1 Definitions, Models, ImplicationsTelemedicine and the Patient Experience Definitions, Models, Implications Matthew E. Hanis © Hanisworks 2016

2 AGENDA Presenter Background Mercy Virtual Overview Defining Virtual Health Healthcare Industry circa 2025 Sustainable Opportunities for Consideration

3 20 Years in the Business of HealthcareTouchCare Mobile Health Engagement Platform Hanisworks Independent consulting practice Mercy Virtual Top 10 virtual health service provider Advanced Practice Strategies Measure & Improve Clinical Decision Making Healthcare Business of Thomson Reuters Now Truven Health Analytics APACHE Medical Systems Critical Care Clinical Analytics now part of Cerner

4

5 Activate Healthy BehaviorTelemedicine Remote delivery of medical consult Virtual Health Anticipate Worsening Activate Healthy Behavior © Hanisworks 2016

6 PANEL 2 Measuring and improving care Source: Health Leaders 10/2015

7 Virtual Health Maturity Model+ FACTORS: Clinical Breadth Digital Footprint Patients Served Virtually PMPM Lives ED Enc, Acute Admits PCP, Urgent Care Self-serve Transactions Contribution Margin Dignity Avera Carolinas Net Economic Impact Size = Scale Mercy Explore a current Problem Not a vendor’s Solution Teladoc - Fragmented Integrated Care Continuity home – mobile – clinic – acute – post-acute © Hanisworks 2016

8 Virtual Care Center A Hospital without BedsSource: Google Images 6/2016

9 Sepsis Program Pre-Sepsis Program (2005 – 2008) DeploymentPost-Deployment Source: Health Leaders 10/2015

10 Virtualizing HealthcareRetailing & Banking Rationalized, What Happened to Healthcare?

11 US Banking Transforms 1990-200515% less branches per 10k people 55% less employees per branch 85% more deposits increase Banking Locations per 10,000 people, US In 15 years, number of banks decrease per 10k people by 15% (3.4 to 2.9) Employees per branch drop 55% (38 to 17) Deposits increase 85% (3.3T to 6.1T)

12 Retail Supply Chain Productivity 1995-2005Annual Retail Sales (in $T)

13 Technology, Regulatory, Business Model© Hanisworks 2016

14 Population Health productivity improved 0. 5% from 1995-2005Population Health productivity improved 0.5% from Retail productivity improved 28%. 120 admits per 1000 vs. Assumes admissions per thousand a proxy for improved population health productivity e.g. triggering healthy behaviors and initiating clinical interventions sooner

15 Financial Implications

16 2015 Anchor Points & Assumptions2015 US Healthcare Spending: $3.1T US Healthcare Spending by Payer Type Source: https://www.cms.gov/research-statistics-data-and-systems/ Source: Provider-Side Assumptions 4 Service Segments = $1.8 T Consumers want virtual $306 Billion (17%) impacted Payer will accumulate value Payer-Side Assumptions $252 Billion economic value Really, really complicated Enormous Barriers Health data fragmentation Misaligned Provider incentives Inflexibility & provincialism © Hanisworks 2016

17 The Virtual Healthcare ConsumerThree personas Under 30, healthy: convenience, my clinician, low co-pay 40 – 50 year with complex Illness: make my complex health information portable & meaningful Adult child of a severely-ill parent: create convenient access, interact daily, keep me notified

18 All Consumers prefer Virtual with their regular provider#2 priority varies by age: Younger consumers rank cost 2nd and older consumers rank immediacy From the Advisory Board Virtual Visits Consumer Choice Survey of nearly 4,900 consumers

19 Virtualizing Urgent Care

20 ROI Model: Load Balancing in Urgent CareLoad Balancing + Bricks & Clicks Urgent Care providers typically have 20% unused capacity Consumers seek urgent care virtually for convenience TouchCare matches consumer demand with unused urgent care provider capacity Generates 300%+ ROI, new patient acquisition, consumer loyalty 2,000 North Carolina commercial insurance plan members surveyed 62% prefer a virtually provider with local presence 11% would switch primary care provider to get virtual offering

21 In-Home Poly-Chronic Care ManagementSource: Google Images 6/2016

22 ROI Model: Medicare Advantage PMPMPatient gets better quality of life Plan sponsor saves enormous $ Acute Care provider loses cash flow

23 Small & Rural HospitalsRetain Small Site Patients Locally CHS transferring sites operate at 49% capacity Transfer 13k per year, 30% avoidable Retain avoidable transfers increase to 56% capacity Adds $55 M to small hospital revenue Load balancing reduces nighttime physician costs Ambulance bypasses due to capabilities Small Hospital Tertiary

24 Barriers & Roadblocks Reimbursement CMS, Medicare, Medicare AdvantageCommercial Payer Telemedicine Policies Clinical Workflow & Clinician Adoption Kaiser Northern California did 60% of patient encounters virtually Consumer Readiness Missouri Telehealth Network survey of 30,000 telemedicine consumers found 90% were satisfied with the quality of care Licensing & Credentialing National Licensure Compact State regulatory barriers Texas Medical Board vs. Teladoc

25 Matthew E. Hanis 54 Broadview Dr., Clayton MO 63105