Twin Ports Performance Excellence Network TPPEN Essentia Health

Twin Ports Performance Excellence Network (TPPEN) Essentia Health: Journey to Accountable Care Debbie Welle-Powell, MPA SVP Accountable Care August 14, 2015

Essentia Health Overview Essentia Health is a fully integrated healthcare system, with $2 billion in annual revenues, serving patients in Minnesota, North Dakota, Wisconsin and Idaho 2

Our Mission, Vision and Values Essentia Health Mission We are called to make a healthy difference in people’s lives. Essentia Health Vision Essentia Health will be a national leader in providing high quality, cost effective, integrated health care services. Essentia Health Values Quality · Hospitality · Respect Stewardship · Justice · Teamwork 3

Essentia Health • • • Duluth Based Not-for-Profit Four State Health System $1. 6 Billion Annual Revenues 13, 000 Employees 800 Physicians 750 Credentialed Professionals 18 Hospitals 68 Clinics 446, 000 Unique Patients (covered lives) NCQA ACO Accreditation (Level 3) S&P “A” Rated 4

Essentia Health: Operating Company 5 5

The Future (Innovation) The Evolution of Essentia Health 2010 -Present 2004 -2010 1997 1888 & 1915 St. Mary’s Hospital Duluth Clinic 1 Region • 3 Hospitals • 22 Clinics • Family Practice Residency • 321 MDs • 4, 200 Employees SMDC • 13 Hospitals • 18 Clinics • 50 Long Term Care and Assisted Living • Family Practice Residency • Multiple EMRs • 400 MDs • 13, 000 Employees • Care Management • Telemedicine 3 Regional Hubs • Education Services • 18 Hospitals Expansion • 68 Clinics • Essentia Institute of • Research Expansion (EIRH)/Data Rural Health Warehouse • 6 Long Term Care • Advanced • 5 Assisted Living Technology • Family Practice • Innovative Payor Residency Relationships • 1 EMR (Epic) • Accountable Care • 800 MDs Organization • 750 Credentialed • Essentia Foundation Providers • Continued Growth • 13, 000 Employees • Common Quality Scorecard Essentia Holding Company. Essentia Operating Company C o m p r e h e n s i v e C a r e 6

So What’s the Problem With Health Care?

Annual Growth Rates, Gross Domestic Product (GDP) And National Health Expenditures (NHE), Calendar Years 1990– 2023. Sisko A M et al. Health Aff doi: 10. 1377/hlthaff. 2014. 0560 © 2014 by Project HOPE - The People-to-People Health Foundation, Inc.

A Few Cost the Most National Sample of 21 Million Insured Americans, 2003 -2007 % of Population 1% 9% 20% 70% % of Total Healthcare Expense Mean Annual Cost per Person 29% $101, 000 39% $15, 000 21% $3, 700 11% $580 Source: Thomson Reuters Markets can Database 9

Real Life Examples Family Health Insurance (Full Pay Plan) 1980 2000 2015 Est. 2025 Monthly Premium $100 $1, 000 $2, 833 $4, 614 Annual Premium $1, 200 $12, 000 $34, 000 *$55, 379 *Union Plan B (almost no cost sharing) **5% Inflation/Year 10

Affordability? • Premium @ $24, 000/year = $11. 53/hour • Premium @ $34, 000/year = $16. 34/hour Who Can Afford? 11

Primary Strategy for Affordability • Cost Shifting & Cost Sharing – Deductibles, Co-pay, etc. • Tiering of Providers – Drive toward lower cost provider – Race to the bottom • Complain – Someone else’s problem! 12

Taking Health Care to the Next Level…ACO’s 13

What is an ACO? ACOs are provider-based organizations that take responsibility for meeting the health care needs of a defined population with the goal of simultaneously: ü Improving health ü Improving the patient experience ü Reducing per capita costs

ACOs Achieve the Triple Aim by Focusing on: Wellness and disease prevention ü Effective chronic disease management ü Hospital care that achieves lasting, positive outcomes ü Setting and achieving high standards for quality, safety and customer service ü Leveraging all of the above to lower costs

Earliest ACO’s • Kaiser Permanente • Group Health • St. Mary’s Hospital 1886

Why Essentia Has Moved to an ACO Model For Care? • ACO fits with Essentia Health’s mission to make a healthy difference in people’s lives. (Focusing on wellness is the right thing to do. ) • Private insurers and businesses support ACOs as way to improve care and reduce costs • Traditional fee-for-service payment model is unsustainable. Health care systems will collapse without change.

National Committee on Quality Assurance • Essentia is an “Early Adopter” for ACO Accreditation (1/6 in U. S. ) • Our “Blueprint for Quality” • Private, 501(c)3 Not-for-Profit • Founded 1990 • Central Figure in Delivering Quality and & Quality Improvement in Health Care • Assures purchasers, patients, and consumers of the ACO Ø A common set of expectations Ø Focuses on the patient and their care Ø The ACO rigorously holds itself to nationally recognized standards 18

NCQA: The 7 Standards Organizational/Structural Standards 1. Established ACO structure and operations 2. Access to the full range of services and specialties needed to deliver comprehensive care 3. Patient-centered primary care 4. Care management 5. Care coordination and transition planning 6. Clear patient rights and responsibilities policies 7. Performance reporting and quality improvement process

Essentia Health Accountable Care Initiatives ACCOUTABLE CARE PLATFORM Accountable Care (ACO) VALUE-BASED CONTRACTS Population Health Management (121, 234 total lives) MSSP 30, 814 Lives MSHO 1, 482 Lives IHP MN Medicaid, 23, 304 lives UCare Seniors 5, 303 Lives BCBS ACO 37, 918 Lives Health Partners 9, 949 Lives Essentia Employee Health Plan 12, 464 Lives ORGANIZED SYSTEM OF CARE Collaboration between clinicians and administrative leaders who have a shared commitment for the quality, cost and patient experience across the entire care continuum VALUE-BASED CARE CAPABILITY SETS 2

Accountable Care Infrastructure ORGANIZED SYSTEM OF CARE Collaboration between clinicians and administrative leaders who have a shared commitment for the quality, cost and patient experience across the entire care continuum Long Term Care VALUE-BASED CARE CAPABILITY SETS Quality Mgmt Advanced Data Analytics Care Coordination Chronic Care Mgmt 3

Our Journey from Volume to Value: Percent of Business Tied to Value Median: HFMA National Survey 4

Essentia Health: Journey from Volume to Value 2014 2013 2015 2014 Data Integration Analysis 2016 2015 Action 2017 2016+ Results Reporting 6

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Population Stratification Tool Patient has no future Primary Care Appointment Patient has visited the ED 5 times in the last 12 months Patient takes 32 medications Patient has been admitted to the hospital 6 times in the last 12 months 25

Focus, transparency, and accountability STEPS to Alignment on our Shared Goals Individual performance goals Department metrics and goals Region metrics and initiatives Essentia System: Strategy Map, BSC metrics and Strategic Initiatives

Integrating all Three: Performance Board, Strategy Map, Strategic Initiatives, Metrics

The environment we face 36

Discussion Questions & Comments