What We Really Need to Know about Economic Dynamics Affecting Healthcare Reform Panelists: Gerald Kominski, PhD, UCLA Center for Health Policy Research Tom Priselac, CEO, Cedars-Sinai Health System Walter Zelman, PhD, Chair, Department of Public Health, CSULA Moderator: Steven Blake, FHFMA, CPA, Executive VP & CFO Integrated Healthcare Holdings, Inc.

Uninsured and Underinsured Health Care Reform Charity Care and Bad Debt Emergency Medicine Managing Population Risk California Health Benefits Exchange Funding for Undocumented Patients Dual Eligible Eligibility Assistance [MEP] Bundled Payment Demonstration Projects MediCal DRG Payments Federal Medicaid Matching Program IT-Meaningful Use

Key Elements of Health Reform Medicaid expansion: all up to 138% fpl Exchanges and subsidies (to 400% fpl) Requirements to purchase insurance Insurance reforms – Pre-existing conditions; experience rating Incentives to train Primary care doctors and pay them more Incentives to move towards ACOs; payment reform; lower cost, higher quality

System Integration: Projection Hospital Integration Fully Integrated System Fee for Service Physician Integration

The Politics of the IDS Who Gets What, When, Why and How? Redistributing the Premium Dollar FEE FOR SERVICE Insurance Administration Profits Hospital Specialists Primary Care 20¢ 40¢ 30¢ 10¢ 10¢ FULL RISK IDS Insurance Administration Profits Hospital Specialists Primary Care 20¢ 25¢ 15¢ 15¢ 15¢ ______?_____25¢ ? = Who Gets the 25¢ Adopted from Source: Jacque Sokolov, Inc. To Insurer /HMO or IDS

Value of Coordination Wide choice of MDs and less Of a team coordination approach48% More limited selection of MDs and emphasis on team coordination between MDs47%

Physician Strategic Options Seeking Control Form, join physician-sponsored HMO Join, merge with larger primary care or multi- specialty group: seek capitation Affiliate with organized delivery system – Large medical group – Health plan – Hospital system Promote direct contracting: bypass insurer or form medical group capable of accepting risk

Core Strategies in the New Marketplace Enhance market power --Choose partners, consolidate Increase capacity to accept capitation: Secure ties to primary care providers Expand services, options, coverage area Increase efficiency, lower costs Secure access to capital Improve clinical performance (and prove it)

Recent Modern Market Analysis (Health Care) Type of Analysis or Information Volume of Information Available Volume of Information Available Rumor Isolated Event: Meaningful? Isolated Event: Meaningful? Anecdote A Few Related Stories Anecdote A Few Related Stories Rigorous Case Study Rigorous Case Study Systematic Analysis Systematic Analysis

Uninsured and Underinsured Health Care Reform Charity Care and Bad Debt Emergency Medicine Managing Population Risk California Health Benefits Exchange Funding for Undocumented Patients Dual Eligible Eligibility Assistance [MEP] Bundled Payment Demonstration Projects MediCal DRG Payments Federal Medicaid Matching Program IT-Meaningful Use