Memorial Hermann Healthcare System Clinical Integration & Disease Management Dan Wolterman April 15, 2010

2 Memorial Hermann Overview

3 Memorial Hermann Healthcare System Non-profit healthcare system operating in Houston, Texas Market share leader In partnership with University of Texas Health Science Center HealthGrades 2010 National Quality Healthcare Award (NQF) 2009 National Patient Safety Leadership Award 2009

4 Memorial Hermann Healthcare System Total hospitals: 12 (9 acute, 2 rehab, 1 children’s) Heart & Vascular Institutes: 3 Managed acute care hospitals: 3 Imaging Centers: 29 Sports Medicine & Rehab Centers: 25 Diagnostic laboratories: 25 Ambulatory surgery centers: 17 Retirement/nursing center: 1 Home Health agency: 1 Annual admissions: 138,351 Annual emergency visits: 411,591 Annual deliveries: 26,731 Employees: 20,840 Beds (acute licensed): 3,581 Medical staff members: 4,857 Physicians in training: 1,821 Annual payroll: $1.088 billion WoodlandsSugar LandTMCKatyMemorial CitySoutheast NorthwestNortheastTIRRPaRCChildren’sSouthwest

5 Clinical Integration & Reduced Costs

6 Clinical Integration for Memorial Hermann Memorial Hermann has over 3,500 physicians within our physician organization - Health Network Providers (HNP) –2,000 “core” clinically integrated, independent physicians submitting quality data –Combination of UT, Private and Employed physicians –Governed by 20 member, all physician Board of Directors –Focused on collecting, reporting and managing quality outcomes –Joint determination of clinical utilization targets for contracting and performance

7 Clinical Integration Physician Criteria The criteria that physicians must agree to by participating in Clinical Integration –(1) Participate in evidenced based medicine, protocol development and implementation –(2) Participate in a preferred electronic health record platform E-Clinical Works is the system supported standard –(3) Submit quality data for both inpatients and outpatients –(4) Agree to transparent use of data to elevate quality and reduce costs

8 Clinical Integration and Reduced Costs Clinically integrated physicians have documented better clinical outcomes than other physicians –Lower average lengths of stay (ALOS) –Less complications –Fewer readmissions –Lower charges to patients HNP has delivered significant costs savings across targeted disease outcomes

9 Clinical Integration and Reduced Costs 30% 15% 4% 33%

10 Disease Management

11 Disease Management Summary Memorial Hermann remains committed to improving wellness and chronic disease issues within the Houston community To address these issues, Memorial Hermann has developed multiple programs including the following –C.O.P.E. – Community Outreach for Personal Empowerment –Community Case Management Initiative Congestive Heart Failure (CHF), Diabetes, etc.

12 C.O.P.E. Program Community Outreach for Personal Empowerment C.O.P.E Program Goals 1.Empower participants to take control of their health care 2.Establish participants with a Primary Medical Health Home 3.Improve and maintain participants’ general health and well being through the use of available local community resources 4.Decrease hospital Emergency Center visits, observation stays, and inpatient admissions 5.Decrease cost per case of Emergency Center visits and inpatient admissions

13 C.O.P.E. Program Eligibility – Patients Must 1.Be registered as “Self Pay” or qualified for Charity Care 2.Have incurred at least 5 emergency center visits or 3 inpatient admissions in the last 12 months 3.Have no current chemical or alcohol dependency diagnoses 4.Live in the Houston area (defined geographical boundary) 5.Have no active psychiatric diagnoses 6.Only be accepted if they have accessed services at Memorial Hermann a.No outside referrals will be accepted into the program Requirements – Patients Must Agree to 1.Return staff phone calls within a 1-2 day time frame 2.Use Primary Medical Health Home or Clinic or Doctor’s office for non- emergent medical care 3.Follow up with all scheduled appointments 4.Show an ongoing effort to complete program goals

14 C.O.P.E. Program Overall reduction of 680 visits at a savings of nearly $2.5 million

15 Disease Management Community Case Management Program Structure Referral and enrollment via in person or telephonic introduction to the program by Navigator (social workers) Telephonic initial assessment and ongoing monitoring calls by RN case manager Utilization of evidence-based literature, tools and self-management activities Assist patient population in understanding and managing their disease and maximizing quality of life

16 Disease Management Congestive Heart Failure As one of the nations’ leading diseases, Memorial Hermann initially focused the community case management initiative on Congestive Heart Failure (CHF) Outcome data supports –Decrease in readmissions and cost for participants –Improved quality of life Program has been successful in assisting community to achieve appropriate utilization of health care services

17 Disease Management Congestive Heart Failure Overall reduction of 439 visits at a savings of over $5 million