Dignity Health. Keith L. Callahan SVP, Supply & Service Resource Management. March 26, 2014
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1 Dignity Health Keith L. Callahan SVP, Supply & Service Resource Management March 26, 2014
2 Living Dignity Health Mission and Values Mission Delivering compassionate, high quality, affordable health services Serving and advocating for our sisters and brothers who are poor and disenfranchised; and Partnering with others in the community to improve the quality of life. Values Dignity Collaboration Justice Stewardship Excellence 2
3 Vision for the Future State of Dignity Health Our Vision is to be a vibrant, national health care system known for service, chosen for clinical excellence, standing in partnership with patients, employees and physicians to improve the health of all communities served. In order to succeed, Dignity Health must aggressively work to transform local markets into integrated systems of choice that can embody the principles of accountable care, each with the capabilities necessary to manage population health. 3
4 It is not the strongest of the species that survives, nor the most intelligent but rather the one most adaptable to change - Leon C. Meggison The U.S. Economy spends 17.5 cents of every dollar on health care, compared to 8 cents in other countries. Buffet said that s a major competitive disadvantage? - Warren Buffet 4
5 Game-Changer Baby Boomers Joining Medicare Health Care System Entering a Brave New World First Wave of the Silver Tsunami Hits Medicare in 2011 Medicare Enrollment (in Millions) Margin Impact of Potential Payer Mix Shift Typical 300-Bed Hospital 2.2% 1.9% Current Margin Future Margin Margin Impact of Potential Case Mix Shift 1 Typical 300-Bed Hospital 2.2% 0.8% Based on five percentage point reduction in surgical share of inpatient volume. Current Margin Future Margin Source: Centers for Medicare and Medicaid Services; Advisory Board interviews and analysis.
6 If our customers cannot afford to buy our products what would Henry Ford do? Lessons learned from Henry Ford: Innovate he found a way to make his product affordable by standardization 6
7 Our New Name Our Future Supporting our Horizon 2020 Goals Strategic Growth Clinical Integration Perfect Care 7
8 Integrated Growth Arizona 3 sites Cave Creek Dignity Health Ambulatory Centers Dignity Health Acute Care Sun City West CVS/MinuteClinic * SimonMed Imaging JV USPI Surgical JV * * * * Scottsdale Mercy Care Plan Phoenix Children's Hospital Buckeye Phoenix Tempe Chandler Gilbert Planned/In Process *Phoenix Children's Hospital Clinic * U of A Cancer Center * Dignity Health Planned Location 8
9 Dignity Health Affiliate Purchasing Network - OLM, USHW, JVs, and all Affiliates Counts
10 Member Value Differentiated Purchasing Services and Supply Chain Management 3. Evidence-based Supply Chain Performance Management Focus Areas 1. Leveraged Contracting/Pricing 2. Strategic Sourcing National Aggregation Strategies Value Analysis Sourcing to Spec Clinical resource / product utilization integrated comparative databases Capital / Construction Time 10
11 11
12 Shared Clarity Utilize CE Information Device Data Registry Data Claims Data OptumInsight Access to 15 CE studies that are updated every 24 months. SharedClarity funds all studies. Clinical Review Teams (CRT), consisting of member Physicians, help develop and oversee the studies. CE Studies & Benchmark Information No Industry Influence! Utilize Optum/Lewin s CE study experience and resources. 12
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14 Suppliers Working with Us Communication The contracting arm will communicate Dignity Health s participation If you re unsure, please ask Don t Assume Not all Affiliates are created equal Admittedly confusing, hopefully temporary Provide us Value Defensible pricing goes two ways Patience! A little goes a long way!!! 14
15 What s Next? Partnering outside of our comfort zone with for-profit companies who bring value by: #1 #2 #3 15
16 Thank You
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