Leadership Summit 2011 (PDF)

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					Health Evolution Partners Innovation Network

                                      Leadership Summit 2011
                                                          Summary report

              April 27-29, 2011 | The Ritz-Carlton, Laguna Niguel | Dana Point, California
Connecting Leading Companies in Health Care                                                                CONTENTS

                                                                                                           A TECTONIC SHIFT FOR HEALTH PLANS                                      2
                                                                                                           HOSPITALS OF THE FUTURE                                                4
                                                                                                           NEW MODELS FOR PRIMARY CARE                                            6
                                                                                                           THE EMERGING HEALTH SUPER-CONSUMER                                     8
   LETTER FROM THE CHAIRMAN                                                                                THE US ONCOLOGY – MCKESSON STORY                                       9
                                                                                                           THE GLOBALIZING BUSINESS OF HEALTH                                     9
   Leadership Summit 2011 brought together world-class health industry leaders for three days of active    RISK-BEARING PROVIDERS                                                10
   discussion about commercial and regulatory forces shaping the landscape. The theme, “Connecting
                                                                                                           THE ROLE OF HEALTH CARE IN THE 2012 ELECTION                          12
   Leading Companies in Health Care,” underscores our belief that a powerful network of industry
   leaders can bring big changes to the health care industry in ways that governments cannot.              LESSONS FROM AN EXTRAORDINARY INNOVATOR: MICHAEL DELL                 15
                                                                                                           CAN THE C-SUITE LEAD INNOVATION?                                      16
   With invaluable support from our speakers, participants and sponsors, Leadership Summit 2011            WHY HEALTH POLICY NEEDS INNOVATION, AND VICE VERSA                    18
   covered the most critical issues facing health industry leaders today:
                                                                                                           ORGANIC AND INORGANIC INNOVATION                                      19
     • Health plan transformation during a period of profound change                                       THE FUTURE OF PERSONALIZED MEDICINE                                   20
     • The future of hospitals in the face of crushing financial pressures and increasingly distributed
       care delivery
                                                                                                           PARTICIPANTS                                                          22
     • Bottom-up reinvention of primary care
     • An unstoppable push for consumer engagement in health                                               HEALTH EVOLUTION PARTNERS                                             24
     • Globalization of care delivery, information technology and health management that matches
       prior globalization of therapeutics
     • Multiple efforts to shift risk to providers, and notions of what providers will need to succeed
     • An uncertain environment of health care politics, from Congress to the Presidency, and even
       the Supreme Court
     • Innovation challenges as early adopters sideline and large organizations grapple with where
       to target their future investments
     • Uncertainty about the future of personalized medicine in light of increasing tension between
       innovators and regulatory agencies

   This report summarizes our key observations from the meeting. We will look back on this period as
   one of great opportunity for companies that solved real problems — better quality, higher efficiency,   “This is an unprecedented time, one of tectonic
   more accountability — for patients, physicians, payers and populations.                                  changes for every stakeholder. It is at times like
                                                                                                            this when transformational innovations emerge
                                                                                                            that change everything.”

                                                                                                           David J. Brailer, MD, PhD
                                                                                                           Chairman, Health Evolution Partners
   David J. Brailer, MD, PhD
   Health Evolution Partners

                                                                                                                                                                   Leadership Summit 2011 Connecting Leading Companies in Health Care   |   1
Charles Saunders, MD                                                               Brad Fluegel                                                                                                                     G. Mike Mikan                                                      David Jones, Jr.
President of Strategic Diversification, Aetna                                      Executive in Residence, Health Evolution Partners,                                                                Chief Executive Officer, Optum              Chairman and Managing Director, Chrysalis Ventures, LLC
                                                                                   and former Executive Vice President and Chief Strategy and                                                                                                                 and former Chairman of the Board, Humana
                                                                                   External Affairs Officer, Wellpoint

a tectonic Shift for Health plans
    Leadership Summit 2011 began with an examination of the challenges                Mikan is among those who believe convergence will shift focus from     Like Optum, Aetna believes its assets and capabilities are ideally        Panelists agreed that it is unclear if health plans can effectively
    and opportunities driving fundamental shifts in strategy among                    whether or not care delivery must be integrated to manage risk and     suited for providers that will need to manage population risk. Saunders   lead the way in engaging patients more deeply in health. The
    many of the nation’s largest health plans. In his opening remarks,                address cost and quality concerns, to the key strategic issue of how   characterized Aetna’s earlier investment in medical management            traditional disconnect between consumers and payors may limit
    Dr. Brailer set the stage by recalling a recent article from the                  integration can be achieved. In Mikan’s view, integration will occur   and technology services through ActiveHealth Management as                plans’ ability to play a significant role on underlying behavioral
    Washington Post in which he was quoted, “If you’re a health plan,                 in both physical and virtual models, making frequently referenced      indicative of the company’s historical focus on solutions for national    issues where plans have developed valuable tools and techniques.
    you either become a care delivery system or an information                        models such as Kaiser just one of multiple potential archetypes.       plan sponsors that will now be transferrable to providers.                Panelists agreed further that better alignment between plan design
    services company. The traditional business is dead.”                                                                                                                                                                               and incentives, as well as an influx of new consumer technologies,
                                                                                      Prior to the Summit, UnitedHealth Group (UHG) announced that           According to Jones, Humana is not positioning itself as an information    will help consumers to understand the real cost of options. However,
    During an unprecedented period in the history of our health care                  subsidiaries, Ingenix, OptumHealth and PrescriptionSolutions,          broker in line with Optum and Aetna. Instead, Humana will continue        Fluegel cautioned that some challenges, such as the cost of
    system, health plans face pressure to continue growing despite an                 would be unified under Mikan’s leadership and the new master           strengthening its focus on serving seniors, integrating directly with     service and system inefficiencies, cannot be addressed though
    unsustainable trend in health spending and the threat of tighter regulation.      brand, Optum, to address convergence opportunities and better          providers and expanding into health and wellness, as indicated            consumer engagement alone; it will require working with hospitals
    In response, insurers are investing billions of dollars to acquire                serve clients across all three businesses with integrated solutions.   by its acquisition of Concentra and partnership with South African        and physicians as well to take certain costs out of the system.
    technology and service businesses that bring them closer to providers             Brad Fluegel, Executive in Residence with Health Evolution Partners    wellness provider, Discovery.
    and enable more direct influence over patient care. For some,                     and former Executive Vice President and Chief Strategy and External
    growth and diversification strategies have also included expansion                Affairs Officer at Wellpoint, proposed that UHG’s longer-term bet      Reflecting on the issue of diversification and use of cash for              KEY INSIGHTS
    into adjacent businesses and targeting global markets.                            on diversification had already placed it ten years ahead of other      acquisitions, Fluegel cautioned that the key question is not whether
                                                                                      plans that are now attempting to shift from strategies based on plan   diversification is the best use of funds for cash-rich businesses,          •	Longer-term trends are driving major shifts among health
    Jeff Margolis, Founding CEO and Chairman of the Board of TriZetto,                consolidation toward investments that compliment the core business     but if health plans can successfully incubate companies they are              plans, but reform has catalyzed immediate strategic diver-
    moderated a panel of executives representing several of the nation’s              of health insurance.                                                   acquiring to achieve sustainable innovations.                                 sification. The traditional health plan model of winning through
    largest health plans.                                                                                                                                                                                                                  execution will be displaced by competition based on differentiation
                                                                                      Can insurers acquire their futures? Collectively, Aetna, Humana        Jones expanded on Fluegel’s comment by suggesting that an                   •	Becoming an information services company is not merely
    Health reform is a flash point. The discussion began with a question              and Optum are estimated to have invested more than $3 billion over     important added value of health plan investment in diversification            a survival strategy. Data-driven tools and services from health
    of whether health reform or larger economic trends are the most                   the last 18 months to acquire technology, services and care delivery   will be the volume of experimentation with new solutions for managing         plans can address critical needs among providers that are unprepared
    significant factor driving strategic diversification among health plans.          businesses. Some point to insurers’ large cash reserves and view       cost, improving quality and engaging consumers. According                     to manage population risk. Aetna and Optum are betting billions
                                                                                      movement within the sector as standard business diversification        to Jones, who is currently Chairman and Managing Director of                  on it
    G. Mike Mikan, CEO of Optum, suggested that industry characteristics              by large corporations. Others have questioned the prices paid to       Chrysalis Ventures, health plans and other cash-rich health care
    and macro trends, such as fragmentation, cost, provider shortages                 acquire new assets and remain skeptical about whether payors can       companies, including large providers, are creating more opportunity         •	Diversification will drive experimentation with new solutions
    and consumerism, have been driving the need for strategic diversi-                actually succeed in the new ventures they are pursuing.                than ever before for innovative growth companies seeking scale,               for reducing cost, improving quality and engaging consumers.
    fication long before reform. The panel agreed that systemic forces                                                                                       partnerships and acquisition.                                                 Cash-rich insurers will create significant opportunity for innovative
    are the underlying driver of change, but it was noted that market                 Charles Saunders, President of Strategic Diversification at Aetna,                                                                                   growth companies, but a critical question remains as to whether
    opportunities arising out of convergence between payor and provider               and David Jones, Jr., former Chairman of the Board for Humana          Engaging consumers. As a final segment, the panel turned to the               health plans can successfully incubate acquired assets to
    resources, as well as at the community level, are being galvanized by             and, outlined how Aetna and Humana, respectively, are responding       role of health plans in engaging consumers.                                   achieve sustainable innovations
    regulatory changes and government efforts to realign incentives.                  to the changing environment by building on competencies they
                                                                                      consider core to their businesses.

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Hospitals are the observable center of health care as most people            specialized player that focuses on complex services in a highly acute        How access to capital impacts ownership. Panelists agreed
know it. Today, hospitals face crushing financial pressure fueled by         setting, while interacting with lower-cost channels in a hub and spoke       unanimously that access to capital is a significant challenge for             KEY INSIGHTS
regulatory change, decreasing reimbursement in the face of rising            model. Mark Laret, CEO of UCSF Medical Center, noted that one                hospitals that will likely drive an increasing number of for-profit
operating costs and growing bad debt, as well as an eroding revenue          major implication will be the increase in quantity and diversity of          conversions.                                                                  •	Hospitals will be here in 10 years, but payment changes
base due to increased competition for high-margin services and efforts       partnerships his organization creates in the future in order to manage                                                                                       will redefine the hospital’s role as one component within a
to migrate care out of costly acute environments.                            the full continuum of care.                                                  Given recent financial performance, many community hospitals are                broader ecosystem of care. The hospital of the future will be a
                                                                                                                                                          finding it difficult to obtain debt capital. With an almost certain decline     smaller and increasingly specialized player that delivers complex
For community hospitals, budgetary crises at the federal level and           Working with providers to manage risk. Hospital systems are moving           in margins forthcoming, as well as increasing demand from lower-                services and coordinates with lower-cost settings
in many states make the current environment even more challenging.           aggressively to achieve scale and greater influence over patient flow        paying publicly insured patients, community hospitals will have few
Amid these changes, for-profit conversion has resurfaced as an               through virtual integration and physician-hospital consolidation in          alternatives to conversion and raising capital in the public or private       •	As we shift risk to providers, hospitals may face choices
opportunity for non-profit institutions and investors to leverage            order to remain competitive in local markets. Such movement is also          equity markets. Laret expressed concern that a lack of alternatives             similar to health plans: either become a risk-bearing organization,
alternative sources of capital.                                              indicative of the larger drive for providers to take on risk.                will drive new owners to narrow focus and limit hospitals’ ability to           or supply services to organizations that choose to take on risk
                                                                                                                                                          conduct traditional cost shifting, leading to a dramatic shortage of          •	Access to capital from public and private equity markets will
Mark Smith, President & CEO of the California HealthCare Foundation,         Panel discussion centered around two important questions: whether            capacity for publicly insured patients.                                         be the most significant driver of an increasing trend toward
led a panel of leading hospital executives through a discussion of           or not hospitals are well positioned to take on population risk, and                                                                                         for-profit conversion
how the environment is impacting hospitals and hypotheses about              what will be necessary to integrate beyond a hospital’s employed             The role of hospitals in a distributed delivery system. In addition
how hospitals may change in the future.                                      physicians and its owned infrastructure/services. Christopher T. Olivia,     to the long-term roles described earlier in discussion, Dr. de Filippi        •	Irrespective of tax status, successful hospitals of the future
                                                                             MD, President and CEO of West Penn Allegheny Health System, and              proposed that hospitals would remain a logical place for the back               will be those positioned as part of systems of health in an
Will the hospital model be different in 10 years? In response to             Laret cautioned that providers have historically not managed risk well,      office of the future delivery system. While convergence of care                 environment of increasingly decentralized and distributed care
the changing landscape, hospital leaders are currently pursuing a            with past efforts resulting in hand-picking of patients rather than caring   delivery and technology will enable migration of care into alternative          delivery
range of strategies, including investing in technology and outsourcing       for populations.                                                             settings and create new roles for non-physician staff, de Filippi
services and expanding their role in managing the full continuum of care.                                                                                 suggests that it will not make sense to recreate administrative
                                                                             Richard P. de Filippi, Immediate-Past Chairman of the Board of Trustees      structures and financial or business processes that hospitals already
When considering how the hospital model might change over the                of the American Hospital Association, noted that organizations with          manage Hospitals may also continue to employ most staff, even as
next decade, panelists agreed that the core function of hospitals and        employed physicians and large primary care bases will have clear             their roles in technology-enabled delivery evolve over time.
roles such as providing educational and research services would              advantages. However, more robust information systems, data integration,
still be necessary in the long-term. However, current trends toward          and innovations that leverage technology to manage patients outside
declining and restructuring of reimbursement will likely force hospitals     the hospital, will be necessary in a broader context, such as an
to become one of multiple components in a broader service delivery           accountable care organization (ACO). Dr. Olivia suggested that
model that provides a more distributed and comprehensive set of              supplying such products and services to ACOs may in fact be a
services. As a result, the hospital may become a smaller and increasingly    more attractive opportunity than managing risk.

Mark Smith, MD, MBA (moderator)
President & CEO, California HealthCare Foundation

                                                                                                                                                                            Hospitals of the Future
Christopher T. Olivia, MD
President & CEO, West Penn Allegheny Health System

Richard P. de Filippi, MD
Immediate-Past Chairman of the Board of Trustees, American Hospital Association

Mark Laret
CEO, UCSF Medical Center                                                                                                                                                                            Will For-profit Hospitals prevail?
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                                                                                  Key characteristics                                                                                                                                                                                      Key characteristics
                                                                                  • Uses primary care as a lever to help patients better navigate the delivery system                                                                                                                      • Reengineering the primary care practice with people, process and technology
                                                                                  • Hires physicians and builds practices from scratch                                                                                                                                                     • Salaried physicians, physical space tailored specifically for the model, flexible
                                                                                  • Targets self-insured employers to fund capitated models that enable primary care                                                                                                                         scheduling and multi-modal patient communications
                                                                                    providers to lead decision making                                                                                                                                                                      • Works within the existing insurance model (HMO, PPO and Medicare)
                                                                                  • Prioritizes focus, relationships and data:                                                                                                                                                             • Restructures cost to make primary care a viable business by making processes
                                                                                     • Focus - eliminates distractions of fee-for-service billing and coding; targets patients                                                                                                               more efficient, eliminating low-value overhead and reducing the administrative staff
                                                                                       with multiple chronic illnesses that are generating two-thirds of spending                                                                                                                            ratio from 3 to 0.33 per physician
                                                                                     • Relationships - builds strong patient relationships, using health coaches to
                                                                                       engage patients                                                                                                                                                                                     Potential to impact cost trend
                                                                                     • Data – leverages information systems to manage a patient population and coordinate                                                                                                                  • Current data suggests that One Medical Group patients are reducing primary care
                                                                                       care across a team, rather than simply upcoding a visit                                                                                                                                               visits by 25-35% by the second year of membership; reducing specialty visits by
                                                                                                                                                                                                                                                                                             30-40%; and reducing ER visits by as much as 50%
                         missing high res image file                              Potential to impact cost trend
                                                                                  • In a study of one Iora practice, ER visits dropped by 48% and hospitalizations                                                                                                                         Patient satisfaction and quality
                                                                                    dropped by 41%, resulting in a reduction of 18% on total spend. A similar pilot for                                                                                                                    • Already serving more than 10,000 patients
                                                                                    Boeing saved over 20%                                                                                                                                                                                  • Patients report high satisfaction and quality care
     Rushika Fernandopulle, MD, MPP                                                                                                                                              Tom Lee, MD
     President and Co-Founder, Iora Health                                        Patient satisfaction and quality                                                               Founder and CEO, One Medical Group
                                                                                  • Patients report high satisfaction and engage more deeply with clinical information
                                                                                    through interactions with their “health coach”

                                                                                  Key characteristics                                                                                                                                                                                      Key characteristics
                                                                                  • Supplements primary care to help address workforce shortages, while delivering a                                                                                                                       • Flat monthly fee for unrestricted, high-touch care that enables greater personalization
                                                                                    strong economic and quality value proposition                                                                                                                                                            and improves outcomes
                                                                                  • Currently provides care for 3 million members, using a technology platform and                                                                                                                         • Provides routine primary care, urgent care and chronic disease management, as
                                                                                    national network of physicians that offer care via phone or secure video conferencing                                                                                                                    well as coordinates care with external providers
                                                                                    24 hours a day, 365 days a year                                                                                                                                                                        • Works outside the traditional reimbursement system by using a direct-pay model
                                                                                  • Contracts with health plans and employers of all sizes                                                                                                                                                   with individuals and employers
                                                                                  • Targets low severity, acute medical needs that are drains on the primary care supply                                                                                                                   • Steady revenue allows for the provision of more care on the margin, enabling same-
                                                                                    and unnecessarily clog emergency rooms                                                                                                                                                                   day appointments seven days per week, extended hours and longer appointment
                                                                                                                                                                                                                                                                                             times, as well as smaller patient panels
                                                                                  Potential to impact cost trend
                                                                                  • A recent customer with 12,000 lives was able to reduce ER utilization by 6.5% over                                                                                                                     Potential to impact cost trend
                                                                                    the entire population, resulting in an 8:1 ROI within 3 months of launch. Teledoc is                                                                                                                   • Based on data from their non-Medicare population, Qliance has reduced ER visits
                                                                                    also credited with enabling early interventions that avoid catastrophic events                                                                                                                           by 65%, relative to their regional benchmarks; reduced hospital days by 43%; and
                                                                                                                                                                                                                                                                                             reduced specialist visits and advanced radiology by 66% and 63%, respectively.
                                                                                  Patient satisfaction and quality                                                                                                                                                                           Qliance has also reduced surgeries by up to 80% through working with patients to
                                                                                  • 97% of patients report satisfaction                                                                                                                                                                      reduce elective orthopedic surgeries
    Jason Gorevic                                                                 • Based on 75,000 visits thus far, 91% of users said that Teledoc completely solved
                                                                                                                                                                                 Norm Wu
    CEO, Teledoc                                                                    the medical issue and did not need to seek care in an alternative setting                    President and CEO, Qliance Medical Management                                                             Patient satisfaction and quality
                                                                                                                                                                                                                                                                                           • Qliance’s high-touch, high-access approach creates high satisfaction levels for
                                                                                                                                                                                                                                                                                             patients while a focus on preventative and appropriate care improves quality

    As the industry struggles to find solutions for improving health,             Despite early signs of success, there are significant barriers to imple-                       Placing themselves in the roles of an actuary and skeptical incoming
    achieving better value and expanding access, exploring new models             menting new models of care and ultimately reinventing the primary                              CEO at a major US health plan considering investment in new models                                               KEY INSIGHTS
    for payment and delivery of care is a focus across all sectors.               care system from the bottom up. The primary care system in the U.S.                            of primary care, Arnold Milstein, MD, Professor of Medicine and Director
                                                                                  faces a growing workforce shortage, uneven geographic distribution                             of the Clinical Excellence Research Center at Stanford University, and                                            •	Multiple pathways for new models to target or circumvent
    Most experts now agree that shifting toward a more patient-centered           of resources and misalignment of incentives. Moreover, companies                               Carolyn Clancy, MD, Director, Agency for Healthcare Research and                                                    traditional payment and delivery. Models illustrate that new
    and primary care oriented system is critical to improving health              aiming to disrupt the current model for primary care must convince                             Quality, led a discussion among four innovative CEOs to explore the                                                 approaches to primary care will involve a range of strategies,
    outcomes and reducing health spending. As a result, new models for            individuals and payers that new models can successfully change                                 following for each model:                                                                                           from traditional payor reimbursement to direct-pay models, and
    primary care, such as the patient-centered medical home, retail clinic        patient experience, improve the bottom line and scale beyond                                                                                                                                                       physical practices to virtual networks on a national scale. The
    and concierge practice are gaining attention. Providers are also looking to   isolated geographies.                                                                               • Key characteristics                                                                                          common bond is belief in the impact of increased access and
    technologies, such as telehealth, as solutions for increasing capacity                                                                                                            • Potential to impact cost trend                                                                               expected savings from reduction in downstream utilization costs
    and extending reach.                                                                                                                                                              • Ability to improve performance on other goals of the triple
                                                                                                                                                                                                                                                                                                   •	The intervention and outcomes are distributed. Projected savings
                                                                                                                                                                                        aim: patient satisfaction and quality
                                                                                                                                                                                                                                                                                                     stem from downstream reduction of expensive and unnecessary
                                                                                                                                                                                                                                                                                                     services. It will be critical for potential buyers to understand initial
                                                                                                                                                                                                                                                                                                     investment requirements and be positioned for direct economic

      New models
                                                                                                                                                                                                                                                                                                     benefit from projected savings

                                                                                                                                                                                                                                                                                                   •	Scalability and effectiveness across diverse patient populations
                                                                                                                                                                                                                                                                                                     must still be proven. New models are gaining traction in select
                                                                                                                                                                                                                                                                                                     markets and demonstrating value for certain patient populations.

      for primary Care
                                                                                                                                                                                                                                                                                                     It remains unclear if they can deliver comparable results where
                                                                                                                                                                                                                                                                                                     complex conditions, such as mental health, or regional market
                                                                                                                                                                                                                                                                                                     dynamics may disrupt the current economic model

      Can they Solve our Health Care Woes?                                                                                                                                       Left to right: Carolyn Clancy, MD, Director, Agency for Healthcare Research and Quality, and Arnold
                                                                                                                                                                                 Milstein, MD, Professor of Medicine and Director of the Clinical Excellence Research Center at Stanford

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the emerging Health                                                                                                                                             the uS oncology - mckesson Story
Super Consumer
                                                                                                                                                                In December 2010, McKesson completed its $2.2 billion acquisition of
                                                                                                                                                                US Oncology. Analysts characterized the acquisition as key to fortifying
                                                                                                                                                                McKesson’s position as a leading distributor of specialty drugs in the
                                                                                                                                                                U.S. and logical given its existing distribution and services businesses.
                                                                                                                                                                For US Oncology’s CEO, Bruce Broussard, the decision was more
There is now general consensus across business and health policy
communities that consumer engagement is essential to transforming                                                                                               Rob J. Fraiman, President & CEO of Cain Brothers & Co LLC interviewed
the U.S. health system. However, experiments with consumer-driven                                                                                               Broussard, now CEO of McKesson Specialty Care Solutions I US
healthcare over the last twenty years have yielded mixed results.                                                                                               Oncology, to discuss the genesis and evolution of the deal, as well as
                                                                                                                                                                how McKesson’s acquisition will impact the delivery of care to cancer
The traditional concept of consumer-directed health care, focused                                                                                               patients in the U.S.
primarily on shifting financial responsibility, has been criticized due to
a lack of price and quality transparency in the marketplace. In recent                                                                                          Over the last 10 years, US Oncology had transformed its business by                           Left to right: Rob J. Fraiman President & CEO of Cain Brothers & Co LLC and Bruce Broussard,
years, the notion of consumer engagement has moved beyond the                                                                                                   shifting to a lighter-weight practice management model, diversifying                          CEO of McKesson Specialty Care Solutions I US Oncology
broad strokes of plan definition to encompass a broader set of goals                                                                                            use of its platform into other business segments at a national level,
that include consumer use of health information technology, participation                                                                                       and expanding into adjacent opportunities to achieve size and scale
in collaborative decision-making and self-management of chronic                                                                                                 at the local level. After a long period of debt-driven physician practice                        Broussard’s advice to leaders of potential targets and acquirers:
disease.                                                                                                                                                        acquisition, US Oncology sought a large-scale acquisition partner.
                                                                                Left to right: James Guest, President & CEO, Consumers Union and Greg Wasson,                                                                                                    • Targets should clarify what they want out of a transaction, be it financial
While major players from all corners of the health care industry at-            President & CEO, Walgreen & Co.                                                 The McKesson acquisition enabled Broussard to satisfy key objectives                               or strategic, and use that lens to evaluate options
tempt to transform their businesses to more directly and effectively                                                                                            he had agreed to with his board: addressing the company’s capital
                                                                                                                                                                structure and obtaining a strong valuation while strategically advancing                         • Acquirers should recognize that the objectives for an acquisition
engage with consumers, consumer-focused companies are increasingly
                                                                                                                                                                the company overall. Broussard’s decision to target McKesson alone                                 will dictate cultural demands. Consolidating deals may allow for
pushing deeper in to the business of health.
                                                                                                                                                                was based on the limited number of potential buyers and unique                                     top-down approaches, but strategic acquisitions with the objective
                                                                                                                                                                synergies that he saw in the potential deal.                                                       of maturing and expanding new assets will require a greater focus
Mike Roizen, MD, Chief Wellness Officer at Cleveland Clinic, facilitated
                                                                                                                                                                                                                                                                   on culture
a dialogue between the CEOs of Walgreens and Consumers Union,
two organizations that are building on their long histories of serving                                                                                          In considering the challenge of translating theoretical synergies into
consumers to address emerging demand for health engagement tools                                                                                                tangible value, both companies recognized the need to focus on
and services.                                                                                                                                                   integrating culture without ignoring their respective strengths. But
                                                                                                                                                                the effort to integrate the consensus-oriented physician culture of
                                                                                                                                                                US Oncology with a performance and customer-focused culture at
                                                                                                                                                                McKesson required significant effort.
    Walgreens                                                                      Consumers union

                                                                                                                                                                the Globalizing Business of Health
    Walgreens is evolving its business to target intersections                     Consumers Union (CU) is building on significant core
    between its retail infrastructure and needs among consumers                    competencies in analytics and distilling complex data into
    and employers, including access to care and continuous                         accessible information to address increasing demand for
    health management.                                                             consumer decision-support.
                                                                                                                                                                As the business of health becomes increasing global, health care
    • Pharmacists have an increasingly important role to play as part              • With growing interest in health information and an established             companies of all sizes are pursuing international strategies. Medical                           KEY INSIGHTS
      of care teams; by investing in automation and employing support                base of “super-consumers” that prioritize informed decision-making,        tourism, use of telemedicine and efforts among health insurers to
                                                                                                                                                                target an emerging middle class in growing economies, such as                                    •	Globalization of health care creates bidirectional opportunity
      staff, Walgreens believes it can free up more time for their phar-             CU is addressing needs for price and quality transparency in               India and China, are some of the early examples of this trend.                                     for arbitrage. Companies that operate in multiple countries have the
      macists to engage patients in a meaningful way. By reducing the                areas such as rating prescription drugs, hospitals and physician                                                                                                              ability to export American best practices and techniques, while at the
      rotation of pharmacists, they can not only engage more fully on                practice performance. Information is sourced through a combination         Miki Kapoor, former Executive Vice President for the William J. Clinton                            same time leveraging success abroad to inform improvements in U.S.
      an episodic basis, but also build lasting patient relationships                of primary research and external sources of complex industry data          Foundation and current head of North America Operations for McKinsey                               operations
                                                                                                                                                                & Company Health Systems Institute, moderated a panel of executives                              •	Value propositions may require reengineering. While products
    • Retail clinics play an important role in providing easy and affordable       • CU is building on their traditional model of consumer-friendly             from health care companies that varied dramatically in size, but                                   and services may appear transferrable, cultural differences can create
      access to routine and preventative care. Ultimately, Walgreens                 data to incorporate story telling, an important approach for               shared a common focus on growing their businesses internationally.                                 the need to reposition benefits and value
      aims to transform its role from a store that dispenses prescriptions to        connecting with individuals on an emotional level and driving
      one that operates more like a community health center with an                  behavior change. The have already captured stories from over                                                                                                                •	Size creates tradeoffs at both ends of the spectrum. Large
                                                                                                                                                                                                                                                                   companies balance the challenge of slower decision making with
      expanded scope of service and additional professionals, such as                10,000 individuals                                                                                                                                                            advantages of existing global infrastructure that can accelerate scale.
      nurse practitioners                                                          • CU’s increasing focus on publishing online enables efficient                                                                                                                  Smaller firms must capitalize on advantages of agility without ignoring
    • Connectivity with providers and health plans, as well as integrating           syndication and greater personalization of data analysis, a top                                                                                                               the inherent premium of risk
      pharmacy and retail information into a single view of customers, are           priority for many health information consumers                                                                                                                              •	Cost control is the common bond. Cultural differences may create
      key priorities for Walgreens. Their strategy includes leveraging                                                                                                                                                                                             barriers to growing certain businesses internationally, but cost is a
      intelligence to improve coordination of care, enhancing consumer                                                                                                                                                                                             universal concern. Companies that create price disruption and enable
                                                                                                                                                                                                                                                                   greater efficiencies will find fertile markets throughout the world
      experience and optimizing pharmacy and retail interactions
      within the store

                                                                                                                                                                Left to right: Jonathan Weiner, CEO, OR International LLC, David Schlotterbeck, former CEO,
                                                                                                                                                                CareFusion, Miki Kapoor, Head of North America Operations, McKinsey & Company Health
                                                                                                                                                                Systems Institute, Dave Tinkler, CEO, Emendo

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                                                                                                                                                                              risk-Bearing providers
“Everyone wants to be in the ACO business now, but
 patients don’t really understand what ACO means yet.
 If we’re not careful, this could end up feeling like HMOs.”

Andy Slavitt
CEO, Ingenix
                                                                                                                                                                                                                    Will they Succeed this time?

                                                                                                                                                                                                                                                                                                        Paul Diaz
                                                                                                                                                                                                                                                                              President & CEO, Kindred Healthcare

                                                                                                                                                                                                                                                                                                              Andy Slavitt
                                                                                                                                                                                                                                                                                                              CEO, Ingenix

                                                                                                                                                                                                                                                                                    Tom Priselac (moderator)
                                                                                                                                                                                                                                                                  President & CEO, Cedars-Sinai Health System

                                                                                                                                                                                                                                                                                                              Mark Ganz
                                                                                                                                                                                                                                                                                                            CEO, Regence

                                                                                                                                                                                                                                                                                               Robert Margolis, MD
                                                                                                                                                                                                                                                                                            CEO, HealthCare Partners

     In recent years, momentum has been building behind models of                panel of leading CEOs representing a cross-section of the industry,        Slavitt stressed the importance of change management at an orga-
     care that shift greater responsibility and risk for managing care to        including providers, payers, post-acute care and health information        nization and community level in order to address necessary shifts            KEY INSIGHTS
     providers, such as the patient-centered medical home and accountable        services.                                                                  in culture. As Mark Ganz, CEO of Regence, noted, culture change
     care organizations (ACOs). Attention to ACOs was amplified in                                                                                          will have to cut across traditional stakeholder lines; change absent         •	Success will require balance and partnership. Providers that
     2010 based on inclusion of a Medicare ACO pilot as a key feature            Characteristics of a successful risk-bearing provider. Priselac            alignment with the economic model will render ACOs as artificial and           successfully take on risk will combine the assets and capabilities
     of the Patient Protection and Affordable Care Act (PPACA), along            began by asking the panel to describe a successful risk-bearing            failed interventions. The panel also highlighted the importance of             of providers and health plans, in many cases through partnerships,
     with programs to experiment with bundled payments and reduction             provider. Panelists agreed that success will require building              physician culture. Organizations that have been successful managing            to engage individual patients and manage health across a community.
     of hospital readmissions.                                                   systems around engaging individual patients, while understanding           physicians and risk, such as Margolis’s HealthCare Partners, have              The more pressing question is how many providers can achieve
                                                                                 how to improve health across a community. Although regional and            worked hard to help physicians understand and find value in tradeoffs          success
     Released less than a month before the Leadership Summit, CMS’s              local characteristics will drive variation, measurable improvement at a    when moving away from a fee-for-service environment.
     long-awaited draft regulations for the Medicare ACO program                 community level will consistently require effective management of                                                                                       •	Connectivity, intelligence, alignment and culture are key
     were met with mixed response. Some expressed concern that the               population health across the full continuum of care, from wellness to      Consolidation: short-term gains or long-term value? In a final                 requirements for success. Beneath the headlines, fundamental
     complexity and level of investment required would discourage broad          chronic illness.                                                           question, Priselac asked the panel to comment on consolidation that            changes to the business model will be difficult for hospital CFOs
     participation, while others criticized the rule for not going far enough                                                                               the industry is seeing among physicians, hospitals and payors, as              and independent physicians to accept
     to address fundamental cost and quality problems that are crippling         Andy Slavitt, CEO of Ingenix, noted that success will likely require       well as the possibility that payor-provider consolidation could be a         •	Consolidation is one multiple approaches to integration.
     our current system.                                                         partnerships to combine the delivery capacity and skills of providers      true end-game.                                                                 Consolidation is inevitable, but horizontal integration offers the
                                                                                 with the techniques and tools that payors have developed to manage                                                                                        greatest opportunity for change, while a focus on vertical con-
     Of course, the Medicare pilot will represent just one type of accountable   population risk. Panelists agreed that the more pressing question is       Paul Diaz, President and CEO of Kindred Healthcare, proposed that              solidation for leverage risks reinforcing the current dysfunctional
     care arrangement. Composition and configuration of organizations            how many providers will be able to do this successfully. Put simply        consolidation is necessary in areas of the industry with high fixed            model
     that take on risk will vary based on market environment, payer              by Robert Margolis, MD, CEO of HealthCare Partners, “some will,            costs and significant fragmentation. However, panelists agreed that
     orientation, provider participation and payment structures. Financial       but most wont.”                                                            horizontal integration may go further toward addressing the industry’s
     arrangements will also differ along a continuum from lower-risk                                                                                        fundamental cost and quality challenges. As Slavitt noted, vertical
     shared-savings models to higher-risk models with full accountability        Key skills providers will need to succeed. In considering key              consolidation risks amplifying current dysfunction while horizontal
     for total per-capita costs.                                                 skills that providers will need, Slavitt proposed that the core require-   integration offers greater opportunity to align incentives and disrupt the
                                                                                 ments for successful providers are connectivity, intelligence and          current economic model.
     Irrespective of the Medicare ACO pilot or the eventual outcome of           alignment between hospitals, physicians and payors. According to
     challenges to the constitutionality of health reform overall, it seems      Slavitt, the entire senior leadership team needs to be engaged at a
     clear that the system is moving permanently toward more risk-               community level, but CFOs will be linchpins as they must support a
     based payment.                                                              fundamental change from a business based on filling beds to one
                                                                                 that prevents hospitalizations.
  Tom Priselac, President and CEO of Cedars-Sinai Health System
  and Past Chair of the American Hospital Association moderated a

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the role of Health Care
                                                                                                                                                              “We are giving coverage to 32 million new Americans                        “Healthcare coverage is the dominant issue that drives
                                                                                                                                                               and the medical industry is going to deal with a lot less                  the debate right now, but I would say that we should be
                                                                                                                                                               charity care. To focus on coverage now without tackling                    focused on health care results. We ought to be organized
                                                                                                                                                               any of the hard issues on the cost side feels like a                       around healthy people, not a dysfunctional insurance

in the 2012 election
                                                                                                                                                               wasted opportunity to me.”                                                 program.”

                                                                                                                                                              Phil Bredesen                                                              Jeb Bush
                                                                                                                                                              former Governor, State of Tennessee                                        former Governor, State of Florida

At last year’s event, Summit participants focused on the immediate              part by Medicaid. People are going to look around and ask: why we             place to consider what things are reserved as state’s rights and the        damental problem. With health care costs growing at 6-7% each year,
and potential long-term impact health reform would have on the industry.        would want to add 16 million people to this system?                           question of whether we really have a federal system any more.               changing the subsidy won’t provide what we really need: affordable
A year later, with battles underway to prevent implementation of                                                                                                                                                                          health care for seniors. I think Congress solved their problem, which
the PPACA, a Presidential election coming, an uncertain economic                GS: Governor Bredesen, in your book you were pretty hard on                   JB: In terms of the 3 options Governor Bredesen outlined, the inter-        is how to start balancing a budget and get the public off their backs.
climate and continued concern over the unsustainable trend in U.S.              Obama about not going to the next step to change the system.                  esting thing is that the democrats included a non-severability clause       But I don’t think they solved my problem, or that of any American,
health spending, we turned our attention to how health care                     Now that we are on track to have 32 millions new individuals                  at the end of the bill, so the whole thing falls apart if the mandate is    which is: How do I get the health care I need when I’m 65 and 85
is impacting the political debate.                                              in the system, can’t that be the foundation for the change you                overturned.                                                                 in a way that’s sensible and affordable, and in a way that offers me
                                                                                envisioned in your book. Do you have to do it all at once?                                                                                                security?
Greg Simon (GS), Senior Vice President of Patient Engagement                                                                                                  Looking ahead, there are two places I think the solutions will come:
and Policy at Pfizer moderated a discussion between Phil Bredesen               PB: I don’t think you have to do it all at once. Social security started      (1) innovations at the state level, some potentially in defiance with       JB: In the Ryan plan, Medicare is not as big a focus because it
(PB), former Governor of the State of Tennessee and Jeb Bush (JB),              out with about 60% of Americans and is now virtually universal. But           the law and others in concert; and (2) alternatives created in the          doesn’t start for another ten years out. If we look at raising the
former Governor of the State of Florida, about the role of health care          there are some key problems with the current plan. There are a host           private sector in pursuit of profit through innovation and use of           retirement age for benefits, reconsidering means testing elements of
in the 2012 election.                                                           of exceptions and the bill is a bureaucratic nightmare.                       technology.                                                                 Medicare and controlling defense spending, you don’t actually need
                                                                                                                                                                                                                                          to raise taxes. I do not believe we are under taxed as a nation, and
GS: Do you think that health reform or the Ryan Medicare plan will              We don’t have to do it all at once, but we are wasting an opportunity         PB: I agree that the states will have to innovate due to the magnitude      taxes reward bad behavior.
be a hot issue in the 2012 election?                                            for change. As a businessperson, I think about this like a negotiation        of the Medicaid issue and there will be a lot of focus there among all
                                                                                with a union; the time to ask for concessions is when you have                governors, not just Republicans. I think you will see pressure from         Where the Ryan creates the most opportunity for reform is in
PB: No one knows. Some conversations will certainly be had, but it’s            something on the table to give. We are giving coverage to 32 million          both sides of the isle on this issue.                                       Medicaid. It turns Medicaid into a defined contribution plan that can
unclear at this point whether picking apart the Ryan Medicare plan or           new Americans and the medical industry is going to deal with a lot                                                                                        force change like we did in Florida. We created a waiver and set out
lining up behind the President’s reform plan will be the Democratic             less charity care. To focus on coverage now without tackling any of           GS: How can we talk about entitlement reform and the cost of health-        a framework where we would accept 2% growth and create a plan
strategy. I do believe that what we have done with health reform                the hard issues on the cost side feels like a wasted opportunity to me.       care and leave taxes off the table?                                         that was actuarially sound; we established lower premiums for those
will be a problem to some extent for the Democrats, certainly at a                                                                                                                                                                        who were healthy and higher ones for those who were sick; we then
national level and possibly at a state level as well.                           GS: In terms of the constitutionality of the reform law, how do you           PB: I give Paul Ryan full credit for putting something on the table         counseled individuals and allowed them to choose from among their
                                                                                think the Supreme Court is going to change the debate?                        and I hope my party will respond with their ideas rather than just          options rather than be assigned a plan.
JB: Health care is going to be an issue because the country is not                                                                                            making it another club we can use. The problem is that any plan that
being led right now. I give Paul Ryan a lot of credit for putting forth         JB: I don’t think we will see a decision until after the election. I’m not    doesn’t change the cost of health care is not addressing the fun-
a plan with substance that is provocative. He’s proposed a plan that            sure what they are going to do, but I think we are arguing about the
clearly touches the third rail in a way that moves the conversation to          wrong things. Health care coverage is the dominant issue that drives
where it needs to be. Whether or not you agree with the plan, now               the debate right now, but I would say that we should be focused on
others will have to put forth plans as well, so that will definitely be         health care results. We ought to be organized around healthy people,
part of the conversation in 2012.                                               not a dysfunctional insurance system.

My fear is that lack of action prior to the election will only add fuel to      Obama was the first 21st century president in many respects, in his
a financial crisis that is looming. We have serious concern right now           attitude, his age and his focus on technology. He won the election
about our ability to renew the $2 trillion of debt, plus the $1.5 trillion of   because he represented change. Unfortunately, instead of carrying
budget deficit and the implicit guarantee of Freddie and Fannie. The            the health system into the 21st century, he simply took the system
Federal Reserve has just announced that it will stop buying our toxic           we had and made it bigger. I think it was a missed opportunity and
debt in June, which means we are going to have a crisis, and the                he’s going to have a huge problem politically as a result.
place to solve that crisis is going to be health care reform. So, the
discussion is going to have to be very different; we are going to need          PB: I have certainly been critical of my own party in not taking advantage
to have a grown up conversation.                                                of all the opportunity on the table. During the first 3 months after
                                                                                the election, the country was in a state similar to after 9/11; people
GS: Did Ryan do the democrats a favor by changing the subject?                  were hungry to be led. I was disappointed that Obama didn’t do
                                                                                more, but what he did was in a long tradition of the way these issues
JB: I think Governor Bredesen and I agree that we had a dysfunctional           have been dealt with. It was not too long ago that a Republican led
system and the current reform plan doesn’t change that dysfunction,             Congress made incremental and not-paid-for expansions of Medicare
it just makes it more complicated, bigger and maybe even more                   Part D.
dysfunctional. We’ll have to wait and see, but the entitlement issues
on top of that are driving the budget problems in our country and we            Getting back to your question about the constitutionality of the law,
are not dealing with them right now.                                            I have no idea when they are going to come down with a decision, but
                                                                                I think it’s important to remember that there are 3 possible outcomes:
PB: There are going to be some health care issues that will come in             the laws is overturned in its entirety, the law is affirmed, or the mandate
to play for the Democrats. The problem with the timing of the election          is overturned but the rest of the law is left in place. If the third option
relative to reform implementation is that over the course of the next           is where we land, then there is going to be a real scramble on all
couple of years, some of the negative effects, such as increases in             sides to figure out what to do. It’s important for the business community
insurance premiums, will be felt without the offsetting positive effects        to think about those three scenarios and consider how it impacts
of large numbers of new people being added to the rolls.                        their strategies.

We also can’t forget that the states are facing huge deficits and in a          As a governor in front of health care leaders and Americans, I’d
lot of trouble with Medicaid. We are going to hear about big budget             say we also need to think about where the line ought to be drawn                                                                                                                     Left to right: Phil Bredesen, former Governor, State of Tennessee
cuts and fiscal crises across many of the 50 states, precipitated in            between federal policy and state laws. Health care is an important                                                                                                                                       and Jeb Bush, former Governor, State of Florida

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Innovation Day
                                                                                                                                                                                                                                     “When we go into a hospital today and we talk about
                                                                                                                                                                                                                                   things we can do for them, we’re really talking about
                                                                                                                                                                                                                                                    patient outcomes, patient results.”

                                                                                                                                                                                                                                                                                       Michael Dell

playing to Win:                                                                                                                                                                                                                                                          Chairman and CEO, Dell, Inc.

taking advantage of Disruption
With tectonic shifts occurring across the healthcare landscape, innovation and business transformation have become imperatives for stakeholders
at all levels of the industry. As a result, we continue to see intensifying demand and competition for innovative solutions, partnerships and
acquisitions as industry participants attempt to strengthen and diversify their positioning for strategic advantage.

In response to these evolving challenges and opportunities, Health Evolution Partners added Innovation Day to the Leadership Summit in 2011.
This year’s Innovation Day activities included executive-level discussions & debates, as well as an Innovation Marketplace that offered a diverse
group of participants the opportunity to gain valuable insights and connect with customers, targets, partners and investors.


The Innovation Marketplace enabled over 100 meetings between innovative CEOs, investors and leading health care organizations. When asked
to vote for the most innovative businesses from across their meetings, marketplace hosts selected Qliance Medical Management, Inc. and
Telcare, Inc. to win the Leadership Summit 2011 Innovation Awards.

                                                                                                                                                    michael Dell
Seattle-based Qliance Medical Management (www.Qliance.com) was founded in 2006 to create a national network of Qliance® comprehensive,
high touch primary care clinics, made affordable by decoupling primary care from insurance. By forming a direct professional and financial
relationship with each patient, Qliance avoids the 40% of each primary care dollar that goes into insurance reimbursement processes, while
its membership model generates an attractive recurring revenue stream.

Telcare (www.Telcare.com) uses award-winning cellular machine-2-machine technology to bridge the last mile between patients and their care-
givers in order to improve the care of chronic illness. The Company’s first product, Telcare BGM, is a 3G cellular-enabled blood glucose meter
(currently awaiting FDA and EU clearance) for the 28 million Americans and 100 million addressable patients worldwide who have diabetes that
                                                                                                                                                    Lessons From an extraordinary Innovator
instantly transmits glucose values to a care-management server and provides instant feedback and coaching to patients with diabetes.

                                                                                                                                                    The final day of Leadership Summit 2011 opened with Steve Lohr of
MARKETPLACE HOSTS:                                                                                                                                  the New York Times interviewing Michael Dell, Chairman and Chief            Dell encouraged healthcare leaders to:
                                                                                                                                                    Executive Officer of Dell, Inc. Lohr and Dell discussed changes to
                                                                                                                                                    Dell’s business in recent years and the company’s growing strategic         •	Unlock information – eliminate information silos between patients,
                                                                                                                                                    focus in health care.                                                         providers and payers through enhanced digitization and the management
                                                                                                                                                                                                                                  and sharing of patient information
                                                                                                                                                    Over the last decade, Dell has been transforming its business to address    •	Empower caregivers – implement point-of-care IT solutions, such
                                                                                                                                                    the opportunity for remote delivery of services that leverage the scale       as mobile clinical computing, that empower caregivers and enhance
                                                                                                                                                    of Dell’s data center infrastructure and the skills of their growing          their productivity to help address the growing issues of clinical workforce
                                                                                                                                                    services workforce. More than 40% of Dell’s 103,000 employees now             shortages and increasing aging and chronically-ill populations
                                                                                                                                                    work in its services business.
                                                                                                                                                                                                                                •	Improve business and technology infrastructure – pursue
                                                                                                                                                    Dell’s commitment to the opportunity in services may be best illustrated      technology and business process improvements in areas such
                                                                                                                                                    by its aggressive move into healthcare. Since acquiring Perot Systems         as revenue cycle to help hospitals reclaim time and money in a
                                                                                                                                                    in 2009, Dell was able to rapidly expand its presence in the healthcare       challenging economy
                                                                                                                                                    industry and become the No. 1 healthcare information technology             •	Use information for innovation – put strategies in place to manage
                                                                                                                                                    services provider in the world, according to Gartner, Inc. The company        the dramatic increase of data generated by EMRs, imaging and genomic
                                                                                                                                                    sees tremendous opportunity to help healthcare organizations expedite         research, allowing healthcare leaders to tap data for intelligence that
                                                                                                                                                    adoption of Electronic Medical Records (EMRs) and cloud computing             can lead to major innovations and create new opportunities for the
                                                                                                                                                    to create new information-driven efficiencies.                                industry
                                                                                                                                                    Dell also pointed to the importance of solutions like EMRs for enabling
                                                                                                                                                    higher-quality and more personalized care. He discussed how EMR
                                                                                                                                                    data will help pharmaceutical companies develop targeted treatments
                                                                                                                                                    for patients who do not respond to conventional drugs, as well as how
                                                                                                                                                    integrating genomic information into EMRs will enable physicians to
                                                                                                                                                    develop lifetime wellness plans for patients with genetic predispositions
                                                                                                                                                    to specific diseases or health conditions.

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                                                                                                                                                                                                             Can the C-Suite
“The future of health care is not just selling pills…what we
 are trying to do is change the business model and
 make sure we are part of the solution.”

Kristen Peck

                                                                                                                                                                                                            Lead Innovation?
Executive Vice President,
Worldwide Business Development and Innovation,

Will Rosenzweig, (moderator)
Managing Director, Physic Ventures

Molly Coye, MD, MPH
Chief Innovation Officer, UCLA Health System

Kristin Peck
Executive Vice President, Worldwide Business Development and Innovation,

Brad Perkins, MD
Chief Transformation Officer and Executive Vice President of Strategy and Innovation,
Vanguard Health Systems

     Today’s fluid environment is causing innovation and transformation         As the Chief Innovation Officer of UCLA Health System, Molly             At UCLA, Dr. Coye is designing a lean extension of the operation         Looking ahead without loosing sight of the present. In a final
     to become critical strategic foci for companies of all sizes and           Coye, MD, MPH, is seeking sustainable value by going beyond the          that focuses on creating “communities of innovation” internally and      area of discussion, the panel discussed how to drive toward innovation
     across every sector of the health care industry; in some cases,            traditional goal of invention in an academic medical center to pursue    working closely with external advisors. Because UCLA’s staff is          without detaching from the current business. Panelists agreed
     transformation will be the only way to survive long-term. As a result,     scale and more effectively monetize innovations.                         geographically dispersed, Dr. Coye is considering how they can           that cultural shift and connectivity to the concept of innovation are
     large health care companies are increasingly establishing roles for                                                                                 leverage technology to facilitate collaboration.                         both key; the innovation function should not be isolated in an ivory
     Chief Transformation and Innovation Officers to cultivate transformative   Brad Perkins, MD, Chief Transformation Officer and Executive Vice                                                                                 tower with an immunity card. Successful innovation at the executive
     ideas and intentionally explore potential disruptions to the current       President of Strategy and Innovation, Vanguard Health Systems, is        Use of technology and an open approach to innovation are also            level will be focused on bringing innovations to the front lines of
     business model.                                                            driving Vanguard’s attempt to transform their business from a hospital   core to Pfizer’s philosophy. The company’s interest in building          the business and pursuing “intentional innovation,” as Dr. Coye
                                                                                company to a next-generation health and health care company that         innovation communities has led them to co-develop software with          called it, with visible ties to operations and defined value.
     Will Rosenzweig, Managing Director of Physic Ventures, led a panel         cares for populations at scale in large urban areas.                     Microsoft that enables internal and external engagement while
     of executives charged with driving change to explore the question of                                                                                facilitating an innovation process from idea to rollout. This approach
     whether the C-Suite can successfully lead innovation.                      Innovation and operations. Next, Rosenzweig prompted discussion          is key to supporting the company’s strategy of mixing internal focus,      KEY INSIGHTS
                                                                                of the healthy tension between executives charged with innovating        where Pfizer has made investments, and external partnerships to
     Similar charge; varied objectives. Discussion began with a focus           and those responsible for managing day-to-day operations. Peck           interface with innovators outside of the organization.                     •	One size does not fit all. The importance of innovating is universally
     on the meaning of innovation from each panelist’s perspective.             explained that CEOs of large, public companies such as Pfizer need                                                                                    recognized, but sector- and organization-specific goals and require-
     Rosenzweig’s question, though simple, highlighted one of the core          the ability to remain focused on meeting customer and shareholder        At Vanguard, Dr. Perkins is finding ways to leverage internal and            ments will vary for each executive
     issues for executives responsible for leading innovation today: the        expectations, while tasking the innovation officer with intentionally    external innovation engines through partnerships and investment.           •	Balancing innovation and operations requires a healthy tension.
     importance of innovating is universally recognized, but innovation         disrupting the current business model. In other cases the CEO            Vanguard has recently committed to making a significant investment           Successful partnerships between a CEO and Chief Innovator must
     may take on different meaning, present unique challenges and               serves as the principal innovator. By empowering his COO to focus        in venture capital.                                                          address the parallel needs to manage day-to-day operations while
     establish different requirements based on the sector and individual        on day-to-day operations, the CEO at UCLA Health System is able                                                                                       intentionally identifying opportunities to disrupt the current business model
     company.                                                                   to be a partner to Coye in pursuing visionary transformation.            Building on panelists’ discussion of architecture, Rosenzweig
                                                                                                                                                         probed for insight into the trend toward partnering early in a highly      •	Look beyond your four walls. Executive innovators should look
     Panelists’ responses illustrated a range of innovation goals being         Architecture and partnerships. Panelists expanded on the issue           acquisitive environment. Panelists agreed that it is no longer               outside of their own organizations for ideas and partners in pursuit
     pursued, as well as the implied challenges that each respective            of how innovation relates to operations by discussing their respective   necessary to own everything. While this may have been a common               of transformation. As health care becomes increasingly solution-
     executive must address:                                                    approaches for building ecosystems of internal and external              strategy of the past for large health care companies, more                   oriented, companies have incentive to be flexible in how and when
                                                                                resources, as well as how they form partnerships.                        solution-oriented needs across health ecosystems demand that                 they partner across health ecosystems to achieve value
     At Pfizer, Kristen Peck, Executive Vice President of Worldwide Business                                                                             companies are adept at partnering early and often to achieve
                                                                                                                                                                                                                                    •	Stay connected. Avoid an ivory tower mentality. Drive value
     Development and Innovation, is leading business transformation             In all cases, panelists consider working with external partners as       value. Dr. Coye also suggested that early partnership can be
                                                                                                                                                                                                                                      out of strong ties to people and processes in operations through
     efforts in order to compete in a more solution-oriented, personalized      an essential element of how they are architecting their innovation       symbiotic, enabling large organizations to define value and work
                                                                                                                                                                                                                                      “intentional innovation”
     and cost-conscious environment, indicative of the major challenges         strategies.                                                              together with innovators to achieve it.
     facing leaders in the pharmaceutical and life sciences industries.

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Why Health policy Needs
                                                                                                                                                         A path to change. As Park works to liberate data, Peter Lee is focusing
                                                                                                                                                         on the second of Park’s two requirements for unlocking the power of                         Examples Lee shared to illustrate how the CMMI is supporting
                                                                                                                                                         innovation in health care: changing incentives.                                             new payment models:

Innovation, and Vice Versa
                                                                                                                                                         Lee recently left his previous role as the Director of Delivery System                      • Multi-payor medical home pilots in eight states to test ways of better
                                                                                                                                                         Reform at HHS’s Office of Health Reform to become Deputy Director                             aligning primary care incentives
                                                                                                                                                         at the Center for Medicare and Medicaid Innovation (CMMI). With                             • A collaborative initiative focused on patient safety to help providers
                                                                                                                                                         a $10 billion allocation from congress for fiscal years 2011 – 2019,                          prevent errors that could negatively impact payment
                                                                                                                                                         the CMMI will be a critical mechanism for building on pathways that
                                                                                                                                                         the PPACA established to drive new payment change. Whereas the                              Additional ways the CMMI is looking to make an impact:
                                                                                                                                                         reform law uses potential sticks to incent change, such as tying an
The last two years have been a period of significant change in health                                                                                    increasing portion of hospital payments to quality and value, the
                                                                              Park shared three examples of how HHS is enabling innovation                                                                                                           • Compliment Medicare ACO rules with additional innovations that
policy at the federal level. The American Recovery and Reinvestment                                                                                      CMMI will offer carrots by working with states and the private sector
                                                                              and fostering entrepreneurship through the liberation of data:                                                                                                           enhance impact and value
Act and passage of health reform have created new funding mechanisms                                                                                     to develop and test payment innovations.
and pathways for change. However, the challenges associated with                                                                                                                                                                                     • Work with industry stakeholders to clarify and improve how we
driving meaningful and lasting change in the health care system will          •	The Direct Project. Born out of a doctor’s reaction to complex           Another important aspect of CMMI is its ability to drive scale for                            define and measure quality
require continuous innovation and productive collaboration between              information exchange scenarios, the Direct Project started with a        payment innovations. Once a new model has been tested and can
the public and private sectors.                                                 simple need for one provider with an EHR to send information to                                                                                                      • Test potential alternatives to fee-for-service payment, such as
                                                                                                                                                         demonstrate savings to the Office of the Actuary, the HHS Secretary
                                                                                another provider with an EHR, causing HHS to focus on the basic                                                                                                        bundled payments and new ways of paying for care coordination
                                                                                                                                                         has authority to scale successful models across the entire Medicare
In an effort to explore how government is infusing innovation into the          problem of moving information securely from point A to point B.          population.                                                                                 • Coordinate with agencies including the FDA on issues where regulation
policy framework, Peter Neupert, Corporate Vice President, Health              HHS setup a wiki and created a forum where over 60 players joined;                                                                                                      can impact both payment and solution innovation, such as mobile health
Solutions Group at Microsoft, interviewed Peter Lee, JD, Deputy                in less than 90 days they created a specification for secure email for    When asked how the CMMI will prioritize types of payment innovations
Director, Center for Medicare and Medicaid Innovation, U.S. Department         healthcare. 70 companies, representing over 90% of EHRs, have             to focus on, Lee explained that magnitude of potential impact is the
of Health and Human Services and Todd Park, Chief Technology                   committed to implementing Direct this year.                               highest priority. According to Lee, the federal government will soon
Officer, U.S. Department of Health and Human Services.                                                                                                   be forced to “innovate or cut.”
                                                                              •	Blue Button Initiative. HHS created the Blue Button Initiative in
“HHS 2.0”…a start-up? Having co-founded athenahealth in 1997,                   August 2010 in response to a basic question from several IT experts:
 and more recently Castlight Health, Todd Park knows about start-ups.           “why is it so hard to make health data accessible for download?” The
 In his current role as CTO for the U.S. Department of Health and Human         agency quickly developed the capability for Veterans and Medicare
 Services (HHS), Park has been charged with disrupting traditional              beneficiaries to download their personal health information as a
 processes and approaches to problem solving within HHS in order                simple text file. Over 270,000 individuals have downloaded their data
 to foster innovation internally and outside of the agency.

In pursuit of this charge, Park is focused on working across HHS and
                                                                                thus far and private sector players are now leveraging the data to
                                                                                create applications that help seniors and Veterans better manage
                                                                                their health.
                                                                                                                                                            organic and Inorganic Innovation
with the private sector to help address what he considers to be the
two requirements for unlocking the power of innovation in health care:        •	Community Health Data Initiative. Based on a model used by the
                                                                                national oceanic and atmospheric administration (NOAA), Park is
                                                                                                                                                            Lessons Learned from the It Industry
(1) changing incentives, from volume based payment to paying for
                                                                                aiming to make HHS the NOAA of health care. A key goal is to make
health, quality and value; and (2) information liberation – getting data
                                                                                data from Medicare, Medicaid, NIH, CDC and the FDA available                Oracle has continued to expand significantly over the past thirty
into the hands of consumers, providers and entrepreneurs to enable
                                                                                online at healthdata.gov for consumption without intellectual property                                                                                                   Five keys to Oracle’s approach:
decisions that improve health, quality and value.                                                                                                           years. With a current annual research and development spend
                                                                                                                                                            of $4 billion and over 78 acquisitions in recent years totaling
                                                                                                                                                                                                                                                        •	 Focus. Health care & Life Sciences is one of 6 major
                                                                                                                                                            $43 billion, Oracle’s leadership commits significant effort toward
                                                                                                                                                                                                                                                           industry groups that Oracle uses to drive focus in investment
                                                                                                                                                            managing growth. Todd Davis, Managing Director at Cowen                                        and operations. By applying focus at an industry level, group
                                                                                                                                                            Healthcare Royalty Partners interviewed Neil de Crescenzo,                                     leadership is able to take risks and make bets based on
                                                                                                                                                            Senior Vice President and General Manager for Oracle Health                                    deep expertise and industry-specific concepts of value
                                                                                                                                                            Sciences to discuss how Oracle balances organic and inorganic                               •	 Open Standards. Oracle has made significant investments
                                                                                                                                                            growth in the health care IT industry.                                                         in an open standards strategy through major acquisitions,
                                                                                                                                                                                                                                                           such as Sun, and board-level involvement with organizations
                                                                                                                                                                                                                                                           including CDISC and HL7. They have also been involved
                                                                                                                                                                                                                                                           with federal technology standards efforts such as NHIN

                                                                                                                                                                                                                                                        •	 Acquisition Discipline. Oracle employs a four-part strategy:
                                                                                                                                                                                                                                                           (1) pick the right targets, (2) pay the right price, (3) achieve
                                                                                                                                                                                                                                                           the right synergies, and (4) repeat

                                                                                                                                                                                                                                                        •	 The Oracle Stack. As a function of business model clarity,
                                                                                                                                                                                                                                                           Oracle transitions acquisitions onto their fully integrated
                                                                                                                                                                                                                                                           stack, eliminating large investments in R&D and interoperability
                                                                                                                                                                                                                                                           that smaller companies were forced to make prior to being

                                                                                                                                                                                                                                                        •	 Culture of Aggressive Innovation. Oracle makes big bets
                                                                                                                                                                                                                                                           and views this type of culture as essential to its success
Peter Neupert
Corporate Vice President, Health Solutions Group, Microsoft
                                                                                                                                                           Left to right: Todd Davis, Managing Director, Cowen Healthcare Royalty Partners and
                                                                                                                                                           Neil de Crescenzo, Senior Vice President and General Manager for Oracle Health Sciences
Peter Lee, JD
Deputy Director, Center for Medicare and Medicaid Innovation,
U.S. Department of Health and Human Services

Todd Park
Chief Technology Officer, U.S. Department of Health and Human Services
18   |   Leadership Summit 2011 Connecting Leading Companies in Health Care                                                                                                                                                                                     Leadership Summit 2011 Connecting Leading Companies in Health Care   |   19
the Future of
                                                                                                                                                                                                                                              “[We understand the impact that uncertainty can have on
                                                                                                                                                                                                                                              innovation and investment], but there has to be realism
                                                                                                                                                                                                                                                 in the outside world about the difference between
                                                                                                                                                                                                                                                  regulatory uncertainty and scientific uncertainty.”

personalized medicine                                                                                                                                                                                                                                                           Jesse Goodman, MD, MPH
                                                                                                                                                                                                                                                                   Chief Scientist and Deputy Commissioner,
                                                                                                                                                                                                                                                                                   Science and Public Health,

Innovators Walking the regulatory Line                                                                                                                                                                                                                                   U. S. Food and Drug Administration

Ginger Graham                                                                        David Pyott                                                                                                               James Coffin, PhD                                                   Jesse Goodman, MD, MPH
President & CEO, Two Trees Consulting,                                               Chairman & CEO, Allergan                                                                       Worldwide Vice President and General Manager,           Chief Scientist and Deputy Commissioner, Science and Public Health,
and former CEO of Amilyn Pharmaceuticals                                                                                                                                            Healthcare and Life Sciences Industry, Dell, Inc.                                       U.S. Food and Drug Administration

     With the cost of personal genome sequencing expected to fall below              genomic and proteomic data, but considers the foundation of EMRs           In light of consumer sentiment, Coffin stressed the importance of           In summary, Goodman suggested that the FDA really does want to
     $1,000 in the coming years, the vision of personalized medicine feels           as a critical first step. He also suggests that EMRs will be important     working on privacy and security standards for genomic data now,             provide pathways for personalized medicine. However, the agency
     increasingly attainable. Moreover, as we begin to see dramatic differ-          for aspects of personalization that are less about science, but equally    rather than waiting for more data to become available.                      is trying to take a risk-based approach that will avoid halting progress,
     ences in the effectiveness of treatments in areas such as Oncology,             important, such as connecting “communities of care” at a local level.                                                                                  without ignoring safety.
     where personalization has resulted in efficacy as high as 97%, the                                                                                         Changes at the FDA. With privacy and information sharing among
     natural desire is to push farther, faster and on a larger scale. Still, there   According to Jesse Goodman, MD, MPH, Chief Scientist and                   a longer list of challenges, Graham asked Goodman to comment on
     is continued tension between industry and regulators over how fast and          Deputy Commissioner of Science and Public Health at the U.S.               what the FDA is doing from a regulatory standpoint to lower barriers.         KEY INSIGHTS
     with what risk tolerance we should be forging ahead.                            Food and Drug Administration (FDA), personalized medicine is a             After suggesting that the challenges described could be considered
                                                                                     high priority for the FDA, and NIH as well. Both agencies view the         normal for any new, information rich technology that impacts individuals,      •	The person in personalized medicine. While the tsunami of
     Ginger Graham, President & CEO of Two Trees Consulting and former               path toward personalization as one that can result in tremendous           Goodman identified steps that the FDA has been taking.                           information that personalized medicine will bring can be empowering,
     CEO of Amilyn Pharmaceuticals, moderated a discussion among a                   benefit, yet is also highly complex and must be navigated carefully                                                                                         the depth and complexity of data will necessitate intense focus on
     panel representing companies in the life sciences and health care IT            to avoid harming patients. Goodman noted that while areas such as          According to Goodman, the FDA is leveraging new funding for regulatory           how to communicate with patients and help them interpret meaning.
     industries, as well as the U.S. Food and Drug Administration.                   Oncology are ripe for personalized medicine, the complexity of even        science to train staff and build relationships so the agency can work in         Establishing standards for privacy and security of genomic data
                                                                                     a single pathway is astonishing. In his view, the science – translating    better partnership with the research community and private industry,             will be critical to earning patient trust
     Opportunities and challenges. Panelists agreed that the opportunity             genetic data into an end result in a patient - is still the biggest gap.   as well as partnering with NIH to support practical applications of
                                                                                                                                                                                                                                               •	Signs of regulatory change. New funding for regulatory science
     for personalized medicine is significant. However, questions remain                                                                                        biomarkers and identify innovative study designs. The FDA has also
                                                                                                                                                                                                                                                 is enabling change at the FDA. The agency has added dedicated
     regarding how quickly and to what extent innovations will evolve and            Who owns the data? Discussion quickly turned to the issue of               added dedicated personalized medicine staff within the Center for
                                                                                                                                                                                                                                                 personalized medicine staff within the Center for Devices and
     become commercially available in light of barriers such as uncertainty          information privacy and ownership. While all panelists agreed that data    Devices and Radiological Health to help companies engage with
                                                                                                                                                                                                                                                 Radiological Health, prioritized private sector relations, and begun
     about the regulatory pathway, pricing, privacy, control over patient data       should be available to individuals, Goodman pointed out that the depth,    officials earlier in the process, set expectations and control risk.
                                                                                                                                                                                                                                                 partnering with NIH on practical applications for biomarkers and
     and nascent systems and processes.                                              complexity and very nature of information associated with personalized
                                                                                                                                                                                                                                                 innovative study designs
                                                                                     medicine will create a critical need for focus on how to communicate       The power of uncertainty. In a final area of discussion, Graham
     Despite these challenges, both industry and government are working hard         with patients. According to Goodman, industry and government are           posed the question of whether or not the FDA truly understands the             •	Differing views of uncertainty. The FDA is fully aware of the
     to make progress. Companies such as Allergan are looking for areas              both working to better understand the science, but the tsunami of          negative impact that uncertainty has on investment and innovation.               impact that uncertainty can have on investment and innovation.
     where science intersects with opportunity, acknowledging that variation         information that will be unleashed through personalized medicine could     According to Goodman, the FDA fully appreciates the link between                 Their challenge: agency officials suggest that some in the private
     in regulation and freedom of pricing will influence how aggressively            further dehumanize medicine if proper steps are not taken.                 uncertainty and innovation, but believes that some in the private sector         sector are confusing regulatory uncertainty with scientific uncertainty.
     they invest in products for the reimbursed or consumer markets.                                                                                            confuse regulatory uncertainty with scientific uncertainty. Goodman              Pathways for personalized medicine are a definite priority, but the
                                                                                     In addition to ownership, Coffin emphasized the importance of under-       explained that sponsors might receive varied guidance at different               approach will be risk-adjusted
     Jamie Coffin, PhD, Worldwide Vice President and General Manager                 standing how truly fundamental consumer trust and control will be to       points in a product’s development for a range of reasons. In some
     of Healthcare and Life Sciences Industry at Dell, views the efforts             widespread engagement in personalized medicine. Coffin cited a study of    cases, continuity in the review process can be a legitimate challenge.
     that Dell is involved with now to implement electronic medical records          patients in the U.S. and Canada in which 52% of Americans surveyed         In others, evolving science or data from a separate study – one not
     (EMRs) on a wide scale as building the foundation for personalized              said they would not share their genome in exchange for a hypothetical      available to the sponsor – may justify a change. This is one example of
     medicine. Coffin acknowledged that significant work remains around              cure to stage 4 cancer that could end their life within 6 months.          how non-transparency is a tradeoff for sponsors.

20     |   Leadership Summit 2011 Connecting Leading Companies in Health Care                                                                                                                                                                            Leadership Summit 2011 Connecting Leading Companies in Health Care   |   21
                                                               A PlAce for MoM                                     coderyTe, inc.                       hiMSS                                                novologix, inc.                                       SouThern cAliforniA PerMAnenTe MedicAl grouP
                                                               AArP ServiceS, inc.                                 coMPrehenSive clinicAl develoPMenT   hoMe heAlThcAre PArTnerS                             novuMed gMbh ociMuM bio SoluTionS                     Sovereign heAlThcAre

                                                               AbilTo                                              coMPriSMA                            hoSPiTAl PhySiciAn PArTnerS                          oMnicell, inc.                                        ST AdviSorS
                                                               AccenTure                                           conSenSuS PoinT                      huMAnA, inc.                                         oncure MedicAl corPorATion                            STAnford univeSiTy
                                                               Accord buSineSS STrATegieS, inc                     conSuMer rePorTS                     huMeTrix                                             one cAll MedicAl, inc.                                STATe of floridA

organizations                                                  AcuriAn, inc.
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                                                                                                                   conSuMerS union
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                                                                                                                                                                                                             one MedicAl grouP
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                                                                                                                                                                                                                                                                   STATe of MinneSoTA
                                                                                                                                                                                                                                                                   STATe of TenneSSee
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                                                               AeTnA, inc.                                         creo STrATegic SoluTionS, llc        iMTherA MedicAl, inc.                                oPTuM                                                 STreAMline heAlTh, inc.
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                                                               AllinA hoSPiTAlS & clinicS                          dexcoM                               inlAnd iMAging                                       PASSPorT heAlTh coMMunicATionS                        Sxc heAlTh SoluTionS
                                                               Aln MedicAl MAnAgeMenT                              dlife                                inSPire                                              PATienTSAfe SoluTionS, inc.                           T2 bioSySTeMS
                                                               AlPhA orThoPAedicS, inc.                            dnA direcT                           inSTAMed                                             PAul cAPiTAl inveSTMenTS                              TelAdoc
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                                                               AMericAn hoSPiTAl ASSociATion                       edelMAn                              invivolink                                           Pfizer                                                Tenzing heAlTh
                                                               AMericAn iMAging MAnAgeMenT                         egl AdviSorS                         iorA heAlTh                                          PhArMMd                                               TeSAro grouP
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                                                               AngioTech PhArMAceuTicAlS                           eMendo                               iSofT                                                PhilAdelPhiA heAlTh cAre TruST                        The breAkAwAy grouP
                                                               AnviTA heAlTh                                       eMMi SoluTionS llc                   johnSon & johnSon                                    PhreeSiA inc.                                         The chArTiS grouP
                                                               APeniMed, inc.                                      eMPower inTerAcTive, inc.            kAiSer PerMAnenTe                                    PhySic venTureS                                       The full yield, inc.
                                                               Arbor heAlThcAre                                    enclAriTy, inc.                      kdh SySTeMS, inc.                                    PillSbury winThroP ShAw PiTTMAn llP                   The leAderShiP inSTiTuTe
                                                               ArcAdiA heAlThcAre                                  encore heAlTh reSourceS              keAS                                                 PiPeline heAlThcAre                                   The new york TiMeS
                                                               ASThMAPoliS                                         endogASTric SoluTionS inc.           kelleher conSulTing, llc                             Policy STudieS inc.                                   The TrizeTTo grouP, inc.
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                                                               Averde heAlTh, inc.                                 envoy TherAPeuTicS, inc.             lAborATory PArTnerS                                  PorTico SySTeMS                                       Tonic
                                                               AviviA heAlTh froM kAiSer PerMAnenTe                evolvence indiA life Science fund    life TechnologieS corPorATion                        PoSiT Science                                         TPg bioTech
                                                               AwArePoinT                                          execuTive heAlTh reSourceS           lifeiMAge                                            PreMATicS                                             Two TreeS conSulTing
                                                               AxiAl exchAnge, inc.                                exTend heAlTh, inc.                  lifenexuS, inc.                                      PreMerA blue croSS                                    u.S. dePArTMenT of heAlTh And huMAn ServiceS
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                                                               AxoloTl corPorATion                                 foundATion rAdiology grouP           linden, llc                                          Providence eQuiTy PArTnerS llc                        u.S. PrevenTive Medicine, inc.
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                                                               blue croSS And blue Shield ASSociATion              gene logic/ociMuM bioSoluTionS       liveProceSS                                          PSiloS grouP MAnAgerS, llc                            ucSf MedicAl cenTer
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                                                               brighAM And woMen’S hoSPiTAl                        good ThingS heAlTh                   luxeMburg cAPiTAl                                    QuAlcoMM, inc.                                        uniTed bioSource corPorATion
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                                                               cAldwell PArTnerS                                   hArvArd MedicAl School               MAnATT PhelPS & PhilliPS                             rbc cAPiTAl MArkeTS                                   univiTA heAlTh
                                                               cAliforniA dePArTMenT of MAnAged heAlTh cAre        hArvArd School of Public heAlTh      MArin heAlThcAre diSTricT/MArin generAl hoSPiTAl     redbrick heAlTh                                       vAluecenTric
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                                                               cAliforniA Public eMPloyeeS’ reTireMenT SySTeM      heAlTh AlliAnce PlAn                 MckinSey & coMPAny heAlTh SySTeMS inSTiTuTe          regence                                               vAriAn MedicAl SySTeMS, inc.
                                                               cAliforniA STATe ASSeMbly                           heAlTh AnAlyTic ServiceS, inc.       MedeciSion, inc.                                     reSilienT neTwork SySTeMS                             verAlighT
                                                               cAliforniA STATe TeAcherS’ reTireMenT SySTeM        heAlTh evoluTion PArTnerS            MedhelP                                              SA igniTe                                             veriSk heAlTh
                                                               cAMbridgeSofT corPorATion                           heAlTh MArkeT Science                MedicAliS                                            SAleSforce.coM                                        verizon
                                                               cAnAdA heAlTh infowAy                               heAlTh venTure grouP, llc            MediconnecT globAl                                   SAMAriTAn heAlTh ServiceS                             verSAnT venTureS
                                                               cArdinAl heAlTh, inc.                               heAlThAgen                           Medley heAlTh                                        SAnAre, llc                                           vicTory heAlTh
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                                                               cArefx                                              heAlThcAre ProducTiviTy AuToMATion   MicroSofT                                            ScS venuTreS                                          wellneSS lAyerS
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                                                               cArol corPorATion                                   heAlTheQuiTy                         Mollen iMMunizATion clinicS, llc                     SeechAnge heAlTh                                      weST Penn Allegheny heAlTh SySTeM
                                                               cATch.coM                                           heAlThhelP                           MyheAlThdirecT                                       Self cAre cATAlySTS inc.                              wiSePATienT
                                                               cedArS-SinAi heAlTh SySTeM                          heAlThieST you                       nATionAl eheAlTh collAborATive                       SePTeMber venTureS llc                                wyATT MATAS & ASSociATeS
                                                               cerTificATion coMMiSSion for hiT                    heAlThinATion                        nAvineT, inc.                                        ShAPe uP The nATion                                   yournurSeiSon.coM
                                                               ch MAck                                             heAlThline neTworkS, inc.            nehi                                                 ShAreAble ink
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                                                               ciSco SySTeMS                                       heAlThrAgeouS, inc.                  nexTiMAge MedicAl                                    SleePQueST, inc.
                                                               clevelAnd clinic                                    heAlThTAP                            nhS innovATionS london lTd.                          SoloheAlTh, inc.
                                                               cnSi                                                heriTAge grouP, llc                  norTh TexAS SPeciAlTy PhySiciAnS                     Sound PhySiciAnS

22   |   Leadership Summit 2011 Connecting Leading Companies in Health Care                                                                                                                                                                        Leadership Summit 2011 Connecting Leading Companies in Health Care   |   23
Health evolution partners                                                                                                                      Leadership Summit 2011 Sponsors
Health Evolution Partners (HEP) invests in all key areas of the health economy: hospitals, managed care, pharmaceutical developers, device
makers and consumer products and services. HEP is guided by a team of exceptional health care investors and operators. We connect our
companies to a substantial network of health care innovators, policy makers and thought leaders. We bring both financial resources and
mindshare to our companies.

Health Evolution Partners Growth Fund

Health Evolution Partners Growth Fund invests in leading companies across the health care industry. HEP invests substantial capital in
companies that are commercially proven and profitable. Investments can take the form of minority or control positions achieved through
buyouts, growth capital or recapitalizations. HEP forms close working partnerships with outstanding management teams who are building
important and valuable enterprises. We align our success with our companies as they grow and prosper.

Our investment teams cover the major sectors of the health care industry, including:

Services – we invest in health care providers and payors, and companies that provide services to providers and payors. This includes
ambulatory care providers, clinical and administrative facility services, managed care services, and consumer driven health care.

Health Information Technology – we invest in information technology companies that help improve care delivery, financial management,
consumer engagement or research and discovery. Our focus areas include the cloud computing, enterprise solutions, digital media, online
services, process automation, revenue cycle management and network transactions verticals within the health care industry.

Life Sciences – we invest in companies that bring proven therapies, devices, diagnostics or product technologies to market. This includes
medical technology, specialty pharmaceutical, life science tools, diagnostic and outsourcing services businesses.

Health Evolution Partners Spectrum Fund

Health Evolution Partners Spectrum Fund is a diversified portfolio of healthcare investments that captures various stages, geographies,
and sectors. These investments are made directly by Health Evolution Partners and indirectly through a partnership between HEP and leading
health care investment funds. In addition to making capital commitments to our partner funds, the Spectrum Fund works closely with partner
funds to create a dynamic ecosystem in which innovative health care companies can excel. Health Evolution Partners also selectively
co-invests directly into companies alongside Spectrum Fund partners.

Health Evolution Partners Innovation Network

Health Evolution Partners Innovation Network unites executives from growing companies and industry leaders who want to adapt to and take
advantage of shifts in the healthcare landscape. The Innovation Network brings together HEP investors and advisors, commercial leaders,
growth companies and industry thought leaders. The Innovation Network delivers value to HEP stakeholders by providing:

Industry Expertise - HEP portfolio companies access deep industry expertise and extensive relationships to identify and capture operational
and strategic opportunities

Connections - Innovative companies and industry leaders forge powerful connections through personal introductions, strategic initiatives and
the annual Leadership Summit

Strategic Resource - Industry leaders build strategic relationships with the Innovation Network and industry peers to gain a window into
innovation and navigate the environment

     Looking ahead
     Leadership Summit 2012
     Reconnect next year. April 25 – 27, 2012 at the Ritz-Carlton, Laguna Niguel.

  The Leadership Summit distinguishes itself from other industry gatherings by inviting only a select group of leading executives each year.
  To be considered for participation and receive advanced information about the agenda, speakers, and registration,
  visit: www.healthevolutionpartners.com/leadership-summit                                                                                                          Embassy
                                                                                                                                                                    of Denmark

24     |   Leadership Summit 2011 Connecting Leading Companies in Health Care                                                                                                    Leadership Summit 2011 Connecting Leading Companies in Health Care   |   25
        Health Evolution Partners
   555 Mission Street, 23rd Floor
  San Francisco, California 94105

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