Key Physicians Value Driven Health Care

1. Key PhysiciansValue Driven Health Care Conrad L. Flick MD John Meier MD, MBA

2. Value Driven Health Care • Key Physicians • Primary Care based • HEDIS based quality metrics • Shared cost savings based contracting • Viable independent primary care physicians and specialists within an interdependent network • Integrating patient data systems without a single EMR • Population management across the network

3. Value Driven Health Care • Value: Patient health outcomes per dollar spent • Coverage • Moving toward ‘universal’ coverage • Delivery system • Coordinating across the full cycle of care • Primary care coordinating the medical condition • Reimbursement • Moving toward bundled payments “A Strategy for Health Care Reform – Toward a Value Based System,” Michael Porter, NEJM July 9, 2009, 361: 109-112.

4. The Relationship of Organization Type and Payment Methods Integrated system capitation Global DRG fee: hospital and physician inpatient Global DRG fee: hospital only Global ambulatory care fees Global primary care fees Blended FFS and medical home fees FFS and DRGs Outcome measures; large % of total payment Care coordination and intermediate outcome measures; moderate % of total payment Continuum of Payment Bundling Continuum of P4P Design Simple process and structure measures; small % of total payment Small practices; unrelated hospitals Independent Practice Associations; Physician Hospital Organizations Fully integrated delivery system Continuum of Organization Source: Shih et al, The Commonwealth Fund, August 2008

5. Wake County/Raleigh Market

6. Key Physicians’ History • 1994: Organization Formed as an IPA • 1995-1996: Capitated / Risk Contract • HealthSource • 1997-2009: Fee-for-Service Contracting • Pay-for-Performance where possible • 2009/2010: NCQA Patient-Centered Medical Home Recognition • Catalyst for Key’s “Accountable Transformation” • 2011: Blue Quality Physician Recognition • 2012/2013: Accountable Care Shared Savings Contracting • Cigna • BCBSNC

7. Key Physicians TodayPrimary Care Medical Homes • 51 Independent Primary Care Practice Locations in the Triangle • 184 Physicians and 51 Mid-Level Providers • 11 PCP Practices with 35 Physicians and 13 Mid-Levels in process of joining

8. New Models of Care Delivery • Patient Centered Medical Home: The Triple Aim • Improve the health and safety of the population served • Improve the experience of each individual • Improve affordability as measured by the total cost of care • Accountable Care Organizations (ACOs) • “Medical Home on Steroids” • Exclusive or Preferred Networks • Clinical Integration • Interdependence & Cooperation across an exclusive provider network • Care Coordination and Care Management • Capability to measure and report quality and value

9. Patient Centered Medical HomePrinciples • Personal physician • Physician directed medical practice • Team approach • Whole person orientation • Coordination of care • Quality & safety • Enhanced access • Payment for added value

10. Key Physicians Goals • Support Member Practices with PCMH and BQPP • Position Key for Success in Accountable Care (ACO) Contracting • IT System Requirements • Care Management Resources • AccountableTransformation of Network • 2010: Patient Centered Medical Home Recognition • 2012: Virtual Integration across Medical Neighborhood Infina Intelligent Care Coordinator • 2012: Accountable Care Contracting as a Network • 2013/2014: Clinical Integration

11. Defining the ACO • CMS: Accountable Care Organization is “an organization of health care providers that agree to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.” The ACO will promote evidence based medicine, be able to report quality and cost measures, and coordinate care including the use of technological systems. • HIMSS: ACOs are provider organizations that accept responsibility and financial risk for the cost and quality of care delivered to a specific population of patients cared for by the organizations and clinicians. The collaborative effort of the ACO model centers on the patient by coordinating and managing care to deliver wellness, economic and clinical value rather than treating episodes of disease and sickness. • Key Physicians’ Definition: A provider-led organization whose mission is to manage the full continuum of care and be accountable for the overall costs and quality of care for a defined population.

12. Key’s ACO Network

13. Accountable Care Contracting • Integration: Connect Medical Homes to Medical Neighborhood • Co-Management Agreements for patient care and adherence to evidenced based guidelines • Electronic communication , referral tracking and care coordination • Population Management • Care Coordinators (Patient Care Advocates) • Actionable Data shared by Health Plan to ACO • Physician Identifies and Refers High Risk Patients • Discharge Planning and Gaps in Care • Valued member of the care team

14. Current Tactical Focus • Patient Steerage to High Quality / Value Providers • Key’s ACO Network • Urgent Care • Cigna Care Designated / BCBS Tier 1 Practice Specialists • Co-Management Agreements • “Choosing Wisely” Awareness and Mind-Set • Address Preventable Events • Duplicate Services, Un-needed Services, Avoidable ED visits, Readmissions, Reducing Complications • Delivery System Redesign – Patient/Population Management • Care coordination, Care transition, Post-discharge management • Patient engagement and education (Employers, Insurers/Payers, Practice, Community)

15. Medium Term Priorities • Improve Quality and Reduce Costs • Quality – HEDIS • Costs – Avoidance, Reducing Price Variation • Expand the ACO Network • Counties outside of Wake County • Network Identification/Marketing • Ensuring patients are steered (via benefit design) to our practices, never away from them • Employers, Insurance Companies, Third Party Providers • Information Technology • Integrating EMRs • Sharing Information • Within the network • From health systems/data systems outside the network • Patient engagement and education

16. Future Strategic ElementsProviding Value Based Care in a more complex market Provider Network Population Mgmt – - Case Specific - Disease Themes - Organize around Medical Condition Broad Moderate Population Mgmt – - Case Specific - Disease Based Narrow Population Mgmt – Case Specific High Moderate Low Insurance Price Sensitivity

17. Value Driven Health Care • Key Physicians • Primary Care based • HEDIS based quality metrics • Shared cost savings based contracting • Viable independent primary care physicians and specialists within an interdependent network • Integrating patient data systems without a single EMR • Population management across the network