Using Newly-Released HHS Benchmark Data to Negotiate and Succeed in Value and Capitation

All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.Any use, reproduction or distribution of this information, in whole or in part, or the disclosure of any of its contents

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2All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

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CAPGRisk-Readiness SM

What Is Happening:

A – Public Data: CMS releasing benchmark data on geographies and docs

B – CMS Policy: Sun-setting Fee for Service to mitigate Unnecessary Spend

C – Market Trends: Payers rolling through with narrowing networks

What This Means for CAPG:

1 – Provider profiles for CAPG with CMS benchmarks for Unnecessary Spend

2 – Provider & market profiles showing the best arrangements for CAPG members

3 – Payer report cards using CMS benchmarks to negotiate more effectively

3All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

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CAPGRisk-Readiness SM

What Is Happening:

A – Public Data: CMS releasing benchmark data on geographies, payers and docs

New powerful data on every provider, market and health plan in the US

When combined with Dartmouth, allows national benchmarks on providers

Providers often perform better against these metrics than traditional payer-driven evaluations such as unit cost and utilization

The data also shows every health plan’s expected profits, strengths and weakness and which providers are contributing to them

Data is public, does not require IT or integration, up the next day

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CMS: 50% of FFS will be gone by 2018

CMS is releasing new, powerful data to support their goals of transitioning providers in to Pay for Value

New Powerful Data on Every Provider, Market and Health Plan in the US

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Medicare DocGraph Referral file (Patient flows between PCPS, specialists, hospitals and post acute centers)

Dartmouth Atlas of Health Care & Choosing Wisely(Decades of research and data on unwarranted variation by condition and geography to keep things apples-to-apples for comparisons)

CMS FFS Data Sets, CDC Data Sets (MEDPAR, Part B, Part D, BRFSS)(Individual providers, groups, hospitals and post acute centers)

Provider Pattern Intensity Profiles and Risk Readiness for every provider, hospital, post acute center in the US. All preloaded with no IT.

New Government Benchmark DataParticularly powerful when pulled together

Affordable Care Act data to determine Risk-Readiness SM of Providers / Networks

When Combined with Dartmouth, Allows National and Regional Provider Benchmarks

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At the core of Risk-Readiness SM is

Unwarranted Variation: Every provider has a unique practice pattern that informs Risk-Readiness SM

Providers often Perform Better against These Metrics than Traditional Payer Evaluations

Apply the Dartmouth Atlas for Unwarranted Variation methodologies to the newly released CMS data. This research has been repeatedly validated over the last 30 years and we now have a national data set to apply the methodologies at a large scale.

This doctor has lower utilization and unit costs

But this doctor is making money for whoever owns the risk

Often, physicians with practice patterns that make money for whoever owns risk do not receive the right compensation

because traditional payer utilization review and actuarial analysis

All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.Any use, reproduction or distribution of this information, in whole or in part, or the disclosure of any of its contents

without the prior written consent of the Company, is prohibited.7

Data on Every Health Plan’s Expected Pro Forma, Strengths, Weakness and Provider Contribution

Payer Profiles and Report Cards California

Determine which payers have acute needs and where and how you help them.

For a payer with low reimbursement, poor population health scores, poor overall clinical metrics and a small population,

negotiate less from your medical performance and more from your coding and panel size.

Blue = Volume

Every Payer in your market

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Parent Org %Parent Org %

Layer on your state and self-reported data sources and get the benefit of external and

internal perspectives side by side

Explore and track based on an integrated view of your data and gov benchmarks

(including Cal-Index and/or IHA Data, etc.)

Start with Government Benchmarks, then Layer on Internal Sources

Data Is Public, Does Not Require IT or Integration, up the Next Day

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CAPGRisk-Readiness SM

What Is Happening:

B – CMS Policy: Sun-setting Fee for Service to mitigate Unnecessary Spend

Burwell’s announcement on sun-setting FFS is real and the CMS ortho bundled payments is the tip of iceberg

Goal is to get rid of unnecessary spend – the 30 cents of every dollar that goes to no value care drove billing in Fee for Service

Concern is providers will not be able to successfully transition (cf. AMA/RAND study) and CMS is making multiple bets on payers & providers across programs

Win is to create a virtuous cycle where providers who mitigate unnecessary spend are paid more and have more membership from plans

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Burwell on Sun-Setting FFS Is Real;CMS Ortho Bundles Is the Tip of Iceberg

CMS: 50% of FFS will be gone by 2018

No, Really, CMS Means

Business!These are just the first pieces

to move and transforming payment across the system!

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Risk-Readiness℠ looks at a different category of spending

Goal Is to Get Rid of Unnecessary Spend, the 30 Cents of Every Dollar of No-Value Care

Clinically Appropriate, but Unnecessary Care

(30% of spend)

Claims Spend for a Health Plan / Government Program

Necessary Utilization(70%)

“Bigger than higher prices, administrative expenses, and fraud, however, was the amount spent on unnecessary health-care services. Now a far more detailed study confirmed that such waste was pervasive.”

In just a single year, up to 42% of patients receive “No Value” Care.

Dr. Atul Gawande, Professor, Department of Health Policy and Management at the Harvard School of Public Health & the Department of Surgery at Harvard Medical School.

“It’s generally agreed that About 30 percent of what we spend on

health care is unnecessary.

If we eliminate the unneeded care, there are more than enough resources in

our system to cover everybody.”

-Dr. Elliott Fisher,Dartmouth Institute for Health Policy

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Magnitude of Problem Means Darwinian Approach30% of the U.S. health care spend goes to no value care and unnecessary spending driven by FFS Incentives

Over $9B in Orange County, CA

Over $66B in Florida

$850 Billion Unnecessary Spend* in 2014

30% of U.S. health care spend that goes to clinically appropriate, but unnecessary care. Newly released data and historic models can identify the cost-savings opportunities in a geography based on the collective intensity of care delivered by doctors in that area.

* Unnecessary Spend =

(Dartmouth Avg cost) * (Population) * (Network Opportunity Index)

Concern Is Providers Won’t Successfully Transition;CMS Is Making Multiple Bets across Programs

RAND/AMA study confirms providers face challenges, especially on data, and may not be able to achieve success. CMS A/B

testing payers and providers across a wide variety of programs and ratcheting economics to find winners.

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Hospital Marketshareby Major Clinical Categories

Provider Group Marketshareby Major Clinical Categories

Physician Marketshare by Major Clinical Categories

Decrease market share of this group

for ortho

Circulatory

Respiratory

Unnecessary Spend in MiamiBy condition across hospitals, groups and physicians

Win Is a Virtuous Cycle where Providers with Less Unnecessary Spend Have More Membership

System goal is virtuous cycle where providers with lower rates of unnecessary care have higher market share.

Fastest path may come from payers, employers and new network design and optimization.

Increase market share of this group

for ortho

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CAPGRisk-Readiness SM

What Is Happening:

C – Market Trends: Payers rolling through with narrowing networks

Narrow networks pay off for payers and employers. [E.g. High/Med/Low scenario in unnecessary spending via network construction.]

Market is consolidating around narrow networks with payers buying providers who mitigate unnecessary spend and private equity accelerating groups to this

Providers often not aware of the valuation impact tied to ability to mitigate unnecessary spend and transition to pay for value

Providers who do not create and articulate value may be ‘designed around’

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All physicians in Winston-Salem, NC generate $1.37 BB of Unnecessary Spending / No-Value Care

Winston-Salem, NC

Diamond Network (95% of PCPs)

Emerald Network (65% of PCPS)

Amethyst Network(50% of PCPs)

Cut Bottom 5% of physicians, save $303 MM each Year

Cut Bottom 35% of physicians, save $615 MM each Year

Cut Bottom 50% of physicians, save $790 MM each Year

Possible Network Savings in Winston-Salem, NC

Curated and Narrow Networks Pay off for Payers and Employers

Network optimization creates large, disproportionate gains as metrically with the very bottom of physicians accounting for large gains. Networks can be optimized by excluding specific

doctors or shifting members/patients within a network.

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Market Is Consolidating around Narrow Networks often Using This Data

Payers buying providers who mitigate unnecessary spending and private equity groups accelerating groups to this. The newly

released data can identify hidden value in providers.

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Risk-Readiness SM Provider Ranking Tool

Providers Often Not Aware of the Valuation Impact Tied to Unnecessary Spending

Mitigating unnecessary spending seen as indicating ability to successfully transition to Pay for Value and often has large

impact on overall valuation of providers. Hidden value also drives negotiations from payers.

Blue = Volume

Shape = Practice Patterns on Key Ratios

Blue = Volume

Purple = Unnecessary Spend

Red = $ LostGreen = $ Gained

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Payers Activity Use This Data

You have heard payers describe market goals

We actively help payers use this data to:

Risk Adjust all P&Ls (commercial & exchange) without Claims

Design Curated Networks around Risk-Readiness SM

Grow Membership into Risk-Ready SM Providers

Design Products based on Risk-Ready SM Providers

Identify and Purchase Risk-Ready SM Providers

Design Risk Arrangements for Providers

Negotiate with Providers Based on Risk-Readiness SM

Often providers are not aware of their own hidden value

We prefer payers interested in creating a virtuous cycle and

partnership with providers, but some will use this data aggressively

Where we’ve done it…

Providers Who Do Not take ‘Value-Poor’ Deals May Be ‘Designed around’

19All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

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CAPGRisk-Readiness SM

What This Means for CAPG:

1 – Provider profiles for CAPG with CMS benchmarks for Unnecessary Spend

New public data shows how risk ready each group is, what is driving that readiness and where their individual physicians fall along that continuum

This can be used identify opportunities to mitigate unnecessary spend and gain profitability from risk arrangements

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New Public Data Shows Risk-Readiness SM and Drivers for Groups, Individual Physicians

Practice patterns for unnecessary spending and no-value care benchmarked nationally and regionally inform government

programs and payer-based risk arrangements

Great profile for aggressive risk

Tread carefully onpath to risk

Match appropriate risk arrangements based on provider practice patterns and Population characteristics within a geography

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EXAMPLERisk-Readiness SM

Practice Risk-Readiness SM Report

IPA (Chinese American IPA)Staff Model (Advocate Health Partners) Clinically Integrated Network (Geisinger Health System)Academic Center (Tufts Medical Center)

Choose National or Regional Benchmarks

All four candidates well positioned with current practice patterns for risk with Tufts the highest on overall benchmark.

Chinese IPA should focus on prescription patterns and visit intensity to improve position for risk and payer perception but

has potential best practices in managing referral intensity.

Blue = Volume

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EXAMPLERisk-Readiness SM

Risk-Readiness SM by Provider Type

* CMS Anomalies

Choose National or Regional Benchmarks

Chinese IPA issues with PCP care and cardiology should be explored, explained for negotiating with payers on risk. Geisinger here is well positioned for risk with a strong

negotiating position with payers around PCP care and cardiology.

Blue = Volume

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EXAMPLERisk-Readiness SM

Chinese American IPATop 5 Largest Providers by Specialty

Choose National or Regional Benchmarks

Chinese IPA prescription patterns in cardiology driven by three physicians and in PCP care driven by four physicians

Blue = Volume

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EXAMPLERisk-Readiness SM

Geisinger ClinicTop 5 Largest Providers by Specialty

Choose National or Regional Benchmarks

Geisinger particular pattern of PCP care driven by visit intensity. For Cardiology risk readiness is largely driven by one physician.

Blue = Volume

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EXAMPLERisk-Readiness SM

Advocate Health and HospitalTop 5 Largest Providers by Specialty

Choose National or Regional Benchmarks

Advocate is particularly well-positioned for risk in PCP care with largest physician generating profit for whoever owns the risk

Blue = Volume

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EXAMPLERisk-Readiness SM

Tufts Medical CenterTop 5 Largest Providers by Specialty

Choose National or Regional Benchmarks

Tufts is particularly well-positioned for risk in both PCP and Cardiology arrangements. On PCP, there is one physician with an

outlying pattern different from other top Tufts PCPs that will raise payer eyebrows and is worth exploration.

Blue = Volume

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CAPGRisk-Readiness SM

What This Means for CAPG:

2 – Provider & market profiles showing the best arrangements for CAPG members

New public data shows what government programs or payer-based risk arrangements will yield the best results short term and long term profitability

This can be used pick the risk government programs and risk arrangements with payers to maximize strategic value today and over time

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New Public Data Shows Best Programs andPayer-Based Risk Arrangements

New public data shows what programs or payer-based risk arrangements will yield the best results short term and long

term profitability and allows negotiating around financial impact of mitigating unnecessary spending and no value care using

government benchmarks

High performers with practice patterns out-performing unit cost and utilization analysis due to case mix and population factors. Looking to grow.

Negotiate from Government Benchmarks forUnnecessary Spend and Economic Impact

29All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

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CAPGRisk-Readiness SM

What This Means for CAPG:

3 – Payer report cards using CMS benchmarks to negotiate more effectively

New public data shows payer attributes including strengths and weaknesses based on CMS finances, populations, and network impact

This can be used to negotiate with payers based on real provider value, specific payer need and impact and alternative government provider options

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New Public Data Shows Payer Attributes,Strengths and Weaknesses

Determine which payers have acute needs and where and how you help them. Walk in not only with your

contribute to payer profit through risk but also with the profile of the payer with whom you are negotiating highlighting their

needs and your value in solving them.

WashingtonPayer Report Card

Blue = Volume

Red = Members LostGreen = Members Gained

Every Payer in your market

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CAPGRisk-Readiness SM

What Is Happening:

A – Public Data: CMS releasing benchmark data on geographies and docs

B – CMS Policy: Sun-setting Fee for Service to mitigate Unnecessary Spend

C – Market Trends: Payers steamrolling through narrowing networks

What This Means for CAPG:

1 – Provider profiles for CAPG with CMS benchmarks for Unnecessary Spend

2 – Provider & market profiles showing the best arrangements for CAPG members

3 – Payer report cards using CMS benchmarks to negotiate more effectively

32All contents are proprietary to RowdMap, Inc. and are being provided on a confidential basis.

Any use, reproduction or distribution of this information, in whole or in part, or the disclosure of any of its contents without the prior written consent of the Company, is prohibited.

CAPGRisk-Readiness SM

US CTO on using this public data:

“Visionary Genius”

This Is Real, a National TrendPayers are using public data for risk and designRisk-bearing providers are getting in the game

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CAPGRisk-Readiness SM

Jump on in![Referrals: http://1.usa.gov/1FzoEOV]

[Variation: http://go.cms.gov/1D8j7LE]

[Shared Savings: http://go.cms.gov/1Hh8vx0]

[Medicare FFS Part B: http://go.cms.gov/OCmyoy]

[Medicare FFS Part D: http://bit.ly/1mGyBxk]

[Medicaid: http://go.cms.gov/1z7b5ic]

[Dartmouth: http://bit.ly/1GXvlJp]

[Behaviors: http://1.usa.gov/1PzcisT]

[Health Data All Stars: http://bit.ly/1GAsVC3]