1. SAO Steve Barlow CMO SelectHealth September 2012

2. Goal for System CPI + 1%

3. Starting April 1, 2016 premiums for large employers will be no more than CPI +1% for the same benefits Current LE premium $250.00 pmpm LE currently 46% of SelectHealth business

4. Structure Three main committees to organize the work –Flow of Funds –Redesigning Care –Patient Engagement

5. Shared Accountability… Realizing the Triple Aim Redesigning Care Evidence-Based Best Practice Integrated Care Management Personalized Primary Care Telehealth Med Management Medical Technology Aligning Incentives Payer Contracting Payment Models Benefit Design Pricing Transparency Engage Patients Shared Decision Making Health Literacy Health Promotion and Wellness

6. Flow of Funds Initiatives that align with different payment mechanisms –Efficiency Initiatives Fee for Service –Cost per case initiatives DRG’s Fixed pricing outpatient services –Population management initiatives Global Risk Contracts

7. Managing the Transition Population Intra Case Developing Medicare, Medicaid Convert Commercial to Fixed Pmt Convert Commercial to Prepayment Dollars in millions

8. CPI+1% will require work with non-Intermountain providers

9. Getting to CPI+1% Lower Revenue Rate Increases Managing Utilization Growth Net Revenue in millions

10. 5,095 4,700 Managing Utilization  Baseline 3,478.9  Population 298.1  Inflation 574.3  Utilization 542.8 → 264.5 (278.3)  Other 200.4 → 83.7 (116.7) Utilization Inflation Utilization Other

11. Clinical Program Goals Discuss 2013 Operating Budget targets –Move to DRG payments for top ten commercial payers –Focus on intra-case utilization for 2013 - 2014 Discuss how we can work together to identify and prioritize intra-case utilization opportunities

12. Establish Care & Treatment Standards Clinical Program/ Service Potential Opportunities Identified Behavioral HealthReducing staffing model variation and hot spotting for patients with high readmission rates. CardiovascularExamine intra-case variation within the Isolated CABG, Isolated valve, and CABG +1 Valve DRGs. Look at physician practices driving the variation ImagingExamine intra-case variation within DRGs with highest imaging utilization. Look at physician practices driving the variation Intensive MedicineExamine intra-case variation within the Sepsis and Pneumonia DRGs. Look at physician practices driving the variation and adherence to current protocols. LaboratoryExamine intra-case variation within DRGs with highest laboratory utilization. Look at physician practices driving the variation. Right-sizing hospital labs vs. Central Lab. PedsAppropriate step down from NICU to Med/Surg. at PCMC, centralized vs. distributed NICU model, Asthma care protocols to reduce readmissions. PharmacyAppropriate transition to oral drugs from IV as soon as is clinically acceptable. Primary CareExamine the impact on cost per case for patients associated with Mental Health Integration. RespiratoryDetermine impact on utilization of "evaluate and treat" protocols implemented at IMED. Surgical ServicesSPRING initiative to reduce supply expense. Examine utilization variation using the Surgical Cost Analysis Tool (SCAT). Women's and Newborns Determine financial impact of shortening length of labor by shortening the time of admission to pitocin, amniotomy, and delivery. Detail: Care Delivery

13. Key Observations Lack of clarity on intra-case vs. population utilization initiatives Very few intra-case initiatives clearly defined and scoped –Data analyses requested Clear need for accurate financial data to link with clinical data Concerns surrounding: –Measuring and budgeting financial outcomes –Variation in costing data –Resources required to do to the work

14. Clinical Program Goals 2013 Behavioral –Reduce staffing model variation –Hot spotting patients with high readmissions Cardiovascular –Intracase variation CABG, Valve, CABG +one valve DRG’s –Physician practices driving variation

15. Cardiovascular Clinical Program

16. Clinical Program Goals 2013 Imaging –Intra-case variation with DRG’s with highest imaging utilization (physicians driving variation) Intensive Medicine –Intra-case utilization in Sepsis and Pneumonia DRG’s (physician practices and protocol adherence)

17. Intensive Medicine Clinical Program

18. Clinical Program 2013 Laboratory –Intra-case variation within DRG’s highest lab utilization (physicians driving variation) –Right-sizing hospital and central lab Peds –Stepdown from NICU to Med/Surg –Centralized vs. Regional NICU –Asthma protocols to prevent readmissions

19. Clinical Programs Pharmacy –Appropriate transition from IV to oral drugs Primary Care –Impact on cost per case with mental health integration Respiratory –Impact of evaluate and treat protocols

20. Clinical Program Goals 2013 Surgical Services –SPRING initiative to reduce supply expense –Blood Utilization Women and Newborn’s –Shorten length of labor by shortening the time of admission to pitocin, amniotomy and delivery

21. Next Steps Resources –Short term: recruit resources to support the evaluation and prioritization process Process –Short term: Begin evaluation and planning process for SPRING initiative. Pull costing data for key processes/APRDRG identified by Clinical Programs/Services –Long term: Develop structure, tools and competency to support key process elements