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Transforming Fairview’s Business Model to Accept Risk and Manage the Health of
Populations
Cornell University’s International Health Care Conference
May 11th – 12th, 2010
Fairview Overview
Large integrated health system• Not-for-profit, established in
1906• Headquartered in Minneapolis,
MN• Partnership with University of
Minnesota• 22,000+ employees• 2,500 aligned physicians
Comprehensive continuum of services
• 8 hospitals/medical centers• 42 primary care clinics• 55+ specialty clinics• 28 retail pharmacies• 20+ rehabilitation centers • 26 senior housing locations • Home care and hospice
2009 data• 4.8 million outpatient
encounters • 80,314 inpatient admissions• $333.6 million community
contributions • Total assets of $2.4 billion• $2.7 billion total revenue
2
• We are being asked to deliver greater value.– Improved clinical outcomes– Lower cost– Improved experience
• We will be asked to care for the health of a population.
• Payment systems and methodologies will change, rewarding those who deliver value.
Change is coming…Change is here
3
The market is changing…Pa
ymen
tM
etho
dolo
gies
Care Delivery
Population/Global
Payment
Individual/
Discount Fee For Service Encounter Episode/Lifetime
XToday
Transition
Market RelevanceGlobal Adoption
Change Experience
Change Experience
Change Care
Change Care
Change PaymentChange
Payment
Consumer
Employer / Plan
Provider
Volume
Value
4
Requiring a new “value chain”…
Change Experience
Change Care
Change Payment
Consumer
Employer/Plan
Provider
Creating Value and Outcomes
“Global Payment”Enables Performance
Rewards Value
Patient Activation and Consumer Engagement
Value
5
And a repositioning of our business model
Multi-Specialty
GroupPractice
OutpatientAncillaries
Sub-AcuteCare
AcuteCare
Care Management
Maximize Utilization/
RevenueGrowth
Minimize Utilization/
ManageMargin
Incentiveto reduceutilization
TODAY (fee for service)
FUTURE(global payment)
Integrated Delivery System
Internet
RetailClinics
EmployerClinics
VirtualClinics
PhysicianClinics
UrgentCare
ER
Multiple Pointsof Access
(Health Home)
Population
6
To deliver on today’s and tomorrow’s definition of “value”
Today Tomorrow
Processes Health& Outcomes Status
Encounter CustomerSatisfaction Loyalty
Cost/ Cost/Case Member
Share of Share ofEncounters Covered Lives
7
Creating capabilities and capacity to manage the health
of populations
2009
2010
2011
2012
Fee-for-Service Shared Savings Partial Capitation Global Payment
Care Delivery
Innovation
Fairview Medical GroupReorganization
Medical Home
Care Packages
Payer Contracting
Methodologies
Epic Install
Physician Compensation
Fairview Population
Volume ValueEpisode Payment
NetworkDevelopment
Population Health
Operating Model/Infrastructure
Virtual Care
SensorTechnology
AccountableCare
Organization
Integrated Business Intelligence
8
Today…care for the sick is physician centric
9
Tomorrow…keeping patients healthy with team-based
care
10
• Improved quality
• Increased access and capacityo promoted virtual care (phone, email, webcam)o created new visit types (nurse only, team visits – n clinicians
to one patient)o asked patients for input on length of appointment required
when scheduling
• Increased patient satisfaction o Migraine exampleo A real person answered the phoneo . . . who knows you
2009 CMI results…
11
Improved quality in CMI clinics
2008 Q1 09 Q2 09 Q3 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 1010%
20%
30%
40%
50%
60%
41.4%
30.1%36.0% 36.2% 40.4%
Quality of CareDiabetes Management
Eagan
Non-CMI Fairview Clinics
2008 Q1 09 Q2 09 Q3 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 1060%
65%
70%
75%
80%
85%
90%
95%
100%
86.7% 86.0% 86.5%
Quality of CareHypertension Management
Rosemount
Non-CMI Fairview Clinics
12
July Wk 4 July Wk 5 Aug Wk 1 Aug Wk 2 Aug Wk 3
0%
20%
40%
60%
80%
100%
30.3
8.0
19.89.8
3.2
62.1
78.0
73.088.2
93.7
Eagan Teamlet DPatient Msg Handling
Provider RN Huddle
MD Capacity Increase Improved Access
Northeast ClinicCall Abandonment Rate
DateAbandonment
Rate6/1-6/5 22%6/8-6/12 33%6/15-6/19 34%6/22-6/26 31%6/29-7/3 34%7/6-7/10 31%7/13-7/17 35%7/20-7/24 33%8/5/2009 GO LIVE8/10-8/14 14%8/17-08/21 13%
Improved access and capacity…
13
Successfully shifting care to lower cost & more patient-
friendly interactions…Team-Based Care
0% 10% 20% 30% 40% 50% 60% 70%
66%
52%
Clinic's % Of Non- Traditional Encoun-
ters
2008
2009
14
49 visits (0 paid extensions)21 coupons used1057 enrolled consumers (4.3% with visits)32 providers (75% with visits)
Time of Day
0% Phone Only100% Web
0 Disconnects0 Provider Cancelled/ Provider Declined49 Completed
Visit Details
94% MD4% Physician Asst2% Nurse Practitioner
Provider Types
1. Skin disorders and redness 2. Behavioral Health3. Insomnia4. Migraines and other headaches5. Hypertension
Top Diagnoses/Disease Areas
Online Care Rooms2133 Total Card Swipes 1503 Main
525 RP105 Virginia
Average Satisfaction with Online CareBy Consumer: 4.69/5 starsBy Provider: 4.31/5 stars
4.63/5 stars
Satisfaction with Provider
0
1
2
3
4
5
6
7
Time
8 am to noon
Noon to 4 pm
4 pm to 8 pm
Virtual care prototype with BCBSM: • Fairview providers care for BCBSM
employees & family members using web cams in employer clinics and homes
• Model and understand virtual care operations
• Design for consumerism
Visit Demographics
69.4% Female30.6% Male
18 prescriptions written.No additional detail available
28.6%21-34
26.5%35-44
32.7%45-54
12.2%55-64
Age
Top Rx
Virtual care…Care Anywhere
( November 30, 2009 - January 25, 2010) 15
Payer revenue at risk
16
• Revenue at risk with 3 major commercial payers
• Various models• Clinical quality• Clinical quality & total cost of care• Total cost of care
• 2010 Revenue at risk $40+M
Challenges
• Changes in the care models are moving faster than payment & growth models
• Living in two worlds is difficult• Change roles
17
18
Our work requires transformational change in
organization focus…
Global Business ServicesCreating enabling expertise
Clinical EnterpriseRealize value
Care Model InnovationCreating new value
Member AcquisitionConnecting to Members
Business Model InnovationRecognizing Economic Value
Design
Operations
19
Our work requires transformational change in
organization focus…Operations
Realize value
Multi-Specialty GroupOutpatient CareSub-acute Care
Acute CareCare Management
DesignCreating new value
Care Model InnovationBusiness Model Innovation
Member Acquisition
Global Business Services
Goals and Strategies
Business model shift
20
Individuals Employers
Payers Providers
DiseaseRisk
SelectionRisk
Perform-ance Risk
RiskMitigation
CashManagement
Sales
Credentialing
NetworkManagement
MedicalManagement
Cash Mgmt.
Risk Reserves
Und
erw
riting
Cash Mgmt.
Credentialing
NetworkManagement
MedicalManagement
New and changing roles will emerge as a “network of capability” forms to deliver on the promise of the new value chain.
ProductDevelopment
MemberServices