Common Understandings Update & Next Steps for Strategic Alliance

1. Common UnderstandingsUpdate & Next Stepsfor Strategic Alliance Presentation to MAPS Board of Directors March 1, 2017 Confidential

2. Board Strategic Retreat December 2015 • Partnership Goals • Gain administrative/operational efficiencies • Strengthen relationships between individuals and their care teams to foster safe care • Desired Partner Characteristics • Not for profit alignment • Collaborative • Long term interest in strengthening relationships between individuals and their care teams to foster safe care • Ability to build trust and maintain inclusive collaboration through sensitivity to real and perceived biases or conflicts of interest

3. Board Strategic Retreat December 2015 Deal Breakers • Safe Care Everywhere cannot get lost • Safety remains a priority • Must maintain a continuum focus • No perceived influence by one provider type or organization • Need continued vitality of leadership engagement

4. Common Understandings - Updates Since Nov. 30th MAPS Board meeting Vision for a durable alliance: UNCHANGED • Stratis Health and MAPS share a common vision for safe care everywhere and have a mutual interest in elevating the voice of patients in support of the vision for safer care • The organizations will strive for seamless devotion and extended capacity to safe care everywhere • The organizations will maintain and deepen community leadership, and streamline operational and administrative activities

5. Common Understandings, continued • Actions Taken: • Adding an “Alliance Agreement” which will be a more formal, legal document implementing the common understandings. This will need to be negotiated and approved before the effective date. This becomes one of several “Closing Conditions”

6. Common Understandings, continued Governance Principles: • The Parent/Subsidiary relationship is not intended to result in either organization having the power of decision-making over the other • The MAPS board will continue to emphasize leadership engagement in its strategic planning and implementation: • MAPS will plan and implement its annual budget, and carry its own assets and liabilities, but will be part of a consolidated financial statement of Stratis Health. • The MAPS board will hire, supervise and evaluate the performance of its executive • MAPS board will propose its bylaws, governance policies, and procedures. • MAPS Board does not have authority to change its articles or bylaws as related to Stratis

7. Common Understandings, continued Governance Agreement • Clarifies that board members for both boards will form a joint committee to consider how to leverage the strengths of both boards…

8. Common Understandings, continued Finances • Key financial assumptions is that MAPS’ membership contributions will continue to support MAPS operations during at least the first two years of the parent/subsidiary relationship. • Stratis Health, as a founding partner of MAPS, is committed to maintaining its current financial commitment of $20,000 per year to MAPS for fiscal year 2017 and 2018, Clarify that no cash exchanged as a term of the Alliance Agreement • MAPS will maintain insurance (either it’s own or through Stratis)

9. Common Understandings, continued • Next Steps • Add Completion Date for “Alliance Agreement” of August 1. • Directs both MAPS and Stratis Health to amend charter documents to accomplish the items in this agreement.

10. Common Understandings, continued Adds several clauses: • Closing Conditions • Parties will negotiate and approve an “Alliance Agreement” consistent with the terms of the common understandings • Satisfactory results of due diligence by Stratis & MAPS • Finalization of documents, including amendments, charter documents, etc. by Stratis Health and MAPS as contemplated by these common understandings • Completion of any other actions Stratis Health would like MAPS to take prior to closing, such as • termination of the current MMJSO Agreement, or • evidence that MAPS has obtained adequate insurance contemplated under Section 6, if applicable • Completion of any other actions MAPS would like Stratis Health to take prior to closing

11. Common Understandings, continued • Each party will have responsibility for its own expenses incurred in connection with the transaction • This Common Understandings agreement, and any dispute with respect thereto, shall be governed by the internal laws of the state of Minnesota • The existence and terms of this Common Understandings agreement are subject to the mutual confidentiality agreement executed by the parties on August 23, 2016.

12. Stratis Health Jan. 27 Board Update Proposed basically 3 changes to the Common Understandings document dated Jan, 24th: • Added Definitions • Financial expectations: • Change dates to reflect Aug. 1 effective date. MAPS to use reserves to cover operating expenses in 2018 & 19 (vs. 2017 & 18) • Requirement to develop a reserve policy to cover loses into the future • “Reserve Powers” in the areas of financial oversight & structure

13. Stratis Health Jan. 27 Board Update Sec. 9.c.i.: In the event that MAPS membership contributions wane in calendar year 2017 or 2018, the MAPS board will draw upon its organizational reserves sufficient to subsidize MAPS operating expenses in MAPS fiscal years 20172018and 20182019in the event of an operating loss.  MAPS agrees to develop a Reserves Policy and to maintain sufficient reserves to cover operating losses.  Sec. 10. Closing Conditions: The parties will have negotiated and approved an Alliance Agreement, with the appropriate reserve powers delineated that ensure the parent has appropriate structural and financial oversight, and which is consistent with the terms of these Common Understandings, which will be effective on the effective date.

14. Guidance to Governance & Joint Committee • Financial considerations: • Shift of timing “MAPS will draw on reserves sufficient to subsidize operating expenses in 2018 & 2019. • Ongoing reserves policy going beyond those initial years. • Reserve Powers: • Considerations for financial oversight • Considerations for structural oversight

15. Strategic Alliance Expenses summary • MAP for Nonprofits • Nov. 2015 – January 2017 • $15,000 • Nilan Johnson Lewis • Dec. 2016 – January 2017 • $4, 368 • Current MAPS Reserves = $325,000 • Regular, budgeted expenses = $16,000/mo

16. Resolutions of the Board of Directors • Minnesota Alliance for Patient Safety (“MAPS”) hereby resolves that the Common Understandings agreement between MAPS and Stratis Health dated January 24, 2017 is hereby approved. • Further, The Alliance Agreement and changes to the MAPS bylaws and articles of incorporation will come before the board for review and approval prior to finalizing any transactions • Further, MAPS resolves that Marie Dotseth, Executive Director, is hereby directed and empowered to take steps consistent with and necessary for achievement of the understandings set forth in the Agreement.

17. Next Steps and Considerations • See hand out for proposed timeline • Need to manage expenses and duration • Additional considerations?

18. Joint boards task force/committee • From Common Understandings: • Board members of both boards will form a joint board committee to consider how to leverage the strengths of the two boards and breadth of expertise and influence present among board members. • Draft Purpose: To develop a shared understanding of the process and timing for each organization to accomplish the exchange of board members, build relationships, foster learning and sharing between Stratis Health and MAPS boards of directors, and to articulate what “success” of the affiliation means. 

19. Joint boards task force/committee Draft ideas: • Members: A total six (6) members, equally representing both boards.  Members could be the designated overlapping board members, or could be regular (non-overlapping) board members. • Time commitment (meeting frequency and format): Monthly calls April/May through December.  In December, the task force would recommend to both Boards how to continue to fulfill remaining goals, perhaps quarterly meetings or other combined activities.

20. Joint boards task force/committee Question/ Discussion: • Guidance on membership, volunteers? • Suggestions regarding draft ideas, purpose?

21. How will we know if we are successful? • What are our desired strategic outcomes? • Achieve better economies of scale for resources devoted to safety • The patient voice is stronger within both organization • The brands of both organizations will be stronger as it relates to safety • Stakeholders & leaders across the continuum will be engaged in safety work • MAPS will obtain programmatic and administrative infrastructure that meets its ambitions

22. The Next Wave of Patient Safety:Highlights of 1/26 IHI Webinar Presented by Don Berwick & Derek Feeley Full presentation archived at: http://www.ihi.org/education/AudioVideo/WIHI/Pages/WIHIArchive.aspx

23. Next Wave of Patient Safety Don Berwick Opening Comments: • A reset is badly needed in patient safety. • Safety has been displaced by cost concerns. • We live under an illusion of "been there, done that” • We over rely on incentives to fix safety problems • We are "choking" on safety metrics and don't display the good ones we have correctly.  • We make a mistake when we separate safety from quality. "That's like separating apples from fruit." • We remain largely "systems illiterate". • The academic community has not stepped up as much as we need them to.  • Need to to continue to push professional development in med. schools.  

24. Next Wave of Patient Safety “NEW SAFETY” • From as few things as possible go wrong To as many things as possible go right • From reactive and responsive To proactive and generative • “Failure is not a prerequisite to learn” • From safety projects, To safety systems • From fear, blame and liability To humility, trust, transparency • From keeping patients safe To co-producing safety • From a narrow definition of harm To a broad definition of harm