Pulse - Revolutionary Mindset

© SCL Health System1© SCL Health System

The Revolutionary Mindset and Redesign of Health Care

Pulse Event

November 12, 2013

Mike Slubowski, FACHE, FACMPE

President/CEO

© SCL Health System2


Incumbents vs. Revolutionaries

• Incumbents– The old model has worked for an extended time period– In “Maintenance Mode” – don’t want to mess with “the

formula”– Leverage brand and historical reputation– Adopting any new approach puts the model at risk

• Can cannibalize one’s own business

– Very few have adopted a revolutionary mindset and have been successful at changing the model

• Revolutionaries– Victory comes by changing the model– Being scrappy, open to invention, leverage out-of-the-box

thinking


© SCL Health System

4© SCL Health System

4

Outline

• Brief background on SCL Health System• The environment we face• Why is “revolutionary behavior” an imperative?• How are we transforming?• Closing thoughts


Brief Background: SCL Health System


Where We Serve

Size and scope….1

9 Hospitals

4 Safety net clinics

1 Mental health treatment center for children

190+ Ambulatory practices

500+ Employed physicians

$2.2 Billion

2012 net patient service revenue

1Continuing operations

© SCL Health System

7© SCL Health System

7

MISSION

We reveal and foster God’s healing love by improving the health of the people and communities we serve, especially those who are poor and vulnerable.

VISION

Inspired by our faith,

• We will be distinguished as the premier person-centered health system and trusted partner.

• We will share accountability with clinicians and other stakeholders to coordinate care across all settings and improve access, quality, health outcomes and affordability.

• We will grow as community-based health networks to serve more people in partnership with others who share our vision and values.

VALUES

Caring Spirit We honor the sacred dignity of each person.

Excellence We set and surpass high standards.

Good Humor We create joyful and welcoming environments.

Integrity We do the right thing with openness and pride.

Safety We deliver care that seeks to eliminate all harm for patients and associates.

Stewardship We are accountable for the resources entrusted to us.

Mission, Vision and Values


Strategic Priorities & Key Initiatives

MinistryExcellence

Leverage Skill& Scale

Physician Alignment& Accountable Health

Associate Empowerment

Growth

• Community health improvement• Quality, safety, patient experience• Financial and operational

• Knowledge sharing, best practices• Unified processes for efficiency• Benefits from scale

• Continued physician integration• Continuum of care services• Population health management

• Culture and talent• Person-centered care• Continuous improvement

• Ministry realignment• System and market expansion• New strategic plan



Community Benefit and Charity Care 2012

• Charity Care - $98.4 million at cost • $269,510 per day!• Increased by $18.7 million (23.5%) over 2011• Has increased every year in the past 7 years• Unified, system-wide financial aid policy

• Total Community Benefit (includes charity care) - $252.8 million • 15.8% growth over 2011

• Charity care, unreimbursed Medicaid, community health programs, subsidized health services, contributions to communities

• Over 197,500 lives touched by our community health improvement services

• Health education programs, clinical services and support services

• Of these, 107,160 lives touched by chronic disease programs


Ministry Excellence

Our health ministry is earning national recognition for Quality, including:

− Denver hospitals among “Top 15” health systems nationwide

− SCL Health System (all hospitals combined) in the “Top 20%” of health systems nationwide

− Six care sites received Healthgrades Awards for Clinical Quality: Top 5% in the nation


The Environment We Face



Health Care Costs are Unsustainable

97%







Consumers want low premiums; will accept narrow provider networks to get them

other specialty drugs


Lessons learned from Massachusetts

Health Marketplaces/Exchange


Significant Market Share Upheaval in Massachusetts

)


Utilization Rates Continue to Decline




Why is “Revolutionary Behavior” an Imperative?



Rapid Change

• Extreme pressure to reduce cost and lower prices• Private health exchanges• Public health exchanges/marketplaces• For-profit, niche providers• Mergers and acquisitions• Care shifts from inpatient to outpatient or “no-patient!”• Medicare reform• “Big Data” and eHealth• New, previously unthinkable partnerships• Shift to retail, person-centered, consumer focus



Paradigm Shift – an overused term from the 1990s?

• Paradigm Shift defined:– Coined in 1962 by Thomas Kuhn, a scientist– “A radical change in thinking from an accepted point of

view to a new belief.”– “A paradigm is what members of a community, and they

alone, share.”

• Key question to be examined by us:– Are we so “locked in” to our current paradigm of health

delivery that it will inhibit us from envisioning and building a new future for our ministry?

– Or, can we open our minds to develop new beliefs?

• Radical change never happens quite as quickly as we may initially think it will, but it does happen!– When it sneaks up on us gradually, we may miss

opportunities if we are still viewing the world through the old paradigm.



Quote from a wise planning executive

• “I tell people we’re not going to get any more clarity. This is as good as it gets.”





Familiar language

• AMI (Acute Myocardial Infarction)• HF (Heart Failure)• PN (Pneumonia)• SCIP (Surgical Care Improvement Project)• HAC (Hospital Acquired Conditions)• VTE (Venous Thromboembolism)• CLABSI (Central Line-Associated Blood Stream Infection)• CABG SSI (Coronary Artery Bypass Graft Surgical Site Infection)• CAUTI (Catheter-Associated Urinary Tract Infection)• WOCN (Wound, ostomy and continence nursing)• POA (Present on Admission)• Admissions• Patient days• Outpatient procedures• Fee-for-service• Patient



Familiar Roles

• Nurses• Technicians• Clerks• Housekeepers• Food service workers• Doctors• Administrators



New World



New Language

• MSSP (Medicare Shared Savings Program)• ACO (Accountable Care Organization)• BPCI (Bundled Payments for Care Improvement)• PCMH (Patient-Centered Medical Home)• ADSP (Adult Day Services Program)• AHN (Accountable Health Network)• PHOs/PPOs/MSOs• PMPM/PMPY (Per member per month/per member per year• Covered lives• “Big data” analytics• Risk pools• Population health• Virtual wellness platforms• Health Marketplace• Essential benefits• Gold, bronze, silver• HRO• Person-centered• Member



New Roles

• Care continuum coordinator• Medical home coordinator• Home health coordinator• ED life coach• Medication management specialist• Community resource specialist• Program/project manager• Payer analytics director• ACO operations• Lean sensei• Report writer specialist• Patient access managers• Customer service coordinators• Physician practice operation specialists• Knowledge management leaders• Business intelligence analysts• Digital content specialist• eHealth manager• Insurance/actuarial/underwriting specialist• Certified application counselor



How are We Transforming?


It Starts With a New Vision


It Requires Commitment to Coverage and Access to Care for All


It Requires a New Strategy

Person-Centered,Consumer Centric Care

Ministry Excellence

Accountable Health

Physician Partnership Growth

Leverage Skill and Scale

Associate Empowerment



It Requires a Shift From “Patients” to “Consumers”

• From “patients” (passive) to “consumers, members, guests” (active) – “person-centered” as our new mantra!

• More customer-centric “retail” strategies • “Hardwire” approach to capturing customers/patients

– Scheduling, follow-up, digital connections

• Patients/customers as “members” of our system, not episodic “transactions”– How do we help them maintain/improve their health?

• “Digital channel” expectations• Different leadership needed• Competing for price sensitive customers with access to

lower cost niche providers• Quality, safety and the care experience are Job One!

– “The price of admission”


• Caring Spirit• Excellence• Good Humor• Integrity• Safety• Stewardship

• Person-centered• Safe• Health outcomes per dollar

spent• Encompasses all services

that determine success for patient’s needs

• Holistic (body, mind, spirit)• Shared accountability

among providers• Longer term

Our Values

Value

It Requires a New Definition of “Values-Based Care”



It Requires a Shift to Accountable Health Networks

We are moving community care beyond just our medical center campuses

To a distributed, connected network of the care continuum we are developing in each market


Denver Accountable Health Network

• Lutheran Health Partners• PHP/PPP• New West Physicians• Home Care Agencies• Long Term Care Facilities• Pre Hospital Agencies

Alliances and Partnerships:• Kaiser Permanente• CIGNA - Associate Health Plan

• Anthem - QHIP in 2011

• Other Payors

Denver Health Network

Aligned Health

Systems

Inpatient• OB 19%• Dir Adm 29%

Outpatient• Hospital-based• Freestanding

EDServices

• 52% of IP Adms• 42% of OP Visits

AlignedPhysicians

Colorado Permanente

Medical GroupKaiser

EPN & GMEEmployedContracted

• ED• Hospitalists• Imaging• Etc. Private Practice

Physicians

West PinesIP & OP

Behavioral Services

Hospice• Inpatient• Outpatient

ColoradoLutheran Home

• SNF w/Alzheimers• Assisted Living• Independent

Living

Pre-Hospital

Home Care

Long Term Care

Information-driven• Epic Inpatient and OutpatientBundled Payment• ESJH ACE Project• Medicare Bundled PaymentClinical integration• CPMG• Lutheran Health Partners (LHP)Pay for Performance/Quality MgmtReadmissions Management• ELMC Transitions Program• ESJH CMS Transitions EligibleChronic Care Management• Chronic Care Model• CardiopulmonaryEvidence-Based Medicine

Denotes aligned service*Illustrative example

We are developing networks in each market*


MedicalCenterDivision

(Hospital)

MedicalGroup

Division (Physicians)

Community-BasedHealth System

“Co-Dependent Equals”

It Requires Reorganization of Leadership

Integrated:Composed of separate parts united together to form a more complete or coordinated entity.

Joint Operating

Council


It Requires New Partnerships to Build the Care Continuum

Traditional Home Health Industry Framework Univita’s Model & Approach

Home HealthAgency

DME / Respiratory IV Provider

Patient Physician Patient Physician

NetworkDevelopment

DischargePlanner

Physician Coordinator

Health Plan / Care Manager

NetworkDevelopment

DischargePlanner

Physician Coordinator

Health Plan / Care Manager

Univita

Focus on Outcomes Focus on Unit Cost

Property of Univita Health, 2012

Home Care Partnership with Univita Health: Coordination Through a Single Point of Contact



It Requires Partnerships for Population Health Management

Population management infrastructure development• Contracted services of Lumeris, Inc.

– Cloud-based data warehousing and electronic medical record

– Market assessment, strategy and tactical planning support– Full risk population management decision support and

reporting tools– Accountable Care Training Institute– Actuarial and TPA capability– Associate health plan data management support– Patient registries, clinical quality and preventive services

reporting

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It Requires Management of Three Distinct Patient Populations

High-Risk

Patients

Rising-RiskPatients

Low-RiskPatients

5% of patients;Usually with complexdiseases, comorbidities

15-35% of patients;May have conditionsnot under control

60-80% of patients;Any minor conditionsare easily managed

Dedicated team-basedcareTrade high-cost servicesfor low-cost management

Avoid unnecessaryhigher-acuity, high cost spending

Keep patient healthy,loyal to the system(“sticky”)

Source: Advisory Board



It Requires Demonstrated Leadership in Managing the Health of our Own Associates (Employees)

• Our total annual spend for health coverage for our associates, spouses and dependents amounts to $78.6 million per year, and the associate cost contribution to premiums is about $22 million per year (this does not include deductibles, coinsurance and copayments, which are an additional cost to our associates and families)

• 19% of our spend is in prescription drugs• There were 129 “catastrophic” claims (serious conditions like cancer and major orthopedic

care that exceed $100,000 per claim) in 2012, and the median spend per claim was 23% higher than the Cigna norm for their entire covered groups

• Our “outlier” (very long) lengths-of-stay for inpatient care were in four areas: major gastrointestinal disorders, cardiothoracic surgery, joint replacements and elective back surgery and mental health/substance abuse care

• Young adults (ages 18-26 yrs.) accounted for 11% of adult inpatient admissions, and 33% of those admissions were for mental health/substance abuse care (an unfortunate sign of the times?)

• Expenditures on emergency care were our second highest outpatient costs. Our emergency department usage is higher than external benchmarks. And young adults had disproportionately higher rates of ED utilization than the rest of our population

• Chronic pain care drives significant outpatient costs for our population, with interventional pain procedures, advanced imaging and prescription drugs



Opportunities to Improve Health of Our Associates

• Care management opportunities for those experiencing chronic pain

• Better coordination of care for those with requiring joint replacements

• Use of more non-surgical treatment options for those with low back pain who would otherwise end up having elective back surgery where the medical evidence on outcomes may not lead to better health status

• Improving access to primary care and urgent care for common ambulatory conditions to avoid use of expensive emergency services

• More options to encourage routine preventive care and screening, and use of outpatient mental health and substance abuse support for young adults

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It Requires a Commitment to PERFECT CARE

• We are not striving for incremental improvement• We are striving for PERFECTION in the care experience:

– Quality, safety, satisfaction– Empowered and engaged patients and families– Outcomes

• To be a “trusted partner” means we must be a HIGH RELIABILITY ORGANIZATION

• Our Model for Perfect Care: Quality, Safety and Care Experience Collaboratives– Focused teams learning, identifying and implementing best practice solutions

• This is meaningful work that requires teamwork to move us to the next level!


Accountable Health Transformation (AHT) is our operations improvement framework.

Achieve Medicare profitability within 3 years.

So far: $100 million.

To go: $150 million.

Levers (Examples)

Operational - Labor Productivity, Revenue Cycle,

Supply Chain, Administrative (System Services)

Utilization - Utilization Management and Reduction in Unnecessary Variation in Care

Portfolio - Outpatient Growth, Surgical Services Growth, Program and Service Line Contribution Margin Analysis/Rationalization

Clinical / Quality - Readmission Rates, Core Measures, and Care Experience Performance

DevelopPlan

ImplementPlan

Communicate& Engage

Operational Levers

Portfolio Levers

Utilization Levers

Clinical / Quality Levers

Year 1 Year 2 Year 3

It Requires a Commitment to Lower Cost Transformation” Project



Leveraging our Skill, Knowledge and Relationships

• Results from size (sites, revenue)• More tangible• Quantifiable in financial terms• Requires more commitment torealize benefits

• Results from size and scope (people, situations)• Generally quantifiable in terms of increasedlearning and savings from “recreating the wheel” • Design and implement work products together • Rapid replication and adoption of best practices

It Requires Leveraging Skill and Scale of Being a System


It Requires “Connecting the Silos”



Servant Leader - Partnership BehaviorsAccountability for results

Engagement and enthusiasm for change

Adaptability and continuous learning

Trust, respect and collaboration

Transparency and candor

Efficient, data-driven decision making

Urgency and follow-through



It Requires Carving a New Growth Path

Grow Market Share

of Volume

• Best-in-Class Acute Care Destination

• Consumer-Oriented Ambulatory Network

Grow Market Share

of Lives

• Full-Service Population Health Manager

• Financially-Integrated Delivery System (Insurer)

Source: Advisory Board



It Requires Growth That is Essential to Invest in Our Future

• Not growth for growth’s sake• $4-5 billion size is a goal to leverage skill and scale

• IT investments, care management and clinical integration investments, best-in-class system services such as revenue cycle and supply chain

• Can occur through shared services, partnerships, management agreements, JOAs, mergers

– Alliances and partnerships, not control

• Growth opportunities pursued:• Local, stand-alone providers/hospitals• Physician groups• Home care• Joint ventures• Other Catholic, secular and faith-based systems


It Requires Focus and Execution

“Great execution, less initiatives”


Closing Thoughts



What We Covered

• Brief background on SCL Health System• The environment we face• Why is “revolutionary behavior” an imperative?• How are we transforming?• Closing thoughts



Incumbents vs. Revolutionaries

• Incumbents– The old model has worked for an extended time period– In “Maintenance Mode” – don’t want to mess with “the

formula”– Leverage brand and historical reputation– Adopting any new approach puts the model at risk

• Can cannibalize one’s own business

– Very few have adopted a revolutionary mindset and have been successful at changing the model

• Revolutionaries– Victory comes by changing the model– Being scrappy, open to invention, leverage out-of-the-box

thinking



Revolutionary Requirements

• New vision• Commitment to coverage and access• New strategy• Shift from “patients” to “consumers”• New definition of “value”• Shift to accountable health• Reorganization of leadership• New partnerships• Managing three distinct patient populations• Demonstrated leadership in managing the health of our own

associates• A commitment to perfect care• Lower cost• Leverage skill and scale• Connecting silos• Carving a new growth path• Focus and execution



Revolution, or Evolution?

Axiom:

“Really fast evolution requires a revolution!”

- Mike Slubowski



Ministry and Business Perspectives (Our Success Model)

• Accountable Care • Community Benefit Ministry• Community Health• Person-Centered Care Experience• Quality and Safety• Access to Care• Population Health

The Ministry is why we exist!

BusinessModel

Drives

•Commitment to Excellence(Top Decile/Zero Defects)•Access to Capital and Credit Strength•Geographic Diversity•Credit Strength

Ministry

To Support




Health & Medicine

Pulse - Revolutionary Mindset