Presentation to 2014 Virginia Health Care Conference

1. Presentation to 2014 Virginia Health Care Conference June 5, 2014

2. Trusted Advisor to America’s Leading Health Systems Three Decades of Experience Translating Policy into Practice Source: The Advisory Board Company. Includes urban and rural health systems; academic medical centers and community hospitals; safety net hospitals; non-profit and for-profit hospitals; and the VA. Key Areas of Expertise Broad Membership Yields Deep Insights • Health care delivery system transformation targeted at higher quality and more efficient care, including development of ACOs and medical homes • Improvements in clinical operations and health care cost reduction, such as strategies to decrease readmissions • Development and effectiveness of health information technology and data analytics • Health care financing and revenue management, including technologies to administer risk-based payments • Health care workforce, leadership development, and staffing strategies 3,600 Member institutions, including health systems in all 50 states1 99 >1,000 165,000 Members among the 100 largest US health systems Small-to-medium community hospital members Health care leaders participating in memberships 2,200 Advisory Board health care professionals worldwide 10,000 Research interviews annually with health care leaders

3. Our Firm in Numbers 3,600+ 2,200+ 1,500+ Hospitals and health care organizations in our membership Health care professionals employed Hospitals using our performance technologies RESEARCH AND INSIGHTS PERFORMANCE TECHNOLOGIES CONSULTING AND MANAGEMENT TALENTDEVELOPMENT Seasoned, Hands-On Support and Practice Management Services Memberships Offering Strategic Guidance and Actionable Insights National Peer Collaboratives Powered by Web-Based Analytic Platforms Partnering to Drive Workforce Impactand Engagement • Dedicated to the most pressing issues and concerns in health care • 300+ industry experts on call • 200+ customizable forecasting and decision-support tools • Leading provider: Over 50% of inpatient admissions in the United States flow through our technology platforms • Over 1.5 million user sessions annually • Key challenges addressed: physician performance, population health, revenue cycle, referral growth, surgical profitability, and supply/ service cost • 2,500+ years of “operator” experience in hospital and physician practices • Principal terrains: hospital-physician alignment/practice management, transition to value-based care, revenue cycle optimization, hospital margin improvement • Range of engagements from strategy/diagnostic to best practice installation to interim management to fully managed services • Impacted the achievement of 76,000+ executives, physicians, clinical leaders, and managers • 17,000+ outcomes-driven workshops tailored to partners’ specific needs • Survey Solutions • Customized strategies for improving employee and physician engagement • National health care-specific benchmarking database of 480,000 respondents 165,000+ health care leaders served globally $500+ million in realized value per year 1,300+ engagements completed 6,200+ employee-led improvement projects

4. Scaling “Best Practices” to Accelerate and Sustain Transformation Advisory Board Approach to Innovation Health Care’s Original “Big Data” Asset Driving Enterprise-Level Outcomes Our Sustainable ROI Model • Field Intelligence • Data Science Care Variation • Performance Blueprints • Roadmaps to Rapid Results • Directive Technologies • Action, Not Analysis Labor and Supply Cost Referral Management • Proprietary Methodology • Tomorrow’s problems today • 80/20 process leverage points • Scalable, sustainable BDPs • Member activation model Clinical Integration Network Optimization • Network-Driven Innovation • Iteratively Attacking Hard Problems Applied Expertise Right Expert Against Right Lever Predictive Care Plans Patient Engagement

5. Offering Data and Analytics to Improve Cost, Quality Performance Technologies Improving Value at Front Lines of Care Source: The Advisory Board Company. Advisory Board Technology Suite Advisory Board Technologies • Improving Quality of Care • Population Risk Management • Preventive and Chronic Care • Cross-continuum Care Management • Patient Engagement and Experience • Patient Safety and Care Quality • Lowering Cost of Care • Supply and Labor Costs • Care Variation Reduction • Aligning Incentives • Value-based Contracting • ICD-10 Transition 360,000 Physician cost and quality profiles 1,500 Hospitals using Advisory Board technology 50% US admissions flowing through Advisory Board IT tools Representative Results Achieved by ABC Members $385K $25.38 $354K $17.61

6. Gaps in awareness of all available information lead to sub-optimal outcomes Opportunity to Personalize Care Current Attempts to Improve Precision Fraught with Shortcomings Static Nurses Screen for Delirium Risk Unstandardized Case Manager Assesses Risk of Readmission ICU Missing Data Care Managers Assess Risk of Non-Compliance 6th Floor Cardiac Care M.D. Office

7. Natural Language Processing to Detect Risk Factors Buried in Clinician Notes Crimson Real-Time Clinical Analytics Sample Findings of Text Analytics

8. Algorithmic Early Warnings Enabling Proactive Risk-Reducing Interventions across Care Settings Crimson Real-Time Clinical Analytics Customized Surveillance Alerts • Clinical Utilization Risk • Risk of readmission • Risk of avoidable admission • Risk of extended length of stay • Risk of extended ICU LOS • Referral Flags • Pain management consult • Mental health consult, undetected depression • Palliative care consult • Social work consult • Clinical Risk Surveillance • Risk of DVT • Core measure patient identification • Sepsis early warning score • Risk of mortality • Revenue Risk Management • Ensure medical necessity is met • Alert to present on admission • Documentation opportunities • Computer-Assisted Coding

9. Precise Risk Stratification, Risk Factor Identification Drives Reduction Enabling Readmission Reduction within the Medicare Population at Baylor Health Change in HF and PN Readmissions Rates at Baylor Health System 16% relative reduction 70% relative reduction Readmissions Rate (%) Readmissions Rate (%) Quarter (Time) Quarter (Time)

10. 1 in 4 Patients with Depression Conditions at High Risk for Readmission Identifying Population Level Risk Factors Enables Efficient Resource Allocation

11. Complementary Changes Required to Create a Value-based System Unlocking the Full Value of “Big Data” Stages of Analytical Progression and Value Creation Predictive Descriptive Prescriptive How many of my diabetic patients are overdue for their a1C test? Which of my diabetic patients is least likely to respond to my outreach to get a blood test? Which outreach message should I send to each diabetic patient to maximize response rate? • Cultural Transformation • Comfort with performance transparency • Data “improvement”, not data “perfection” • Incentives Alignment • Right rewards for clinical transformation • Lowering costs (and perceived threats) of data sharing • Integration with Workflow • Minimally-disruptive to native workflows • Contextually-appropriate “answers” • IT Interoperability • Lower the total cost of accessing data, systems • Data unification across systems

12. Policy Can Play Role in Fostering Interoperability Lower Cost Connectivity Will Accelerate Innovation Opportunities for Policymakers to Encourage Interoperability • Require standard APIs in Meaningful Use Stage 3 • Any API would need to be published, public, and open to use by any third-party • Commonly required APIs should expand over time • Further specify standards for data transport • Current standards make data transfer possible, but not financially viable • Reducing financial barriers to data integration would spur rapid and broad innovation • Drive greater data sharing between providers and payers • Would facilitate better population health management • At a minimum, providers should have access to full claims data under risk-sharing arrangements