The Road Ahead: The Evolving Role of

Physicians and Health System

Due Date
Date Function Initials Notes
4/19
4/26
Edited NB
Mel
Permissions Pending
Formatted
Images OK
Resave final as next version, delete Post-it, and put previous
version in Old folder with Post-it for paper trail.
Bill Woodson
Senior Vice President, Sg2
Confidential and Proprietary 2014 Sg2 2
From Wholesale
to Retail
Market and ACA Update
Retail Health Care
Pursuing Growth
Virtual Health
Your Role
ACA = Patient Protection and Affordable Care Act.
3 Confidential and Proprietary 2014 Sg2
Clinical Integration
PCMH
From Tumult to Focused Execution
Meaningful Use
Population Health
Changed 2014 blurb to match webinar title.
Shared Savings
Value-Driven Metrics
PMCH = patient-centered medical home.
4 Confidential and Proprietary 2014 Sg2
A Palpable Tension Defines the Market
Weve done so well for a period of
time that Im nervous. The solutions
that got us here are not the right
ones going forward.
The question is not do we need to
change, but what do we need to
change into?

Physician Executives attending Sg2 CEO Summit



5 Confidential and Proprietary 2014 Sg2
ACA Where Do We Stand?
Steady Stable Growth
ACA-Based Scenarios
Employers Exit, Enrollment Surges
Consumer Backlash, Risk Selection Spiral
2016 2015 2014
Source: Sg2 Analysis, 2014.
6 Confidential and Proprietary 2014 Sg2
ACOs Have Moved From Fringe to Mainstream:
Whats Important For Physicians To Know?
ACO = accountable care organization.
Source: Leavitt Partners LLC, 2014.
0 100 200 300 400 500 600 700
Q2 2014
Q1 2013
Q1 2012
Q1 2011 Community-Based Organization
Insurer
Physician Group
Hospital System
Number of Accountable Care Organizations Over Time
626
456
148
65
More than half
of the US
population resides
in areas served
by ACOs.
Removed Health Affairs source because
they cite it to Leavitt.
Need Leavitt permission. Approved 5/6
7 Confidential and Proprietary 2014 Sg2
One Notable Success Where Physicians Were The
Essential Leaders
CalPERS = California Public Employees' Retirement System.
Sources: Melnick G and Green L. Four Years Into a Commercial ACO for CalPERS: Substantial Savings and Lessons Learned. Health Affairs blog. April 17, 2014.
+3%
annualized
cost trend
$
105
million in
gross savings
out-of-network
claims
days/1,000
25%
25%
23% increase in ED visits/1,000
8 Confidential and Proprietary 2014 Sg2
YOUR
MONEY
RETAIL WHOLESALE
Providers sell themselves
to consumers.
Individuals make decisions
on benefits, providers and
course of care.
Providers sell themselves
to physicians and insurers.
Employers make decisions
on behalf of individuals
and their families.
The Market Is Changing in Fundamental Ways
HOUSE
MONEY
9 Confidential and Proprietary 2014 Sg2
Why Is This Happening?
New benefit and network designs are making the health care
consumer more selective and cost conscious. 1
2
3
4
Factors Driving the Retailization of Health Care
Public and private insurance exchanges are making the consumer a
more active participant in the health care process.
Entrepreneurs, governments, payers and health systems are bringing
price transparency to the marketplace.
Consumers continue to be attracted to convenient and cost-effective
sites of care (eg, retail clinics, virtual care).
10 Confidential and Proprietary 2014 Sg2
Exchange Markets Have Brought Back Narrow
Networks; Consumers Trading Access For Price
Hospital Exchange Networks by Breadth, 2014 Individual Exchange Market
Narrow networks = 48%
of all exchange networks
across the US.
Broad networks = 52%
of all exchange networks
across the US.
Notes: Broad networks include participation by more than 70% of hospitals within a rating area. The narrow network category used above consists of standard narrow networks,
ultra-narrow networks and tiered networks. Standard narrow networks have 31% to 70% of hospitals within a rating area participating in the network. Ultra-narrow networks include
participation by 30% or less of hospitals within a rating area. The tiered network category reflects models where a payer puts different hospitals into different tiers with different co-
payment requirements. Source: McKinsey Center for US Health System Reform. Hospital Networks: Updated National View of Configurations on the Exchanges. June 2014.
Survey of Consumer Network Breadth Selection
58% of network
breadth was broad and
42% was narrowed.
of respondents were
aware of network breadth.
74%
11 Confidential and Proprietary 2014 Sg2
Walgreens Was the Tipping Point
in Private Exchange Adoption
AON HEWITT CORPORATE
HEALTH EXCHANGE
Employers are required to be fully
insured.
600,000 covered lives include
family members in 2014.
Clients include Walgreens, Sears
Holdings, Darden Restaurants.
Sources: AIS Health. Mercer Touts 52 Active, Retiree Exchange Clients for 2014. October 2013. For more information, go to www.AISHealth.com; Aon
Hewitt. Aon Hewitt analysis shows lowest US health care cost increases in more than a decade [press release]. October 17, 2013; Aon Hewitt. Aon Hewitt
shows continued cost savings for companies and individuals participating in the Aon Active Health Exchange [press release]. September 18, 2014; Sg2
Interview With Aon Hewitt, September 2014.
MERCER MARKETPLACE
Employers choose fully insured
or self-insured.
200,000 covered lives include
family members in 2014.
Clients include Petco, Kinder
Morgan, Metro TransitSt Louis.
80% of enrollees chose the lowest cost plan within their metallic tier.
All 18 companies that participated in Aon Hewitts exchange in 2014
are returning for 2015.
12 Confidential and Proprietary 2014 Sg2
Consumer Pricing Is Becoming Mainstream
ELLIOT HEALTH SYSTEM, MANCHESTER, NH
Sources: Elliot Health System. Elliot CareBundles offer high quality care at the lowest price with no bills [press release]. February 26, 2014.
The price covers costs for the
procedure, physician, lab, imaging
and anesthesia.
The fee is paid up front, and the
patient will not receive any bills
after the procedure.
ELLIOT CAREBUNDLES
$1,995
Colonoscopy
$4,995
Hernia Repair
$5,995
Knee Arthroscopy
13 Confidential and Proprietary 2014 Sg2
What Does This Mean For HFPN?
Payment Reform Continues To Evolve
Consumer Decision Making Enters the Equation
Scale, geographic coverage, infrastructure,
partnerships matter
New Insurance Products With New Networks of
Physicians and Hospitals
14 Confidential and Proprietary 2014 Sg2
Sg2 ANALYTICS
Wheres The Growth?
Office/Clinic
Urgent/Retail Care
Other
Home
2014 Site of Care Volumes and 5-Year Forecast, Adults
US Market, 20142019
+7%
Volume
6M
SNF
+17%
Volume
193M
+14%
Volume
180M
+12%
Volume
2.2 Billion
+9%
Volume
10M
+5%
Volume
101M
ED
2%
Volume
33M
Inpatient
+11%
Volume
393M
Hospital OP/ASC Volume in 2019
50M
In 2019, 4% of all E&M
visits will be delivered
in a virtual care setting.
Virtual
Acuity
Note: The analysis excludes 017 age group. Other includes nonhospital locations such as OP rehab facilities, psychiatric centers, hospice
centers, federally qualified health centers and assisted living facilities. ASC = ambulatory surgery center; E&M = evaluation and management; OP = outpatient;
SNF = skilled nursing facility. Sources: Impact of Change

v14.0; NIS; PharMetrics; CMS; Sg2 Analysis, 2014.

15 Confidential and Proprietary 2014 Sg2
The Old Model of Growth
16 Confidential and Proprietary 2014 Sg2
New Approaches To Growth Focus on Access
Channels
Acute care facilities
and EDs
Affiliations and
partnerships
Ambulatory care
campuses
Contact centers
Payers
Physician clinics
MATURE
Freestanding EDs
Freestanding
imaging and
diagnostic centers
Retail clinics
Urgent care clinics
Clinician-to-clinician
virtual health
DEVELOPING
Community organizations
Employers
Employer-based clinics
CAM providers
Decision support tools
Social service agencies
Consumer-facing virtual
health
EMERGING
Sg2s Typology of Health Care Channels
CAM = complementary alternative medicine.
17 Confidential and Proprietary 2014 Sg2
Retail Can Help Attract and Keep Consumers
COMMUNITY HEALTH NETWORK, INDIANAPOLIS, IN
Retail Clinic Goals
Serve as an extension of Community Health
Networks large primary care network and
provide better coordinated care.
Meet the demand for convenient site access
(location and hours) of current and new
Community Health Network patients.
Expand network footprint and market share.
Approach
Clinical collaboration with Walgreens
Healthcare Clinics (HCC).
Started with 7 HCC sites in 2013; expanded
to 14 in central Indiana.

Source: Sg2 Interview With Community Health Network, April 2014.
Consumer Profile
60% female
Average age: 47
24% have a PCP
75% insured
Initial Results
85% first visit to retail site
Of all HCC referrals to CHNw sites:
Urgent care: 46%
PCPs: 31%
ED: 16%
Referral center: 5%
Radiology: 2%
18 Confidential and Proprietary 2014 Sg2
Disease-by-Disease Nuances:
Simple vs Complex
CABG = coronary artery bypass graft; MI = myocardial infarction; PCI = percutaneous coronary intervention.
Slides 8-9: Joans choice, but it might be nice to animate
in left to right with 2 clicks. --Steve
19 Confidential and Proprietary 2014 Sg2
Shortfalls in Medical Care 10%
Environmental Exposures 5%
Behavioral Patterns 40%

15% Social Circumstances

30% Genetic
Predispositions
Population Health? Be Careful What You Take On.
Determinants of Health
Source: McGinnis JM et al. Health Aff (Millwood). 2002;21:7893.
20 Confidential and Proprietary 2014 Sg2
Today
Building a Care Team for a Population of One
ACO Patient
Behavioral
Health
Community
Support
Complex
Care
Care
Navigator
Care
Manager
Dietitian
Palliative
Care
Primary
Physician
Pharmacist/PharmDperforms
postdischarge med rec via telephone
Monarch Medical Directors, Hospitalists
and SNFists
Patient Assistance Line24/7
availability via telephone
Additional Patient Support
Source: Slide originally presented by Monarch HealthCare at Sg2 Care Coordination meeting and used with permission. SNF = skilled nursing facility.
21 Confidential and Proprietary 2014 Sg2
Tomorrow
Building a System of CARE for a Population of One
Joan and Henry: This is the slide for June. However, we may tweak it some for the July runs at Patricks suggestion. We dont have
time to do that right now. Ok - RM
MyChart
Primary
Physician
Virtual Care
Connections
Community
Services
Test
Results



Social
Networks
Health Navigator
22 Confidential and Proprietary 2014 Sg2
Coordination Strategy Evolves
to Meet Consumers on Their Terms
HEALTHEAST CARE SYSTEM, TWIN CITIES EAST METRO AREA, MN
Note: Care Guides are nonclinical patient navigators. PMPM = per member per month.
Source: Sg2 Interview With HealthEast Care System. March 2014.
45
%
in admissions
31
%
in ED visits
Improvement in
statewide diabetes
measures
Results Cohort 1 Background
System desired effective strategies to coordinate care of
medical home patients.
It has over 300 physicians employed, primarily PCPs.
Program Design
Care Guides form central hub of patient care.
Embedded in PCP clinics (about 1 per 5 PCPs)
Panel size is 100125 patients.
Develop plan with patient prior to physician visit.
Meet monthly with medical team for case review.
PMPM payment offered for Medicaid and (via waiver)
Medicare.
23 Confidential and Proprietary 2014 Sg2
Did Allison get approval? Mel
24 Confidential and Proprietary 2014 Sg2
Improved Patient Convenience, Satisfaction
FRANCISCAN HEALTH SYSTEM, TACOMA, WA (CONTD)
58%
would have gone
to an urgent
care center.
21%
would have
visited their
PCP.
10%
would have
done
nothing.
11%
of patients
would have
gone to the ED.
If Not for This Service
75%
2,000+
Patients
Served
50,000
Landing Page
Visits
New Patients Who Schedule
a Follow-up Appointment
After a Virtual Consult
Patients Previously
Without a PCP
45%
Sources: Sg2 Interview With Franciscan Health System, 2013; Sg2 Franciscan Virtual Health webinar, March 12, 2014.
Mel didnt see an original slide to read against for this. May 13: Allison got Levis permission to use.
25 Confidential and Proprietary 2014 Sg2
Breadth of Virtual Health Drives
New Value Opportunities
Mobile apps
Social media
Geo-tagged devices
Patient web portals
Online support groups
Virtual consults
Urgent care
Specialty care
Tele SPECIALTY
Virtual conferencing
Remote monitoring
Virtual medication
management
Telehealth kiosks
Clinician to Clinician Clinician to Patient Consumer Driven
eICU, eED
Telestroke
Personal activity
monitors
Patient
scheduling apps
Quality and price
transparency tools
eICU = electronic intensive care unit; eED = electronic emergency department.
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.

26 Confidential and Proprietary 2014 Sg2
Where Is Virtual Health Today?
CHF = congestive heart failure; COPD = chronic obstructive pulmonary disorder; ROI = return on investment. Source: 2013 Healthcare Benchmarks: Telehealth and Telemedicine,
produced by the Healthcare Intelligence Network. For more information, please visit: http://store.hin.com/product.asp?itemid=4662 or call: 888.446.3530.
The top devices used
The top targeted
clinical conditions
While 56% of survey respondents say it is too soon to measure
ROI from telehealth, 26% report that it falls between 2:1 and 3:1.
The top technologies used for telehealth programs
53%
Scales
40%
Smartphones
38%
Glucose
Monitors
33%
Sensors
31%
Heart
Monitors
Internet Data Monitoring
41% 59% 47%
CHF (53%)
Diabetes (50%)
COPD (38%)
Hypertension (38%)
Mental health (31%)
Stroke (24%)
Asthma (24%)
Medication
adherence (24%)
Videoconferencing
27 Confidential and Proprietary 2014 Sg2

Results
Reduced LOS, sepsis cases and
central line infections
ROI 3:1 from reduced costs
Centralized Acute Care Monitoring Units
Drive Down Costs and Improve Outcomes
MERCY HEALTH SYSTEM, ST LOUIS, MO
SafeWatch eICU
Single hub
Early warning software and remote
monitoring tools
550 ICU beds in 9 states covering
Mercy and 3 other health systems
RESULTS
Mortality decreased by 2/3
Morbidity reduced by 1/2
ALOS decreased by 5 days = savings
of $350k/year
Virtual Sepsis Unit
Algorithms search over 800 warning
signs and flag sepsis patients early.
Sepsis protocols integrated into EMR.
At-risk patients placed in virtual unit.
One nurse oversees patients from
30 hospitals.
Results
Mortality decreased by two-thirds
Morbidity reduced by one-half
ALOS decreased by 5 days = savings
of $350K/year
ALOS = average length of stay; EMR = electronic medical record.
Sources: Sg2 Interview With Mercy Health System, January 2014.
28 Confidential and Proprietary 2014 Sg2
eEmergency Program Grew Out
of eICU Offering
AVERA HEALTH, SIOUX FALLS, SD
Challenges
How to best use existing infrastructure built for
eICU program
Workforce demand needs in emergency care
at small, rural hospitals
Solution: eEmergency Program
Connect to 85 smaller hospitalswithin and
outside the Avera system
Access to board-certified emergency medicine
physicians and nurses
Technical costs: ~$24K for videoconferencing
equipment and $6K in annual broadband fees
Sources: Sg2 interview With Avera Health, 2013; Sg2 Analysis, 2013.

Results
Reduced time to
diagnosis and treatment;
also decreased ED
length of stay
Avoided transfers to
date: 1,681 patients,
$13.4 million savings
Enhanced local
recruitment and
retention of physicians
and nurses
29 Confidential and Proprietary 2014 Sg2
More Data Means A Different Role for Patients
Lifestyle Coaching
EHR = electronic health record. Sources: Perna G. Top ten tech trends: transforming patient-generated data into decision support. Healthcare Informatics. February 17, 2014;
Pai A. Policy, patient education could help drive medical inoperability. MobiHealthNews. December 11, 2013; Kvedar J et al. Health Aff (Millwood). 2014;33:194199. Deering
MJ. Issue Brief: Patient-Generated Health Data and Health IT. Office of the National Coordinator for Health Information Technology, December 20, 2013.
I see my doctors as consultantsthey dont manage my
disease, I do.
Anna McCollister-Slipp, Diabetic, Co-Founder of Galileo Analytics, HIMSS
2013
Red edit accurate (plural)?
Do we need the Healthcare Informatics and Health Affairs sources? Seems like this info
could be from the health care orgs sites where we wouldnt need permission (fair use).
Geisinger
Health System
Patients update
medication lists,
dosage through
portal before visits.
Partners Center for
Connected Health
Wireless pedometer
data linked to
motivational texts.
Daily mental health
questionnaires
uploaded to EHR.
Veterans Health
Administration
Remote monitoring +
EHR + informatics =
19% hospitalizations
25% bed days
I see my doctors as consultantsthey dont
manage my disease, I do.
ANNA McCOLLISTER-SLIPP, DIABETIC,
CO-FOUNDER OF GALILEO ANALYTICS, HIMSS 2013

Added Animation
30 Confidential and Proprietary 2014 Sg2
Disruptions Ahead!
Image used with permission of Theranos.
Theranos, Palo Alto, CA
Need image permission from Theranos
Micro-sample finger stick collection
Automated reflex testing on same sample
Priced at <50% of Medicare rates
Redesigned lab reports
Mobile app for making appointments,
viewing test results and more
Online scheduling
Service within 5 minutes
Full range of lab tests and sample types
Permission
unlikely. Should we
just use an image
of a finger instead?
31 Confidential and Proprietary 2014 Sg2
F
R
O
M

60 Minutes
$
Hours 10 Minutes
50%
T
O

Theranos Reinvents the Lab Value Chain
Receiving
the
Order
Collecting
the
Specimen
Identifying
the
Specimen
Transporting
the
Specimen
Preparing
the
Specimen
Performing
the
Analysis
Processing
the
Information
Interpreting
the
Test
Delivering
the
Report
Added Animation
Permission unlikely.
Should we just use an
image of a finger instead?
Traditional Model
Disruptive Model
Images used with permission of Theranos. I
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.

32 Confidential and Proprietary 2014 Sg2
Retail Pharmacy
and Clinics
Wellness and
Fitness Center
Diagnostic/
Imaging
Center
Urgent
Care
Center
Physician
Clinic
Ambulatory
Procedure
Center
Home
Hospital
E-visits
Inpatient
Rehab
Skilled
Nursing
Facility
Home
Care
Outpatient
Rehab
2030
Prevention Diagnosis Treatment Management
Your Role Will Continue To Evolve in a System of
Health
Daily
Swimming
iWatch
(Self)
Virtual Visit
With Advanced
Practice Nurse Patient Portal
iWatch Used to
Report to Care
Engagement Team
Elevated
Test Result
Communicated
Virtually
Print
Medication
at Home
Social
Engagement
Groups
Cholesterol
Monitoring
via Mobile
Device
Live Chat
With Health
Coach
33 Confidential and Proprietary 2014 Sg2
The Science of a Successful
Strategy in 2014 and Beyond
Tap into alternative payment models and new
care delivery models.
Combine advanced growth metrics with market
performance metrics.
Assess, build and master your System of CARE.
Build a multichannel approach for sustainable growth.
Know your target markets and consumers.
Remember the patient!
34 Confidential and Proprietary 2014 Sg2
What Does This Mean For HFPN?
Your patients/consumers?
Day to day operations?
Your role?