CHE Update Visiting Nurse Association Health Group Annual Board Retreat

1. CHE Update Visiting Nurse Association Health Group Annual Board Retreat Judith M. Persichilli, RN, BSN, MA June 2011

3. Catholic Health East was formed to…. strengthen the role and identity of the Catholic health ministry in the Eastern United States. use its collective strength and resources to pioneer new and creative ways to respond to community needs. be better positioned to take risks and explore innovative approaches to healthcare which no one facility could have done independently.

5. 2009 2010* FTEs (approximate) 54,000 54,000 Total Assets $ 6,405,157,000 $6,628,516,000 Total Revenue $ 5,976,620,000 $5,586,337,000 $338,813,642 Total Social Accountability $ 320,000,000 Catholic Health East At a Glance

6. Vision, Strategy & Focus

7. CHE Vision & Strategic Direction • Planning horizon expanded from 3 – 10 years • Two-way (not top-down) planning efforts • Cascades throughout entire organization • Strategic, strategic financial and 3 year rolling operational plans fully integrated • We started with a “future ideal” and we are now working backwards by building a roadmap of “how to get there”

8. 2017 StrategicFramework • Developed in 2006, CHE’s Vision 2017 document calls for the continuation of our role as a transforming, healing presence in the communities we serve. • Vision 2017 outlines CHE’s Health Care Delivery Model of the Future, and our specific goals and strategies for 2017 • A comprehensive review of this document, completed in 2010, showed how contemporary it still is, and how in synch it is with health care reform.

9. Vision 2017 Inspired by our Mission and committed to our Core Values, Catholic Health East will achieve excellencein all we do, creating a system that empowers communities and individuals to achieve optimal health and quality of life.

10. Characteristics of Our Preferred Delivery Model Delivers compassionate, holistic person-centered care to all; Builds and fosters a values-based culture which attracts diverse individuals dedicated to the healing ministry; Demonstrates excellence in quality, service, access and value; Leads in the provision of personal health data and professional advice and support that empowers persons to participate in managing their care and optimizing their health; Provides coordinated, integrated care management for persons across the continuum of care; Advocates for quality care, especially for those who are marginalized; and Collaborates broadly to serve persons in our communities.

11. Person-Centered Care The Scriptures teach us that we are made in the image and likeness of God. Every person possesses innate dignity and deserves reverence and respect. This is the foundation of our understanding of person-centered care. We care for each person in the community, recognizing and appreciating his/her unique gifts, challenges, needs and possibilities.

12. Definition Person-Centered Care creates healing partnerships through relationships that strive to achieve optimal health and quality of life honoring individuals, offering informed choices and respecting innate dignity.

13. Person-Centered Care Guiding Principles • Each person- body, mind and spirit – is the center of our work. • Each person comes to us with unique needs, concerns and values that compel us to build/design systems for the benefit and best interest for the person. • Each person’s family, friends and support system are integral to the healing partnership and we encourage their participation.

14. Person-Centered Care Guiding Principles (cont.) • Each person needs access to understandable health information to empower decision making and to participate in their care. It is our responsibility to provide access to that information. • Each person should expect open and active ongoing exchange of information including their own health record to assist them in making choices regarding their healthcare. • Each person has the opportunity to make decisions essential to his/her well being. It is our responsibility to maximize the person’s ability to make educated and informed choices and to respect their decisions.

17. CHE Strategic Framework CHE’s Strategic Framework was developed in 2007, prior to Healthcare Reform. It is a reformed vision that included input from colleagues throughout the CHE System in alignment with physicians, governance, and sponsors. The CHE framework facilitated a focus on strategy, and on collaborative efforts in our markets to support sustainability of our mission and partnering with others to accomplish goals of improved healthcare in our communities

18. How will CHE Define Value? Value = Quality and Cost Decrease readmissions – focus on chronic care management in communities Focus on reduction/elimination of hospital readmissions Scale, size, and leverage Payments based on quality of care Effective physician alignment Continued focus on Hospital Acquired Conditions Shift from cost management to effective cost structure Investment in effective Information Technology

19. Accountable Care InitiativesProviders – Payers - Patients ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü ü

20. Physician Alignment Strategies • Co-management • Orthopedics • Cardiology • Joint Ventures • Cardiac Catheterization • Ambulatory Surgery Centers • Employed Models • Over 450 Employed Physicians • Partnerships/Other Models • CIPA (Catholic Health System – IPA) - 800 Physicians • Mid-Jersey IPA – 230 Physicians • Hampden County Physician Associates, LLC (Massachusetts)

21. Focus on PeopleCHE Leadership Academy • Academy developed in partnership with Seton Hall University • Identified individuals as “top” leaders or “emerging” talent • Balance of disciplines • Career aspirations consistent with CHE’s organizational & strategic needs • Track record of leadership • Demonstrate potential for increasingly larger or more senior leadership within CHE • A commitment to continued professional and spiritual growth • Part of an executive assessment process • 21 Leaders in First Cohort/Program (SMT, RHC CEOs, RHC Management, Physicians) • 2-Year Program • First Academy Cohort on April 5th and 6th, 2011 • The future of our System is dependent on the development of experienced, strong, mission-driven leaders who will embrace our vision, values and culture. Leadership Academy Objective: To identify and develop a cadre of committed well-formed lay leaders who can successfully carry the CHE Ministries into the future and facilitate smooth succession for senior management teams at the RHC and CHE levels.

22. Focus on PeopleCHE Leadership Academy

23. Ministry Formation Programs • Healthcare Ministry Basics • One day introduction for directors and managers • Reviews origins of Catholic health care and our role in this ministry • Foundation of Catholic Health Care • Two day seminar for all executive teams • Reviews history of the Biblical roots and key moral and ethical traditions of Catholic health care • Excellence in Ministry • Six two-day modules scheduled over a three year period for all executive leaders • Modules cover • Biblical foundation • Church structures and relationships • Sponsorship roles and responsibilities • Catholic Social teaching • Ethical decision making • Servant leadership

24. Focus on QualityAdvancing Clinical Transformation: “ACT” ACT Goal • “Every Person, Every Place, Every Time” • Implement breakthrough processes that: • Reduce/eliminate the incidence of hospital-acquired conditions • Reduce length of stay • Reduce readmissions under 31 days • Decrease expenses associated with denial management by significantly reducing/eliminating the administrative claim denials and/or improving revenue received by the RHCs • Further reorganize System Office to better support clinical transformation • Further improve supply chain value realization • Further improve labor management and revenue management • $100 million Annualized Improvement Target • Sustainable results

25. Focus on QualityHospital Acquired Conditions - 2010 Target Met HAPU = Hospital-acquired pressure ulcers Falls = Fall with Injury VAP = Ventilator Acquired Pneumonia CLABSI = Central Line-associated Bloodstream Infection CAUTI = Catheter-associated UTI • Three New Measurements for 2011: • CDiff – C. Difficile • MRSA – MRSA Infections • VTE – Venous Thromboembolus

26. Focus on Evidence-Based Care • CareLink is CHE’s system-wide, evidence-based care initiative • CareLink will transform the way that care is provided throughout our ministry • CHE will spend an estimated $300 million on the CareLink project over the next five years • When we achieve meaningful use compliance, CHE may be eligible for Federal stimulus funds, estimated ≈ $100 million Clinical Integration

27. Focus on Evidence-Based CareAlignment of Goals between Meaningful Use and CareLink In 2017, Catholic Health East is a Mission-driven health system that: Delivers compassionate, holistic person-centered care to all; Demonstrates excellence in quality, service, access and value; Leads in the provision of personal health data and professionaladvice and support that empowers persons to participate inmanaging their care and optimizing their health Provides coordinated, integrated care management for persons across the continuum of care Collaborates broadly to serve persons in our communities Advocates for quality care, especially for those who are marginalized Builds and fosters a values-based culture which attracts diverse individuals dedicated to the healing ministry • Improve quality, safety, & efficiency • Engage patients & their families • Improve care coordination • Improve population and public health • Reduce disparities Clinical Integration

28. Healthcare ReformAre we ready?

29. Healthcare Reform Themes Cost Containment Delivery System Reforms Insurance Reform and Expansion Shared Responsibility New Agencies

30. While 2014 will bring many of the most dramatic changes of the PPACA, some elements have earlier – or later – effective dates. • 2010 – 2013 • Rules, Regulations and New Funding • 105 new agencies/programs • Coordination between states and federal government • Coordination between federal agencies • Insurance conformity • Excise taxes – insurance, medical devices, drug companies • 2014 – 2016 • Mandates, Pilots & Exchanges • Individual mandate • Health exchanges • Employer pay or play • Demonstration & pilot programs • 2017 + • “New Normal” • Delivery system integration • Insurance market stakeout • Legislative amendments/rulemaking • Appropriations

31. What Does This All Really Mean for the Hospital Industry???

33. Challenges • People still want as much as they want, whenever they want it, and really don’t want to pay for it. • Hospitals do not control their revenues – everyone else does. • Healthcare is and will remain a capital intensive business. • We are living in the old world while we are moving forward in the new world.

34. Overall Objectives of Reform • Get more people covered. • Good News – get payments for patients previously not insured • Bad News – get paid less for others to cover the cost • Cut waste out of the system • Reduce unnecessary utilization • Improve value – highest quality for lowest cost • Increase provider accountability for outcomes through economic rewards and sanctions.

35. The essential and most important proposition is that the hospital industry is entering a new business model.

36. New Model Principles

37. Rethinking the Organization of Care Where Is Your Place? What is Realistic, What is Achievable? • The law addresses disparities in care by: • Allowing health plans within exchanges to reward providers that address disparities as part of quality activities. • Elevating the focus of eliminating disparities in the Department of • Health and Human Services • Requiring all federally funded data collection efforts on health care • to include collection of data on race, ethnicity, primary language, etc. • Providing grants to state & local governments and community • organizations for evidence-based community preventive health • activities aimed at reducing racial and ethnic disparities.

38. Cost Structure COMMERCIAL GOVERNMENT

39. Rethinking the Cost Structure If average payment rates approach Medicare, then the operating cost structure of hospitals will have to be completely redone. For large organizations, the implication of such changes can approach $100 million or more annually. This is a cost structure problem, not a “cost management” problem.

41. Immediate Management Goals • Enhance value – cost + quality • Physician Integration Strategy • Care Coordination / Evidence-Based Medicine • Information Technology • Developing a Service Distribution System • Financing the Transition • Acquiring Scale in the Market • Analysis, Analysis, Analysis

42. Hospital Acquired Conditions FIRST – DO NO HARM!

43. Hospital Acquired Conditions • Central Line Blood Stream Infections • Approximately 250,000 cases occur annually • Ventilator Associated Pneumonia • Approximately 40,000 patients a year die from VAP • Catheter Associated Urinary Tract Infections • Most common type of body infections • Accounts for 40% of all hospital acquired infections • Falls with Injury • Approximately 3-20% of inpatients fall at least once during their hospital stay • Decubitus Ulcers • 900,000 patients develop a new ulcer each year

44. The Emerging Success Model for Hospitals Will Require… • Scale and size • A strong position in the geographies served • Multiple operations in a connected geography • A solid, integrated physician platform coupled to a culture of “quality” • Acute attention to operations and business management • Ability to measure (in exquisite detail) clinical and financial performance. • Excellent quality across the continuum

45. Ministry Assessments Old Paradigm: Looking Back to Go Forward

46. Strategic Repositioning New Paradigm

47. Next Steps – Strategic Repositioning

48. Strategic Repositioning2010-2011 Assess the viability, sustainability and achievability of our mission in each existing community we serve in the context of the new healthcare business model, where value not volume is the driver

49. Strategic Repositioning Framework

50. Strategic Repositioning Framework(cont.)