Health for a Better World Accelerating to Health
Health for a Better World Accelerating to Health 2. 0 Progress and Upcoming Changes October 16, 2018 1
Welcome! Rod Hochman, M. D. October 16, 2018
Recap: Our Journey to Health 2. 0 1 December 2 January 3 4 5 March May / June Today 2018 – 2022 Integrated Strategic Introduction to and Financial Plan Health 2. 0 New Mission, Vision and Values Accelerating to Health 2. 0 Leading our teams through change 3
It has been an incredible last few months! Collectively, we… Rhonda Medows, M. D. Population Health Kevin Manemann Physician Enterprises Robert Hellrigel Home & Community Care Mike Waters Ambulatory Care …launched 4 “Lines of Business” …scoped 100+ unique opportunities …launched a new Capital Allocation Framework 4
We are getting more comfortable with explaining what we are doing Health for a Better World: October Summit Pre-Survey How much do you know about Accelerating to Health 2. 0 and the changes that will support our vision of Health for a Better World? How able are you to explain the work we are doing for the Revenue Growth Portfolio? 60% - “motivated and committed to gain others' commitment” How able are you to explain the work we are doing for the Modernization Portfolio? How able are you to explain the work we are doing for the Capital Efficiency Portfolio? 47% 29% 50% 28% 37% 45% Selected ‘Good’ or ‘Excellent’ Indicated ‘Poor’ or ‘Fair’ 5
And we need to provide more details! We asked, “What else do you need to support and lead your team? ” More of the Why More of the What More of the How “Continued focus on clarity / simplification of our comms starting with the Mission” “Concrete specifics as soon as they become available to share” “More clarity and timelines” “Want to hear more about our new businesses” “Materials relevant to my team” “How will we implement the changes being proposed? ” 6
Our goals for the next two days Share, Inspire… • Learn about the changes happening across the organization • Exchange ideas with peers that will inform your regional change plans Summit Goals • Be motivated by the business value and wins realized today and in the future …Take Action • Develop regional change plans to be implemented in Q 4, lay the foundation for Q 1 7
Bringing our change leaders together System Support Regional Leaders (HR, Change, Comms) Chief Human Resource Officers Workstream Leaders Leading Change System & Functional Leaders Regional Chief Executives Clinical & Line of Business Leaders Regional Communications 8
Reflection Orest Holubec
Six ways we are organizing for our future Rod Hochman, M. D.
Six ways we are organizing for our future Expanding our ambulatory network and medical groups Forming a new population health management company Becoming a services and solutions provider Building out the continuum of care Unconventional partnerships Modernizing administrative services 11
Health for a Better World: Progress Update Mike Butler
health for a better world 13
Performance strengths • • • People served grew by 5% Access to primary care grew by 10% Ambulatory services grew by 4% Managed care revenue grew by 8% Productivity improved by 3% EBIDA grew by 12% Community benefit grew by 2% Philanthropy grew by 20% Safety measures are strong Physician engagement is strong YTD September 2018
Performance challenges • • Inpatient admissions down 2% Medicare payer mix grew by 2% Inflation grew 2% Investment income down $429 m Sepsis O/E ratio trending negative caregiver engagement trending negative Long term EBIDA & affordability trends Mission imperative is to diversify, modernize & inspire YTD September 2018
Health for a better world outcomes • • • Healthiest communities & patients Best care, experience & cost Best place to be called to be a caregiver Highest % of health spend per capita Most modern, predictable infrastructures Leading market share in all we do Mission imperative is to create & transform customers & caregivers for life
servant leadership required. forgive, forget, unite listen love curiosity discipline unity mission not ministry reconciliation
Organizationally aligning to leading market share in all we do • • • Ambulatory care network +20% annual growth Physician enterprise +10% annual growth Home & community care +10% annual growth Digital innovation +13% annual growth Inpatient – 35% risk by 2022 The role of leadership is to continually define reality Mission imperative is to accelerate, invest, partner & compete
Implementing modern, predictable infrastructure • Administrative cost 4. 5% > benchmark • Clinical cost $500 m > Medicare reimbursement 15. 0% 10. 0% 5. 8% 5. 0% 4. 5% 2. 7% 0. 0% EBIDA % -5. 0% -3. 0% Current Administrative Clinical Affordability 2022 Target Mission imperative is to accelerate decisions & execute while living our promise with each other – know me, care for me, ease my way
When steadfast love and God graced skill work together, expect a masterpiece. THIS IS OUR TIME to courageously continue this 240 year old master piece that could humbly result in the most transformational company in our country’s history. 15 years The Mission bonds us through every transformation
Reaching Escape Velocity Venkat Bhamidpati
Escape How do we Reach Escape Velocity with Health Velocity 2. 0? 22
Results show revenue and EBIDA improvement over prior year continues but margin still low overall +6. 3% $15. 2 B $15. 1 B $15. 2 B $16. 1 B $57 M $32 M NOR up 6. 3% from prior year +18% +182% $899 M $799 M $880 M $942 M Regional EBIDA up $100 M year-over-year ($33 M) PY PY Adj* Bud Act ($69 M) PY Adj* Bud PY NOR Act PY YTD B/(W) Prior Year (Adjusted) YTD *Net of PAML Transaction PY Adj* Bud EBIDA NOI Margin EBIDA $144 M better than last year Act NOI improvement of $126 M Core Shared Services EBIDA improved $66 M EBIDA Margin Operating margin near zero 23
Rating Agencies appreciate our strategic plans, but note margin weakness …decision to hold off taking any rating action after 2016 financial results was justified …need to focus on improving operations and getting margins and credit metrics back to overall strength that supports current rating… …margins still low to peers. The trend upwards is good, though need to continue to improve on operations and execute on Health 2. 0 and related plans which could lead to Stable outlook within next year… …strong vision. PSJH ahead of curve with Health 2. 0 vs. peers (Health 1. 5) giving the edge to PSJH going forward…approach to transformation actions shows thoughtfulness, and organizational alignment…not slash and burn approach…operating margin must show further improvement
Metrics need more work relative to peers and rating Net Operating Margin Operating EBIDA Margin 8. 90% 9. 50% 3. 57% Kaiser AA 3 Median 8. 00% 6. 80% 2. 10% 5. 80% 0. 90% 0. 20% PSJH YTD Ascension Trinity Kaiser AA 3 Median PSJH YTD Ascension Trinity 25
Health 2. 0 redesigns how we serve our communities Health for a Better World Retail Reimagining our Operating Model Connecting with our Communities in New Ways Mental Health Scientific Wellness Urgent Care Centers Ambulatory Surgery Centers Physicians Digitally Enabled Health Products Insurance Specialty Hospitals Patients & Consumers Genomics & Research CAREGIVER ENABLED Redefining the value chain Digital Innovation Data Assets Hospitals Post Acute Health Services Companies Ancillaries Telehealth Rebuilding the Organization Home Services HEALTH 2. 0 26
How What Why Accelerating to Health 2. 0 requires that we deliver revenue growth, modernization and functional excellence, and capital efficiency Mission Vision Health 2. 0 Strategy Financial objectives Portfolio Ensure sustainability of the Mission: achieving >9 -10% EBIDA and >11% ROIC Revenue growth Modernization and functional excellence Capital efficiency 27
Leading our teams through the journey Greg Till, Greg Hoffman
Recap: why we started our acceleration efforts New challenges, opportunities and community needs… May 2018 …outdated and fragmented structures, processes and systems 29
Recap: Accelerating Health 2. 0 will be key to transforming our future, strengthening our core and be our communities’ health partner Modernization and Functional Excellence Revenue growth Rev Cycle Optimization & Payor Contracting Strategies Ambulatory Commercial Market Growth Pop Health Services & Digital Care Delivery and Operations External Spend Excellence Enterprise Support Services Modernization Capital efficiency Reallocate Capital Divest noncore assets Partnerships Reducing Clinical Variation 30
The next two days will help us prepare to lead change Revenue Growth Modernization and Functional Excellence Insights into several of our new lines of business and our priorities Deep dives on the initiatives and upcoming changes that support our modernization journey Physician Enterprise Services Care Delivery & Operations Home & Community Care Enterprise Support Services Ambulatory External Spend Excellence Digital Solutions Reducing Clinical Variation Capital Efficiency A look at how we allocate our capital and the principles that drive our spend Managing Capital Allocation 31
Q 4 starts our modernization journey To achieve our vision of Health for a Better World, we need to operate in new and different ways to respond to the realities of today and ensure the sustainability of the Mission in the future. Aligning skills and expertise to deliver better service Partnering to improve value Reducing organizational complexity Simplifying core processes and reducing variation Optimizing our external spend Using technology to simplify our work 32
This effort is both a step-wise change in performance in and of itself, and the start of a continuous improvement journey Performance Illustrative AH 2. 0 Future Current Time • AH 2. 0 is transformative change in the nearterm: farther, faster, than we have been able to go in the past • It also builds the infrastructure and organizational “muscle memory” to sustain and iterate on the change over time • Once we evolve, we'll both be in a totally different performance plane, and able to build on the improvement trajectory over and over again 33
Your role – the next two days So that you can… …understand what is changing …contextualize for your region …build an initial plan We will spend time on • The vision behind changes • The value we need to create for the Mission • What these changes will mean for your region Together you will develop • The localized and energized region-specific messaging • Alignment on the groups you will need to bring with you on this journey Together you will agree • When, where and how you will engage your teams • How you will mitigate any risks • What you will do next 34
The next few months will need active leadership Where we have been (May – Oct) Planning our Health for a Better World approach Initial Regional engagement Our current focus (Oct/Nov) Finalize regional prep Prepare Core Leaders Communicate with caregivers Engage through transition (Dec onwards) Engage and refine 35
Care Delivery and Operations Jo Ann Escasa-Haigh, Helen Andrus
Care Delivery and Operations | Summary Big Aims Immediate Wins / Changes • Enhance our core services • Labor productivity management • Simplification – of our structures, processes practices • 340 B clinic expansion • Leverage our scale • Increase value by lowering cost and reducing variation • Building for the future of Health 2. 0 • Decision to focus on centralized learning administration • Organizing our Real Estate management structure Yields Care Delivery and Operations $300 -500 M 2019 2020 On the Horizon • Clinical workforce contract labor optimization • Pharmacy of the “Future” • Rationalized rolebased learning requirements as part of our modern learning experience 37
CDO | Overview of our portfolio • • Initiatives span across the clinical and operational space. Prioritization included projection of modernization and transformational opportunities. Pharmacy RECF Preston Simmons, Elie Bahou Erik Wexler, Bruce Lamoureux, John Milne Education Clinical Workforce Research Clinical Engineering Elaine Couture, Meg Steele Elaine Couture, Deb Burton, Kevin Manemann, Robert Hellrigel Guy Hudson, Calvin Harrison Jo Ann Escasa-Haigh, Hector Boirie Quality Medical Staff Admin Lisa Vance, Jennifer Lisa Vance, Bayersdorfer, Joanne Roberts Richard Parks Intended Outcome Sustainable operating models that optimize productivity, simplify processes, enhance core services, lower costs, and reduce variation, so that we can live out the Mission to the 38 fullest extent.
CDO | Our work reflects the Mission We expect Providence ministries to cherish the Mission and values and develop ways to assess the effectiveness of the people and practices required to sustain them. Hopes and Aspirations Be courageous to undertake what God wants of you and constant to persevere in what you undertake, never giving up, whatever difficulties occur… Maxims of Jean-Pierre Medaille Faith, Foresight, Flexibility and Humility, Simplicity, Charity 39
Portfolio Overview Helen Andrus 40
CDO | Initiative Messaging Overview Clinical Workforce Inefficiencies and inconsistencies in labor management practices are preventing the optimal use of our most valuable asset, our people. This can be overcome through the development of a regional staffing model with a focus on reducing utilization of premium pay, supporting productivity efforts, and addressing the root cause of labor challenges. 41
CDO | Initiative Messaging Overview Research PSJH’s commitment to research and to our investigators is ongoing; ensuring that the organization has the necessary infrastructure and resources to support the work, while meeting regulatory and other contractual requirements. 42
CDO | Initiative Messaging Overview Quality Reliable, efficient quality management focused on continuous value improvement 43
CDO | Initiative Messaging Overview Medical Staff Administration Fast, consistent, and efficient medical staff administration across all of our ministries VISION: One application, one provider, one time across PSJH 44
Initiative Deep Dives Helen Andrus 45
CDO | Ways CDO is achieving our vision To achieve our vision of Health for a Better World, we need to operate in new and different ways to respond to the realities of today and ensure the sustainability of the Mission in the future. Aligning skills and expertise to deliver better service Simplifying core processes and reducing variation Partnering to improve value Optimizing our external spend Reducing organizational complexity Using technology to simplify our work 46
Real Estate, Construction, Facilities, Environmental Services (RECFE) Erik Wexler 47
CDO | Ways RECFE is achieving our vision To achieve our vision of Health for a Better World, we need to operate in new and different ways to respond to the realities of today and ensure the sustainability of the Mission in the future. Aligning skills and expertise to deliver better service Simplifying core processes and reducing variation Partnering to improve value Optimizing our external spend Reducing organizational complexity Using technology to simplify our work 48
CDO | RECFE: Facilities & EVS Integration RECFE will ensure all real estate assets are being utilized efficiently and with the utmost fiscal responsibility through an integrated, high performance, multidisciplinary team which partners with and supports all campuses and ministries. What to expect in November What to expect in 2019 and beyond • Expand scope of REC Core Team • Integration of the full suite of services related to physical asset management • Streamline management structure of Facilities and EVS services across system • Regionalized direction on market competitive models • Definition of facility and EVS market competitive productivity levels • Respectful communication and treatment of our dedicated caregivers • Better visibility and strategic use of capital • Required services provided at the most cost effective levels 49
Pharmacy Preston Simmons 50
CDO | Ways Pharmacy is achieving our vision To achieve our vision of Health for a Better World, we need to operate in new and different ways to respond to the realities of today and ensure the sustainability of the Mission in the future. Aligning skills and expertise to deliver better service Simplifying core processes and reducing variation Partnering to improve value Optimizing our external spend Reducing organizational complexity Using technology to simplify our work 51
CDO | Pharmacy: Steps Towards Health 2. 0 Developing a “Pharmacy of the Future” by implementing innovative and high value initiatives, discovering opportunities to centralize key functions, and, in collaboration with other departments, redesigning the Pharmacy organizational model. What to expect in November What to expect in 2019 and beyond • Regional straight-line reporting single executive regional pharmacy leader • Improve regional labor efficiency • Roll out HIV and Psoriasis Pharmacotherapy Clinics in Oregon • Implement Purchasing opportunities • In conjunction with REH, identify opportunities for drug substitution and price hedging • Expand # of Pharmacotherapy clinics • Continued evolution of structures and processes to deliver the right drug at the right time at the lowest cost. 52
Education Elaine Couture 53
CDO | Ways Education is achieving our vision To achieve our vision of Health for a Better World, we need to operate in new and different ways to respond to the realities of today and ensure the sustainability of the Mission in the future. Aligning skills and expertise to deliver better service Simplifyingcoreprocesses and andreducingvariation Partnering to improve value Optimizing our external spend Reducing organizational complexity Using technology to simplify our work 54
CDO | Education Create a modern learning experience, dedicated to improving patient care and fulfilling the PSJH mission through clinical, non-clinical and ‘community-direct’ education and development. What to expect in early 2019 • A centralized learning administration function What to expect beyond • Technology transformation to provide ease of access • 25+ new learning administration positions • Rationalized role-based learning requirements • Careful redesign of workflows and accountabilities • Optimization of management structure and organization 55
Physician Enterprise Direction Kevin Manemann
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Direction & Key Pillars 58
Pillars & Key Initiatives Innovation and Consumerism 1. Access and Navigation 2. Scaling Innovations from D. I. G. 3. Patient Engagement Center Realize Quadruple Aim 1. Scaling “Own It” 2. Innovative Care Team Models 3. Operating Commitments and Quality programs 4. Drive Value Based Contract Performance High Performing Network 1. PCP Sustainability – Breakeven on CM 2. Revenue Cycle focus for P. B. O. 3. “Roadmap” data analysis (Connect VOA) Physician Partnership 4. Aligning Investment and Return (chargeback) 1. Medical Group Governance Models 2. Integration of Key Shared Services into business unit 3. EPIC Alignment and physician practice build 59
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