[WEBINAR] New Economics: Health Plans and Payer Contracts to Advance Value-based Care

Confidential – Do Not Distribute

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New Economics:

Health Plans and Payer Contracts to

Advance Value-Based Care

Webinar | October 8, 2014


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Presenters

Mike Maiberger

Senior Vice President,

Value-Based Services,

Premier Health

Mark Shaw

Vice President,

Managed Care and

Chief Revenue Officer,

Premier Health

Steve Wigginton

Chief Development Officer,

Evolent Health


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Agenda

• Brief Evolent Health Introduction

• Overview of Premier’s Value-Based Strategy

• Q&A


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Value-Based Care Now at Heart of System Strategy

• Rate cuts

• Narrow networks

• Price transparency

• Exchanges

• ACOs / at-risk MD groups

• A price-sensitive marketplace

Mounting Market Pressures

Managing “cost” through population

health, not price / rate reductions (other

than owned plan)

Compete on Outcomes

Health system well-positioned to grow /

protect market share at stable margins

Move Upstream to

Capture Volume

Explosion of Activity;

All Focused on Narrow

Networks and Total Cost of Care


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Not All Contracting Models Will Achieve theDesired Outcome

Today’s Market

StatusQuo

LaunchInvest.

Pop HealthReturns

NetGrowth

LaunchInvest.

Pop HealthReturns

NetGrowth

LaunchInvest.

Pop HealthReturns

NetGrowth

Syste

m P

rofi

t

Status Quo

Current market forces

will create a downward

pressure on premiums

and significantly reduce

system revenues.

Have the potential to create

gainshare but does further

cannibalize revenue and have

limited returns.

Provide systems with a higher

upside potential but also

increase downside risk.

Offers a significant increase in

revenues and high exposure to

downside risk.

Payer Partnerships

(low risk share)

Payer Partnerships

(high risk share)

Health Plan

NPV = ? NPV = $50–100M NPV = $100M

Cost

Cuts


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Siloed Models Frustrate Physicians and Patients

PortalCase

Management

Utilization

Management

Aetna

Cigna

UnitedHealthcare

Blue Cross

Blue Shield

Employer

EMR Portal

EMR Pod

Radiology

Benefit

Management

Patient

Physician A

Physician B


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Towards a Unified, Provider-Led Solution

OPTIMIZES CHOICES

AND CARE

Informed,

activated

patient and

caregiver

Prepared,

proactive

physician

team

PRODUCTIVE INTERACTION

Physician

Enterprise

Services

and Network

Value-Based Business OrganizationThrough Evolent partnership,

infrastructure to manage populations under risk

HEALTH SYSTEM

Population health goals: higher quality, lower

costs, better patient experience

Payers Face

Rising Costs

Insurance Company

Operational Focus

Administrative

FunctionsBilling, Customer

Service, Sales,

Marketing

Focus on Medical

ManagementAnalytics,

Stratification, High

Cost Areas

Efforts to engage

member in care

management

Clinical

ProgramsCHF, Diabetes,

HIV

Moving away from a failed model… …to a proven model


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Solution Architecture

BLUEPRINT

PAYER

VALUE ALLIANCE

HEALTH PLAN

VALUE EDGE

EMPLOYER

VALUE ADVANTAGE

MARKET FACING SOLUTIONS

VALUE BASED OPERATIONS

Population

Health Performance

Financial and

Administrative

Management

Delivery Network

Alignment

Organizational Transformation

Identifi Technology Platform

Powering Value-Based

Market Facing Solutions

Operating World-Class

Competencies

Charting Strategic Course

and Operating Plans

Transforming From the

Inside Out

Integrating Data, Analytics,

and Workflow

Establishing a Dedicated

Value Based Business

Infrastructure


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Accelerating the Path to Progress

Payer

Value Alliance

• Aligned value

contract templates

• National and regional

payer and

provider relationships

• Specialized managed

care negotiators

and actuaries

Health Plan

Value Edge

• Accelerated health

plan launch

• Provider-centric

product designs

• Nationally scaled

infrastructure

• Consumer and broker

marketing toolkits

Employer

Value Advantage

• Health system

employees

• Local employer

strategies

• Private exchanges

• Value-based plan index

• Benefit consulting

MARKET FACING SOLUTIONS


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Agenda



• Q&A


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Premier Health: At A Glance

Located in

Dayton, OH:

1.5M+population

4hospitals

$1.8Bin annual

revenue

250+employed

physiciansNot-for-profit

Locally

governed

>14,000 employees

100+locations in

25communities


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Priorities:

1. Patients andFamily FIRST

2. The Partnership

3. The Partners

Mission

We will BUILD HEALTHIER

COMMUNITIES with others who share our

commitment to provide high-quality,

cost-competitive health care services.

Vision

Patients, physicians and

employees will CHOOSE

Premier Health over any health

care provider in

southwestern Ohio.

We will EARN their choice, and GROW our

market leadership,

by anticipating their needs and exceeding

their expectations.

ValuesWe…

… RESPECT each person’s dignity.

… act with INTEGRITY to do the right

thing in all aspects of

our responsibilities.

… serve with COMPASSION that

embraces each individual’s concerns

and hopes.

… commit to EXCELLENCE as measured

to the highest level

of performance.

Premier Health: Mission, Vision and Values


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Dayton Market Context

Providers:

• Premier: >50% market share

• Competing system: >30% market

share

Payers:

• Anthem: >40% market share

• United: >30% market share

Primary care physicians:

• Premier-employed: ~15%

• Competing system-employed: ~5%

• Independent: ~80%

Additional market context:

• Total population growth flat, with

mix shifting to Medicare

• Anthem launched narrow network

product with competing system on

public exchange on 1/1/14

Dayton

Premier

hospitalCompeting

system


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Premier’s Vision for Population Health

Premier Health can drive substantial

community health improvement with the potential to

enhance annual financial performance at scale

by $10M+ by 2020 on 150K+ lives through the execution of a

multi-year Population Health Strategy


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Premier is Launching a Comprehensive Multi-Year Population Health Strategy to Achieve the Vision

Employee

Health

Medicare

Advantage

Commercial

Payer

Partnerships

• 17,000+ employees and dependents

• Full replacement plan in 2014

• State-of-the-art wellness program

• MA HMO and D-SNP

products in 2015

• Individual market on- and off-

exchange in 2015

• Small group off-exchange, large

group, self-insured in 2015

• Small group on-exchange TBD

• Exploring risk-based

partnerships in Medicare,

Medicaid, and Commercial


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Organizational Structure for the Population Health Business

Premier Value-

Based Services

Premier

Health Plan

Premier

Health Group

• Leads product development,

including self-insured,

Medicare Advantage, and

Commercial products

• Leads sales and marketing

of products

• Holds insurance license,

reserves, and bears risk

of financial losses

• Leads development and

management of

provider network

• Leads population health

management, including care

management operations,

quality improvement and

physician alignment

• Contracts with 3rd party

payers to manage their

populations’ health


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The Importance of Having a Health Plan

Maximum ability to understand what drives economics of population health

to keep payer partnerships sustainable

Maximum ability to capture value from population health:

$1 in utilization reduction = $1 in health plan margin

Maximum ability to integrate and optimize payer and provider functions to

improve outcomes and patient and physician experience, e.g.:

• Administrative and clinical data

• Payer call center and provider scheduling

• Payer utilization review and provider case management


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19040

250

320

50

980 980

10

280 310

1,700 1,710

2012 2018

But it Has Limits…We Project ~3-7% of Dayton Population Will be Covered by Premier Health Plan

Covered Lives (in Thousands)

Premier Health Plan

+0% p.a.

Uninsured

Medicaid

Commercial

Medicare


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… And it Takes Time to Build

~ 15,000

~ 30,000

~ 40,000

~ 50,000

~ 60,000

2014 2015 2016 2017 2018

Estimated Premier Health Plan Membership


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Payer Partnerships are an Important Complementary Strategy, Particularly in the Early Years

Greater

Physician

Mindshare

Greater

Alignment with

Independent

Physicians

Greater

Scale


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Building a Custom Network to SupportPayer Partnerships

Health Plan

ProductPremier Health Plan Other Payer 1 Other Payer 2

Broad Access

Network

Subset of

Broad

Access

Network(s)

Driving Payer

Partnerships

Customers

Medicare

Advantage

Enrollees

IndividualsEmployers

PHG

Broad Network

Other Payer 1

Broad Network

Other Payer 2

Broad Networks

Payer Partnership Network (PPN)


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Payer 5

Payer 4

Payer 3

Payer 2

Payer 1

Differing Processes Lead to Confusion and Cost Within the Physician Practice

??

?

Risk AdjustmentProcess Key Care Management Success Metrics


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Payer Partnership Network Creates Streamlined Processes for Physician

Payer 5

Payer 4

Payer 3

Payer 2

Payer 1 Payer Partnership Network

Multi-disciplinary

Care Team

Integrated Technology

Solution

Optimized Process

Physician

Quality Bonuses

Payer 6

Risk AdjustmentProcess Key Care Management Success Metrics


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If We’re Successful, We Get to Determine Our Future

Build capabilities using both Health Plan and Payer Partnerships

As capabilities mature, we have improved strategic relevance to payers

Long-term, we provide multiple sustainable options to the community for

accessing our advanced care model


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Agenda



• Q&A


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800 N Glebe Rd, Suite 500

Arlington, VA 22203

evolenthealth.com

+ connect

[email protected]