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UCSF Clinical Enterprise Strategic Plan

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Presentation on theme: "UCSF Clinical Enterprise Strategic Plan"— Presentation transcript:

1 UCSF Clinical Enterprise Strategic Plan
Retreat 1 May 6, 2013

2 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

3 UCSFCE Strategic Planning Process – Project Overview
1. Engage USCF Leadership to Define UCSFCE’s Vision & Strategic Imperatives 2. Engage UCSF Community to Develop Strategies & Tactics 3. Create Implementation Plan for Success February - April May - July August - October 4. Clinical Enterprise Group & Steering Committee Meetings

4 Leadership of the CE Strategic Planning Process
Executive Sponsors (M Laret, S Hawgood) Clinical Enterprise Group (CEG) Clinical Enterprise Strategic Planning (CESP) Steering Committee Strategic Initiative Workgroups 1. Grow Complex Care Referrals Via Innovation & Distinction 2. Lead a High Value System of Care 3. Build a Culture of Continuous Process Improvement 4. Strengthen Fiscal Position & Resource the Plan Teams of 15 – 20 faculty and clinical enterprise leaders that will recommend strategies, tactics and requirements to the CESP Steering Committee Teams will meet 5 times, between May – late July

5 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

6 A Health Plan View of the California Market
UCSF Clinical Enterprise Strategic Planning Retreat May 6, 2013 1

7 My Perspectives 8 Years of Consulting, Physician Practice Management
14 Years at Blue Shield of California Strategic Planning Network Contracting Employer Sales and Account Management Hill Physicians 3 Weeks as Chief Operating Officer 2

8 What’s Important Three most important priorities for health plans (and should be for the rest of the healthcare delivery system)… Affordability We’ve been discussing this for years, but now it is much, much more serious… 3

9 Drivers of Change Social/Political Tipping Point
Health reform put healthcare front and center Visibility/transparency of prices in the exchange Sticker shock driven by health reform impacts Premium rate setting legislation is being proposed Employers are Struggling Health insurance costs are equal or greater than the profit margins of many companies Health insurance costs = fully loaded salary of a software programmer in India Companies that compete in global industries can’t afford it 4

10 Drivers of Change (cont’d.)
The value proposition is not compelling Prices of health insurance rise ~10% per year the last 15 years… About the same networks About the same outcomes (that the system can show) Similar member experience One organization is providing a differentiated product: Kaiser More affordable More integrated More standardized Attracting superior (healthier) risk 5

11 Erosion of Employer Based Coverage
Average Premiums 2002 vs. 2012 +169.7% Inflation 2002 vs. 2012 +32% Political View: Health insurance inflation is the health plan’s fault Reality: Health insurance inflation is due to health care cost inflation 6

12 Why will there be Sticker Shock?
Individual policies in the exchange will be expensive due to… Risk selection (a big unknown) 3:1 Age Rating Benefit levels (“essential” benefits) Employer premium may also rise due to… Age rating limitations Essential benefits Few people today understand what health insurance costs – the exchange will make it much more visible and politicians will react 7

13 The Challenge How can our system achieve dramatically lower cost/trend and demonstrate quality and outcomes, while maintaining the vitality and innovation of individual provider organizations working together? If we do not solve it, the government may try to solve it for us. 8

14 Implications Plans/Hospitals/Physician Organizations must find ways to work together in an integrated manner… Aligning incentives Integrating data and using data to improve care Building systems of care Breaking down silos Avoiding waste Moving from reactive to proactive Focusing on total cost of care for populations 9

15 Reasons for Optimism Sacramento ACO for CalPERS Before the ACO
Blue Shield, Dignity Health, Hill Physicians 0% trend year 1, dramatically lower trends years 2 and 3 Aligned incentives, focused attention Leadership engaged at the highest level Focusing on outcomes of system as a whole Membership migration to the ACO Before the ACO 8-10% trends every year Loss of members to Kaiser. 10

16 Reasons for Optimism (cont’d.)
ACO in San Francisco with Health Net, UCSF, Dignity Health and Hill Physicians Started 1/1/13 Promising engagement Sharing data Aligned incentives Focusing on improving care while managing costs UCSF has been a great partner ! Too early for results, but encouraging signs 11

17 Implications for Plans and Providers
Work closely together with aligned incentives – make decisions that drive a better overall outcome not maximize the result for one party/department/facility/group Share and use data to move from fee-for-service fragmented care to population health management Use new technologies and approaches to improve care, such as team-based care, use of secure messaging, in-home technologies Change organizational structure and decision making to break down barriers and silos Work with plans to design benefits with meaningful incentives for members to improve health status 12

18 Thoughts on UCSF Incredible reputation and brand for high quality (and expensive) healthcare A magnet for higher risk patients (e.g. in The Exchange), and very important to purchasers who are less price sensitive (e.g. high-tech companies) Need to find a way to partner with others to combine broad-based and cost effective care in the community with high quality tertiary and quaternary care delivered by UCSF Requires a difficult shift away from “heads in beds” and expensive clinical programs to finding ways to keep people healthy (and get paid for it) Need to move away from cost shifting: compensating for inadequate Medicare and MediCal reimbursements by increasing margins on commercial insurance is killing the golden goose

19 Questions?

20 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

21 Academic Medicine for the Future
UCSF Clinical Enterprise Retreat Tom Enders, Managing Director Manatt Health Solutions May 6, 2013 Couple high level observations: no mention of the $30 million in research we have done/are doing or the advances in behavioral economics also being a key driver in terms of changing the possibilities set Nerve center seems a) focused on inpatient, while I’d assert the bigger opportunity (and where UPHS could distinguish itself as leading change) is to have an outpatient nerve center for chronic disease management…at the very least as a balanced focus vs. patients already hospitalized, and b) very human / manual, while the reality of a good nerve center will not be the staffing but the capacity for exception handling and continuous refinement of algorithms and intervention design based on outcomes The ‘crawl’ recommendations include home-based sensors, remote monitoring of chronic patients, predictive modeling and shift to managing chronic conditions. Pilot testing of this should proceed since it will take time to figure out how to do this well and if we start taking on risk-bearing contracts this will suddenly be a run. We need to start preparing for alternative future states of the world we think are reasonably likely and not just react to the present.

22 Excellent Clinical Margins
Despite dire predictions, the last two decades have been excellent for academic medicine Innovation in Medicine — Aging of the Population — Specialty Services Boom NIH Doubling Health Reform Excellent Clinical Margins Growth of the AMC Missions Philanthropy Boom Stock Market Bubble 2003 – 2008 NIH Stimulus Managed Care and Capitation We have one foot in the “academy” and one foot in the highly competitive world of health care delivery Business schools do not manage large corporations - law schools do not manage comprehensive law firms…but our institutions include the largest, most complex medical centers in the world The prevailing model - in which the clinical system significantly cross-subsidizes the academic and research missions, is under attack by a broken health care system, under-funded clinical education, and systemic gaps in research capitalization Substantial growth in the missions resulted Each highly focused on their own agenda A portfolio strategy of sorts A virtuous cycle: Underpinned by clinical income supporting the academic enterprise Attracting patients and building market share through the real – and perceived – excellence of its stars and the innovative treatments it was developing, testing, and delivering 1990 1995 2000 2005 2010 2015

23 Erosion! AMC Defenses Relentless Forces

24 The AMC Business Model….
AMC Sustainability 2 Talent x Pricing Power x (Enterprise Costs) ∫(Δ)(Technology Introduction - Diffusion) (Regulation)

25

26 The Challenge of Change
Risk of change perceived as great Connection to people who succeeded in the old model Fear of lacking the competence to succeed Overload Healthy skepticism about new ideas The fear of hidden agendas Feeling of personal threat from the changes Genuine belief that “next generation” models are a bad idea

27 Strategy

28 Options for AMCs Population Health Manager
Merge / Affiliate with Mega-System Specialized Complex Care Leader High Performance Regional System Regionally distributed health care system Risk bearing “population manager” Health Plan or payer partnership to support Clinically integrated network of faculty and community based physicians $ Multi-Billion Scale Merge or establish primary preferred affiliation with large health system and become the “academic brand” for the system Renown regional, national, international for a selected comprehensive specialty service (e.g. Cancer) Contractor to large systems Expert at Complex Care management Very strong Brand promise Independent AMC with tightly controlled system of care in attractive geography Market share leader in an attractive “sub- regional” geography with “must-have” status Strong brand promise

29 Clinical Strategies of Research Intensive AMCs
NIH RANK INSTITUTION 1 JOHNS HOPKINS 2 UCSF 3 U MICHIGAN 4 U PENNSYLVANIA 5 U WASHINGTON 6 U PITTSBURGH 7 UCSD 8 WASHINGTON UNIVERSITY 9 YALE UNIVERSITY 10 UNC CHAPEL HILL

30 Some Consistent Themes
Sufficient scale to build a regional system of care Highly differentiated programs of excellence with well integrated basic & clinical research Economic alignment with physician, academic and hospital partners Increasing integration of clinical services Primary care & ambulatory care expansion Sophisticated analytics and IT infrastructure Maximizing brand value Quality: Measurable, Demonstrable, Superior Quality will be key for maintaining and expanding the other strategies. Demonstrable quality makes us attractive not only to patients and payers, but also to partners and philanthropists. It is the foundation upon which we will differentiate ourselves from the competition. But we must simultaneously move forward with shoring up the other strategies shown here to successfully navigate the upcoming healthcare environment.

31 AMC System AHCs should aspire to lead the transformation of healthcare
Reorganizing biomedical research and health delivery systems into a seamless continuum from discovery to clinical delivery to community health. Moving from Academic Health Center (AHC) to Academic Health Sciences System (AHSS).

32 Strategy Organization Execution Redesign of healthcare delivery model
–Significant reduction in expense & restructuring of financial model –Re-examine & optimize the academic model –Institutional enterprise-wide planning efforts •Enhance coordination & accountability across AHC •Clarify responsibility for provision of financial support for academics –Accelerate Innovation that leads to “disruptive” technologies & approaches

33 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

34 Vision Questions What mission will our clinical enterprise meet?
What will distinguish our clinical services and operating model from Kaiser? From Sutter? From Stanford? If the distinctiveness is innovation, what does that mean? Who will be part of the clinical enterprise? At what scale will we operate? Will we be independent or part of a system? What settings of care will be invested in? What payment model will we operate under and how will we succeed with it? *The CEG was asked to provide answers/comments to these questions regarding the UCSF Clinical Enterprise Vision. Some select answers/responses to each: Mission of the Clinical Enterprise “Support the teaching and research mission first and foremost by being a successful clinical enterprise” exemplary training setting and laboratory for implementation science “form strong partnerships with community providers…” What will distinguish our clinical services? Most respected provider of care on the west coast. Respected will mean different things to different people. Must compete on quality and cost but innovation will distinguish us “Delivering the best outcomes for complicated care at a reasonable cost” “Operating in a network equally as convenient as Kaiser…” Who will be part of the clinical enterprise and at what scale will we operate? “Participation in a network of hospitals and physicians bound together by shared capital investment, shared operating risk, shared services and shared values” What settings of care will be invested in? “Relationships with the full continuum of care services” What payment model will we operate under and how will we succeed with it? “FFS with some risk for tertiary/quaternary care and capitation for the broader network” “Must be able to compete in multiple payment models” Will we be independent or part of a system “Hard to believe that any entity will succeed independently”! United and Star Alliance

35 Clinical Enterprise SWOT
Strength Weakness Regional leader in select tertiary/quaternary services Research innovator Talent and commitment Capital investment in plant, IT Nascent network development Based on an evaluation of the current state of our clinical enterprise, these major strengths, opportunities, weaknesses and threats should direct our thinking about the future. Opportunity Threat

36 Clinical Enterprise SWOT
Strength Weakness Regional leader in select tertiary/quaternary services Research innovator Talent and commitment Capital investment in plant, IT Nascent network development Cost structure Limited regional primary care Hard to access specialists Limited access to capital Limited population health experience or infrastructure Highly federated governance Based on an evaluation of the current state of our clinical enterprise, these major strengths, opportunities, weaknesses and threats should direct our thinking about the future. Gaps in administrative and management team – lack of band width Patient care expense per adjusted discharge (adjusted for wage and CMI) = $12,560 > 90th % COTH Opportunity Threat

37 Clinical Enterprise SWOT
Strength Weakness Regional leader in select tertiary/quaternary services Research innovator Talent and commitment Capital investment in plant, IT Nascent network development Cost structure Limited regional primary care Hard to access specialists Limited access to capital Limited population health experience or infrastructure Highly federated governance Provider consolidation and competition Changing insurance models New world challenging to our ‘core’ identity & competencies Based on an evaluation of the current state of our clinical enterprise, these major strengths, opportunities, weaknesses and threats should direct our thinking about the future. Opportunity Threat

38 Clinical Enterprise SWOT
Strength Weakness Regional leader in select tertiary/quaternary services Research innovator Talent and commitment Capital investment in plant, IT Nascent network development Cost structure Limited regional primary care Hard to access specialists Limited access to capital Limited population health experience or infrastructure Highly federated governance UCSF brand development Trainer of the workforce Nascent ACO experience Regional relationships – getting to scale Provider consolidation and competition Changing insurance models New world challenging to our ‘core’ identity & competencies Based on an evaluation of the current state of our clinical enterprise, these major strengths, opportunities, weaknesses and threats should direct our thinking about the future. Opportunity Threat

39 Proposed Vision as Developed by the Clinical Enterprise Group & Clinical Enterprise Strategic Planning Committee UCSF will be Northern California’s preeminent high value health system as defined by our success in providing innovative, high-quality, cost-competitive clinical services, and delivering an unparalleled patient experience across the entire care continuum. This is ambitious and a long way from where we are Value = Quality/cost Can we really compete on value or is there a refinement related to high performance We will achieve this by: Delivering the best outcomes in tertiary and quaternary care in Northern California and continuously introducing innovation in the delivery of complex care throughout our health system Rapidly translating clinical research results into groundbreaking treatment for our patients Leading a high value health system with community based hospitals and physicians distributed throughout Northern California which combines excellence in distinctive services with practice consistency and patient satisfaction Delivering next generation GME and recruiting graduates into our health system Organizing ourselves as a highly aligned UCSF clinical enterprise integrating hospital, physician, subacute, and financing services and rigorously reducing costs and improving safety and quality Pioneering personalized medicine, genomics and new patient and consumer engagement approaches leveraging information technology Engaging deeply with the San Francisco community to promote enhanced health of the population by providing a medical home, encouraging wellness, and engaging patients broadly in clinical trials and clinical research Investing in the UCSF brand to enhance recognition and respect.

40 Northern California System of Care
Vision: UCSF as the Preeminent High-Value System in Northern California Northern California System of Care World Class Education Specialist Network Home & Sub-Acute Care Long-Term Care UCSF Cutting Edge Research High-Value, Quality Clinical Care Strong Primary Care Teams Clinical Research Implementation Leading Acute Facilities Regional T/Q Partnerships Strategic Regional Expansion Our vision is UCSF as the preeminent high-value system in Northern California. The elements of this system include: Central UCSF “hub” with world-class education, cutting-edge research, and high-value, quality clinical care Leading acute care facilities Strong primary care physician base Robust network of specialists in the community Long-term care services Home and sub-acute care services Strategic regional expansion (SCCIPA etc.) Regional tertiary/quaternary referral partnership development Implementation of clinical research into practice Honest evaluation of current state

41 Grow Complex Care Referrals Via Innovation & Distinction
Strategic Priority 1: Grow Complex Care Referrals Via Innovation & Distinction Patient Outcomes & Breakthrough Research System of Care with Referring Providers Excellent Patient Experience UCSF is a leader in cutting-edge research and is a leader in delivering high-quality, complex patient care for patients across Northern California. Our challenge is to create a system of care with referring partners across the region to leverage those capabilities in research and high-end care delivery. This is our extendable core

42 Existing UCSF Distributed Services
Strategic Priority 2: Lead A High Value System of Care UCSF Hospitals / Systems (Marin General, UCSF oncology affiliates etc.) Existing UCSF Distributed Services SCCIPA Pediatric System Kaiser? Other? Physician Groups (Hill, One Medical, etc.) Key Requirements of a High-Value System of Care: Governance and partnerships Population health management Health information technology Analytics and reporting Patient-centered care This has not been our historic core competency but it is this or retrenchment and marginalization Relationships will not be a one size fits all – how to brand, manage quality, performance, and standards The more dominant the UCSF brand, the harder the partnering The more passive the UCSF leadership the harder to build systemness and brand Existing Relationships On Which To Build Relationships Under Development Potential Transformation of Existing Relationship

43 Build a Culture of Continuous Process Improvement
Strategic Priority 3: Build a Culture of Continuous Process Improvement Tomorrow: Integrated organization that is high-quality and efficient Today: Organization in silos…. Current factors preventing UCSF from developing a more integrated, high-quality, and efficient organization: High cost structure; Limited use of Lean production methodology; Lack of transparency on data across the clinical enterprise; Limited bandwidth to define and introduce new clinical protocols; Limited standardization in the care processes/Standard Operating Procedures; Departmentally based approaches to cost and quality management. Trust > Conflict > Commitment > Accountability > Results

44 Enablers of UCSF’s Strategic Priorities and Vision
Develop Physician Services Train and Recruit The Next Generation Apply Research to Clinical Care Lead in Precision Medicine Establish Risk Management Capability Additional detail on the Enablers: Develop Physician Services: Build clinical and financial integration across faculty; develop primary care physician base; develop a robust distributed physician services model Train and Recruit Next Generation: Specifically with a strategy to retain UCSF graduates Apply Research to Clinical Care: Rapidly translate clinical research into groundbreaking treatment for UCSF patients Lead in Precision Medicine: Pioneer the application of personalized medicine, genomics, telemedicine, and novel IT. Establish Risk Management Capability: Develop capabilities to effectively manage populations and associated risk Align Financial and Administrative Operations: Integrate into a “UCSF Health System” approach for integrated patient care Build UCSF Brand: Invest in the UCSF brand and define UCSF’s distinctive “high-value” care to enhance recognition and respect regionally, nationally and internationally Align Financial and Administrative Operations Build UCSF Brand

45 UCSFCE Vision Grow Complex Care Referrals Via Innovation & Distinction
The preeminent high-value health system in Northern California Grow Complex Care Referrals Via Innovation & Distinction Lead A High Value System of Care Build a Culture of Continuous Process Improvement Build the UCSF Brand Lead in Precision Medicine Align Financial & Administrative Operations Establish Risk Management Capability Apply Research to Clinical Care Train & Recruit the Next Generation Develop Physician Services ENABLERS STRATEGIC PRIORITIES Use simplified version

46 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

47 UCSFCE Vision The Preeminent High-Value
Health System in Northern California Grow Complex Care Referrals Via Innovation & Distinction Lead A High Value System of Care Build a Culture of Continuous Process Improvement Develop Physician Services Build the UCSF Brand Lead in Precision Medicine Establish Risk Management Capability Apply Research to Clinical Care Train & Recruit the Next Generation Align Financial & Administrative Operations ENABLERS STRATEGIC PRIORITIES Use simplified version

48 Imperatives Grow Bay Area Market Share
Transition from FFS to Risk-Based Contracting Develop Population Health Management Capabilities Grow Bay Area Market Share Establish an Integrated Physician Platform Deliver a World Class Patient Experience

49 UCSF Market Position: Overall Bay Area Market Share - Adults
Adult IP Market Share – Bay Area CY 2011; Market Discharges = 524,170 ? Source: UCSF Data Reports and OSHPD; Excludes MS-DRG 795 Note: Counties included: San Francisco, Marin, Napa, Solano, Sonoma, San Mateo, Santa Clara, Alameda, Contra Costa

50 UCSF Overall Adult Market Share by County
Sutter is the second major player in SF County, and is very strong in the East Bay and Sacramento Filed Knox-Keene license to become a full service health plan Dignity Health’s positioning is strongest in the Far North, Sacramento & pockets of South Bay & Central Valley markets Brown & Toland has an approved Knox Keene license to manage global risk UCSF’s Strongest Overall Market Share UCSF Overall Market Share by County USCF’s overall market position is strongest in SF and Marin Counties; outside of these 2 counties, UCSF pulls < 5% overall adult market share per county UCSF’s 14% market share in SF County ranks it third behind Sutter and Kaiser SF General accounts for 14% of the market in SF County, which supports UCSF’s position North Bay, East Bay, and South Bay market share driven by tertiary/quaternary services Stanford’s overall modest market strength remains mostly in the South Bay and Central Coast, but is aggressively moving into the East Bay Kaiser dominates the Bay area markets and parts of Sacramento

51 Building on UCSF Regional Outreach
UCSF’s current outreach is strongest in the SF, North & East Bay markets and coastal areas of Far Northern CA. There may be opportunity to expand specialty outreach to the south and east in order to build T/Q referrals UCSF Overall Tertiary/Quaternary Market Share by County To date, UCSF’s outreach to facilities and health systems incorporates 36 agreements for various clinical services Most of the agreements are for neurosurgery, pediatrics, orthopedics, oncology, and maternal well-baby co-operative agreements. UCSF also has transplant outreach clinics in several counties (Contra Costa, Santa Clara, Fresno, Stanislaus, Tuolumne, Monterey

52 Establishing a Robust, Clinically Integrated Physician Network
North Bay Marin General/PRIMA and Marin IPA are good partners and represent significant opportunities to build stronger ties Other regional relationships (Queen of the Valley and Santa Rosa Memorial) could be expanded further Sacramento Close Coordination with UC Davis (and potentially Dignity) could help establish more integrated system in Sacramento, and across far North and Central Valley East Bay Children’s Oakland enhances pediatric presence Additional adult physician partners are needed – Alta Bates and John Muir are well established options UCSF Overall Market Share by County USCF’s overall market position is strongest in SF and Marin Counties; outside of these 2 counties, UCSF pulls < 5% overall adult market share per county UCSF’s 14% market share in SF County ranks it third behind Sutter and Kaiser SF General accounts for 14% of the market in SF County, which supports UCSF’s position North Bay, East Bay, and South Bay market share driven by tertiary/quaternary services South Bay – SCCIPA Develop medical group and establish a strong provider presence in the South Bay Enhance MSO capability

53 UCSF ACO Ingredients of a High-Value System of Care Risk Contracts
Population Health Management Governance and Partnerships Patient Centered Care Health Information Technology Analytics and Reporting UCSF ACO Risk Contracts

54 Strategies to Promote Clinical Integration
1. Rapidly developing primary care physician practices employed by UCSFCE 2. Increasing the ability of the faculty practices to function in a highly effective group practice mode 3. Enhancing the scope and scale of clinical affiliates that are aligned and clinically integrated with the faculty practice and other employed UCSF physicians. 4. Building the relationship with SCCIPA so that it flourishes and provides UCSF a major position in the South Bay. Build stronger relationships with other IPAs. 5. Integrating Children’s Oakland physicians, enhancing the ability of the pediatric strategy to succeed Rapidly developing clinically integrated physician practices employed by UCSFCE 200+ in 5 years, predominantly primary care, providing an option for graduating UCSF physicians with non-faculty UCSF employment. Increasing financial and clinical integration across the faculty practice Enhancing the scope and scale of clinical affiliates that are aligned and clinically integrated with the faculty practice and other employed UCSF physicians. Strengthening ties with non-faculty physicians, consolidating contracting, facilitating referrals and care coordination, T&Q outreach efforts and a regional ACO would require commitment to adopt, use and adhere to standards of care, clinical pathways, and population health management capabilities and services Building the relationship with SCCIPA so that it flourishes and provides UCSF a major position in the South Bay. Build stronger relationships with other IPAs. Integrating Children’s Oakland physicians, enhancing the ability of the pediatric strategy to succeed Could provide employment and non-employment option

55 High-Value System of Care
Measures of Success High-Value System of Care High Quality - Medical Home - Patient-Centered - Evidence-Based Accessible - Timely - Convenient - Affordable Innovative - Continuous Improvement - Translating Discovery Efficient - Information Driven - Right Care in the Right Environment Adapted from The Commonwealth Fund, Framework for a High Performance Health System for the United States, August 2006

56 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

57 Clinical Enterprise Financial View
UNDERSTAND & PROJECT THE FINANCIAL PERFORMANCE OF THE UCSF CLINICAL ENTERPRISE IN ITS ENTIRETY Integrate Finance with Strategy Leverage scale of our Enterprise Align assumptions, planning, and decision making Create new financial resources that will be needed for investment in the strategy and our missions of research and education

58 UCSF Clinical Enterprise Financial View
Clinical Operating Margin Expenses Institutional & Technical Revenue Pro-Fee Revenue

59 UCSF Clinical Enterprise Financial View
Clinical Operating Margin Clinical Departments Medical Center Research and Education Operating Expenses/Program Investments and Reserves Program and Capital Investments Reserves Debt Non-Operating Revenue/Philanthropy

60 UCSF Clinical Enterprise Key Assumptions
FY 2013-FY22 (Medical Center and Medical Group) Volume Inpatient Outpatient 0%-1.5% annually % annually Payor Mix FY 2013 Budgeted Payor Mix: 0.5% shift from Commercial to Government; additional 1% shift to Government in FY 2020 (1) Net Revenue Government Commercial 0%-2.5% annually 4.0%-5.0% annually Salaries (2) 3.0% annually (UCSF MG) 3.0-%-4.7% annually (UCSF MC) UCRP Benefits (Covered Comp Only) 12.8% in FY 2014 14.8% in FY 2015 and beyond Net New Clinical Faculty 89 for FY 2013-FY 2023 Increase to 3.6M from 3M wRVUs Notes: Base to be updated to the UCSF Medical Group historical payor mix Variance in salary rate increases are reasonable due to the difference in staffing mix between the UCSF Medical Group and the Medical Center

61 UCSF Clinical Enterprise FY 2012 Actuals

62 UCSF Clinical Enterprise Consolidated Income Statement
*Projections based on FY 2013 Budget *Note: Medical Center margin is negative only in FY 2016; FY16-FY18 combined negative margin takes into account strategic support to Medical Group.

63 Balance Sheet Details UCSF Medical Center

64 UCSF Clinical Enterprise Medical Center Net Income - Mitigation Strategies

65 UCSF Clinical Enterprise Medical Center Capital Allocation Proposal
UCSFCE IS CERTAIN TO NEED MORE!!

66 UCSF Clinical Enterprise
A. Forecast Challenges B. Needs Downward pressure on reimbursement rates (Medi-Cal, Medicare, DSH, IME, insurance exchange) Pressure on professional fee margin to support sponsored research and education High pension and retiree health insurance rates Expanded fixed costs (i.e.. Mission Bay) State Budget impact (specifically on education and research) Philanthropy targets not met Strategic & Program Investment Capital demands for IT and routine replacement and infrastructure (i.e. non-clinical facilities needs) Capital investment issues Limited or no debt capacity

67 UCSF Clinical Enterprise Balancing Sources and Uses
Source: Kaufman, Hall & Associates 67

68 Clinical Enterprise Financial View
Take-Aways: Must anticipate significant investment requirements our current economics will be hard pressed to meet We will need to increase the yield from operations…. ….while developing new & creative sources of capital 68

69 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

70 Leadership of the CE Strategic Planning Process
Executive Sponsors (M Laret, S Hawgood) Clinical Enterprise Group (CEG) Clinical Enterprise Strategic Planning (CESP) Steering Committee Strategic Initiative Workgroups 1. Grow Complex Care Referrals Via Innovation & Distinction 2. Lead a High Value System of Care 3. Build a Culture of Continuous Process Improvement 4. Strengthen Fiscal Position & Resource the Plan Teams of 15 – 20 faculty and clinical enterprise leaders that will recommend strategies, tactics and requirements to the CESP Steering Committee Teams will meet 5 times, between May – late July

71 Retreat Break-Out Groups
Break-out groups’ findings will be used to provide content to the CESP Work Groups Each break-out group will focus on one of 3 topics: Grow Complex Care Referrals Via Innovation & Distinction Lead a High Value System of Care Build a Culture of Continuous Process Improvement Break-out groups will have approximately 60 minutes to engage in discussion on an assigned set of questions. Group leaders have been assigned to each break-out group to facilitate and share the group’s findings

72 Breakout Group Assignments
Topic Tables Facilitators Support Location 1 A: Grow Complex Care Referrals Via Innovation & Distinction 3, 6 Mark Laret & Talmadge King Tom Enders Conference Room 1 1 B: Grow Complex Care Referrals Via Innovation & Distinction 9, 10 Mike Hindery & Peter Carroll Alex Morin Conference Room 2 2 A: Lead a High Value System of Care 4, 5 Kevin Grumbach & Bruce Wintroub Jan Norris Main Conference Room 2 B: Lead a High Value System of Care 1, 2 Sam Hawgood & Ron Arenson Jonah Frohlich 3 A: Build a Culture of Continuous Process Improvement 7, 8 Ken Jones & Jay Harris Min Zhu Conference Room 3 3 B: Build a Culture of Continuous Process Improvement 11, 12 Barrie Strickland & Tad Vail Megan Ingraham

73 Retreat Agenda Time Activity Speaker 8:00am – 8:30 Welcome
Overview of Opportunities & Challenges Facing UCSFCE Brief Summary of Planning Process Perspectives on the Clinical Strategy Mark Laret Jack Stobo 8:30 – 9:20 A Health Plan View of the California Market David Joyner, Hill COO, formerly of Blue Shield 9:20 – 9:45 Academic Medicine for the Future Tom Enders, Manatt 9:45 – 10:00 Break -- 10:00 – 10:30 Emerging UCSFCE Vision & Draft Strategic Priorities Sam Hawgood 10:30 – 11:10 Building a High Value System of Care in Northern California Jonah Frohlich, Manatt ---- Mark Laret & Jay Harris (Q&A) 11:10 – 11:40 Clinical Enterprise Economics: Challenges & Opportunities Barrie Strickland & Mike Hindery Sam Hawgood (Q&A) 11:40 – 11:55 Boxed Lunches Break to Tables Tom Enders 11:55 – 1:15pm Retreat Participant Breakout Group Sessions Participants 1:15 – 2:00 Groups Report Out; Q&A Closing Discussion M Laret, S Hawgood, T Enders

74 Retreat Breakout Groups # 1 A & B: Grow Complex Care Referrals Via Innovation & Distinction
For the next 5 years, specify the critical issues & solutions the Complex Care Work Group should address to advance innovation and build our complex care referrals What are the critical issues to be addressed? What break-through solutions should be put on the table for further exploration?

75 Retreat Breakout Group # 2 A: Lead a High Value System of Care
A “high value system of care” rests on the foundation of clinical and financial integration between physicians and health service providers across the community. With this in mind: How can we establish a strong foundation of clinical integration between UCSFCE and community-based physicians & other health care providers? What needs to change at UCSFCE in order to achieve a “high value system of care” that can manage the health of a population?

76 Retreat Breakout Group # 2 B: Lead a High Value System of Care
How could the UCSF Medical Center and clinical practices work together to accomplish building a true regional system of care? What strategic opportunities should be prioritized and pursued? What needs to change at UCSFCE in order to address the prioritized opportunities and successfully achieve a regional system of care?

77 Retreat Breakout Groups # 3 A & B: Build a Culture of Continuous Process Improvement
How can UCSFCE migrate to a culture where every single person in UCSF shares the imperative to achieve and deliver world class quality, cost, safety & patient experiences? How do we achieve the magnitude of change that will be required across the enterprise in order for us to be successful?

78 Appendix

79 UCSF Clinical Enterprise Consolidated Income Statement
Projections based on FY 2013 Budget

80 Workgroup 1: Grow Complex Care Referrals Via Innovation & Distinction
Strategic Priority: Expand market position as a referral center for tertiary/ quaternary services* by achieving superior patient outcomes and efficiencies and continuously introducing innovation in the delivery of complex care throughout the UCSF health system Objectives: Consider the future state market dynamics regarding T/Q care in Northern California and beyond Define an approach that enables UCSF to deliver leading-edge, consistently distinctive T/Q care to referral and network patients on an episode of care basis for specific services, with the necessary care management and outpatient care to achieve superior outcomes Consider how to succeed with bundles Define an approach to demonstrate services’ outcomes and cost-effectiveness to purchasers and patients Consider how this model may align with an advanced partnership with Kaiser Permanente *Q/T services are defined based on the UC Health Tertiary / Quaternary Strategy, March 2013.

81 Workgroup 2: Lead a High Value System of Care
Strategic Priority: Transform health care delivery and partner with a network of Northern Californian hospitals and providers to create a comprehensive health care system accountable for a defined population’s health and providing a seamless continuum of coordinated, patient-centered, cost-effective care Objectives: Establish health care principles for the UCSF Health System, defining what it will stand for and its value proposition to potential purchasers, leveraging external perspective as appropriate Define operating principles, the change management process, and accountability standards for a redesigned care model, including transformation of primary care into patient-centered medical homes, integration of care into service lines, and coordination across primary/secondary/TQ services and between inpatient, ambulatory, and community sectors. Define a regional network through partnership and outreach strategies, identifying specific types of target physician, hospital and sub-acute care partners in each region, the primary care capacity needed to care for the size of the targeted enrolled population for the health system, and the organizational models for an expanded physician network. Establish clinical integration among UCSF affiliated physicians – faculty and community physicians – for purposes of supporting value-based clinical practice, a lower-cost system of care and common payer contracting

82 Workgroup 3: Build a Culture of Continuous Process Improvement
Strategic Priority: Rigorously and unrelentingly apply data-driven process improvement principles to reduce waste and improve safety and quality Objectives: Define enterprise-wide principles to transform UCSFCE culture into one committed to continuous process improvement and related accountability Develop approach to identifying and rolling out efficient practices across the enterprise Identify 2-3 process improvements to launch enterprise-wide as a pilot over the next 18 months


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