2016 MGMA Gulf Coast Business Plan Competition Value Through Unity November 5th, 2016

Executive Summary Physician Buy-in Finances Unified ACO PCMH PCSP Value Based PCMH PCSP Unified ACO Finances Physician Buy-in Definitions MIPS: Merit-based Incentive Payment System PCMH: Patient Centered Medical Home PCSP: Patient Centered Specialty Practice Advanced APM: advancd Alternative Payment Model ACO: Accountable Care Organization FFS to Value based Two bonus structures: MIPS and aAPM aAPM: clnic and network levels PCMH PCSP ACO Finances Look forward to take advantage

State of Healthcare Under FFS Patients and physicians are isolated Fragmented healthcare market Wasteful operations Charting burden

Misaligned Incentive Leads to Misaligned Care US Federal Budget 2040 2014 1970 Value Volume Cost Source: Budget of United States Government 3 bins are: pharmaceutical, insurance, medical consumption http://www.pgpf.org/budget-basics/budget-explainer-medicare

Value Value Cost Cost Realigning Value Healthcare Providers will integrate the new value structure. Value Cost Value Cost

ACO Lays the Tracks for Success Patient Guided PCP Guided

Our ACO shelters the care network from administrative burden Fragmentation of Care Accountable Care Organization PCMH PCSP Patients Physicians PCMH PCSP Patients Physicians

Five Components in a Market Analysis Rival Hospitals ACO Entrant Buyer Patient Substitute ER Care Self Care Supplier Physicians Insurance Rival Hospitals ACO Entrant Buyer Patient Substitute ER Care Self Care Supplier Physicians Insurance Coordinated Care

Five Components in a Market Analysis Rival Hospitals ACO Entrant Buyer Patient Substitute ER Care Self Care Supplier Physicians Insurance Rival Hospitals ACO Entrant Buyer Patient Substitute ER Care Self Care Supplier Physicians Insurance Coordinated Care Physician Focused

New legislation proposes two models: MIPS and aAPMs. Advanced APM

ACO Finances PCMH Coordinated Care High Quality Physician Driven Revenue Model Pro-Forma Margins Savings Bonus ACO Operations Integrated Structure Coordinated Care Innovative Beginning the ACO Phrase it in complete sentences, don’t read off slide

No Gaps in Patient Care PCMH ACO Finances Coordinated Care High Quality Physician Driven Intuitive EHR Patient portal Quality analytics Comprehensive care Primary care focused Preventive, Chronic Dz Care coordinator Continuity of care Patient accessibility Intuitive EMR Patient portal Simple interface Quality Analytics Continuity of care Patient accessibility Nurse Coordinator Comprehensive Care Primary + preventive care Chronic disease management Value through coordinated care

Quality maintenance Continual progress Quality Maintenance PCMH ACO Finances Coordinated Care High Quality Physician Driven Innovation Center Quality maintenance Synchronized IT Real-time metrics PCMH level metrics Continual progress Healthy competition Adopt what works Quality Maintenance Continual Improvements Real-Time Metrics Value through removing redundancy

Value through intrinsic motivation PCMH ACO Finances Coordinated Care High Quality Physician Driven Physician Friendly Autonomy Workflow efficiency (less bureaucracy/charting) Academic-friendly Aligned incentives Quality metrics Stakeholder Collaborative Minimized risk Administrative Burden Physician Autonomy Allusion to innovation center Workflow efficiency (less bureaucracy/charting) Value through intrinsic motivation

SUMMARY GRPAHIC OF HOW ACO AND PCMH INTERACTS Finances SUMMARY GRPAHIC OF HOW ACO AND PCMH INTERACTS Extended Network ACO Hospitals Labs PCMH PCSP

Value through a strong ACO network PCMH ACO Finances Network Strength Integrated Structure Coordinated Care Innovative Beginning the ACO Dual Governance PCMH and PCSP Hospital affiliates Tertiary care affiliates Governance Essential oversight Physician leadership - board Unified voice Bargaining power in marketplace PCMH, PCSP, & Affiliates Bargaining Power Network Strength Value through a strong ACO network

PCMH ACO Finances Integrated Structure Integrated Structure Coordinated Care Innovative Beginning the ACO Integrated Structure Coordinated Care Innovative Beginning the ACO Quality Coordination managers Nurse leadership IT Support for PCMH Synchronized HIE extends network Quality Set standards Metrics and feedback for system Set standards Feedback system EHR IT Coordination Managers Support for PCMH Synchronized HIE extends network Nurse leadership Value through strong cross-linking

Innovation Center PCMH ACO Finances Innovation Center Integrated Structure Coordinated Care Innovative Beginning the ACO Operations Ideas Innovation Center Operation – share information Research – academic Physician promotion Collaborative Innovation Research Platform Physician Promotion Value through internal improvement

Value through removing barriers PCMH ACO Finances Integrated Structure Coordinated Care Innovative Beginning the ACO Attract Membership Leadership Bonus Incentives Joint Ownership Growth Clinic Partnerships Commercial Payers Patient Volume Initial Strategy Attract membership Members joint ownership Private Equity Strong bonus incentives Growth Acquisition Commercial Payers Value through removing barriers

30% 70% PCMH ACO Finances Revenue Model Pro-Forma Margins Savings Bonus ACO Operations ACO and PCMH Financials and Cost Structure 5% 5% 5% 5%

Immediate Profitability PCMH ACO Finances PCMH within our ACO PCMH alone Immediate Profitability Revenue Model Pro-Forma Margins Savings Bonus ACO Operations ACO Model Staffing Reduction – 10% Technology Reduction – 30% Computer Reduction – 80% Increase Patient Volume – 1% Without ACO Staffing Increase – 3% Income Decrease – 2%

PCMH ACO Finances Revenue Model Pro-Forma Margins Savings Bonus ACO Operations Total Bonus Pool is modelled a large care organization ACO improves coordinated care ACO improves technology administration

PCMH ACO Finances Revenue Model Pro-Forma Margins Savings Bonus ACO Operations

Restoring Doctor-Patient Relationships Physicians treat patients

Our Two Key Success Factors Coordinated Care Physician Focused Questions?

Appendix

Pro Forma for One PCMH

Pro Forma for Entire ACO

Performance Incentives ACO meets benchmark, and all physicians meet benchmark Minimum 105% + bonuses based on comparisons based on absolute value Incentives are preserved because increasing amount of cost-savings shared At a certain point of maximal value, clinic increases in volume Feedback loops and growth ACO meets benchmark, and one sector of physicians does not Baseline 105% for all. Bonuses still go to cost-saving physicians Feedback system in place ACO does not meet benchmark, and one sector is successful Bonuses come from savings and private equity to cost-saving physicians All physicians still get 105%. ACO does not meet benchmarks, and nobody meets benchmark Unlikely, as Houston healthcare market is very successful