Bellin Health Lessons from a Successful Medicare Pioneer ACO March 31, 2016 Table of Contents I. We Are Doing Some Good Things Rating Agency Actions II. Who We Are Bellin Health s Platform Organizational Structure Market and Scorecard Measures II. Lessons From A Top Performing Medicare Pioneer ACO 2 1
Strategic Initiatives We Are Doing Some Good Things Bellin Health s Ratings Actions 3 Continued Very Strong Financial Performance Operating performance measures continue to strengthen in 2014 Results are ahead of budget for first fiscal quarter of fiscal 2015. Liquidity has also improved due to positive performance and capital structure and debt service ratios are very strong. 4 2
Bellin Started at BBB+ 6/04 Bellin Upgraded to A 6/06 Bellin Upgraded to A 10/10 Bellin Affirmed A 4/14 Bellin Upgraded to A+ 3/15 Data as of Dec. 31, 2014. Standard & Poor s 2015. 5 Initial Rating Assigned BBB+ Stable 9/01 Rating Affirmed 11/03 Rating Bellin Affirmed Upgraded 8/05 to A3 4/06 Rating Affirmed 10/08 Outlook Bellin Revised Upgraded to A3 to A2 Positive 12/11 6/10 Affirmed A2 Rating 3/13 Affirmed A2 Rating 6/14 Affirmed A2 Rating 3/15 Source: Moody s 6 3
Strategic Initiatives Who We Are Bellin Health s Platform 7 8 4
Our Corporate Structure Bellin Health Systems, Inc. 501(c)(3) Lake Michigan Health Care Services, Inc. 501(c)(3) Bellin College, Inc. 501(c)(3) Bellin Foundation, Inc. 501(c)(3) Bellin Psychiatric Center, Inc. 501(c)(3) Bellin Memorial Hospital, Inc. 501(c)(3) AboutHealth, LLC Taxable Bel-Regional Home Medical, Inc.. Taxable Oconto Hospital and Medical Center, Inc. 501(c)(3) Bellin-ThedaCare Healthcare Partners, Inc. Taxable D1 Sports Training of Green Bay, LLC Taxable Unity Limited Partnership 501(c)(3) Bellin Orthopedic Surgery Center, LLC Taxable Obligated Group Member NorthReach Healthcare, LLC 501(c)(3) Bellin Health Partners, Ltd. Taxable 9 Who We Are Bellin Health provides quality healthcare to the residents of a 12-county area covering northeastern Wisconsin and the Upper Peninsula of Michigan. Strong and long-standing relationships with physicians 73% of our revenue is derived from outpatient services BELLIN MEMORIAL HOSPITAL 71-bed acute care multi-specialty hospital; known as the region s heart center, it was the first hospital in the area to offer a comprehensive heart program BELLIN HEALTH OCONTO HOSPITAL 10-bed critical access hospital BELLIN PSYCHIATRIC CENTER 65-bed freestanding hospital; the Center s team of professionals treats children, adolescents, and adults with emotional and/or addictive disorders BELLIN MEDICAL GROUP Employs 151 physicians in 38 locations Continued increases in visits NORTHREACH HEALTHCARE 14 physicians and 14 midlevel providers BELLIN HEALTH FOUNDATION $5.2 million in assets as of September 30, 2015 for the benefit of the organization BELLIN COLLEGE Offers a four-year degree for students pursuing a Bachelor of Science in Nursing, Master of Science in Nursing, and a Bachelor of Science in Radiologic Technology Medical College of Wisconsin now on Bellin College Campus ABOUTHEALTH Statewide network involving six other healthcare organizations: Aspirus, Aurora Health Care, Gundersen Health System, Marshfield Clinic, ProHealth Care, ThedaCare, and University of Wisconsin Hospital & Clinics developed to build upon and advance the clinical quality, efficiency, and customer appreciation BELLIN-THEDACARE HEALTHCARE PARTNERS Pioneer Accountable Care Organization ( ACO ) Model comprised of the Hospital, ThedaCare, and approximately 700 independent and employed physicians, providing services throughout Northeastern Wisconsin and the Upper Peninsula of Michigan BELLIN HEALTH PARTNERS Locally, clinically integrated network Participating in Next Generation Medical ACO 10 5
Our Scorecards Follow and Measure Our Strategies Bellin has a System Scorecard that is driven by individual Brand Scorecards to define and measure progress toward achieving our Strategies. Focus of measures involves primary care growth, physician and staff engagement, improving the health of the population, including clinical quality which impacts financial performance and financial measures. The System Scorecard drills down to the department level to show clear accountability. 11 Utilization Data 12 6
Strategic Initiatives Lessons from a Top Performing Medicare ACO in the Country 13 Bellin-ThedaCare Healthcare Partners SYSTEM RESOURCES 715 Physicians 57 Primary Care Locations 3 Tertiary Hospitals 4 Critical Access Hospitals 1 Psychiatric Hospital with full-service Behavioral Health Clinic Hospice & Palliative Care Services Skilled Nursing Facilities (1 systemowned) POPULATION SEGMENTS Employees, Children & Families 540,000 people Medicare160,000 people Medicaid 180,000 people Uninsured 120,000 people Total Population 1,000,000 people 14 7
Bellin Health-ThedaCare Relationship Characteristics Contiguous markets with similar demographics and economic base Early adopters of process improvement theory Similar governance Common competitors Operated a joint venture, provider-based health plan for 10 years (1995-2005) Share an enterprise-wide medical record based on Epic software In 2006 - established a clinically integrated delivery system, know today as Bellin-ThedaCare Healthcare Partners 15 Pioneer BTHP 2 Hospital Systems 740 Physicians 1.2 Million Population 20k Pioneer Pts. 16 8
Pioneer Recap 17 Bellin-ThedaCare Pioneer ACO Attribution 20,000 Medicare fee-for-service beneficiaries Primarily PCP attribution Financial Accountability Medicare Parts A&B (not Part D) ALL claim files for our population Baseline expenditure vs. National Baseline expenditure Quality Accountability 33 quality metrics National comparison 18 9
The Math Summary Generate savings/losses CMS Quality Score BTHP 19 4 Domains of Quality Pioneer ACO must report on 33 Metrics Overall score determined the % of Shared Saving returned to the ACO Domain Source # indicators Patient/ Caregiver Experience CG-CAHPS 6 1 # pts Weighting 12 2 25% Care Coordination/ Patient Safety Claims EHR reporting EMR 3 1 2 6 4 4 25% Preventive Health At Risk Population EMR 8 16 25% EMR 12 14 25% 20 10
BTHP Pioneer Results 2012 $11,500 $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 Baseline Year 1 Year 2 21 BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 Baseline Year 1 Year 2 22 11
BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 $9,500 $9,000 BTHP $8,500 $8,000 $7,500 Baseline Year 1 Year 2 23 BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 $9,500 $9,000 BTHP $8,500 Expected Target $8,000 $7,500 Baseline Year 1 Year 2 24 12
BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 $9,500 $9,000 BTHP $8,500 Expected Target $8,000 $7,500 Baseline Year 1 Year 2 25 BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 Savings: $389 per bene $9,500 $9,000 BTHP $8,500 $8,000 Expected Target Savings $7,500 Baseline Year 1 Year 2 26 13
BTHP Pioneer Results 2012 $11,500 National Trend $11,000 $10,500 $10,000 $9,500 Savings: $389 per bene Quality: 100% Reported $9,000 BTHP $8,500 $8,000 $7,500 Expected Target Savings Baseline Year 1 Year 2 27 Pioneer 2012-2014 $11,500 $11,000 $10,914 (PY1) National Trend $10,500 $10,731 (PY1) $10,990 (PY2) $10,819 (PY3) $10,000 $9,500 $9,000 $8,500 $8,583 (PY1) BTHP $8,419 (PY1) $8,451 (PY2) $8,521 (PY3) $8,000 $8,030 (PY1) $8,274 (PY2) $8,355 (PY3) $7,500 Baseline Year 1 Year 2 Year 3 2012 2013 2014 28 14
2012-14 Pioneer Summary Totals Investment Return 2012 $773,000 $5,136,000 2013 $834,260 $2,268,660 2014 $816,000 $2,180,463 Total $2,421,668 $9,585,123 29 Pioneer s Average Cost Per Beneficiary 16,800 15,800 14,800 13,800 12,800 11,800 10,800 9,800 8,800 Medicare Pioneer ACO's Average Annual Expenditure Per Aligned Beneficiary 7,800 2012 2013 2014 Allina Health Banner Health Network Bellin ThedaCare Healthcare Partners Brown & Toland Physicians Fairview Health Services Heritage California ACO Monarch Healthcare Mount Auborn Cambridge Independent Practice Association Park Nicollet Health Services Steward Healthcare Network Atrius Health Beacon Health Beth Israel Deconess Care Organization Dartmouth Hitchcock ACO Franciscan Alliance Michigan Pioneer ACO Montefiore ACO OSF Healthcare System Partners HealthCare Trinity Pioneer ACO 30 15
Pioneer s Quality Results 96.00% 94.00% 92.00% 90.00% 88.00% 86.00% 84.00% 82.00% 80.00% 78.00% 76.00% 74.00% 72.00% 70.00% 68.00% Medicare Pioneer ACO's Overall Quality Score 2013 2014 Allina Health Banner Health Network Bellin ThedaCare Healthcare Partners Brown & Toland Physicians Fairview Health Services Heritage California ACO Monarch Healthcare Mount Auborn Cambridge Independent Practice Association Park Nicollet Health Services Steward Healthcare Network Atrius Health Beacon Health Beth Israel Deconess Care Organization Dartmouth Hitchcock ACO Franciscan Alliance Michigan Pioneer ACO Montefiore ACO OSF Healthcare System Partners HealthCare Trinity Pioneer ACO 31 Pioneer Quality Results 32 16
Quality Recognition at National Headlines 33 34 17
35 Pioneer Defining Which Projects to Target by Creating a Driver Diagram 36 18
Pioneer Defining Which Projects to Target by Creating a Driver Diagram (closer look) 37 Pioneer Examining a Subset of the Pioneer Population Defined criteria to subdivide the Pioneer population Broke Pioneer population into 4 subsets based on spend and chronic diseases Purpose To identify how the subsets varied from one another To identify how to best manage the health and experience for each subset To identify the largest areas for opportunity to make improvements for the population 38 19
Pioneer Strategy Strategy #1: Primary Care Strategy 100% of our Pioneer population 1. Leverage our existing and Primary Care system 2. Medicare Annual Wellness visit 3. Pioneer metrics 4. Patients with chronic conditions are well managed and in control Strategy #2: Super User Strategy 3% who spend 30% of the costs 1. Predictive modeling 2. Identify barriers (physical, psychosocial, cultural) 3. Care coordination 39 Pioneer Success Factors 1) Continuation of trend 2) Rigorous systems of improvement 3) New initiatives spurred by financial construct 4) Leveraged primary care and common EMR 5) Spread Risk 6) Hearts and Minds 40 20
Lessons Learned 1) Population health big endeavor 2) Pioneer alone is not enough value-based care 3) Claims based attribution is not accurate enough 4) Financial construct devils in the details 5) Fee for service is deeply engrained 6) Quality hazards everywhere metrics, specs, measurement, reporting 41 Steps to improve 1) Move away from FFS - Total cost of care 2) Cost accounting 3) Attribution attestation, panels 4) Reward improvement and achievement 5) Better data 6) Standardize quality platform 7) Patient incentives 8) Get out of the way, let the market work 42 21
Manage Populations to Achieve the Triple Aim Driver Diagram 43 Future Direction 1) >50% revenue in value based contracts 2) Participating in CMMI Next Generation ACO 3) Payment to front line aligned with goals 4) Data to the point of care 5) Redesign of care systems around the patient 6) Shared responsibility patient, provider, payer 7) Partnership across community 44 22