Bellin-ThedaCare Healthcare Partners a Pioneer Accountable Care Organization. George Kerwin President/CEO Bellin Health

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1 Bellin-ThedaCare Healthcare Partners a Pioneer Accountable Care Organization George Kerwin President/CEO Bellin Health

2 Objectives Describe the characteristics of Bellin-ThedaCare Healthcare Partners and the market we serve Provide an overview of the Pioneer Accountable Care Organization opportunity Review our analysis of CMS data relating to our Pioneer population Share our keys to success 2

the Pioneer Accountable Care Organization opportunity Review our

3 SYSTEM RESOURCES 697 Physicians 57 Primary Care Locations 3 Tertiary Hospitals 4 Critical Access Hospitals 1 Psychiatric Hospital with fullservice Behavioral Health Clinic Hospice & Palliative Care Services Skilled Nursing Facilities (1 systemowned) POPULATION SEGMENTS Employees, Children & Families 540,000 people Medicare160,000 people Medicaid 180,000 people Uninsured 120,000 people Total Population 1,000,000 people 3

Services Skilled Nursing Facilities (1 systemowned) POPULATION SEGMENTS Employees, Children & Families

4 Bellin Health-ThedaCare Relationship Characteristics Contiguous markets with similar demographics and economic base Early adoptors of process improvement theory Similar governance Common competitors Operated a joint venture, provider-based health plan for 10 years ( ) Share an enterprise-wide medical record based on Epic software In 2006, established a clinically integrated delivery system, known today as Bellin- ThedaCare Healthcare Partners 4

provider-based health plan for 10 years (1995 2005) Share an enterprise-wide medical record based on Epic

5 Business Case High Coordination -$ $$ Low Risk TODAY -$ High Risk Low Coordination 5

6 Payer Segments by % of Net Revenue Commercial Self-Funded Fully-Funded Individual Medicare Medicare Advantage Fee-for-Service Medicaid Other 44% of Theda/Bellin Business 12% of Theda/Bellin Business 27% of Theda/Bellin Business 10% of Theda/Bellin Business 7% of Theda/Bellin Business 6

44% of Theda/Bellin Business 12% of Theda/Bellin Business 27% of

7 Pioneer Summary What is it? Impacts the Medicare Fee-for-Service Population CMS initiative to test designs of new care that will reduce cost while improving the health of the Medicare population Administered by Center for Medicare/Medicaid Innovation (CMMI) Through better coordination of care and redesign of care delivery desired outcome is improved quality results measured by 33 quality measures and at the same time a reduction in overall cost for the Medicare population 7

improving the health of the Medicare population Administered by Center for Medicare/Medicaid Innovation (CMMI) Through

8 Pioneer How it works? Participating organizations will take accountability for the quality outcomes and overall cost of care for the population assigned to them Payment will be the normal fee for service amount plus a share of savings if they can provide total cost of care below the national trend Downside risk is assumed by the participating organization and a payment back to CMS will occur if total cost of care is above the national trend Initial term is 3 years with an option to extend for an additional 2 years. There is a 60 day out clause for any reason. Goal of CMS is to save $1.1 billion over the life of the program from all 32 participating organizations 8

fee for service amount plus a share of savings if they can provide total cost of care below the national trend Downside risk is assumed by the participating

9 Medicare Fee for Service (FFS) vs. Medicare Advantage Charges & Total Medicare Payments (in dollars) Theda/Bellin Medicare Charges 800,000, ,000, ,000, ,000,000 - Medicare Fee For Service Medicare Advantage 203,024, ,342,144 Medicare Fee For Service 416,844, ,992,782 Medicare Advantage Fiscal Percent Percent Total Medicare Payments - Theda/Bellin 2011 of Total of Charge Medicare Payments - Medicare Advantage 78,545,969 30% 39% Medicare Payments - FFS 187,171,428 70% 40% Total Medicare Payments 265,717, % 40% 9 9

200,000,000 - Medicare Fee For Service 2009 2010 Medicare Advantage 203,024,996 203,342,144 Medicare Fee For Service 416,844,854 464,992,782

10 Healthcare Partners Pioneer ACO (Annual Savings Per Beneficiary) 10,500 10,000 9,500 National Trend 9,000 8,500 8,000 7,500 7,000 6,500 Base NEWHVN Trend $345 $444 $ Baseline National HC Partners Target Savings 10

8,500 8,000 7,500 7,000 6,500 Base NEWHVN Trend $345 $444

11 Bellin-ThedaCare Healthcare Partners Pioneer ACO Summary Financial Analysis Measurement Measurement Measurement Total Over Year 1 Year 2 Year 3 3 Years Shared Savings Population Benchmark (2) $ 7,290 $ 7,964 $ 8,523 Performance Year Expenditure (3) 6,945 7,515 8,079 Savings (loss) (2)-(3) $ 345 $ 449 $ 444 Number of FFS Beneficiaries - aligned 19,226 20,670 21,935 If Yes, multiply aligned beneficiaries by savings (4)*(5) $ 6,632,970 $ 9,280,830 $ 9,739,140 Shared savings to Healthcare Partners - 70%, 75% (6)*.70 $ 4,643,079 (6)*.75 $ 6,960,623 (6)*.75 $ 7,304,355 $ 18,908,057 Percentage savings (loss) (4)/(3) 4.97% 5.97% 5.50% Is 13 greater than 1% Yes Yes Yes Did you meet all Quality Performance Standards Yes Yes Yes 11

21,935 If Yes, multiply aligned beneficiaries by savings (4)*(5) $ 6,632,970 $ 9,280,830 $ 9,739,140 Shared savings to Healthcare Partners - 70%, 75% (6)*.70 $ 4,643,079 (6)*.

12 Pioneer ACO Program Costs Category 2012 Cost of Capital Letter of Credit $50,000 Administration Quality Reporting 154,000 Consulting Services 150,000 Patient Satisfaction Surveys 50,000 Compliance Costs 50,000 Legal 100,000 Learning Collaborative 25,000 Partial Cap Administration Beneficiary Opt-out Mailings 30,000 Personnel Costs Medical Director 100,000 Pioneer ACO Coordinator 85,000 Care Coordination Team 500,000 Care Coordination Team PLUS Total $1,294,

Learning Collaborative 25,000 Partial Cap Administration Beneficiary Opt-out Mailings 30,000 Personnel Costs Medical

13 Pioneer ACO Keys to Success 1. Work together around common aims 2. Improve care delivery across the entire patient experience 3. Use information and data resources effectively 4. Learn how to assume accountability for a population 13

14 Pioneer Participants Broad diversification across the country Geographic concentration in Minnesota Different types of organizations in the initiative

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Medicare accountable care organization (ACO) update

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