Prospects for New Delivery Systems and Reimbursement Models AHLA Practice Group Luncheon June 28, 2010 | Rick Woods Executive Vice President & General Counsel Group Health Cooperative | Seattle, Washington

What is the benefit? Improved patient experience Lower costs Higher quality Increased use of evidenced based medicine

Integrated Delivery Systems Several characteristics are essential for all integrated delivery systems (ACOs) Financial incentives to create the system of care Provide or manage the continuum of care as a system Sufficient size to support comprehensive performance measurement and expenditure measurements Capable of internally delivering shared savings and prospectively planning budget and resource needs Group Health has operated as an integrated delivery system for 60+ years and our experience tells us it works and it is worth it

Group Health Corporate Structure

26 Group Health Medical Centers 640,000 covered lives 1,200 doctors 10,000 employees

Better results through integrated care

A system of care at Group Health 24/7 Access Patient Web Portal Virtual Visits Secured Messaging Urgent Care Primary Care Specialty Care Consulting Nurse Service Quality Disease Predictive Modeling, Registries and Protocols Patient Population Research Patient Safety Monitoring Electronic Medical Record Content of Care Shared Decision-making Evidence-Based Tools & Practice Guidelines Continuity of Care Medical Home Model Seamless Care Transitions Case Management and Outreach On-site Care Managers These 4 quadrants represent some of the key areas where our ACO needs to excel Our information systems have helped us accelerate our delivery system transformation. And we have aggressively adopted lean thinking as it applies to our clinical and business efforts. To manage a patient population you need to enhance access, enable continuity of care, and engage patients in their health. We use disease predictive modeling, outreach to patients, and study of our outcomes. Our system is great for patient care, but it is also sustainable business model which we believe it is replicable. Next we will drill down into these quadrants to show how we are using an ACO approach to coordination care for our patients. We believe all of these are essential pieces in managing quality and costs. 7

Group Health’s Medical Home Model

Prospects: What it takes to create performance focused care 1. Focus on engaging patients to meet their health care goals Patients must be an active part of an effective system of care Future “retail” orientation of health reform exchanges will make this more important Need to capitalize on the role of employers in promoting patient engagement 2. Financing structure that reimburses clinical providers for achieving better outcomes (cost, utilization, quality, service) for a common population of patients All parts of the system are focused on health outcomes All parts of the system are aligned and have reason to look broadly at how to achieve the goals 3. A strong, integrated, multi-specialty group practice Compensation based on salaries with focus on quality and service Transparent comparative reporting of performance Advanced primary care model serves as foundation for accessing and organizing care & coordinates with other aspects of delivery system

Prospects: What it takes to create performance focused care 4. Integrating systems that support care coordination Electronic health record, full-featured patient web portal, consulting nurse service, transparent performance reporting and more Operational & management excellence derived from Lean principles 5. Strong clinical leadership that translates scientific evidence into clinical practice Active use of comparative effectiveness data & processes Clear decisions about clinical guidelines & a conviction to use them to measure & improve performance Evidence-driven drug formulary 6. Effective partnerships with other care providers & resources with common goals that support a coordinated, cost-effective system Endorse principles of chronic care model Hospitals, clinicians, hospices, churches, fitness centers, grocery stores, families all contribute to outcomes

Reduced health care costs through Integrated Systems Appropriate care teams Improved care coordination Reduced waste Internal process improvement Informed patient choices Chronic disease management Point of care reminders and best-practices Actionable, timely data