ACO update and proposal for physicians

6. What is an Accountable Care Organization?

11. This is not a PHO Source: Mc Dermott Will and Emery, used with permission PHO ACO Insurance risk Performance risk Panel of patients Population of patients Scrum for share of revenue Rational allocation of revenue Charge based Value based Managed care leveraged Care coordination Episodic care focus Patient focused Split control and governance Physician leadership Do more Do less Intervention Prevention Clinical integration to achieve anti trust compliance Clinical integration to achieve efficiencies and quality improvement

13. Ownership Relationship in a System

14. Desired Impact: shared savings

15. The Disease/Health Continuum Health is a continuous variable, according to George Isham, MD, HealthPartners Medical Director and Chief Health Officer. A person is not simply healthy or sick; there are various degrees of health. The Partners for Better Health program tries to move members along the disease/health continuum, toward lower risk and greater health through prevention. Source: HealthPartners, Partners for Better Health. Active Disease Early Symptoms High Risk At Risk No/Low Risk

17. Episode Treatment Groups

19. Acute Bronchitis with Co-morbidity Clean Period Start Clean Period End Office Visit (Anchor Record) Lab Services (Ancillary Record) Radiology (Ancillary) Pharmacy Records (Ancillary) Cluster 1 PCP 444 Cluster 2 Specialist A Cluster 4 PCP 444 Cluster 3 Specialist A Insulin Diabetes All records in the episode share the same unique episode number

20. Medical Episode Grouper Claims Data Clinical Classification Grouping Methodology Analytic Outputs Inputs include professional claims, facility claims, inpatient admissions records, and pharmacy claims Grouping diagnosis codes into one of the over 550 Disease Staging categories and severity stages Appropriately group claims into episodes according to disease category and relative time between services Output aggregated information for the episode and allow for analytic flexibility for analysis

34. Private Market Commercial Employers Cities, Counties, School Districts Labor Unions, Taft Hartley Trusts, Trade Associations

36. New Structure of Community-based Health Plan Employer Physicians MSO/JVCO Hospital

38. Potential IPA or Medical Society Role

45. ACO Infrastructure

48. Analysis of Options Factor ACO ( physician model) MA Plan CO-OP Risk 7.5% upside years 1 & 2.10% upside 5% downside Yr 3 Full Risk Yr 1 Full Risk Yr 1 Member Rq 5000 Non MA (advantage to stay under 9999) 5000 MA Commercial Bonus Potential Bonus Potential Bonus Potential Bonus and Grants AntiTrust Filing may be required No No Marketing No Yes Yes Reimbursement Cap Top & floor 110% Medicare Coml MC+30 Startup Costs 1.0 Million plus 21 months budget to first bonus Existing license plus 1.0 Mil 1.0 mil 750K state license Cost tech 40% 50% 40% Cost staff 60% 50% 60% Investment available Limited Good Very Good Time 18 months 12 months 12 months

53. Thank you