The Changing Face of Healthcare: Challenges & Solutions. Mark Stauder, President/COO

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1 The Changing Face of Healthcare: Challenges & Solutions Mark Stauder, President/COO

2 Disclosure of Relevant Financial Relationship with Commercial Companies/Organizations Mark Stauder has disclosed financial relationships with the following entities, Innovation Health and Signature Partners, LLC Innovation Health is a 50/50 Joint venture between Inova and Aetna Signature Partners is a wholly-owned Not-for-Profit LLC by Inova

3 Government & Business Community Problem Statement Increase Quality Lower Cost

4 The Government s Response The Affordable Care Act What s Next The Prelude Hospital Price Cuts Value-Based Purchasing Market Expansion Insurance Market Reforms Coverage Expansion Regulation and Restructuring Excise Tax Reimbursement Reductions Payment Model Reforms Possible Lose of Tax-Exemption Sg2 Presentation to Inova, March 8, 2014

5 The Employer s Response Spectrum of Options for Controlling Health Benefits Expense Abdication Activation No Health Benefits Defined Contribution/ Private Exchange Self-Funded Benefits Pros: Total escape from cycle of rising premium costs Cons: Fine for violating employer mandate Loss of important labor market differentiator Pros: Health benefits still part of compensation package Predictable, controllable cost growth Cons: Fundamental disruption in benefit design Employees may underinsure Pros: Full control over networks Exemption from minimum benefits requirements Cons: Greater exposure to unexpected expenditures Complex network negotiations Source: Health Care Advisory Board interviews and analysis.

6 OLD World: Historical Hospital Growth Strategy Demand Price Increase Lock Up Referral Streams Consolidate Market Position HEALTH SYSTEMS Source: Health Care Advisory Board interviews and analysis.

7 NEW World: Deliver on Value-Equation Three Key Decision-Makers Wholesale Purchasers (Payers, Employers) Referring Providers Consumers Source: Health Care Advisory Board interviews and analysis.

8 Toward an Economics of Value 8 Adapting to New Rules of Competition Health System Strategy, c Health System Strategy, Description Price-Extractive Growth Grow by being bigger: Leverage market dominance to secure prime pricing, network status Value-Based Growth Grow by being better: Leverage cost, quality, service advantage to attract key decision makers Key Success Factors Expand market share Strengthen service lines Exert pricing leverage Solidify referrals Secure physicians Increase utilization Expand covered lives Compete on outcomes Minimize total cost Assemble network Offer convenience Expand access Target of Strategy Commercial payers Government purchasers Physicians Employers Individuals Population health managers Performance Metrics Discharges Service line share Fee-for-service revenue Pricing growth Occupancy rate Process quality Share of lives Geographic reach Risk-based revenue Share of wallet Outcomes quality Total cost of care Competitive Dynamics Service line competition Centers of excellence Referral channels Physician loyalty Comprehensive care Patient engagement Clinical quality Service quality Critical Infrastructure Inpatient capacity Outpatient imaging centers Clinical technology Ambulatory surgery centers Primary care capacity Care management staff and systems IT analytics Post-acute care network Source: Health Care Advisory Board interviews and analysis.

9 Inova Vision 2015 Strategy Inova Culture 2 Population Health Management Capitation Payment Health Services Delivery Inova Brand Integrated IT 1

10 1 - Health Services Delivery: Economic Drivers 1 2 Strong Genomic Brand: World Class Doctors & Research Access Oriented Business: Premium Services/upscale market Access + Convenience 3 4 High Value Hospital Services: Lower cost, high productivity, high patient experience, high quality, high volume Advantages of Scale: Cost, productivity, quality, subspecialization Profitability =

11 2 - Population Health Management / New Payment Models: Economic Drivers 1 Utilization 2 Prevention / Risk Prediction 3 Case Management / Administrative Cost

12 Infrastructure to Manage Health & Assume Risk Regional plan: individual, commercial fully insured and self-funded, Medicare Advantage 50/50 joint venture with Aetna 100,000 Covered Lives 2014 for Medicare Advantage Strategy for Expansion of Medicaid Eligibles INTotal Health (formerly Amerigroup Virginia LLC) has served Medicaid members in the state of Virginia since ,000 Members Strategy for Dual Eligibles: Medicare and Medicaid PACE Program (Program for the All Inclusive Care of the Elderly) 12

13 Experimentation with New Payment Models Bundled Payments Medicare Shared Shaving Programs Ambulatory Hospital Beginning in 2015, Inova Entering into 3-year Program for: Medicare Shared-Saving Program (MSSP) Bundled Payments for Care Improvement (BPCI) Initiative

14 14 High Value Physician Network Signature Partners Lead by Physicians Signature Partners is a physician-led, clinically integrated network, comprised of physician, hospitals and other ancillary services spanning the continuum of care. Clinically Integrated The goal of Signature Partners is to engage physicians to address and position themselves for changing health care delivery and payment environment. Provider Network Signature Partners is the select network for Innovation Health and the value based alternative to the larger Aetna network for Innovation members.

15 Advanced Patient-Centered Medical Homes Team Based-Approach Expansion of Extenders/Educators Health Coaches Drive Engagement Self Management Primary Care: Internal Medicine, Family Practice Mid-Levels: Nurse Practitioners, Physician Assistants Disease-Specific RN s IMG Primary Care 17 Locations NCQA Level 3 Certified Lifestyle / Health Coaches 15

16 16 Care Management Infrastructure Managing discharges and readmission: Transitional Care Management (TCM) program, post-discharge community placement, medical home (30 day) for high risk for readmission Post discharge clinic visit for medically underserved Community-based care coordination Emergency department case management Safety net clinic and primary care medical homes Self management programs for chronic disease Care coordinators in primary care offices Telemedicine programs In-home monitoring of chronic conditions Specialty consultations for underserved Health Coach call centers

17 Leveraging IT to Improve Health Fully Integrated EMR (EPIC) All Hospitals, Physician Offices and Ambulatory Sites Use II MyChart (portable E.H.R.) Patient Engagement Driver Telemedicine Analytics Real-time, and predictive data analytics for clinical quality Care Management Population Health Management Tools Care Continuum Data Warehouse Clinical effectiveness, health outcomes, affordability & efficiency 17

18 Success as a Population Health Manager Three Areas of Focus Element #1: Stratify the Patient Population Element #2: Clinically Manage Within the Health System Element #3: Engage Patients at Home and in the Community Prioritizing Population Health Interventions The Scalable Population Health Enterprise Better Clinical Outcomes Improved Patient Access Decreased Costs Enhanced Community Health Source: Health Care Advisory Board interviews and analysis.

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