As most of us await the Supreme Court decision on health reform, and one thing is certain: a repeal of Healthcare Reform will not reinvigorate sales nor reverse spending cuts. The time to understand and integrate the many regulatory changes of October 1, 2012, into your company’s mission is NOW. With these slides, you can expect to learn: The key elements of provider-focused healthcare reforms, including: ACOs Value Based Purchasing Bundled Payments IT incentives How to recognize and evaluate the process of project justification The connection between performance metrics, organizational initiatives, reform implications and your solutions Actionable Recommendations

1. How Healthcare Reform Impacts
Your Business Today
June 27, 2012
Gunter Wessels, Ph.D., MBA Sam O’Rear, M.A. BA
Partner, Practice Principal, TIGI Senior Partner, Founder, TIGI
gunter@mytigi.net sam@mytigi.net
@gunterwessels @TIGI_Inc
www.tigi.net
© TIGI 2012 All rights reserved

2. Objectives
Evaluate the key elements of provider-focused healthcare
reforms, including:
• ACOs
• Value Based Purchasing
• Bundled Payments
• IT incentives
Recognize and evaluate the process of project justification.
The connection between performance metrics, organizational
initiatives, reform implications and your solutions.
Recognize that you need to build the business case for your
solutions, in the current healthcare environment.
© TIGI 2012 All rights reserved

3. Implications of Reform
1 Project Delays/Deferrals
2 Financing Hurdles
3 Customer Cost Reductions
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4. The Budgeting Process
Project initiation
Problem
Alternatives and resources available
Cost information
Benefit information
Prior performance benchmarking
Risk projection
Evaluation of Projects
Financial viability, resources and reserves
Cost
Funding Decision
Financial viability, resources and reserves
Management
Medical staff
Public Image, competitive positioning
Project Implementation and Reporting
Project funds sourcing
Forecast generation
Measure development
Budget adjustment
© TIGI 2012 All rights reserved

5. Evolution of Healthcare Delivery Management
Utilization Population
Quality Management
Management Management
Payer Focus: Payer Focus: Payer Focus:
• Referral Management • Clinical Quality Indicator • Wellness Programs
• Prior authorization/pre-certification Monitoring • Demand Management
• Concurrent Review • Credentialing and Re- • Disease Management
credentialing
• Discharge Planning
• Case management • Delegation Oversight
• Retrospective Review/Appeals
• Pharmacy Management
© TIGI 2012 All rights reserved

6. Patient Protection & Affordable Care Act 2010
Reform is Creating Turmoil and Opportunity
Reform Elements:
Insurance Reform
• Controversy: Individual and State Mandates
• Constitutional Challenge
Delivery-System Reform
• Limited Controversy: Quality-based payment
Core Provisions
• Value Based Purchasing
• Accountable Care
• Bundled Payments
• Continuation of Health IT
© TIGI 2012 All rights reserved

7. Volume Changes
Elective Procedure Volumes Down 1-5% Nationally
Non-Elective Procedure Volumes Steady
“ A survey of more than 375 acute care hospitals
found inpatient volumes down 2.2% and outpatient
volumes down 1.1% for April. Inpatient surgeries “
were up 3%, outpatient surgeries were up 3.5%,
and births were up 1.1%. ER visits fell 1.8%
© TIGI 2012 All rights reserved

8. More Granular Data About Disease & Procedures
ICD-10 Coding system and EMR/EHR
• Implementation Accelerated, And Then Delayed
• Part of Meaningful-Use Stage 2
• Automated Core-Measures Reporting
• Automated PQRI Reporting Capture
• Enhanced Analytics
Useful for Comparative Effectiveness
CMS Innovation Institute, and Comparative
Effectiveness NIH research (ARRA 2009)
Useful for Cost Effectiveness
Independent Payment Advisory Board- (IPAB)
Repealed by the House...in Limbo
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9. Cascading Consequences for Suppliers
1 Provider Consolidation
2 Supplier Consolidation
3 Pricing Pressure Intensifying
4 ROSI (Return on Sales Investment) Becomes More Challenging
5 Less Executive Decision-Maker Access
6 More Complex Interactions (committees, approvals, delays, etc)
© TIGI 2012 All rights reserved

10. What Providers Are Doing
Integrating Clinical Mission, Operational Effectiveness, and Financial Performance
• Building a strong infrastructure for their medical policy
• Focusing on enhancing their application of EBM (evidence-based medicine)
• Engaging the physicians in a collaboration model supported by the EMR design
• Committing to marketing initiatives that will build their brands
• Learning how to price services for alternative
revenue models involving risk
• Evolving to missions of prevention as well as
intervention
• Reviewing use and application of technologies to
balance asset utilization w/attaining the clinical
mission
© TIGI 2012 All rights reserved

11. Framing Reform in Context
Key Words in Healthcare Management
Core Measures Improvement
Disease Management
Benchmarking
Patient Flow Improvement
Leveraging IT
Shared Governance and Alignment
Reducing Process Variance
Patient Satisfaction Improvement
Patient and Employee Experience
Coding and Charge Capture
Margin Erosion and Reimbursement Trends
Accounting for Severity and Complexity
© TIGI 2012 All rights reserved

12. Success as a Supplier in This Terrain
Your Solution Must Link To One Of The
5 Hurts Of Healthcare Executives
1 Revenue
2 Operational Efficiency
3 Quality & Safety
4 Regulation & Compliance
5 Competition
© TIGI 2012 All rights reserved

13. Recommendations for Suppliers
Focus Your Sales & Marketing Teams onto The Five Hurts
Frame Solutions with the Three Dimensions of Value:
Clinical
Operational
Financial
Search & Discover Service Line Management, and Their Unique Set of Hurts
Demonstrate to Your Customers How Your Solutions Will Increase Their Flexibility
Recognize That Some Customers Understand Their Market Better Than Others and
Want to Collaborate
Trust That Your Marketplace is Growing and That Your Services Are Increasing in Value
© TIGI 2012 All rights reserved

14. Questions?
www.tigi.net
© TIGI 2012 All rights reserved

15. Upcoming Events
Webinars:
July: 5 More Medical Device Strategies Doomed to Fail in 2012
To Register: http://www.tigi.net/webinar-calendar
Open Enrollment, 1 Day Workshop:
TIGI and MassDevice Present, TIGI Bootcamp 2012
The Changing Healthcare Buying Environment: Adapting to the New Normal,
August 22 in Boston
To Register: http://www.tigi.net/the-changing-healthcare-buying-environment/
© TIGI 2012 All rights reserved

16. Thank You
Gunter Wessels, Ph.D., MBA Sam O’Rear, MA, BA
Partner, Practice Principal, TIGI Senior Partner, Founder, TIGI
gunter@mytigi.net sam@mytigi.net
@gunterwessels @TIGI_Inc
www.tigi.net
© TIGI 2012 All rights reserved