Shift in the Payer Movement in the Provider Space to Augment the Movement of Value Based Integrated Payments

The Evolution to Health Solutions

Jonathan B. Gavras, MD

President, GuideWell Health

September 29, 2014

How Health Care Is Changing…

A HEALTH SOLUTIONS COMPANY

A leading innovator enabling healthy communities through new solutions that improve health outcomes and access while driving down industry costs.

Integrated Health Integrated Health

SolutionsSolutions Health Insurance Health Insurance

market leadermarket leader

Innovative Innovative consumer servicesconsumer services

Diversified Diversified health products health products

and servicesand services

Health &Health &health care health care

delivery servicesdelivery services

SOLUTIONS

ONE New Enterprise Structure

Health Insurance Company

Health Insurance Company

GuideWell Health Leadership

Focused and dedicated assets to drive the strategic vision of integrated health care

Focused and dedicated assets to drive the strategic vision of integrated health care

Entrepreneurial and nimble approach

Entrepreneurial and nimble approach

Strong M&A

competencies

Strong M&A

competencies

Tight alignment to

affiliated consumer company

Tight alignment to

affiliated consumer company

Culture of innovation

and execution

Culture of innovation

and execution

Assimilation of experienced and

proven talent

Assimilation of experienced and

proven talent

Possesses Key Requirements to WinPossesses Key Requirements to Win

Leverage existing

successful provider models

and talent

Leverage existing

successful provider models

and talent

Marketplace Overview

Health reform is changing the health delivery system. The system is being turned upside down with the power shifting from Payers and Facilities to Patients and Primary

Care Physicians

Provider Convergence and Consolidation in the Marketplace - PwC

Characteristic` Current Delivery System Future Delivery System

Focus Provider and Payer Patient

Aim Price Reductions Population Cost Reduction

Financial Intent Grow Volume Find Savings and Efficiencies

Quality Quality Assurance Quality Dependent Payment

Contracts Fragmented Agreements Single Integrated Contract

Physician Focus Specialists Primary Care Physicians

Market Trends

Highest proportion of deal

activity occurred within the

Integrated Delivery System

Domain With almost 64% of

the deal volume and close to 46% of

the deal value

Consumerism/ retail

experienced the second highest

deal volumeWith almost

20%, but only 1.4% of the total value

Consumerism/ retail

experienced the second highest

deal volumeWith almost

20%, but only 1.4% of the total value

The cost containment

deal value heavily

influenced by the $34B

acquisition of Medco

The cost containment

deal value heavily

influenced by the $34B

acquisition of Medco

Government market

transactions account for only 3% of the volume, but about 14% of the

deal value

Health and wellness accounts for a higher volume than Government market, but only 0.5% of the total

valueLikely indicates some start-up activity in this

domain

Market Trends

Industry consolidationIndustry consolidation

Different environment from 1990s and 2000s

Different environment from 1990s and 2000s

Six deal types predominate

Six deal types predominate

• Seeing both large (Catholic Health East – Trinity) and local (Baptist – Bethesda) Systems

• Transactions increased 18% in 2012; facilities by 60%• East and urban markets hottest

• Was response to insurer consolidation• Now have separation of “have” and “have nots” of

hospital systems• Revenue and operating models changing

• Inpatient revenue decreasing• Need for capital• FFS to VBR

• Distress • Alliances (usually local)• Adjacent markets• Bigger chassis• Big get bigger• Academic Medical Centers evolve to Academic

Medical Systems

Axioms of Modern Health Care Industry

Healthcare is of local relevance to most people

Reform, consumerism, health needs and cost will require variable access

and price requirements

Quality (and how measure) will drive a large part of health care financing

Administrative cost pressure enormous with fixed MLRs

There will be those that are advantaged moving forward in the

marketplace

A new delivery system is evolving

– Blurring of provider and payer space

– Non-traditional participants

– “Radical” alliances

– “Mosaic” of delivery system components

3,53,5

4,6, 10, 13

4,6, 10, 13

1, 111, 11

Accountable Care Organizations (ACO)s1.Baptist Miami/AMS (Oncology)2.NCH Healthcare (Naples)3.BayCare Physician Partners4.Holy Cross Physician Partners5.H. Lee Moffitt Cancer Center (Oncology)6.Cleveland Clinic7.HMA Brevard8.Orlando Health Physician Partners9.First Coast Health Alliance (Flagler Hospital)10.Memorial Health Network (Memorial SFL)11.Baptist Health Quality Network (Baptist Miami)12.Physician Health Partners at Munroe Regional13.Advantage Health Network (Tenet)

Bundled Payment Pilots1.Mobile Surgical Services2.Florida Ortho Institute3.Mayo Clinic

Patient-Centered Medical Homes and Similar Programs •>300 Physician Groups

•>2,200 Physicians Participating

Payment Innovation

22

77

88

99

1212

Payment Innovation footprint:-Population-based payment models in 52 of the 67 Florida counties-27% commercial spend and 28% Medicare spend is flowing through these models

Payment Innovation footprint:-Population-based payment models in 52 of the 67 Florida counties-27% commercial spend and 28% Medicare spend is flowing through these models

Hospital Pay-for-Performance•33 Hospitals Contracted on a P4P Model

Medicare Collaborative Care Models (CCM)

Currently 35 and expanding

Leon

GuideWell Health – Current Market Presence

Holly Hill, FL

Volusia

Largo, FL

Pinellas

Orange

Winter Park, FL

Tallahassee

• GuideWell Emergency Medicine Doctors, LLC (GWEMD) is a non-blue branded, wholly-owned legal entity that will provide high quality, patient-centered, advanced urgent care in retail settings for those we serve in Florida

• All GWEMD sites will be staffed by Crucial Care with Board Certified Emergency Physicians and will be Joint Commission accredited

• By providing consumers with improved access to emergency medicine physicians, we are able to treat the right conditions in the right setting resulting in superior patient experience, quality outcomes and provider-driven medical savings

Existing Vertical Strategic Entities

• Serves Volusia (Daytona), Flagler, and Seminole Counties, providing coverage to 51,000 area residents

• NCQA Commendable rating• STAR rating of 4.5• A.M. Best Financial Strength rating of “A+”• Better Business Bureau rating of “A+”• Voted "Best HMO/Health Plan" for 23 consecutive years• Gold Level Worksite Wellness Award Recipient• 15 years as the areas only Healthy Kids provider • Over 35 years of service to Volusia & Flagler counties

• Provides medical services to 100,000 Pinellas County residents at 5 locations

• Multispecialty practice with 100 providers representing 23 specialties

• Serves as a one stop medical home that leverages technology to provide comprehensive integrated ambulatory care

• Expanding capabilities in population management and value based care

• Participates in all lines of business with essentially all payers• Awarded CMS Medicare ACO with Walgreens• Awarded NCQA Patient Centered Medical Home Level 2

• Serves the area surrounding Tallahassee, providing coverage to more than 125,000 members

• Committed to serving as a medical home, focusing on delivering evidence based care directed by Primary Care Physicians, in an effective, timely and cost effective manner

• A.M. Best Financial Strength rating of “A+”• STAR rating of 4.5• NCQA national ranking - #4 for Medicare; #16 for

Commercial and #1 in Florida for both

Delivery System Strategy Supporting Segment Growth

Provide vertical (owned) delivery system assets to join with virtual (financially aligned) delivery system assets in creating a mosaic of new models of care that address affordability, create a competitive advantage or close a competitive gap and brings new innovative products and

services to market

Virtual

•Accountable Care Organizations (ACOs)•Patient Centered Medical Homes (PCMHs)•Medicare Collaborative Care Models

Alignment of Vertical, Virtual and Other Healthcare Delivery Solutions

Vertical

Future Partnerships

Future Partnerships Providers Providers

Other Delivery System SolutionsConsumer Engagement, Decision Support, Transparency Data, Member Rewards and Navigation

AnalyticsFinancial

Management Capability Build Connectivity

2013 2014 2015 2016

CoreCore

Integrated HealthAlliances

Vertical

Delivery System Future State

Integrated Health

A Health Care Delivery Challenge

Individual market is going to more than double in the next 3 years due to ACA.

At least half of the growth comes from the

uninsured.

2013 pre-ACA uninsured rate of 34% in Miami-Dade.

Significant market churn within the Exchange and

Medicaid and from Groups dropping coverage. The

Medicare market will continue to grow due to aging baby boomers.

Double digit–19% compared to 0.2% non-Hispanic White–Hispanic population growth in Florida by 2019 particularly from

Central and South American countries

Hispanics Dynamic Between the US and Home Country

Culturally Sensitive Integrated Care in the US and “Home” Country Presents a Unique Opportunity to Serve Hispanics

A GuideWell Health Solution

Strategic alliance between GuideWell and Organización Sanitas Internacional (OSI) to create a new company with the purpose of offering a culturally relevant health care delivery model for the important and growing Hispanic market

Brings two leading health care brands together GuideWell: parent company to a family of forward-thinking

companies focused on transforming health Organización Sanitas Internacional: leading health care

business group in Latin America through companies such as Colsanitas, Medisanitas, Sanitas Venezuela, Positiva Sanitas and Medisanitas Brasil as well as a wide network of highly recognized clinics, hospitals and educational institutions

OSI Organizations Footprint

Figures as at Dec. 31/2012

A GuideWell Health Solution

• Integrated medical care centered around patients and their individual health and wellness needs

• Incorporating a patient’s cultural and social needs to deliver holistic and personalized care

• Timely identification of health risks and charts a clinical care pathway to improve health

• One stop shop conveniently located in dense Hispanic Miami-Dade areas

• Extended office hours

• Minimize patient wait time

• An ‘in-language’ and ‘in-culture’ experience that addresses the differences in how Hispanics use and receive health care services

• Welcome the entire family into the care experience since Hispanics see health as a family issue

Medical Centers Value Proposition

Leon

GuideWell Health – Future Market Presence

Holly Hill, FL

Volusia

Largo, FL

Pinellas

Orange

Winter Park, FL

Tallahassee

Miami

Geraghty said GuideWell dispatched a team to Latin America to tour Sanitas’ clinics and hospitals, and they found a high quality healthcare provider with an innate understanding of its clientele’s cultural preferences.

“We were impressed with their understanding of how to treat folks,’’ Geraghty said. “They’re focused on quality. They’re focused on running efficient organizations. They’re focused on customer care.

The partnership between GuideWell and Sanitas is the latest example of the growing globalization of healthcare, said Steven Ullmann, a health policy expert at the University of Miami business school.

But there is also evidence, Ullmann said, that culturally sensitive healthcare can produce better outcomes for patients.

“There are studies that have been done that indicate when patients are culturally comfortable with their providers that outcomes become significantly better,’’ he said.

Reach UsJonathan GavrasOrganization: GuideWell Health

Phone: (904) 436 - 4365

Email: jonathan.gavras@guidewellhealth.com

Website: www.guidewell.com