Cerner Mick Hubner KSOB CBLS FINAL for Web

Mick Hubner, FACHE

Client Development Indiana 816-885-4576 [email protected]

[email protected]

[email protected] 13, 2016

The Shift from Inpatient to Alternate Care Settings

Center for the Business of Life Sciences: Kelley School of Business: Indiana University

mailto:[email protected]

mailto:[email protected]

© Cerner Corporation. All rights reserved. This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner.

21299466134_CernerOverviewStandard_v15 Updated: 03/30/16

Client Needs: Navigating the new normal

• Transparency

• Standardization

• Aggregation/Consolidation

• Integration

• Coordinated programmatic care-

delivering right care in the right location

• Transition from fee-for-service volume to

value-based reimbursement



2015 Client Value Achievement

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4

Cerner – at the Intersection of Health Care and IT

Founded in Kansas City in 1979

• Largest standalone health care IT company in world

• 22,000 associates worldwide

• 18,000 client facilities in over 30 countries

• 18 of 30 largest health systems have Cerner footprint

• Annual R&D investment ~$700M

• $4.9B cumulative R&D

• 5,000+ person IP org

• 2,000 clinicians

• 350 patents

• $4.4B 2015 revenue

• 14% 10-year CAGR (mostly organic growth)

22% 10-year Operating Earnings CAGR* Operating earnings reflects adjustments compared to results reported on a U.S. Generally Accepted Accounting

Principles (GAAP) basis in our 2015 annual report on Form 10-K. Non-GAAP results should not be substituted as

a measure of our performance but instead should be used along with GAAP results as a supplemental measure

of financial performance. Please see the Appendix for a reconciliation of these items to GAAP results.



Cerner today



Fortunate to work with leaders

© Cerner Corporation. All rights reserved. All Cerner trademarks and logos are owned or licensed by Cerner Corporation and/or its affiliates. All other brand or product names are trademarks or registered marks of their respective owners.

7

Total acquisitions*

Same EHR vendor

Potential wins

Potential losses**

Potential net wins

Acq

uire

d H

osp

ita

ls

*Total acquisitions – total acquisitions by clients

**Potential losses – total acquisitions by competitors clients

Source: HIMSS Analytics 2013-2015

Cerner clients accounted for nearly 50% of buying activity

Historical Hospital M&A Data2013-2015 Top Vendor Activity



Investing in innovation



Investing in innovation

Focused on the Now and Next

• 4,300 associates engaged in R&D

• Rapid development in mobility, open systems and interoperability

• Revenue management is 20 percent of Cerner’s total R&D

• Regulatory about 11 percent of R&D FTEs



Open Developer Site: http://code.cerner.com

“Cerner has taken a

significant leadership role in

the SMART on FHIR effort …

Cerner’s efforts will educate

the rest of the industry.”

John Halamka, MD, CIO

Beth Israel Deaconess Medical Center

Health Data Management, 2/12/2016

http://code.cerner.com/



Impactful innovations



World-class technology

2015 top inpatient EHR vendorGreat Population Health Management product &

market overall grades

#1 Hospital chains, system and IDNS

#1 Community Hospitals (101-250 beds)

Completeness of vision

Ab

ility

to

exe

cu

te

Gartner Magic Quadrant for Global Enterprise EHR Systems; March 16, 2015

© 2015 Gartner, all rights reserved.

A leader in vision and execution

Cerner is in the

leaders quadrant for enterprise EHR systems

© 2015 Black Book Market Research, all rights reserved. blackbookmarketresearch.com 2014 Analytics for Population Health Management © 2015 Chilmark Research. All rights reserved.

Scores well above industry average

Acute care EMR scores

Industry

average

Cerner

Millennium®

© 2015 KLAS Enterprises, LLC. All rights reserved. www.KLASresearch.com

70

75

80

85

http://www.blackbookmarketresearch.com/

http://www.klasresearch.com/

Why the Move to Alternate Care Settings?



“Our” vision aligns with the Triple Aim

Betterpopulation

health

Betterindividual

care

Lowercosts

We help our client perform by

executing the vision.

Month 12Month 6

Month 12Month 6

Fragmented and reactive FFS care delivery approach

$45,000+ spent in health care costs

Month

1

67-year-old patient with a history of heart failure, poor understanding

of disease, poor compliance with diet and medications.

Readmission(6 days)

Heart failureAdmission

Nursing homeQuality of life decreases

High risk –

taking anticoagulants

PCP Visit ED Visit Cardiology

New onset atrial fibrillation

Overall decompensation of

Health

Heart failureAdmission (11 days)



Good

health

Poor

health

Cri

tical

care

ED

Vis

it

General medical care

(3 days)Cardiology

Consult

Day 1 Day 5 Day 11

Longitudinal, proactive and personalized care delivery approach

• Paper Clipboards

• Siloed Record

• Prolonged ED Visit

• Heart Failure Order Set

• Redundant Assessments

• Nursing Documentations

• More …

TYPICAL CARE

EVIDENCE DRIVENLONGITUDINAL CARE

Episode of Care

• Care Process Models

• Adaptive Order Sets

• Smart Referrals

• Readmission Risk

Prediction

• Transition of Care

• More …

Home

Health

Cardiology

Remote Monitoring

Critical care(4 days)

Cardiology Consult

General medical care

(6 days)ED Visit

Day 1 Day 11

WITHOUT EVIDENCE DRIVEN CARE

WITH EVIDENCE DRIVEN, COORDINATED CARE

Longitudinal Personalized Care

• HealtheIntent Programs

• Longitudinal Record

• Longitudinal Lifetime Plan

• Proactive physician visits

• Continuous Surveillance

• Admission Risk Prediction

• Medication Adherence

• Shared Decision Making

• More …

$5,000+ spent in health care costs67-year old patient with personalized plan for health that includes education,

nutrition, maintenance meds, quarterly PCP visits and proactive surveillance.

Month

1

PCP Visit PCP Visit PCP Visit PCP Visit

Continuous surveillance | Care coordination | Shared decision-making

2D EchoCardiology Cardiology

Daily weight and blood pressure monitoring

Placed on a heart failure program – Surveillance and proactive

management© Cerner Corporation. All rights reserved. This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner.

Health Care Cost Growth Eats Both Middle Class Take Home Pay Growth and Corporate Productivity

Five years later

Real wage growth impacting electoral politics

The productive pay for the those who cannot pay

Medical bill bankruptcies

0

5

10

15

20

25

30

35

High Performance Integrated Provider/Insurer Payer Industry Average

Acute Spend as Percent of Medical Loss Ratio

All Commercial Plans

Source: Interview CEO Integrated Provider/Insurer

Leapfrog Hospital Grade Distribution 4/25/201633,459 Avoidable Deaths Saved If All Hospitals Performed at Grade A

BRNDEXP 2.0 0714 © 2016 Cerner Corporation. All rights reserved. This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner.

18

0

200

400

600

800

1000

1200

A B C D F

Findings point to a 9% higher risk of avoidable death in B hospitals, 35% higher in C hospitals, and 50% higher in D and F hospitals, than in A hospitals.

The Complexity of Healthcare Reform • Alternative payment modelsdo not act in isolation andmust be flexible in careDelivery

• CMS is offering Medicareproviders greater incentivesfor alignment

• The interaction betweenAPMs may createunintended consequences

Economics of Health Care Reform

A Deeper Cerner Overview

More than an Electronic Health Record and Revenue Cycle Management Supplier

The Cerner Healthe Intent Population Health Platform

BRNDEXP 2.0 0714 © 2014 Cerner Corporation. All rights reserved.

This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner.

21

”“

22This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner

1299466134_CernerOverviewStandard_v15 Updated:03/30/16

While EHRs have successfully digitized some health care

information, convenient and personalized care will only be

achieved through integration of data from sources within

and outside the EHR platforms – it is about time for the

health care industry to begin taking advantage of cloud-

based, big-data analytics, like HealtheIntentSM, to manage

patients.

Dr. Alistair Erskine

Chief Clinical Informatics Officer

Cerner’s approach to population health management

Person EHR Device HIE Payer Pharmacy Post-acute Open data

Contract

management

Patient record NetworkingScorecards

Risk

modeling

Care

management

Medication

managementRegistry

HealtheIntent

EDW and

analytics

24© Cerner Corporation. All rights reserved. This document contains Cerner confidential and/or proprietary information belonging to Cerner Corporation and/or its related affiliates which may not be reproduced or transmitted in any form or by any means without the express written consent of Cerner.

ACO Growth At-Risk Contracts Growth Drivers

2010

Today

2020

Hospitals Percent of Revenue

Risk-Based

6%

16%

40%

5,100,000

23,200,000

105,000,000

2011 2015 2020

Growth in ACO Covered LivesBelief at-risk models are a better way

of achieving triple aim

Federal/State incentives & penalties

Growth in Commercial Plans – Aetna

estimates 70% of contracts value-

based by 2020

Success of initiatives tied to value-

based care

Global phenomenon – triple aim will

not be limited to US healthcare marketSource: Leavitt Partners, Projected Growth of Accountable Care Organizations, December

2015

Source: Leerink Partners MEDACorp Survey, June 2015

Growing Need for Population Health


25

Cerner Acute Transitions of Care

Model Development

• Model suggests 30% of the population could be sent to a more optimal venue and achieve better outcomes

• Venue shift and readmission reduction accounts for ~$200 million in savings from total cost of care

Analysis

• CMS analysis estimated that by better management of post-acute episodes and sending more beneficiaries to home health, Medicare could save $34 billion to $100 billion over 10 years

Discharge

locations

Actual

(historic)

Model

recommends

higher level

Model

recommends

lower level

Model

Home 67.1%

11% 19%

66.4%

Home Health 13.2% 15.5%

SNF 14.7% 14.2%

Rehab 2.4% 1.6%

LTAC 2.6% 2.3%

Analyzed 535 variables for inclusion

• Age

• Falls history

• Functional status score

• Hip, knee, ankle, joint

replacement/revision

• Insurance

• LOS

• Medical service category

• No social support

• Patient lives alone

• Psychotic disorder

• Admitting facility

• Service needed at

discharge

• Sepsis

• Spine surgery

• Stroke

• TPN

• Trauma


26

Analysis

ACC’s All Cause Readmission model outperforms, and continues to improve, other peer reviewed predictions:

Cerner All Cause Readmission

Source C-statistic

Early collaboration model 0.77

Average models reviewed in JAMA 0.66

Yale NHHS/CORE for CMS 0.66

Disclaimer: Not all clients will realize similar benefits due to scope of

solutions and capabilities, business implementation models or

organizational attributes.

What Advocate and Cerner are

doing together around

readmissions is about 15-20%

better than anything that exists in

the industry today.Dr. Rishi Sikka

Senior Vice President of Clinical

Transformation

Advocate Health Care

Monitor

Readmission risk is

monitored and updated

every 2hrs to better align

care

21%

Reduced high risk

readmissions by 21% for

heart failure patients

Manage

Patients that receive high

risk education have a 20%

lower readmission rate



Client success with population health

21%Reduced high-risk

readmissions by 21% for

heart failure patients

ManagePatients that receive high-risk

education have a 20% lower

readmission rate

MonitorReadmission risk is monitored and updated

every two hours to better align care


28

39unique data

sources

Drives business results

11 acute care hospitals

• 2 children’s hospitals

• 5 level 1 trauma centers

• 4 teaching hospitals

• 4 magnet designations

• More than 250 sites of care

14,670+unique users

5,000+providers

Second-Largest clinically

integrated ACO in the nation

700,000+at-risk covered

lives

Enabled

capabilities

• Registries

• Scorecards

• Analytics

• Outreach

• Pharmacy management

• Announcements

• Prediction models ”“

…real time performance…resulted in more

proactive care and performance targets being

achieved six to ten weeks earlier in the year.

Physicians received needed interventions

sooner….and…were able to reach out…to

develop plans of care …or link patients to

care management programs….*

*Advocate Physician Partners 2015 Value Report

www.advocatehealth.com/valuereport

35/39Population-Specific

Benchmarks Exceeded

25/39Measures Exceeded

Savingsvs. Plan Targets:

Blue Cross PPO: 1.4%

Full-Risk HMO: 2.7%

MSSP: 0.2%

$100M+Bonuses Paid to Providers

Outcomes48% Higher Asthma Control Rate vs. National Average

Expanded Early Diabetic Intervention by > 50%

136/155Organizational KPI Targets ExceededClinical | Efficiency | Care Coordination | HCAHPS

http://www.advocatehealth.com/valuereport

Health care is too importantto stay the same.TM

Cerner Mick Hubner KSOB CBLS FINAL for Web

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