physicians Years of experience managing risk Acute care facility clinical performance Breadth of medical service capabilities Culture is built upon acute care Cultural integration across continuum of care IT infrastructure across continuum Funding resources Balance between volume based and value based models Beneficiary engagement StrengthsChallenges 15

16. The True Impact of the Triple Aim 16

17. BHN - Overall Lessons Learned New business models ranging from shared savings to joint ventures have developed faster than we anticipated. Physicians will adapt to accountable care principles if you have specific clinical and financial models to invite them into, such as patient-centered medical home, bundled payments, shared savings, or other mechanisms to align quality, service, and cost goals. Finance, data infrastructure, and administrative work dominate time and attention during the start-up phase. 17

18. BHN - Overall Lessons Learned (cont.) Clinical performance, innovation, and member service are the keys to long term success. We plan to stay focused in these areas. Identifying specific areas of financial quality or service improvement is a great way to align interests of all parties toward a common goal. Don’t underestimate the extent to which communication is needed for these relationships to be successful. In-person meetings of any type (formal or informal, large or small) seem to be the most useful method of transmitting information. 18

19. Questions and Answers 19