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Physician Employment Advocate Health Care James R. Dan, M.D. May 2, 2014.

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Presentation on theme: "Physician Employment Advocate Health Care James R. Dan, M.D. May 2, 2014."— Presentation transcript:

1 Physician Employment Advocate Health Care James R. Dan, M.D. May 2, 2014

2 Leading in a challenging environment Intense reimbursement/price/cost pressure Care shifting to outpatient Rapid growth in consumerism Massive provider consolidation New industry entrants

3 The healthcare economic reality 2013 Federal budget Gov’t spending as % of GDP Federal Health Programs Social Security Other Mandatory Sources: Estimates from The Budget and Economic Outlook (January 2012) - Congressional Budget Office. Growth projections for Federal spending Gov’t Outlays $3.8T Healthcare consuming over 50% of gov’t receipts Gov’t Receipts $2.9T

4 Reimbursement dynamicsReimbursement dynamics Commercial 20 0% (20) Medicare (20) MedicaidMedicaid UninsuredUninsured 40% (40) (100)% 255075 Health System Payer Mix Op er a t in g Ma r g i n % 0100 Avg Margin: 3.5%Avg Margin: 3.5% Comm’l MedicareMedicare MedicaidMedicaid UninsuredUninsured (100)% 255075 Health System Payer Mix Op er a t in g Ma r g i n % 0100 Avg Margin: (4.5)%Avg Margin: (4.5)% ExchangeExchange Today2020 Outlook GE Healthcare Proprietary and Confidential Information TODAY Medicaid Expansion 3.5% +2% Aging/ Medicare -4% Exchanges-2% Reimburseme nt Cuts -2% Comm’l Rates-2% 2020 Outlook-4.5%

5 The Death of the ChargemasterThe Death of the Chargemaster The Brill Effect Consumer-driven high deductible plans focus the mind on price as much as use Reference pricing scares providers All payer transparency is coming soon GE Healthcare Proprietary and Confidential Information

6 The Environment Intense reimbursement/price/cost pressure Care shifting to outpatient Rapid growth in consumerism Massive provider consolidation New industry entrants

7 Fill the hospital Empty the hospital 2012-2020 Inpatient growth 2012-2020 Outpatient growth Shift from high-cost acute settings accelerating Overall Orthopedics Neuro Cancer Gynecology Spine Gen Med/Surg Cardio Overall Cancer Gen Med/Surg Neuro Spine Cardio Ortho Gynecology +18-20% 30% 21% 20% 18% 10% 17% 8% 1% -6 to -8% -1% -5% -25% GE Healthcare Proprietary and Confidential Information

8 The Environment Intense reimbursement/price/cost pressure Care shifting to outpatient Rapid growth in consumerism Massive provider consolidation New industry entrants

9 Consumerism rapidly growing GE Healthcare Proprietary and Confidential Information

10 Consumerism rapidly growing

11 The Environment Intense reimbursement/price/cost pressure Care shifting to outpatient Rapid growth in consumerism Massive provider consolidation New industry entrants

12 Provider consolidation GE Healthcare Proprietary and Confidential Information Source: Kaufman Hall & Associates, Inc., Presentation by Anu Singh, GE analysis -5 largest airlines control >75% of seats -5 largest health systems control < 10% of beds

13 The Environment Intense reimbursement/price/cost pressure Care shifting to outpatient Rapid growth in consumerism Massive provider consolidation New industry entrants

14 New entrants GE Healthcare Proprietary and Confidential Information Walgreens Goal: Reinvent Pharmacy Advance community pharmacy to play a greater role in healthcare through integration and expanded services- focus on chronic disease management Source: Presentation at Lazard Annual Healthcare Conference

15 New entrants

16 16

17 Physicians on Advocate Medical Staffs = 5,900 Advocate Physician Partners (APP) = 4,400 Non-APP = 1,500Independent = 3,000 AMG/Dreyer 1,200/200 Pluralistic Physician Structure 17

18 What is the Role of AMG? Advocate Vision To be a faith-based system providing the best health outcomes and building lifelong relationships with those we serve. AMG Role A nationally-recognized, physician-led integrated group committed to delivering the best health outcomes. Advocate Vision To be a faith-based system providing the best health outcomes and building lifelong relationships with those we serve. AMG Role A nationally-recognized, physician-led integrated group committed to delivering the best health outcomes. 18

19 AMG Growth History and Projection *Projected 19 Number of Physicians

20 Group Composition

21 Consolidated, Dedicated Management 2008 Physician-led Governing Council 2009 Rapid Growth and Integration 2010-2011 Group Optimization 2012-2014 The Advocate Medical Group Journey 21

22 AMG Contribution to Advocate Health Care Health Outcomes/Safe Clinical Enterprise Advocate Experience AdvocateCare Service Lines Loyal Patient Growth Progressive Care Models 22

23 AMG Performance Top decile in 7 of 9 national CI benchmarks Associate Satisfaction – top decile 4 years Physician Satisfaction – 78 th %ile Patient Satisfaction – 62 th %ile Cost/RVU actual decline over past 5 years Growth - With Dreyer, 20% of system revenue and the engine of Advocate Medicare Advantage medical costs flat year- over-year for 4 years 23

24 AMG Value Proposition Group focused on health outcomes and safety Competitive physician compensation and benefits Professionally satisfying practice environment Proactive input into clinical and operational practice performance Strong connection to Advocate system leadership Resources of a large, nationally recognized, integrated health care system 24

25 What you need to believe to thrive in AMG 1.Committed to Vision of Best Health Outcomes and Safest Care 2.Cost Concerns are Best Addressed via #1 3.Integrated, Team Care is Essential for #1 and #2 4.Commitment to Personal Leadership of a Health Care Team 25

26 What is the Role of AMG? Advocate Vision To be a faith-based system providing the safest environment and best health outcomes, while building lifelong relationships with the people we serve. AMG Role A nationally-recognized, physician-led integrated group committed to delivering the best health outcomes. Advocate Vision To be a faith-based system providing the safest environment and best health outcomes, while building lifelong relationships with the people we serve. AMG Role A nationally-recognized, physician-led integrated group committed to delivering the best health outcomes. 26

27 Historical Data 2013

28 What We Need to Believe to Thrive in AMG: Leading from Principles 1.Committed to Vision of Best Health Outcomes and Safest Care 2.Cost Concerns are Best Addressed via #1 3.Integrated, Team Care is Essential for #1 and #2 4.Commitment to Personal Leadership of a Health Care Team 28


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