The Summit Health Experience with Physician

Integration Healthcare Executive Forum

March 23, 2017

SUMMIT HEALTH – OVERVIEW

Corporate Structure

58%

12%

5%

24%

1% Expenses

ChambersburgHospital

WaynesboroHospital

ChambersburgHealth Services

Summit PhysicianServices

Himelfarb SurgeryCenter

66%

14%

4%

14% 2%

Net Patient Service Revenue

ChambersburgHospital

WaynesboroHospital

ChambersburgHealth Services

Summit PhysicianServices

Himelfarb SurgeryCenter

58% 15%

27%

Employees

ChambersburgHospital

WaynesboroHospital

SPS/CHS/HSC

Services and Locations

Workforce

• Employees = 3,500 • FTEs = 2,755 • Affiliated Physicians = 640 (332 “local” physicians) • Employed Providers = 260

PHYSICIAN INTEGRATION APPROACHES – OVERVIEW

Factors Driving Integration

• Market Share Control • Declining Reimbursement for All • Increasing Administrative Complexity • Increasing Risk for All • Increasing Costs for All • Provider Consolidation • Physician Aversion to Risk • Physician Lifestyle Objectives • Physician Disinterest in Entrepreneurship • Access to Capital

Source: Halley Consulting Group

Common Integration Challenges

• Win/Lose Scenario • Form Before Function • Hospital-Centric Vision • Absent or Conflicting Objectives • Personal Agendas/Self Interest • Disagreement Over Tactics • Accountability for Performance • Historical Animosity

Source: Halley Consulting Group

Hospital-Physician Integration Strategies

• Hospitalists and Professional Service Agreements • Compensating Physicians for Time Spent in

Improvement Activities • Sharing Performance Data with Physicians • Gain Sharing • Management Services Organizations • Joint Ventures • Integrated Ambulatory EHR

Source: HFMA

Hospital-Physician Integration Strategies

• Co-Management • Physician Leadership Academy • Organizing Medical Groups into a Single Group • Patient-Centered Medical Home • Employed Physician Compensation Methods • Clinically Integrated Network • Population Health Management

Source: HFMA

Physicians’ Considerations in Hospital Choice • Strategy • Strategy Execution • Market Position • Capital Resources • Service Levels • Market Management • System Relationship(s) • Financial Performance • Information Technology

Source: Halley Consulting Group

Evolving Alignment Models

• Accountable Care Organization (ACO) • Patient-Centered Medical Home • Quality Collaborative • Clinically Integrated Network (CIN)

Precursors to Clinical Integration

• Call Coverage • Clinical Co-Management/Service Line • Equity Model • Foundation Model • Independent Practice Association • Joint Venture

Source: Max Reiboldt

Precursors to Clinical Integration

• Management Services Organization • Medical Directorship • Physician Employment or Staff Model • Physician Hospital Organization • Physician Recruitment • Professional Services Agreement

Source: Max Reiboldt

SUMMIT HEALTH – HISTORY

History – Differentiators

• Earlier to Market – Ahead of HMO Curve • Vision to Establish Market and Integrate to Health

System – Versus HMO Purposes Only • Establish Pipelines for Future

History – 1993

• Cumberland Valley Medical Services (CVMS) Established – 2 Physician Practices

• Focused on Primary Care (Family and Pediatric Medicine)

• Main Goal – Recruitment of Primary Care Physicians to Franklin County

• 6 Primary Care Practices by 1996

History – 1999

• Summit Surgery Center Established • Main Goal – Create Joint Venture with Community

Surgeons

History – 2004

• Cumberland Valley Specialty Services (CVSS) Established

• Surgical Based Practices – Orthopedics and General Surgery

• Established to Develop a Separate Company from the Family Physician Group

History – 2010

• Summit Physician Services (SPS) Established • CVMS and CVSS Merged to Form SPS • New Board of Directors • Hired a Medical Director, CMIO and 2 Directors • Developed a Physician Advisory Council • Implemented an Organizational-Wide Electronic Medical

Record

Current – 2017

• Multispecialty Group • Physician and Administrative Dyad Leadership Teams • Serving All of Franklin County – Growing Market in

Southern Tier • Organizational-Wide Standard Work and Processes

Driving Forces – Health System

• Medical Staff Recruitment and Development • Capture Market Share • Improve Care Processes and Quality Outcomes • Increase Physician Loyalty

Driving Forces – Providers

• Stabilize Income • Decrease Call Coverage • Increase Outpatient Presence • Decrease Office Overhead • Pay Off Student Debt • Increase Access to Capital and Technology

KEYS TO SUCCESS

Imperatives

High functioning, truly integrated medical groups have six characteristics: 1) Physician Leadership Hierarchy 2) Common Infrastructure 3) Alignment with System Goals and Values

Imperatives (continued) 4) Operating at Benchmark Productivity and Efficiency 5) Evolving Physicians to Lead Patient Care Teams 6) Compensation Systems that Reward Individual and

Group Performance ‒ Productivity ‒ Quality ‒ Service ‒ Citizenship

Physician Leadership Hierarchy

• Traditional Organized Medical Staff – VPMA/CMO

• SPS Leadership Structure – Chief Medical Officer for Physician Services

• Lead Physicians – Operational Directors

• Site Managers • Corporate Expansion of Physician Leaders

– 3 VP’s on Senior Management – Paid Medical Director Structure

Common Infrastructure

• Electronic Health Record • Infrastructure Solutions

– Human Resources – Revenue Cycle – Policies – Standard Operation Solutions – Lean Management

Alignment With System Goals/Values

• Physician Culture Change • Adopting Evidence-Based Medicine

– Clinical Guidelines Committee (SPS) – Medical Director Council Clinical Improvement

Council (SH)

Productivity, Efficiency and Operational Improvement • Sharing of Operational Data with Providers to Engage

Them in Improvements • Ongoing Discussions about Financial Integration of

Providers, Hospitals and Health System • Reducing Clinical Variation • Reducing Overhead via Economies of Scale as Part of

the Health System • Supporting the Revenue Cycle and Corporate

Compliance

Physician-Led Patient Care Teams

• Patient Centered Medical Homes • Ambulatory Flow Teams • Outpatient Care Coordination • Inpatient Unit-Based Teams • Possible Future Hospitalist-Led Unit Teams • Medical Director of Patient-Family Care

Evolved Compensation System

• Salary vs. Productivity Ratio Individualized • Aligned Incentives • Resources Available for Leadership

Size and Scale Matter

• Population Health • Patient Centered Medical Home • Spread Fixed Cost • IT Investments • Aggregation of Practices to Drive Down Cost and

Increase Quality

Payers Shifting Risk to Providers

• MACRA • Value Based Purchasing • Bundles • Accountable Care Organizations

Contacts • John Massimilla

COO – Chambersburg Hospital jmassimilla@summithealth.org

• Niki Showe Sr. VP, Physician Services – Summit Health nshowe@summithealth.org

• Dr. Frank Mozdy VP & CMO – Summit Physician Services fmozdy@summithealth.org

• Kimberly Rzomp VP & CFO – Summit Health krzomp@summithealth.org