This document summarizes a presentation about systemic changes to the revenue cycle in healthcare due to the Affordable Care Act. It notes that the number of uninsured Americans is declining but the insurance market is becoming more complex with the rise of public and private exchanges. It also discusses the growth of accountable care organizations and value-based payment models driving transition away from fee-for-service. The presentation addresses strategies healthcare providers can employ to improve operations and accommodate rising volume and complexity, such as investments in technology, workflow realignment, and risk mitigation programs requiring accurate coding.

1. Systemic Change and the Revenue Cycle
September 2014
Presented by:
David Smith, Partner
Twitter: @DavidSmithLP

2. Our Speakers
Michael Mast
Director, Product Marketing
GE Healthcare
David E. Smith
Director of Payer Services & Partner
Leavitt Partners

3. ©2014 LEAVITT PARTNERS
Changes to Coverage

10. © 2014 Leavitt Partners
The Number of Uninsured is Certainly Falling
Front End
Middle Office
Back End
Impact Dashboard
20.8
21.1
20
20.3
18.7
18.3
17.5
18.5
17.9
17.4
15.2
13.9
14.8
16.5
16.2
15.1
12.3
10.1
0
5
10
15
20
25
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Trends in Uninsured
states Not Expanding Medicaid
All adults
States Expanding Medicaid
Gallup Poll
Source: Urban Institute
Health Policy Center

11. © 2014 Leavitt Partners
But This Has Certainly Fostered an Increasingly Complex Insurance Market because…..
Front End
Middle Office
Back End
Impact Dashboard
0
5
10
15
20
25
30
35
40
45
2014
2015
2016
2017
2018
CBO Public Exchange Projections
Accenture Predicted Private Exchange Enrollment
~65 M new enrollees

12. © 2014 Leavitt Partners
Next Year’s Exchange Enrollment Could Double PY2014
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
1
2
3
4
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
11/1/2014
12/1/2014
1/1/2015
2/1/2015
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
11/1/2014
12/1/2014
1/1/2015
2/1/2015
11/15/14
12/15/14
1/15/15
2/15/15
11/15/14
12/15/14
1/15/15
2/15/15
11/15/14
12/15/14
1/15/15
2/15/15
Monthly Projection
Cumulative Projection
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
1
2
2
3
3
4
4
11/15/14
12/15/14
1/15/15
2/15/15

13. © 2014 Leavitt Partners
Price Rules and HDHPs will be the New Normal for ~65M Enrollees
Front End
Middle Office
Back End
Impact Dashboard

14. ©2014 LEAVITT PARTNERS
Q1: What is your most prominent strategy to accommodate the volume and complexity associated with the ACA?
A.Major workflow realignments are already underway
B.Making technology investments
C.Consolidating business offices
D.Acquiring outpatient centers
E.All of the above

15. © 2014 Leavitt Partners
Catalyzing in Tremendous Pricing Pressure on Some Providers
Front End
Middle Office
Back End
Impact Dashboard

16. © 2014 Leavitt Partners
And Creating New Strategic Opportunities, Which Exacerbates the Existing Complexity
Front End
Middle Office
Back End
Impact Dashboard

17. © 2014 Leavitt Partners
Risk Mitigation Programs Will Necessitate Flawless Coding
Across Markets
Implementation Step Timing
1 Rate filings due for 2015 products (approximate) May 2014 (est.)
2 First installment of reinsurance contribution is due Jan 2015
3 Issuers submit year-end financials based on State schedule Mar 1 or Apr 1, 2015
4 Issuers submit full year 2014 data with 3 months of run-out, for risk adjustment Apr 2015
5 HHS calculates and reports final risk adjustment payments (in and out) Jun 30, 2015
6 HHS collects final risk adjustment payments from low-risk carriers Jul 2015
7 Risk corridor (and MLR) reporting deadline for 2014 benefit year Jul 31, 2015
8 HHS makes reinsurance payments to issuers Aug 2015 (est.)
9 HHS distributes final risk adjustment payment to high-risk carriers Aug 2015
10 Second installment of 2014 reinsurance contribution is invoiced (U.S. Treasury portion) Oct 2015 (est.)
11 Second installment of 2014 reinsurance contribution is due (U.S. Treasury portion) Dec 2015 (est.)
Source: Wakely Consulting
Front End Middle
Office
Back End
Impact Dashboard

18. © 2014 Leavitt Partners
Strategic Considerations
•Uninsured will continue to fall. Private and public exchange growth will drive greater access and more complex products.
•Distribution changes will catalyze transformative economic considerations at the provider- level.
•Unusual strategic partnerships will abound.
•Greater need for patient education in using/selecting health plans to mitigate bad debt.
•Proper coding and clinical documentation are mission-critical.
•Payer-based changes will require improved efficiencies on the front and back end of the revenue cycle.

19. ©2014 LEAVITT PARTNERS
Payment & Delivery System Reform

20. © 2014 Leavitt Partners
The Absolute Volume of ACOs Continues to Grow
81
97
138
148
208
334
356
458
489
606
627
631
0
100
200
300
400
500
600
700
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
#of ACOs
Leavitt Partners Center for Accountable Care Intelligence 2014
Front End
Middle Office
Back End
Impact Dashboard

21. © 2014 Leavitt Partners
73
145
150
197
201
203
260
109
147
159
186
197
203
238
20
31
35
46
49
50
55
6
11
12
29
32
33
53
0
50
100
150
200
250
300
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
Q3 2012
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
#of ACOs
Physician Group
Hospital System
Insurer
Other
Physician Group Models are Becoming more Dominant

22. © 2014 Leavitt Partners
Different Strokes for Different Folks

23. © 2014 Leavitt Partners
Factors Driving Transition to VBP

24. © 2014 Leavitt Partners
Inflection Point: 2016

25. ©2014 LEAVITT PARTNERS
Q2: Does your organization have a plan to assume a greater percentage of risk?
A.Yes. A clearly defined 1-3 year plan
B.Yes. A clearly defined 3-5 year plan
C.Yes, but without a clear defined timeline
D.We do not have a plan in place
E.We do not plan to assume risk now or in the future

26. © 2014 Leavitt Partners

27. © 2014 Leavitt Partners
Strategic Considerations
•ACOs represent a systemic trend of evolving financial complexity in the short and medium term.
•A confluence of government programs and commercial arrangements will drive delivery system change.
•The pace of change varies widely from market to market resulting in unique solutions by unique providers.
•The timing of the transition from volume to value is contingent on myriad factors; the transition itself will require management of multiple payment models.

28. ©2014 LEAVITT PARTNERS
Government Program Changes

29. © 2014 Leavitt Partners
Medicaid’s Systemic Influence is Rising
Front End
Middle Office
Back End
Impact Dashboard

30. © 2014 Leavitt Partners
1115 Demonstration waivers or SPAs that have been approved by CMS
In Negotiation
Development
Proposed
POLICY OPTION/STRATEGY
Arkansas
Iowa
Michigan
Wisconsin
Pennsylvania
Indiana
New Hampshire
Utah
Private Option/Premium Assistance
X
X
X
X
X
Health Savings Account Model
X
X
X
Cost Sharing –Premiums
X
X
X
X
X
X
Cost Sharing –Service Copays
(above federal levels)
X
X
X
X2
Incentives for Healthy Behaviors
X
X
X
X
X
Medical Home/Care Coordination/ACOs
X
X
X
Work Component
X
X
X
X
Enrollment Limits
X
Global Waiver/”Block Grant”
X
•4 States with alternative waivers and potentially more to come
•Each alternative waiver is tailored to the state
•Most waivers are quite different—no standard model of deviation
•Most states will end up expanding Medicaid
And Myriad Forms of Expansion will Prevail

31. © 2014 Leavitt Partners
Most States will Expand in Medium/Long Run

32. © 2014 Leavitt Partners
Most States will Expand in Medium/Long Run
Front End
Middle Office
Back End
Impact Dashboard

33. © 2014 Leavitt Partners
State Innovation Models
Duals Demonstration Projects
And Other Payment & Delivery Form Innovations will Emerge

34. © 2014 Leavitt Partners
Strategic Considerations
•One in four Americans will be covered by Medicaid in some way by 2024.
•States are experimenting with myriad new payment models (privatization of Medicaid) ; that will accelerate the transition to value.
•Expanded access to coverage on the part of the Medicaid population will increase provider opportunity; complexity with different payment forms could exacerbate existing challenges.
•Other programs from CMMI are driving various innovations in the delivery system; CMMI is poised to drive others.

35. A health care intelligence business
LeavittPartners.com

36. Imagination at work.
GE Healthcare IT
Integrated Care Solutions Connecting productivity with care
JB21000XX | May 2014

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JB21000XX | May 2014
©2014 General Electric Company –All rights reserved.
The results expressed in this document may not be applicable to a particular site or installation and individual results may vary. This document and its contents are provided to you for informational purposes only and do not constitute a representation, warranty or performance guarantee. GE disclaims liability for any loss, which may arise from reliance on or use of information, contained in this document. All illustrations are provided as fictional examples only. Your product features and configuration may be different than those shown. Information contained hereinis proprietary to GE. No part of this publication may be reproduced for any purpose without written permission of GE.
DESCRIPTIONS OF FUTURE FUNCTIONALITY REFLECT CURRENT PRODUCT DIRECTION, ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE A COMMITMENT TO PROVIDE SPECIFIC FUNCTIONALITY.TIMING AND AVAILABILITY REMAIN AT GE’S DISCRETION AND ARE SUBJECT TO CHANGE AND APPLICABLE REGULATORY CLEARANCE.
Omnyxproducts are for in vitro diagnostic use for specific clinical applications, and are intended for research use only on other applications.
Predix™ is GE’s software platform for the Industrial Internet. Predixenables asset and operations optimization by providing a standard way to run industrial-scale analytics and connect machines, data, and people. Whether your solutions are deployed on machines, on-premiseor in the cloud, Predixprovides an integrated stack of technologies for distributed computing and big data analytics, asset management, machine-to-machine communication and mobility, meeting your needs for scalability, extensibility, customizability, and security.
GE, the GE Monogram, Centricity, Predix, and imagination at work are trademarks of General Electric Company.
Caradigmis a registered trademark of CaradigmUSA LLC. Omnyxis a trademark of Omnyx, LLC.
All other product names and logos are trademarks or registered trademarks of their respective companies.
General Electric Company, by and through its GE Healthcare division.

38. 38
HYPOTHETICAL EXAMPLE . Information presented in this example is hypothetical and for illustrative purposes only. Any analysisorinformation derived from this example is for general information purposes only and is being furnished free of charge without representation or warranty of anykind whatsoever, including with respect to the calculations, inputs, outputs, and/or information provided in such analysis. While this example allows several variables to be entered by you and is based on your unaudited inputs, it also contains certain assumptions that may not be valid for your specific facts and circumstances. Actual expenses will vary depending on many factors including, without limitation, your specific operating costs, savings, actual numbers and types of procedures performed.This example and any analysis are provided for your use only and may not be transferred to any third party.
THIS example IS BASED UPON CERTAIN PUBLIC INFORMATION AND ASSUMPTIONS WHICH MAY NOT APPLY TO YOU Certain values provided in thisexample were obtained from available third party sources and are being furnished by way of example only. No representations or warranties are given regarding the accuracy of any such values.
YOU MUST INDEPENDENTLY VERIFY THIS INFORMATION AND SEEK EXPERT ADVICE. You should not rely on any analysis, calculation, output or information provided by this example. Any reliance shall be at your sole risk, and we shall have no liability to you or any third party for any reason. Nothing in this example and no analysis derived therefrom should be construed as constituting tax, accounting, legal or financial advice. You should consultyour own professional advisors for such advice. Nothing herein constitutes a proposal or commitment for any particular transaction. Any such transaction would be subject to execution of documentation in form and substance satisfactory to GE.
HEALTHCARE PROFESSIONALS ARE RESPONSIBLE FOR MAKING INDEPENDENT CLINICAL DECISIONS AND APPROPRIATELY BILLING, CODING AND DOCUMENTATION THEIR SERVICES. This example is not intended to interfere with a health care professional’s independent clinical decision making. Other important considerations should be taken into account when making purchasing decisions, including clinical value. The health care providerhas the responsibility, when billing to government and other payers (including patients), to submit claims or invoices for payment only for procedures which are appropriate and medically necessary and in accordance with applicable laws. You should consult with your reimbursement manager or healthcare consultant, as well as experienced legal counsel, prior to any expansion of service.
© 2014 General Electric Company –All rights reserved
ROI Disclaimer
JB21000XX | May 2014

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The world has changed…

40. 40
The rapid rise of value-driven healthcare
JB21000XX | May 2014
Increased government policiesand financial pressures…
…drive shift to more integratedand value-based care models…
…which require software-enabled solutions to deliver on cost and quality

41. 41
Our joint opportunityHealthcare IT transformation to help drive better outcomes
Accelerating workflows, streamlining processes, improving analytics capabilities…
Liberate and create new
value from data
Enable patientswith more informed and proactive healthcare experience
Give providerstools to help deliver better outcomes
From treating illness to managing health
JB21000XX | May 2014

42. 42
Key ingredients to deliver successful outcomes
Software & Analytics
Workflow & Domain Expertise
StrongEcosystem
JB21000XX | May 2014
All three elements required to improve healthcare delivery

43. 43
Bringing it all together to deliver successful outcomes
JB21000XX | May 2014
Software
Analytics
Services Expertise
Ecosystem
Care Delivery Management
Enterprise Imaging
Population Health Management
Financial Management
Financial Performance
Clinical Quality
Operational Efficiency
Outcomes
Solutions
Enablers

44. 44
Turning Insights into Outcomes
Common
Approach:
High Cost patients
77,000 Diabetics
High Cost Population
High Impact Population
54,552
patients
925
patients
Savings Potential$6,403,775
1.6 M population
Stronger Analytics:
Acute Impact
Quality Compliance
Motivation
Movers
Savings potential
$425 PM/PY
Risk Management -Maximizing Return on Intervention
Focus on the right interventions with the most actionable patients
Savings potential
$7000 PM/PY

45. 45
Enterprise Revenue Cycle Solution
IntegratedEDI
Financial RiskManager
PatientAccess
Mobile
Connectivity
Services
PracticeMgmtSystems
High-performing
Drives financial results through increased efficiency from scheduling through collections
Integrated financials
Is reform-ready from ambulatory to hospital
Comprehensive automation
Enables control of every aspect of your accounts receivable --every payer, every edit, every rejection

46. 46
Financial Management
Reduced billing lag time by 69%1
“How can we take on risk and still deliver solid patient outcomes?”
Financial Risk Management Solutions
Decreased A/R days by 58%2
“What type of healthcarereform model is rightfor my practice?”
Contract Modeling & Management
Helped reduce cost to collect to less than 4%3
“Which metrics should I focus on to drive maximum profitability?”
Revenue Cycle Management
Activity-Based Costing
Increased up-front collections by $2M to $12M3
“How do I connect my ITsystems to ensure
accuracy and great outcomes in reporting?”
EDI & Claims Processing
1 Baystate Health in Massachusetts: reduced billing lag time by 69% -Source: Baystate Health in Massachusetts Case Study, 2012
2 University of Missouri Health: decreased days in A/R by 58% -Source: University of Missouri Health Case Study, 2012
3 Saint Francis Health System: increased up-front collections by $2M to $12M. Source: Optimizing Revenue Cycle Management: A Case Study of Centricity Business at Saint Francis Health System, IDC Health Insight, August 2012
Customer Challenges
GE Solutions
Customer Outcomes
JB21000XX | May 2014

47. 47
Questions