Building the Accountable Enterprise Through Care Redesign

Transcription

1 Buildin the Accountable Enterprise Throuh Care Redesin

2 The Case for Well-Timed Care Redesin riht care riht time riht settin

3 Buildin the Accountable Enterprise Throuh Care Redesin The health care industry has dabbled at the edes of process improvement for decades. Yet it remains plaued by skyrocketin costs and poor quality rooted in inefficiencies across the care continuum. Misalined incentives are partly to blame. Public and private payers now seek to upend the payment models that have promoted overuse and poor coordination. Rather than rewardin volume, they are movin increasinly toward risk-based contracts that incent efficient service use, lower costs and hiher quality. Incremental improvement initiatives will be insufficient to meet the demands of a value-driven health care marketplace. As payment incentives evolve market by market, provider systems must implement innovative approaches to care delivery to ensure their performance keeps pace. But care redesin cannot be pursued in a vacuum. Both its timin and focus must be tailored to market factors and institution-specific characteristics. Tareted care redesin will take varied forms. Some oranizations will continue to rely most heavily on minimizin costs and variation; others will take aim at unnecessary or inappropriate care rampant within services positioned as most crucial to their strateic plan. Restructurin where care is provided and by whom as well as implementin an infrastructure that promotes wellness and prevention will represent even more proressive redesin initiatives. The necessity for care redesin is not in dispute. An oranization s readiness to pursue specific redesin efforts is another issue entirely. And a lot is at stake. Moves that are out of sync with chanin financial incentives risk both marin and market position. Furthermore, effective care redesin will enhance patient enaement, in turn reducin system leakae, rowin market share and improvin overall performance. In this publication, S2 details 4 cateories of care redesin and examples of potential initiatives for each. We then provide a decision framework that plannin teams can use to uide their approach to care redesin. This includes the institution-specific and market factors that must influence the direction of redesin efforts; scenarios showin how prioritization may vary based on these factors; and a final checklist to uide the process. In the end, provider oranizations will be evaluated on the quality of care they provide with the oal of ensurin that each patient receives the riht care, at the riht time, in the riht settin. They cannot et there without a customized approach to care redesin. Confidential and Proprietary 2012 S2 2

4 Investiate the Variety of Redesin Approaches Effective performance stratey supports and informs provider systems strateic direction. Care redesin then becomes an essential inredient to execute on oals established in the strateic plan. Wisely implemented, it can: Improve outcomes as measured by quality metrics Decrease costs of the encounter and episode and, ultimately, the total cost of care Increase patient enaement and satisfaction Yet, there is no one-size-fits-all approach. Redesin efforts must be shaped to reflect both the value souht (quality over cost) and the execution risk (e, financial, competitive, cultural) involved in one type of redesin project vs another. 3 Confidential and Proprietary 2012 S2

5 Buildin the Accountable Enterprise Throuh Care Redesin Four variations cross the care continuum, influencin the patient encounter from the pre-acute to the post-acute phases. There is fluidity across the 4 redesin elements; some components of the various approaches cross cateories. To some extent, skills built in one lay the foundation for the next, and the impact on the oranization ultimately is cumulative. Even so, reconizin what there is to ain from each unique element will be leadership teams first step in loically selectin initiatives and allocatin resources needed for implementation. Variance and Cost Reduction Improvin operational efficiencies Unnecessary Care Reduction Decreasin avoidable, unproductive and duplicative services Clinical Restructurin Ensurin treatment occurs in the optimal settin with the most appropriate level of provider System Optimization Shiftin focus to upstream, preventive care throuh clinical interation and population health manaement Elements of Care Redesin Value (Quality/Cost) Variance and Cost Reduction Unnecessary Care Reduction Clinical Restructurin System Optimization Execution Risk Confidential and Proprietary 2012 S2 4

6 Elements of Care Redesin Variance and Cost Reduction Health care quality and costs vary widely. Sinificant variance has been well documented in services ranin from dianostic tests to procedures to rehabilitation. Even a cursory look at cost per case or lenth of stay (LOS) benchmarks shows the rane. Public payers have taken aim at this variance as proof of the potential to improve health care value. Individual institutions have also souht to rein in outliers within service lines and across the system. Efforts to curtail costs and variance have underpinned performance initiatives for decades; lare-scale full-time equivalent reductions and neotiation of supply chain costs have dominated the acute care focused aendas of many performance departments. Now, heihtened payment pressure and evolvin risk-based models brin new urency and demand for a more expansive view of these initiatives. Variance and cost reduction are central to remainin competitive and financially sound in any market, reardless of whether that market is still rounded in a feefor-service (FFS) world or on the forefront of new payment models. Data Snapshot: S2 Comparative Database Key Metric (Direct Cost) Lumbar/ Thoracic Fusion MS-DRG 460 Standard Performer Stron Performer Top Performers $20,750 $18,539 $15,899 Examples Supply chain costs: Reneotiate contracts with implant suppliers for total joint cases. Administrative and facility overhead costs: Ensure they alin with softenin inpatient volumes. Turnaround times: Place chemotherapy patients in chairs only once ready for infusion; conduct administrative tasks in a separate area. Emerency department (ED) triae of asthma patients: Partner with pulmonary and ED physicians to ensure use of a standardized clinical pathway for all asthma patients after triae. Staffin and productivity: Taret national benchmarks based on patient acuity, unit of service. Sample Analytics Clinical variation data by provider or disease: Orthopedic sureons costs per case Marin mix: Service line assessment of payment vs averae cost Labor effectiveness/appropriate staffin: Worked hours per patient day in the medical intensive care unit (ICU) Supply cost analysis: Efficiency pricin and supply standardization data for trauma supplies Cervical Fusion MS-DRG 473 $10,142 $8,565 $7,754 Potential Hurdles Inadequate data capabilities Existin vendor relationships Physician resistance Lack of sustainable cost-cuttin processes Safeuardin quality while cuttin cost Note: Standard Performer indicates the median hospital in the S2 Comparative Database; Stron Performer indicates the hospital at the 75th percentile; Top Performers are those in the 90th percentile or hiher. MS-DRG = Medicare severity dianosis-related roup. 5 Confidential and Proprietary 2012 S2

7 Buildin the Accountable Enterprise Throuh Care Redesin Elements of Care Redesin Unnecessary Care Reduction Breakdowns in current care delivery often result in unnecessary care. This includes clear-cut overutilization, such as duplicative imain studies that occur when providers in separate care sites fail to coordinate their orders. However, costly readmissions resultin from poor dischare plannin, inadequate primary care physician (PCP) follow-up and limited health literacy also are a prime focus of this redesin cateory. Postdischare clinics and nurse naviators can help limit readmissions. But provider systems will be challened to move beyond these Band-Aid solutions. Penalties levied by private and public payers, combined with the rapid rise of tiered networks, will drive providers to more aressively and innovatively taret unnecessary care. Data Snapshot: S2 Comparative Database Key Metric (Readmission Index*) Standard Performer Top Performers Stretch Goal Total 30-Day CHF Diabetes Examples Early advanced imain for low back pain: Implement clinical decision support tools to ensure compliance with medical necessity uidelines. Daily blood draws on inpatients: Move toward phlebotomy based on clinical necessity, rather than routine daily testin. Prostate cancer screenins: Provide physicians and elderly male patients with educational material that facilitates discussions about the lack of evidence to support screenin. Conestive heart failure (CHF) readmissions: Combine strateies focused on dischare plannin and transitional follow-up care for reatest impact. Sample Analytics Evidence-based clinical criteria/utilization review: Compliance with inpatient admission criteria for cardiac ICU Mandated quality analysis: HAC rate per 1,000 oncoloy patients Dianostic appropriateness: Percentae of patients treated conservatively prior to MRI for low back pain Readmission analysis: Readmission rate for pneumonia patients dischared to SNFs Potential Hurdles Weak relationships with PAC providers Slow development and diffusion of clinical effectiveness research Lack of physician leadership to evaluate utilization across the System of CARE Access issues Poor care coordination amon providers *The Readmission Index is risk adjusted and calculated as actual rate/expected rate. Expected rates are adjusted for ae, comorbidities and primary dianosis to ensure adequate comparisons based on variable patient populations. CARE = Clinical Alinment and Resource Effectiveness; HAC = hospital-acquired condition; MRI = manetic resonance imain; PAC = post-acute care; SNF = skilled nursin facility. Confidential and Proprietary 2012 S2 6

8 Elements of Care Redesin Clinical Restructurin The who and where of care delivery are major cost drivers. Numerous trends have hamstrun efforts to wrin cost out of the system, such as soarin physician-to-physician referral rates, failure to deploy midlevel providers widely enouh and even the industry s overreliance on the acute care settin. Moves into bundled payment (either for acute care only or for a full episode), as well as steps toward manain a patient population s total cost of care, will require newfound enery to reverse these trends. Only by restructurin the clinical experience will provider systems be able to substantially cut costs without compromisin patient outcomes. Data Snapshot: AAPA Census Examples Transfer plans: Identify patients on admission day 1 or 2 and initiate necessary dischare processes to ensure timely step-down from acute care to SNF beds. Pharmacist utilization: Capitalize on the full extent of their licensure by charin them with manain the medications of patients with chronic conditions. Early palliative care assessment: Establish protocols for palliative consults across the inpatient settin. Observation units: Devise a process to appropriately triae patients with chest pain and other hemodynamically stable cardiac conditions to an observation unit rather than an inpatient admission. Most Common Practice Settin for Physician Assistants (2010) Sinle-specialty physician 26% roup practice Solo physician practice 15% Hospital IP unit* 14% Hospital ED 14% Multispecialty physician 12% roup practice Hospital OP unit 11% Sample Analytics Site of care cost and payment data: Marin analysis for CHF patients in observation vs inpatient status Low-acuity access modelin: Assessment of patient options for care of musculoskeletal conditions after hours/durin weekends Rate of primary care referrals: Referrals to dermatoloy for simple skin conditions, such as acne Hospital OR 8% *Not includin ICU/critical care unit. Source: AAPA Annual Physician Assistant Census Report. AAPA = American Academy of Physician Assistants; IP = inpatient; OP = outpatient; OR = operatin room. Potential Hurdles Current reulations and benefit coverae limits (e, a 3-day acute stay required within 30 days as a prerequisite for SNF Medicare coverae) Lack of human capital plannin and staff education to redirect scarce staff resources to diverse care sites Capital investment to leverae technoloy across the system Physician resistance Limited access to PCPs/post-acute care Insufficient professional infrastructure 7 Confidential and Proprietary 2012 S2

9 Buildin the Accountable Enterprise Throuh Care Redesin Elements of Care Redesin System Optimization Many industry initiatives today aim to push provider systems to assume much broader accountability for the overall health of their communities. Greater emphasis on prevention, as well as work to build an enablin infrastructure, are core elements of system optimization initiatives. Ensurin upstream care and education needed to curtail chronic diseases, systematically trackin utilization and outcomes, and improvin care coordination across providers and settins all constitute valuable work at this level. Effectively executin on these components will be essential for oranizations already assumin lobal risk for their patient populations throuh shared savins prorams (e, ACOs) and fully capitated contracts. Even in markets where payment models are not quickly evolvin toward risk-based contracts, providers must bein to understand this care redesin element and be positioned to move forward as their specific market and institutional dynamics allow. Data Snapshot: S2 Comparative Database Key Metric Potentially Avoidable Admissions for COPD Standard Performer Top Performers Stretch Goal 33% 21% 15% Examples Disease-based medical homes: Ensure hih-risk, chronic patients receive coordinated care throuh a centralized provider. Patient enaement strateies: Deploy video-based telemonitorin for homebound patients as a new avenue for face-to-face encounters. Disease reistries: Create and mine reistries for patients with hih-volume conditions or procedures, such as those receivin artificial joints. Screenin rates: Prompt patient compliance with physician recommendations for timely colorectal cancer screenins throuh use of innovative information technoloy (IT). Sample Analytics Patient and population health analytics: Averae annual cost of care for patients with diabetes Personalized health plans: Total monthly system utilization for patients with hypertension PAC performance metrics: Rates of readmissions and repeat ED visits from local SNFs for patients with CHF Growth metrics: Outpatient rowth projections for patients with COPD Potential Hurdles Lain incentives for preventive care and care coordination Sinificant capital investment for a coordinated shared savins infrastructure Inadequate relationships with PAC providers Insufficient IT architecture ACO = accountable care oranization; COPD = chronic obstructive pulmonary disease. Confidential and Proprietary 2012 S2 8

10 View Customized Care Redesin as a Tool for Value- Driven Stratey Care redesin initiatives possess the power to reatly elevate Value-Driven Stratey. They provide answers to many of the more nuanced questions that dominate this type of strateic thinkin. Often Heard Value-Driven Thinkin How do I drive sustainable marin? Let s be an ACO! Readmits are revenue. Worry later. A new technoloy? Buy! How can I backfill as readmissions drop? How do we perform? What is our product? What is our value proposition? How do we survive new payment models? A deliberate approach to care redesin positions an oranization to develop the competencies needed to address current priorities and to transition to new ones as they evolve. This beins with a few uidin principles: Anticipate chane. Care redesin will take different forms within and across markets. Careful selection and development of initiatives alined with future market demands and financial incentives ensures they will not unnecessarily compromise financial marins today. Invest wisely. Prudently allocate resources for the technoloies, infrastructure enhancements, partnerships and human capital needed to implement care redesin. Allocation decisions must be based on projects likely financial return, community benefit and alinment with the overall strateic plan. Focus on quality. Value creation is inexorably tied to quality and outcomes. Data transparency within a market will expand community and payer knowlede of comparative performance and care choices. Build the best team. Consider the full rane of staff members required for successful selection and implementation of each redesin initiative: strateic plannin and quality personnel, facility planners, clinical leadership, and financial planners. Senior leadership support and clear communication of initiatives oals will be crucial. Reward innovation. Reconize that cultural chane is difficult, and allow for failure alon the way to truly transform care delivery. 9 Confidential and Proprietary 2012 S2

11 Buildin the Accountable Enterprise Throuh Care Redesin Pinpoint Performance Opportunities via Data and 2-Part Decision Framework To establish realistic oals in the strateic plan, robust performance data must first shed liht on the current value and comparative rankin of the oranization s clinical services. Without this, an oranization may launch initiatives that ultimately have limited impact on total value or that compromise marins essential for current financial sustainability. Mine databases to identify service lines, diseases and sites of care that: Provide neative or low marin Are actively movin from the inpatient to the outpatient settin Represent hih-volume conditions Offer reatest performance opportunity Represent revenue at risk Show hih variability across the hospital or clinical enterprise Sample Data How do my costs compare to benchmarks? Your Standard Top Performance Performer Performer General Medicine Variable Direct Cost per Case What is my eneral medicine marin risk? $10,000 CM at Risk $8,000 $5,000 $4,000 $3,000 Q3 FY2009 Q4 FY2009 Q1 FY2010 Q2 FY2010 Q3 FY2010 $6,000 $4,000 $2,000 $0 General Medicine Medicare CM Direct Cost per Case How do my service line contribution marins vary? Service Line % of Volume Contribution Marin/Case Cardiovascular 21% $4,580 General Medicine 42% $2,298 General Surery 12% $6,010 Orthopedics 8% $4,002 How are my eneral medicine conditions trendin? Service Line Value Index Cancer CV General Medicine Neuro Ortho General Surery Condition S2 Value Index TM Trendin COPD 65.4 Diabetes 36.6 Pneumonia 45.3 This internal, data-driven approach is one part of the process. In the end, care redesin will not succeed unless initiatives are precisely tailored to institutional and market specifications. The followin paes present a 2-part decision framework to enable oranizations to prioritize initiatives based on these factors. CM = contribution marin. Confidential and Proprietary 2012 S2 10

12 Decision Framework: Institution-Specific Factors Numerous institution-specific factors influence the optimal direction and likelihood of success in advancin care redesin. Marin Manaement Without in-depth understandin of hih- vs low-marin services, redesin efforts could have unintended financial consequences. Do current marins indicate substantial opportunity for further overhead and/or direct cost reductions? Is there a stron cost-accountin system to enable leaders to more precisely taret enterprise-wide cost reduction opportunities and assess potential marin impact? To what extent are current marins at risk due to penalties or loomin payment cuts? What financial exposure would the institution face if it was paid only at Medicare rates for all contracts? System of CARE Stratey Many redesin initiatives demand aility in naviatin and assessin performance across both owned and independent sites that span the care continuum. Have inpatient volumes permanently softened to the extent that substantial unused capacity is possible? Is there adequate capacity beyond the acute care settin to pursue innovative care redesin? Is there a process in place to pursue strateic partnerships to fill aps? How could care redesin efforts support ambulatory stratey? Is physician alinment stron enouh to optimize community-based and post-acute care? Do metrics exist to track performance beyond the inpatient settin? Sample System of CARE Gap Analysis Community-Based Care Acute Care Hospital Acuity Home Community/ Lifestyle Center Urent Care Center Physician Offices Ambulatory Surical Center Post- Acute Care Skilled Nursin Facility Home Health Ownership Partnership Missin 11 Confidential and Proprietary 2012 S2

13 Buildin the Accountable Enterprise Throuh Care Redesin Clinical Leadership A broad set of skills positions both clinicians at the point of care as well as those on the executive team to envision and deliver new approaches to care delivery. Is there reconition of the competencies needed to care for an ain, medically complex population? Does the institution have the riht skill mix and competencies in the community and acute care settins? Do leaders have the skills and resources necessary to champion care redesin initiatives for this population? Is there a culture of quality within the institution? Innovation Competency Oranizations already versed in traditional performance improvement and chane manaement have a stron foundation from which they can effectively accelerate redesin initiatives. Does the institution currently focus solely on incremental innovations usin Lean or Six Sima concepts with the oal of optimizin processes? Or has it already taken steps toward disruptive innovation that could fundamentally transform care delivery? Does the oranization employ a chief innovation officer? Do leaders have the experience and willinness to rethink financial incentives to better alin them as needed to support new care delivery processes? Technoloy Assets Future success depends on provider systems ability to anticipate emerin technoloies and strateically invest in those that will improve quality and differentiate services. Does the institution use a formal process to ensure adoption of technoloies needed to remain competitive in areas essential for smart rowth? Are hih-cost clinical technoloies vetted aainst future, disease-specific demand and impact on cost of care? Is there reconition of the equal importance of technoloies needed for new care approaches: those desined to enae patients, share medical records, enhance provider communications and track performance? Confidential and Proprietary 2012 S2 12

14 Decision Framework: Market Factors Beyond institution-specific factors, shifts in the competitive landscape and the pace of moves toward new payment models also must be considered when prioritizin care redesin initiatives. Comparative Performance Routinely benchmarkin performance aainst that of competitors is essential with the heihtened use of pay-for-performance incentives and tiered networks. Does the institution have an effective system for trackin such performance metrics as cost per case, lenth of stay, readmissions and patient satisfaction? Does the institution s current performance qualify it as top tier in any commercial payer networks that may already exist in its market? Is it clear where performance outpaces or las that of competitors for key services? Sample Comparative Performance Rankin Percentae Difference From Market Averae Hospital PQI LOS Index WAMAC 30-Day Readmits Hospital A 6.2% 3.5% 23.4% 2.9% Hospital B 13.4% 10.2% 33.7% 5.0% Hospital C 14.1% 12.2% 24.4% 1.0% Hospital D 6.2% 10.7% 9.6% 2.8% Community- Based Care Acute Care Post-Acute Care Smart Growth Understandin historic and future trends in service demand enables oranizations to identify their best rowth opportunities and then initiate plans to ensure they can deliver the value to capture that rowth. Is market share in the oranization s primary and secondary service areas locked in or shiftin in particular services or care sites? Is patient out-miration impacted by patient satisfaction/enaement? Do opportunities exist in the tertiary market to enable a bier share of total care, thus spreadin any risk exposure in new payment contracts over a broader population? Which strateic partners are needed to respond to rowth trajectories? PQI = Prevention Quality Indicator; WAMAC = wae-adjusted, mix-adjusted cost. 13 Confidential and Proprietary 2012 S2

15 Buildin the Accountable Enterprise Throuh Care Redesin Payment Evolution The local market s movement toward risk-based contracts also must be a key decision factor. To some extent, the varied elements of care redesin alin with specific payment models. Over the course of the decade, business increasinly will be tied to metrics related to the total cost of care, outcomes and the patient experience. Increasinly innovative care redesin will be imperative to move the needle in each area. Can the oranization project the local market s readiness to take on risk? Does the institution s current approach to care delivery and the value it delivers position it to thrive under new payment models? Alinment of Payment Evolution With Care Redesin Predominant Payment Models Fee for Service Payment Penalties, Manaed Care Bundled Payment (IP or Full Episode) Full Risk for Total Cost of Care Execution Risk Variance and Cost Reduction Unnecessary Care Reduction Clinical Restructurin System Optimization Care Redesin Elements Ultimately, there is no definitive formula for selectin an ideal care redesin approach. And the care redesin elements are not mutually exclusive. Oranizations likely will need to simultaneously pilot varied redesin approaches based on the strateic oals of specific services or service lines. At the same time, an element of care redesin best suited to today s landscape may not be the riht fit for the future. Both short- and lon-term redesin options should be considered. The scenarios on the followin pae suest how such decisions could play out. Confidential and Proprietary 2012 S2 14

16 Consider Varied Scenarios to Guide Short-term vs Lon-term Care Redesin Scenario 1 Strateic oal: Become the most efficient orthopedics provider in the reion Institution-Specific Factors Marin: $2,579 per case at risk if all cases were paid at Medicare rates System of CARE: Adequate IP capacity; limited community-based, post-acute sites and partners Clinical Leadership: Limited Innovation: Lain Technoloy: Focused on clinical advances Market Factors Comparative Performance: Averae Growth: Stron IP future demand Payment: Mostly FFS; major payers explorin bundled payment Variance and Cost Reduction Continued cost viilance will be necessary to maintain marins at droppin payment rates. Reducin LOS could free up capacity for additional cases needed to offset marin pressure. Potential Initiatives Identify bottlenecks to timely OR schedulin. Create a joint camp to standardize therapy protocols. Short-term Redesin Focus Lon-term Redesin Focus TJR = total joint replacement. Clinical Restructurin Newfound competency will be essential for securin an upside in emerin episodebased payment models. Potential Initiatives Devise pathways that direct post-op TJR patients directly to OP therapy rather than SNFs. Bein to select hih-performin post-acute partners. 15 Confidential and Proprietary 2012 S2

17 Buildin the Accountable Enterprise Throuh Care Redesin Scenario 2 Strateic oal: Increase market share of outpatient cardiovascular (CV) volumes Institution-Specific Factors Marin: $2,015 per medical case at risk if all cases were paid at Medicare rates; $6,758 per surical case at risk System of CARE: Constrained IP capacity; limited community-based, post-acute sites and partners Clinical Leadership: Short supply of CV specialists Innovation: Lain Technoloy: Limited IT infrastructure Market Factors Comparative Performance: Averae Growth: Weak IP future demand Payment: Emerin bundled payment pilots for implantable cardioverter defibrillator (ICD) implantation; rapid market acceleration toward full-risk contracts Unnecessary Care Reduction Heihtened emphasis of the CMS National Coverae Determination for ICDs will be necessary to limit payment risk. Potential Initiative Develop an education proram for referrin physicians to reduce uideline discordance. Short-term Redesin Focus Lon-term Redesin Focus System Optimization Success under total cost of care contracts requires aressive efforts to manae chronic disease and to improve patient enaement in the onoin care required after device implantation. Potential Initiatives Implement an OP heart failure clinic staffed by midlevel providers to better manae chronic disease. Invest in remote monitorin technoloy to optimize homebased care. CMS = Centers for Medicare & Medicaid Services. Confidential and Proprietary 2012 S2 16

18 Prepare for Care Redesin Based on results from the institution and market decision framework on the precedin paes, and conruent with the oranization s strateic plan, senior leaders should be able to effectively determine the focus of care redesin and prioritize related performance initiatives. Some comprehensive redesin efforts may require a multiyear commitment. Leadership can use the followin checklist to ensure effective performance stratey formulation. P P P Institutional Assessment Identify diseases and/or service lines with: subpar performance, hih cost or quality variability, low marins, and/or hih levels of payment at risk from penalties. Use the S2 Value Index to easily enerate the necessary reports. Map your System of CARE, both owned sites as well as areas maintained throuh strateic partnerships, to spot aps in care delivery that could hamstrin future care redesin. Reister for the S2U course, Strateic Plannin 2.0: Value-Driven Stratey, to learn how to aument traditional strateic plannin by layerin in a value-driven imperative and new data. Market Assessment Benchmark performance aainst that of competitors. Use the S2 National Performance Rankin and Market Performance Rankin tools. Gather historical census data and match aainst projected service demand to determine future capacity. Use S2 s Impact of Chane demand forecast. Anticipate how quickly your market may move toward new payment models. Refer to the S2 publication, Preparin for Payment Evolution: Risk Reward Readiness, for more information. Strateic Response Taret efforts to specific services and/or service lines that are the focus of oals established in the strateic plan. Identify the element(s) of care redesin that best alins with your current competencies and short-term market dynamics. Plan the loical proression of care redesin elements based on expected market evolution. Minimize execution risk. Pilot small-scale performance initiatives, perhaps for a sinle disease. Consider your employees as an effective laboratory for care delivery innovation. Address potential hurdles at the outset: physician resistance, lack of sustainable process for chane manaement, questionable leadership support, insufficient IT, weak performance metrics. Note: Access to S2 tools listed above may vary based on your relationship with S2. 17 Confidential and Proprietary 2012 S2

19 For additional intellience on care redesin or related strateic analytics, call or click on the S2 Analytics tab at members.s2.com.

20 A Product of the S2 Center for Performance Stratey Anticipate the Impact of Chane S2 s analytics-based health care expertise helps hospitals and health systems interate, prioritize and drive rowth and performance across the continuum of care. Over 1,200 oranizations around the world rely on S2 s analytics, intellience, consultin and educational services Old Orchard Road Skokie, Illinois S2.com 0512-S2-364