TRANSFORMING HEALTHCARE

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1 TRANSFORMING HEALTHCARE FROM REACTIVE TREATMENT TO PROACTIVE HEALTH MANAGEMENT CRITICAL THInKInG AT THE CRITICAL TIME

2 1 Looking Forward Transforming Healthcare from Reactive Treatment to Proactive Health Management 3 The State of Healthcare Reform Slow but sure progress, or failure to deliver? 6 The FTI Consulting View 7 Making the Case for Change 8 Partner with FTI Consulting 2 FTI Consulting, Inc. Looking Forward Transforming Healthcare

3 Looking Forward Transforming Healthcare from Reactive Treatment to Proactive Health Management Where we are In transition from medical treatment to health management. Long before the passage of the Patient Protection Affordable Care Act (PPACA) in 2010, healthcare reform was critically needed. Healthcare expenditures as a percentage of U.S. GDP, for example, were escalating at an unsustainable rate, and similar trends were evident in most of the developed world. The drivers of this trend were clear populations were aging, making them more susceptible to chronic diseases including diabetes, cardiovascular disease, COPD, cancer and chronic diseases that are expensive to treat. Costs of treatment were also being pushed higher by the proliferation of more expensive drugs to treat specific conditions, medical device technologies that were expensive to develop and deploy, and insurance costs that had to increase to keep pace. In response, Accountable Care Organizations (ACOs) organizations comprised of payers, physicians, hospitals or other healthcare providers who work collaboratively and other integrated care organizations have emerged as major new organizational structures in an effort to reduce the cost of healthcare by providing efficient, highquality, coordinated care to assigned populations of patients. These healthcare entities are designed to lower healthcare costs, improve quality outcomes and the quality of the care experience by transforming healthcare from its traditional reactive role of providing immediate medical services to proactive healthcare management conducted over time. By aligning the activities and incentives of providers, insurers and patients around improved outcomes, the total cost of care can be reduced in comparison to the traditional approach of waiting until patients actually have chronic diseases that require intense and sustained treatment. In short, putting downward pressure on healthcare costs requires controlling the total long run cost of care. Looking Forward Transforming Healthcare FTI Consulting, Inc. 1

4 Experts disagree on the progress of healthcare reform and its ability to deliver the needed results. 2 FTI Consulting, Inc. Looking Forward TransForming HeaLTHcare

5 The State of Healthcare Reform Slow but sure progress, or failure to deliver? Experts disagree about the success of the transition to controlling the total long term cost of healthcare. Some experts believe that reform efforts are progressing well and that, over time, improvements in cost, access and quality of care will be achieved to the benefit of patients and communities. Other experts believe progress is not sufficiently transformational, and that a new direction is needed. Everyone agrees, however, that the fundamental realignments needed have occurred too slowly, and that success will require significant and sustained coordination and alignment amongst key players. There also seems to be a general consensus that factors, such as demographics, socio-economic status, mental health and social behavior must be part of the mix, even though there has been limited forward progress to date in reflecting their influences. In this environment, health systems have the opportunity to engage as a go-to resource for education, preventive medicine, and post-acute care. Serving as the patient s advocate for long-term health and the patient s resource for chronic illness and disease management are fundamental prerequisites for transformational success. Looking Forward Transforming Healthcare FTI Consulting, Inc. 3

6 Taking a Community Perspective on Healthcare Health outcomes Length of Life Quality of Life Tobacco Use Health Behaviors Diet & Exercise Alcohol & Substance Abuse Health Factors Policies and Programs Clinical Care Social & Economic Factors Physical Environment Sexual Activity Quality of Care Access to Care Education Employment Income Family & Social Support Community Safety Air & Water Quality Housing & Living Conditions Transportation Source: Adapted from County Health Rankings, 2014 Fundamental to a transformational approach to healthcare is a community perspective on healthcare, in which ACOs and other healthcare participants think strategically about comparative advantages in a broader healthcare, landscape: what services does the organization perform well and what are its weaknesses; which service lines should be provided, and what others should be added or need to be dropped; what services make a positive contribution to its financials and which do not; what services does it consider to be core ; and what healthcare responsibilities can best be undertaken jointly, as part of a broader healthcare community. 4 FTI Consulting, Inc. Looking Forward Transforming Healthcare

7 Some experts believe progress in transforming healthcare to deliver improvements in cost, access, and quality of care has not been sufficiently transformational. Looking Forward TransForming HeaLTHcare FTI Consulting, Inc. 5

8 The FTI Consulting view FTI Consulting believes that a successful transition from traditional delivery of medical services to proactively promoting the maintenance and optimization of long-term healthcare starts with an objective assessment of the community being served: - What does the community look like currently? - How is it likely to change going forward? - What does that imply about community patient needs today and over the long run? - What are the levers (and associated incentive structures) that can be used to reduce the demand over time for healthcare services by the patient community; - What are the options to supply healthcare resources to the patient community more efficiently; and - What are the potential effects of exogenous changes that might realistically occur in the marketplace (such as Medicaid reform). Armed with this information, health systems in collaboration with the broader community in which it operates can now make intelligent tactical decisions that will move them meaningfully toward that goal: narrow the organization s focus to focus on areas in which it has a comparative advantage expand or realign the organization s footprint to address all aspects of healthcare in these areas of focus Think beyond acute and post-acute care by focusing on preventable healthcare management, in collaboration with other healthcare players in the community 6 FTI Consulting, Inc. Looking Forward TransForming HeaLTHcare

9 Making the Case for Change As a first step in this transition, FTI Consulting recommends a Transformational Demand Assessment. This assessment looks at more than just past hospital history. It also identifies demographic, socio-economic, mental health and social behavior factors; predicts future disease patterns that are likely to occur in a community if left unaddressed; and provides a stratified health profile of the population to determine the specific healthcare resources that will be needed, based on empirical and statistical analysis. Using this Transformational Demand Assessment, FTI Consulting helps communities and providers design integrated care systems that better meet the needs of their diverse patient populations today, and well into the future. Wellness Preventative Incentive-based Medical Behavioral Chronic disease Acute disease Emergent Urgent Obesity Smoking cessation Alcohol/drug abuse Highly Complex Case Management High Risk Disease Management Chronic Care Health Promotion Preventive Care Primary Care Specialized Care Community care facilities Hospice Acute care hospital CARE COORDINATOR Physician office Urgent care / miniclinics Mental Medically-related Incident-related Depression Chronic Care Long-term Care Sub-Acute Care Acute Care Skilled nursing facilities Rehabilitative Care End-of-Life Care PATIEnT needs CARE needs CARE SETTInG Source: Center for Healthcare Economics and Policy, 2015 Looking Forward TransForming HeaLTHcare FTI Consulting, Inc. 7

10 Partner with FTI Consulting Our healthcare clients agree FTI Consulting experts seamlessly combine deep and broad relevant experience. Clinicians and hospital executives who have been in every executive position from chief nursing officer, chief medical officer, COO, CFO, CEO, who understand the practical difficulties and day-to-day needs and demands in the healthcare environment. Economists and modelers with expertise in healthcare transformation and analytical tools that are relevant, and data that is both pertinent and predictive. Unparalleled data analytics, benchmarking and core metrics, best practices, micro/macro simulation and predictive modeling algorithms to change the healthcare equation. Strong track record of assisting each of our clients hospital executives, physicians, employers, payers, state and regional governments, or ACOs to achieve a clear vision of the role they can most effectively play in this new health care environment, and the tactical steps they can take now that will move them meaningfully toward that goal. Deep supporting experience in related business specialties. - real estate and construction - corporate finance - forensic litigation - strategic communications 8 FTI Consulting, Inc. Looking Forward Transforming Healthcare

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12 Susan Manning Senior Managing Director Meg Guerin-Calvert Senior Managing Director Michael Biggs Senior Managing Director Jonathan Guppy Senior Managing Director +44 (0) About FTI Consulting FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. FTI Consulting professionals, who are located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management and restructuring FTI Consulting, Inc. All rights reserved.

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