A dvanced M edical D evices, I nc. Advanced Decision Modeling, LLC OPTIMIZED STRATEGIC AND OPERATIONAL DECISION MAKING © 2012 Advanced Decision Modeling LLC. All Rights Reserved. CONFIDENTIAL, TRADE SECRETS OF ADVANCED DECISION MODELING, LLC

INTRODUCTION

THE ADVANCED DECISION MODELING SYSTEM ADM MODELS ENHANCE STRATEGIC DECISION MAKING: Hospitals, Health Systems and Academic Medical Centers Private Medical Practices Clinical Research Centers Technology Transfer Centers Life Science Private Equity Funds (VC and LBO)

THE ADVANCED DECISION MODELING SYSTEM HEALTH CARE AND LIFE SCIENCE DECISION MAKERS NEED HELP Hospitals, Health Systems, Academic Medical Centers and Private Practice Groups need help making rationale decisions: Evaluating provider performance and quality Setting effective provider compensation paradigms Recruiting primary care and specialist physicians and groups Performing practice valuations and acquisitions Developing and managing Accountable Care Organizations (ACO), Pay for Performance (P4P) protocols Making effective resource allocation and HR decisions Managing the business aspects of medical practice Physicians and Patients need help making rationale decisions: Treatment selection Hospital and provider selection Health insurance product selection Using the evidence based literature in medical practice

CURRENT APPLICATIONS HEALTH SYSTEM AND PRACTICE MANAGEMENT Physician Productivity Assessment Physician Performance Improvement and Quality Measurement Provider Compensation Decisions and Negotiation Provider Recruitment Planning Practice Valuation and Acquisition Analysis Resource Allocation Decisions

CHALLENGE Health care decisions are complex Decision makers must understand and synthesize: Sophisticated and oftentimes ambiguous internal and external information Preferences, concerns and experience on key decision criteria and objectives The complexity of the process is magnified by the need to make tradeoffs among competing objectives

ADVANCED DECISION MODELING, LLC MODELS Built on the Expert Choice™ Platform (Expert Choice, Inc. Arlington, Virginia) Provides the optimal system for strategic decision making in the health care delivery spaces Based on the Analytical Hierarchy Process (AHP) mathematical method developed at the Wharton School of Business for use in strategic decision making

STRATEGIC DECISION MAKING EVERY DAY EXAMPLES OF THE NEED FOR PROCESS IMPROVEMENT Balancing your checkbook Managing your investments Buying a house Process Improvement tools in everyday life: Quicken Microsoft Money

GOAL Synthesize: Factual Data Qualitative Judgments and Intangible Factors Produce efficient, rational decisions that tolerate uncertainty and minimize bias

MODEL STRUCTURE The models are constructed by defining the goal and structuring a non-linear The decision is de-composed into objectives and sub-objectives Each level of the model reflects a redefinition of problem elements with increasing specificity Decisions are reduced to component elements that are readily organized and analyzed

AHP MODEL STRUCTURE BED RMS BUY A HOUSE Goal LOCATION TYPE PRICE SCHOOLS HOUSE 2 HOUSE 1 HOUSE 3 Objectives (Multiple Levels) Alternatives Data Measurement & Synthesis & Resource Alignment BATHS

MODEL STRUCTURE The models lead the user through a series of judgments on the objectives and sub-objectives The judgment process is generally based on the relative importance or preference that the user ascribes to objectives and sub-objectives Judgments are made utilizing the pairwise comparison method whereby individual decision factors are compared as isolated elements related to a common parent RATIO SCALE ANALYSIS Judgments can be made verbally, numerically or graphically Expert Choice derives Ratio Scale Priorities by calculating the principle right eigenvector of the reciprocal matrix of pairwise judgments From multiple pairwise comparisons, the user’s experience and intuition are synthesized with objective data to yield effective strategic decisions

MODEL STRUCTURE Graphical sensitivity analysis enables the user to adjust priorities to see the effect of changes in judgments on the overall ranking of decision alternatives Inconsistency ratio analysis enables the user to test the mathematical accuracy of judgments within the model to identify and correct: Clerical errors in entering judgments Lack of concentration Inappropriate use of extremes Resource alignment allows the user to optimize resource allocation, organizational performance and capital budgeting strategies

A dvanced M edical D evices, I nc. Advanced Decision Modeling, LLC PLATFORM DEMONSTRATION PLATFORM DEMONSTRATION ORTHOPEDIC SURGERY PROTOTYPE MODEL PHYSICIAN PERFORMANCE ASSESSMENT AND RESOURCE ALLOCATION

DEMONSTRATION (Click to view)

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