1 Meyer Consulting 5900 N Granite Reef Road

1 Meyer Consulting 5900 N. Granite Reef Road Suite 100 Scottsdale, AZ 85250 602/321. 0753 ACOs and Other Partnerships: What it Takes to Make Them Successful Mike Meyer, President V 6 October 19, 2011

2 HOW IMPORTANT ARE ACOS? Results from a nationwide survey of hospitals, health plans and multi-specialty medical groups regarding trends in contracting and partnerships

What percentage of cost-savings do you believe can be taken out of the healthcare system in the next three years without substantially impacting quality? 3 0 10 20 30 40 50 60 70 80 Average = 15% Meyer Consulting Proprietary and

In preparing your organization for health care reform, which of these partnerships will be the most essential? Why? 4 4% 18% 23% Hospital and Physician Partnerships Hospital, Physician and Health Plan Partnerships Provider and Major Corporate Partnerships 55% Provider, Corporate and Health Plan Partnerships Meyer Consulting Proprietary and

What types of alternative contracting approaches are you considering? 5 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Accountable Pay for Care Performance Organization Meyer Consulting Bundled Payments Case Rates Contact Capitation Proprietary and

In preparing your organization for health care reform, which of these partnerships will be the most essential? Why? 6 “Hospital and physician partnerships are obvious…hospitals need the physicians’ cooperation to drive more effective and efficient outcomes. The health plan partnership will need to evolve to align financial incentives equitably and appropriately. It will be a challenge to change from the current adversarial partnership of necessity to one that is collaborative. ” – Health Plan Respondent Meyer Consulting Proprietary and

7 Culture, Leadership and Organization will Define ACO Partnership Success

Paradigm Shift 8 Old Paradigm Reimbursement Market Share Quality – Patient Centric New Paradigm Meyer Consulting Quality – Patient and Population Centric Improving Patient/Provider satisfaction Bending the Cost Curve Market Share Aligned Incentives (Clinical, Financial) Proprietary and

The ACO / Partnership Circle 9 Leadership Physicians • Culture • Mission • Vision Health Plan • Culture • Mission • Vision Leadership Meyer Consulting Hospital • Culture • Mission • Vision ACO • Culture • Mission • Vision • Leadership • Execution Proprietary and

The ACO / Partnership Circle 10 Health Plan • Culture • Mission • Vision Leadership Physicians • Culture • Mission • Vision Leadership Meyer Consulting Hospital • Culture • Mission • Vision Major Corporation • Culture • Mission • Vision ACO • Culture • Mission • Vision • Leadership • Execution Leadership Proprietary and

11 Culture Matters

Culture Defined 12 Basically, “organizational culture” is the defining characteristics of an organization. Culture is comprised of the values, norms, mission and vision of organization members and their behaviors. Meyer Consulting Proprietary and

Examples of Types of Health Care Organization Cultures 13 Physician-Centric Academic Technology-Centric Intrapreneurial Tolerance for Risk Meyer Consulting Continuous Process Improvement Not-For-Profit System Proprietary and

14 Leadership Matters

Characteristics Necessary in ACO Leaders 15 Ability to align financial and quality incentives Commitment to ACO Mission and Vision Physician-centric Innovator Capable of integrating teams Technology-centric Understanding of quality Entrepreneurial Analytical Someone who gets things done Meyer Consulting Proprietary and

Characteristics Necessary in ACO Leaders 16 Each partner must have a leader who other partners see as competent, fair and committed. If you don’t have that the ACO partnership WILL FAIL. Meyer Consulting Proprietary and

How to Identify ACO Leaders 17 Finding leaders (Board and Management) with years of ACO experience is difficult. Meyer Consulting Proprietary and

How to Identify ACO Leaders 18 EXTERNAL – In organizations that represent partnerships between physicians, hospitals and health plans Delivery Systems Health plans Consultants Sophisticated medical groups Military Hospitals Integrated INTERNAL - Within each partner organization These leaders bring first-hand understanding of the desired culture and local market dynamics Meyer Consulting Proprietary and

Skills Needed in ACO Leaders 19 Skill Expert Medical/Care Management X Analytics X Intermediat e Information Technology X Finance X Actuarial X Optional Legal Network Development/Management Business Development/Marketing Meyer Consulting X X X Proprietary and

20 Organization Matters

Models for ACO Organization Structure 21 Embedded model Separate company by one or more of the partners Separate ACO/corporation formed by the partners Meyer Consulting Proprietary and

Functions Under the ACO 22 ACO structure must include authority over certain functions to ensure success Necessary Functions: Medical/Care Management Analytics/IT Finance and Actuarial Business Development/Marketing Network Development/Management Optional/Shared Functions: Medical Group Management Legal Meyer Consulting Proprietary and

ACO / Partnership Board 23 How should Board Members be selected; Board Chair? Is there an agreed upon Mission / Vision Statement? Does the Board have Fiduciary Responsibility? Are there Position Descriptions for Board Chair and Members? Meyer Consulting Proprietary and

ACO / Partnership Teams 24 Who are the team members responsible for planning and execution? Is there a CEO or “Leader” designated? Do team members have time, resources and authority to execute successfully? How are they selected? What worked and did not work? Meyer Consulting Proprietary and

25 ACO Resources and Compliance Have sufficient resources been budgeted? Is venture in compliance with FTC, DOJ and HHS requirements? “Meaningful Clinical Integration” Meyer Consulting Proprietary and

26 Examples

Co-Management Organizational and Leadership Model 27 Physician Group(s) Intra Company Funding Commitment Shareholders Health System Management Services Agreement Board Chair ACO / Partnership Legal Structure SERVICE LINE 1 SERVICE LINE 2 Operating Agreement SERVICE LINE All other functions not specified in the MSA EVP/CMO Clinical Management Meyer Consulting EVP/COO Financial Management Operational Management Proprietary and

Cal. PERS ACO Collaboration Structure Meyer Consulting Proprietary and

CCSF ACO Collaboration Structure 29 Meyer Consulting Proprietary and

30 Finding the Right Partner

Finding the Right Partners 31 Test Motivation of the Potential Partner Are they responding promptly? Have they assigned senior people? Do you have a shared vision? Will the partnership work in the long run? Meyer Consulting Proprietary and

Finding the Right Partners 32 Test if Potential Partner has Ability to Execute On core competencies Financial resources If not, can they get there? Meyer Consulting Proprietary and

Finding the Right Partners 33 If Partner is a Provider how are Physicians being paid? Test Sophistication to be a Partner Is there a solid Board structure? Is there a commitment to Evidence-Based Medicine? Meyer Consulting Proprietary and

34 The More Partners, The More Difficult It Gets

Good or Bad Partners? 35 Meyer Consulting Proprietary and

36 Put Three in Mix…Even Harder Meyer Consulting Proprietary and

Four…Even Harder 37 Meyer Consulting Proprietary and

Meyer Consulting 38 Mike Meyer President 5900 North Granite Reef Road Suite 100 Scottsdale, AZ 85250 Phone: 602/321. 0753 mmeyer@meyerconsultinginc. com www. meyerconsultinginc. com Meyer Consulting Proprietary and