1. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 1 Innovations in Reducing Cost and Improving Quality of Health Care: Geisinger Health System Example Ronald A. Paulus, MD EVP, Clinical Operations and Chief Innovation Officer

2. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 2 Geisinger Health System Careworks Convenient Healthcare Non-Geisinger Physicians With EHR Last updated 07/09/09 Geisinger ProvenHealth Navigator Sites Contracted ProvenHealth Navigator Sites Geisinger Medical Groups Geisinger Specialty Clinics Geisinger Inpatient Facilities Ambulatory Care Facility Geisinger Health System Hub and Spoke Market Area Geisinger Health Plan Service Area

3. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary Geisinger Transformation Infrastructure

4. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 4 Alerts Prompts/Reminders Order Sets Automated care plans Patient messages Information Rx … Effectors … EBM Guidelines Patient Preferences Formulary/Economics Other Inputs EHR Clinical, Schedule … Real-time Clinical Status Decision Support CDIS Normalization, Transformation, Analytic Application Finance Claims Ops … Clinical Decision Intelligence System (CDIS) … Population Trends Empirical Norms

5. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 5 Creating Real Value: Geisinger’s Core Care Transformation Initiatives Population Health Optimization –Geisinger Medical Home ProvenHealth Navigator SM –Chronic Disease Care Optimization ProvenCare - Chronic ® Acute Episodic Care Optimization –ProvenCare - Acute ® (aka the “surgical warranty”) Transitions of Care Optimization –ProvenTransitions SM Patient engagement and activation throughout all initiatives –ProvenEngagement SM (dealing with “non compliance” Delivering a “System of Care” focused on the right things… Optimizing high, cost, capital intensive care (bundling with a “warranty”…) Incentivizing Quality – eliminating reworkIncentivize engagement and self-care

6. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary ProvenHealth Navigator ® Geisinger’s Value-based Patient- Centered Medical Home

7. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 7 Functional Components 1.Team-based, patient-centered primary care (including embedded care management nurse) 2.Joint payor-provider population management 3.High quality, efficient specialist identification and referral 4.Quality Outcomes Program 5.Value-based Reimbursement Program 1.Baseline FFS 2.Practice transformation stipends 3.Quality-gated gain sharing

8. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 8 Acute Admissions Show Improvement Risk-adjusted acute admits/1000 (Medicare)

9. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 9 Readmissions Show Improvement Medicare Readmissions/1000

10. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 10 Spending Decreased Compared to Expected Trend Spending (-8%)

11. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary ProvenCare - Chronic ® Chronic Disease Optimization

12. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 12 DM Best Practice Alert/Order Set

13. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 13 MyGeisinger Patient Reminder View

14. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 14 Patient Education Letter

15. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 15 Patient Trend Report Most recent values displayed Therapeutic goals are stated Clinical consequences are stated

16. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 16 Diabetes Bundle Primary Care Average (n=23,404)

17. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 17 CAD Bundle Primary Care Average (n=14,714)

18. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 18 Adult Preventive Care (n=209,090) 11/0712/09 Adult Preventive Bundle9.2%25% Breast Cancer Screening (q 2 40-49, q 1 50-74)46%61% Cervical Cancer Screening (q 3 yr Age 21-64)64%73% Colon Cancer Screening (Age 50-84)44%62% Prostate Cancer Discussion (Age 50-74)72%75% Lipid Screening (Every 5 yr M > 35, F > 45)75%83% Diabetes Screening (Every 3 yr > 45)85%87% Obesity Screening (BMI in Epic)77%94% Documented Non-Smokers75%78% Tetanus Diphtheria Immunization (every 10 yr)35%65% Pneumococcal Immunization (Once Age >65)84%87% Influenza Immunization (Yearly Age >50)47%53% Chlamydia Screening (Yearly Age 18-25)22%33% Osteoporosis Screening (every 3 yr Age > 65)52%66% Alcohol Intake Assessment84%88%

19. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary ProvenCare Acute ® Geisinger’s Bundled Episodic Care

20. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 20 GHS Receives “All In” Global Fee One fee for the ENTIRE 90-day period including all surgery-related care: –ALL surgery-related pre-admission care –ALL inpatient physician and hospital services, including cardiologists, cardiac surgeons, anesthesia, consultants, etc –ALL surgery-related post-operative care –ALL care for any related complications or readmissions Aligns incentives across provider, patient and payor

21. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 21 Process Redesign: Work Flow

22. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 22 Process Redesign: Hardwiring

23. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 23 ProvenCare ® CABG: Reliability

24. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 24 Before ProvenCare ® ProvenCare ® % Improvement (n=132) (n=321) In-hospital mortality 1.5 % 0.3 % 80 % Patients with any complication (STS) 38 % 33 % 13 % Patients with >1 complication 8.4 % 5.9 % 30 % Atrial fibrillation 24 % 21 % 13 % Neurologic complication 1.5 % 0.9 % 40 % Any pulmonary complication 7 % 5 % 29 % Re-intubation 2.3 % 0.9 % 61 % Blood products used 24 % 22 % 8 % Re-operation for bleeding 3.8 % 2.8 % 26 % Deep sternal wound infection 0.8 % 0.3 % 63 % Readmission within 30 days 6.9 % 5.6 % 20 % CABG Clinical Outcomes

25. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 25 Hospital Financial Outcomes Time Period Net Revenue Change Cost Change (Variable Direct/Total) Net Margin Change July 2006 – March 2009 +7.8%-5.1% / -5.2% +160%

26. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 26 Other ProvenCare Acute Programs

27. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary ProvenEngagement ®

28. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 28 The Real Caregivers… “People with chronic conditions are the principal care-givers. Each day, patients decide what they are going to eat, whether they will exercise and to what extent they will consume prescribed medicines.” Bodenheimer et al, JAMA 2002

29. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 29 Population by Activation Level Source: J.Hibbard, University of Oregon 12% of the population 29% of the population 37% of the population22% of the population

30. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 30 HTN Patients Who Engage in Self- management Behaviors Source: J.Hibbard, University of Oregon

31. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 31 Patient Data Capture Tools Give patient a voice Structured data –Higher Quality –Actionable Real time analytics –Guideline based evaluation Guide patient- physician dialogue –Real time display of advice Save time and money –Why are you here? –What do you have? –What do you want? –How are you doing? –What are you taking? –How is your medicine working? –What are your risk factors? –What are your barriers to improving outcomes? –… and the list goes on.

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36. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 36 Summary Quality and efficiency are inextricably linked together Efficiency originates from the same place as quality – fundamental care model redesign At Geisinger, we are trying to reinvent many aspects of the care process Geisinger has many advantages due to our integrated delivery system and its “Sweet Spot”

37. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary Thank You.

38. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary ProvenTransitions ® Care Hand-off Optimization

39. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 39 A Major Medicare Issue… “Potentially Preventable” admissions account for $12+ billion in Medicare spending (>8% of $146B total Part A spend in 2006) 30 Day Readmission Rate 60 Day Readmission Rate 90 Days Readmission Rate 18%35%67% (or dead)

40. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 40 Readmissions DRIVERSKEY TACTICSGOAL Screening Care Mgmt: Inpatient/ Outpatient Team Communi- cations (IDTs) Patient Education/ Med Rec Drivers to Reduce Readmissions Post- Transition Care Early identification of readmission risk Target interventions based on risk level Early DC needs assessment of high risk pts DC Planning – choose best next care setting Seamless transition between IP & OP Care Mgt Outreach to OP Care Mgmt based on risk level Consistent documentation (location, content) Multi-disciplinary care coordination Social issues addressed (non-compliance, ability to buy meds, advanced directives) Ready the patient for successful self-care Teach Who-What-When-Where if help needed Multidisciplinary Teaching - patient and family Post-DC Follow-up appt for EVERY patient Instant communication of hospital course and follow- up needs to post-DC providers/agencies IP Pharmacist consult on high risk pts/meds MH with tele-monitoring, follow up phone calls, SNF management

41. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 41 ED Screening Instrument Based upon combination of literature review, expert interviews, Geisinger data and clinician experience GWV % Readmissions 6/2008 – 8/2008

42. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 42 Patients Screened

43. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 43 FY 09 Final Results: GWV 30 Day Readmission Rate

44. Heal Teach Discover Serve Geisinger Health System Confidential and Proprietary 44 Next Up: Bundled Readmission Payment Bundle proportion of historical readmission rate/payment into up-front DRG rate Step down the % of historical over a 3-5 year period (say, 95% to 60%) Key Advantages: –Provides a direct incentive to reduce rates –Enables hospitals to earn “windfall profits” during early years –Avoid abrupt change with negative impact –Sets a high bar, that can be reconsidered –Even 60% is higher than best performing Medical Home sites, so not unrealistic –Administratively simple