Telehealth from the Business Perspective Peter Kung MBA

SCL Health at a Glance St. James Healthcare Butte St. Vincent Healthcare Billings Holy Rosary Healthcare Miles City SIZE AND SCOPE Hospitals 10* Montana St. Francis Health Topeka St. Mary’s Medical Center Grand Junction Colorado Saint Vincent Clinic Leavenworth Safety-net clinics 3 Mental health treatment center for children 1 Ambulatory practices 210 + Employed providers 600 + Duchesne Clinic Kansas City Marian Clinic Topeka SCL Health Community Hospital – Westminster Good Samaritan Medical Center Lutheran Lafayette Medical Center Wheat Ridge Hospital Safety-Net Clinic Children’s Mental Health Treatment Center Mount Saint Vincent Denver Platte Valley Medical Center Brighton Accountable Care Organizations/ Clinically Integrated Networks 5 2015 net patient service revenue $2. 5 Bond rating Aa 3/ AA- Saint Joseph Hospital JOA – National Jewish Health/ Saint Joseph Hospital Denver (Children's Mental Health Treatment Center) Billion * Includes SCL Health Community Hospital – Westminster as of * November 2015; three additional Community Hospitals under * development 2

A Blockbuster Parable

600 Million Traditional PCP Visits in 2015 Retail clinic visits – 10. 5 million annually Virtual visits – 1. 8 million annually Home health visits – 112 million annually Multiple Sources: Deloitte, Cigna, Tractica Primary Care Visits 600 million annually

20% Reduction in PCP Office Visits by 2020? Retail visits 25. 2 million annually Virtual visits – 120 million annually Home health visits 136 million annually Multiple Sources: Deloitte, Cigna, Tractica Primary Care Visits 660 million annually

Performance Today: We Should Accelerate The Shift To The ‘Second Curve’ Natural Trajectory Curve #2: VALUE-BASED PAYMENT » Achieving “Triple Aim” , as per IHI: › Better Care Experience for Individual › Better Health for Populations › Lower Per Capita Costs Curve #1: FEE-FOR-SERVICE » All about volume » Reinforces work in silos » Little incentive for “real” integration Time Second Curve Market Requires Services, Integration Courtesy of Navigant Source: Institute for Health Improvement, Ian Morrison and NCI analysis.

Triple Aim SMAC Competition Analytics Leakage Budget Daily Respons. EHR Security Bundles/ACO Volume to Value Innovation Consumerism

Strategy, Innovation, and Execution?

Growth Trend • Kaufman Hall predicts that the Virtual Health market will grow from $19. 2 billion in 2014 to $43. 4 billion by 2019 • Sg 2 projects that by 2023, 17% of all E&M visits will occur virtually

Virtual Health Continuum Tele-specialty Virtual multidisciplinary conference e. Consult Clinician to Clinician e. ICU e. ED Telestroke Source: Sg 2 Virtual e-visits Primary/Urgent Care Virtual specialist consults (e. g. teledermatology, Clinician to Patient telepsychiatry) Remote monitoring Virtual medication management Mobile self-tracking apps Social media Epic My. Chart Patient scheduling apps Consumer Oriented Personal activity monitors Quality and price transparency tools

Source: Advisory Board

Segment & Beachhead Position on Continuum • Consumer-Based Care (retail) for Associates and Public • 24/7 Primary Care at your fingertips Consumer-Based Care E-visits Source: Sg 2

Telehealth as a Service

Source: Advisory Board

Marketing

What do They Think About Healthcare?

So Ph ny on e Sv Ba c nk C in re g di t. C ar ds AT &T C ab PC le P' C o s H ea mp an lth ie In su s ra nc e el l 60 C 60 er tz 72 H es t th w e 80 Ap pl A 100 So u -20 U SA Net Promoter Score 87 50 40 20 0 41 19 18 9 9 3 -3 -5

The Virtual vs. Physical Experience Consumers • • • 50 - 60% of their time in virtual experience Researching health & providers Tracking health & fitness Accessing virtual health Reviewing & rating providers Transacting via health portals Healthcare Leaders • 90% of their time managing the physical experience NRC Blue Sky Exercise – 2012 - 2015

How Can We Fix Where We Need To Be?

Using Innovation Types Strategically Business model Offering Process. Finance Networking Enabling process Core process Product performance Delivery Product system Service Channel Brand Customer experience Source: The Doblin Group

Leading To A Shift In Value Creation… Hi Finance Process. Offering Business model Enabling process Product performance Networking Core process Delivery Product system Service Channel Brand Customer experience Volume of innovation efforts Last 10 years Lo Source: Doblin analysis

Leading To A Shift In Value Creation… Hi Finance Process. Offering Business model Enabling process Product performance Networking Core process Delivery Product system Service Channel Brand Customer experience Cumulative value creation— Last 10 years Less than 2% of projects produce More than 90% of value… Lo Source: Doblin analysis

Closing: My Observations - Strategy is the True North -> Innovation can create new services/business models - Capture value! - Consider: Tradeoffs and Risk - Create a swim-lane - 2 worlds can Co-Exist: Facilitation/Communication is key - Widen the search - Be flexible - Foster the culture

The Vision and Journey Ahead Remote Monitoring Specialty Video Visits e. Visits Ambulatory Clinic Hospital Home e. Consult /e. Referral Post-Discharge Coordination Patient Engagement Tools