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					                                     CONNECTIONS 2010
                          HEALTHCARE ON THE WINDS OF CHANGE
                                                                                     Physician Strategies
                                                                                    Session Number M7

                      Engaging Physicians to Share Bundled Payments
                                       September 13
                                  11:15 a.m. - 12:30 p.m.

Mr. John Fink                                         Ms. Deirdre Baggot
Senior Manager                                        Administrator, Cardiac and Vascular Institute
ECG Management Consultants, Inc.                      Exempla Saint Joseph Hospital
San Diego, CA                                         Denver, CO

Summary Description
Reimbursement is becoming increasingly dependent upon your ability to demonstrate quality.
Furthermore, hospital, physicians, and other healthcare providers will soon be sharing a bundled
payment to manage episodes of care. Learn the latest about payment reform, participation in
CMS’s Acute Care Episode demonstration, and the implications of payment reform initiatives to
your organization.

Learning Objectives
1. Understand the coordination required to receive bundled payments from Medicare based on
   experience with the Acute Care Episode demonstration.
2. Learn how to position your organization to prosper as financial incentives in our healthcare
   system change from a being volume driven to value driven.
3. Understand the implications of payment reform initiatives on your relationships with

Faculty Information
Mr. John Fink is a senior manager at ECG Management Consultants, Inc. Mr. Fink has been
providing healthcare consulting services since 1991. His experience in strategic and business
planning, operations improvement, and information technology provides him with the skills
necessary to evaluate and resolve the complex strategic, financial, operational, and technological
issues facing healthcare organizations today. His background includes strategic and business
planning for health systems and physician organizations, hospital/physician alignment efforts,
business expansion guidance, and mergers and acquisition assistance resulting in over 50
transactions. Mr. Fink received a master of business administration degree and a bachelor of
science degree in finance from Indiana University.

Ms. Deirdre Baggot is Administrator of the Cardiac & Vascular Institute at Exempla Saint
Joseph Hospital, which is a participant in the Centers for Medicare & Medicaid Services (CMS)
Acute Care Episode (ACE) demonstration project. Ms. Baggot joined Exempla Saint Joseph
Hospital in 2005 after 10 years in academic health care, first at Northwestern Memorial Hospital

                                  SEPTEMBER 12-15  CHICAGO, ILLINOIS
                                     CONNECTIONS 2010
                           HEALTHCARE ON THE WINDS OF CHANGE
                                                                                     Physician Strategies
                                                                                    Session Number M7

and later at The University of Michigan Health System. Ms. Baggot holds a Bachelor of Science
in Nursing, a Masters in Business Administration from Loyola University Graduate School of
Business, and is currently pursuing her PhD at the University of Colorado. Currently, Ms.
Baggot serves as a board member on the Colorado Organization of Nurse Leaders.

Executive Summary/Outline
What are some of the biggest problems with the U.S. healthcare system? Poor quality? Inability
to measure quality? Poor coordination? Medical errors? Lack of care management and
accountability? High-cost care (intensive interventions) rewarded over higher-value
(preventative) care? These are all symptoms of a bigger problem – fragmentation. Our healthcare
system is fragmented because of the incentives driving the delivery of care.

Our fee-for-service incentives are the root cause of many of our industry’s problems. Fee-for-
service encourages high volume over high value, encourages use of high-cost services, penalizes
effective care and preventive care, and promotes transactions rather than relationships with
patients. In contrast, under a bundled payment system of reimbursement, healthcare providers are
encouraged to work together to efficiently provide high quality care over the course of a patient’s
treatment for a specific illness or injury.

Bundled payments have been proposed to help improve healthcare quality and efficiency by
aligning incentives among providers to provide high value care. The number of active bundled
payment demonstration projects across the country and the provisions in the recent health reform
law calling for a national bundled payment program tell us that the future holds a much stronger
link between the financial imperatives of our hospitals and the ability to demonstrate clinical
quality outcomes, coordinate care among multiple providers, avoid more intensive care through
prevention, and reduce the overall cost of providing care. Many of these goals can only be
achieved by moving to more integrated delivery models. As we move from fee-for-service to
episode-based and capitated payment system, those providers in integrated delivery systems will
have significant advantages over those practicing independently.

Our presentation will present key concepts that strategic planning, business planning, and
marketing personnel need to understand relative to payment reform and its impact on
hospital/physician relationships. It will include a quick review of the latest payment reform
initiatives, a detailed discussion of the experience one of the five participants in CMS’s Acute
Care Episode demonstration project, and a recommendation of what hospitals and physician
should do to prepare for payment reform.

The following outline summarizes our presentation. Because of new findings from active
demonstrations and new initiatives that will occur in 3 months leading up to the conference, the
final presentation is expected to deviate slightly from this outline.

                                  SEPTEMBER 12-15  CHICAGO, ILLINOIS
                                   CONNECTIONS 2010
                         HEALTHCARE ON THE WINDS OF CHANGE
                                                                                Physician Strategies
                                                                               Session Number M7

I.     Payment Reform Update
       A.    Incremental Payment Reform
       B.    Primary Care Payment Reform
       C.    Episode-Based Payment Systems

II.    CMS’s ACE Demonstration Project
       A.    Current state of the ACE demonstration and Obama imperative.
       B.    Rationale for the Obama administration believing bundling payments is the
             vehicle by which coverage will be expanded to the nearly 50 million uninsured
       C.    Examining the risks and understanding the frameworks that must be in place in
             order to achieve success under the new reimbursement model.
       D.    Impact on revenue cycle – how billing works under ACE.

III.   Preparing for Payment Reform
       A.     Hospital/Physician Integration
       B.     Medical Leadership
       C.     Engaging Your Medical Staff

IV.    Questions and Answers

                                SEPTEMBER 12-15  CHICAGO, ILLINOIS

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