Value is a Prescription for SuccessSteve Hester, MD, MBA

Senior Vice President and Chief Medical Officer

Pilgrimage HealthcarePatients Deserve More Options…

Integrated Delivery Network of Five Not-for-Profit Hospitals

15 Out-patient Centers

1.6 Million yearly patient encounters$1.7 Billion yearly revenue

12,000 Employees600 Employed Providers

2,000 Physician Medical Staff1,857 Licensed Beds

60,000 Admissions/year

Norton Healthcare

Who is Accountable for Care?

Autonomy versus

Paternalism“Flu Shot”

ACO Current State

• Accountability is an Action… Not an Organization

• ACA has pushed organizations to compete on quality and price rather than fee-for-service.

• Currently 5% of Medicare Beneficiaries in an “ACO”

• 89 initial CMS approved ACOs – only five with both upside and downside risk

ACCOUNTABLE CARE ORGANIZATION

Manage population health

Patient attributionCommunity outreachTraining and educationBehavior and change

managementSegmentation and risk

factor capabilitiesMarketing

Cost and Efficiencies

Effective Health

Management

Coordinate Items and Services

Manage to Quality

Standards

Manage Costs and Efficiencies

Manage to Quality StandardsCoordinate Items and Services

Components of an ACO

Quality management (definition by population, not event or episode-driven)

Quality standards reporting

Disease managementData management and

analyticsBusiness intelligence

management of clinical, operational and financial data

Effective Health Management

Risk managementFinance and accountingDisease managementMeasurement of clinical,

operational and financial key performance indicators

Preventive careMedical managementTelemedicineFunding administrationSupply chainParticipation in Health

Information Exchanges (HIEs)

EmployersPatientsHospitalsAcute, sub-acute and

long-term care providers Ambulatory care centersPharmaceutical

companiesMedical device

manufacturersCare Givers (physicians,

nurses, home health, clinical social worker, clinical psychologist, and other ancillary providers)

PayorsFederal government

The Players

Used with Permission KPMG HEALTHCARE

• Initiated as part of Brookings – Dartmouth Commercial Pilot in 2009

• Future plans for other manage care providers as model develops.

• Patient population – 1.24 million in community

• Current included groups: NHC employees/Humana employees – 10,000

• Approximately 300 physicians included

— Primary Care and Specialists

• Consideration to expand into other reimbursement partnerships

— Bundled Payment

— Shared Risk (smaller employers)

Journey for Accountable Care

Strategy for Success

• Accountability is an Action

• Manage the Patient Through the Care Continuum

• Patient and Community Engagement and Accountability

• Transparency

• Data Infrastructure Management and EMR

• Patient, Provider, Payer, and Employer Partnerships

• Change is Hard

• Decrease Variation – Increase Personalization

Learning

ImprovingPredicting

Evolution of Analytics

WHAT happened?

WHY it happened?

WHAT WILL happen and

WHEN?

Transparency

Year 1 Financial Data

Norton Year 2 1.7% Reduction below target PMPMHumana Year 2 14.9% Reduction below target PMPM

Norton Healthcare – Humana Accountability Pilot

Clinical Results: Aggregated Commercial ACO-Utilization/Quality/Overuse Metrics

Inpatient days/1000 Down 29%

ER visits/1000 Down 46%

Physician visit within 7 days discharge Up 14.6%

Diabetes A1c testing Up 6.1%

Cholesterol Management - Diabetes Up 8.6%

Appropriate Imaging – Low Back Pain Up 13.9%

Avoidance of Antibiotics w/Acute Bronchitis Up 32%

Norton Healthcare Accountability Pilot

15

Dartmouth – Brookings ACO Pilot Performance

Measurement

Quality Measure(for all, higher %s represent better performance)

2009 HEDIS PPO

Norton Baseline

NortonYear 1 Change

Diabetes – A1c Management (testing) 83.3% 87.7% 93.4% 5.6%

Diabetes – Cholesterol Management (testing) 78.6% 83.9% 91.8% 7.9%

Use of Appropriate Medications for People with Asthma 92.8% 96.2% 82.8% -13.4%

Cholesterol Management for Patient with Cardiovascular Conditions (testing) 80.2% 88.9% 89.5% 0.6%

Use of Imaging Studies for Low Back Pain 72.7% 65.2% 56.3% -8.8%

Avoidance of Antibiotic Treatment for Adults with Bronchitis 22.6% 12.2% 16.7% 4.5%

Persistence of Beta Blocker Treatment After Heart Attack 69.6%

Cervical Cancer Screening 74.6% 77.9% 78.2% 0.3%

Breast Cancer Screening 67.1% 79.9% 81.6% 1.7%

Annual Monitoring for Patients on Persistent Medications 77.0% 83.7% 88.6% 4.9%

Too few eligible cases.

Anti-Infective Purchasing/QTR/Patient Day

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012

1 1

0.86

0.98

0.90

0.730.75

0.68

Miscellaneous Beta-Lactams

Macrolides

Miscellaneous

Aminoglycosides

Antivirals

Quinolones

Antifungals

Tetracyclines

Anti-Pseudomonal Beta-Lactams

Anti-MRSA

Dol

lars

Per

Pati

ent D

ay

Total Joint Replacement(Per Case)

Absolute Impact % Impact

Direct Variable Cost ($665) -8.0%Length of Stay (0.27) -9.5%

COPD Initiative(Per Case)

Absolute Impact % Impact

Direct Variable Cost ($400) -13.1%

Length of Stay (0.37) -7.5%

CHF Initiative(Per Case)

Absolute Impact % Impact

Direct Variable Cost ($243) -6.8%

Length of Stay (0.01) -0.2%

Clinical Effectiveness

ESRD Initiative(Per Case)

Absolute Impact % Impact

Direct Variable Cost ($1094) -9.4%

Length of Stay (0.75) -8.7%

The Future of Clinical Re-Engineering

• Improved care coordination and communication

• Improved access – physician extenders – email – phone call etc.

• Prevention and early diagnosis

• ED and Immediate Care Center visits

• Increase generic medication utilization

• Hospital re-admissions and multiple ED visits

• Improved management of complex patients – Manage the Top 100

– Care Coordination and High Resource Utilizers

Evidence or Bias?

Disruptive InnovationFuture of Healthcare

Think Differently – Treat DifferentlyFuture of Healthcare

*The Volume-To-Value Revolution. Oliver Wyman

Resource Management

Questions

Steve.Hester@NortonHealthcare.org