Something to Teach, Something to Learn. Dr Mark Britnell Chairman and Partner Global Health Practice KPMG.

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1 Something to Teach, Something to Learn. Dr Mark Britnell Chairman and Partner Global Health Practice KPMG

2 2 © 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (‘KPMG International’), a Swiss entity. All rights reserved. This document is confidential and its circulation is restricted. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative, a Swiss entity. Mark Britnell – 60 countries, 167 occasions.

3 World Economic Forum, Davos 2012: “The financing of health systems has increasingly burdened developed economies, which has been exacerbated by the fiscal crisis. Participants agreed on the drivers of the expenditure growth and, since many of these factors are unlikely to recede (e.g. ageing, lifestyles, public expectations), there is a clear need to develop a more sustainable way of managing health systems. The magnitude of health financing challenges suggests that incremental solutions may not be enough; however, a shared vision of new models for health systems does not yet exist.” Source: The Great Transformation: Shaping New Models – World Economic Forum Annual Meeting Davos 2012

4 4 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Changing business operations to realize cost efficiencies Improving cash and working capital management Exploiting growth opportunities through successful transactions Preparing your organization for major business model changes Managing and retaining the right people within the organization Addressing risk throughout the organization Looking for growth in emerging markets Innovation through product development Adapting to take into account changing customer and stakeholder behavior Using information to forecast response to uncertain times Refinancing or seeking capital Using technology as a strategic enabler, not just an operational facilitator Embedding sustainability in the business model Responding to regulatory change Seizing opportunities offered by increasing public/private sector interaction KPMG research: Transaction trumps transformation. Note:(a)Due to rounding up and down total figure may vary from 300% Source:KPMG ‘Succeeding in a Changing World’ 2012 Total adds up to 300% all respondents had three votes (a) 3,000 CEOs from all industries see the importance of transformational change but focus their attention on short term transactional efficiency.

5 5 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Healthcare leaders are even more focused on the urgent issues of today and less on the important ones of tomorrow. Note:(a) Due to rounding up and down total figure may vary from 300% Source:KPMG ‘Succeeding in a Changing World’ 2012 Total adds up to 300% all respondents had three votes (a) Healthcare Improving cash and working capital management Changing business operations to realize cost efficiencies Addressing risk throughout the organization Exploiting growth opportunities through successful transactions Using information to forecast response to uncertain times Preparing your organization for major business model changes Seizing opportunities offered by increasing public/private sector interaction Looking for growth in emerging markets Adapting to take into account changing customer and stakeholder behavior Using technology as a strategic enabler, not just an operational facilitator Embedding sustainability in the business model Managing and retaining the right people within the organization Refinancing or seeking capital Innovation through product development Responding to regulatory change

6 6 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. KPMG in Rome, 2012. Over 40 senior executives and clinicians from 22 countries debated major global challenges of today. Frances Diver Executive Director, Victorian Department of Health Chris Rex CEO, Ramsay Health Care Dr. Claudio Luiz Lottenberg Chairman & President, Hospital Israelita Albert Einstein Prof. Axel Ekkernkamp CEO, Unfallkrankenhaus, Berlin Glenna Raymond President and CEO Ontario Shores Centre for Mental Health Sciences Dr. Kevin Smith President and CEO, St. Joseph's Health System Prof. Shan Wang CEO, Peking University Peoples Hospital Christian Boel Vice Healthcare President in Region Midtjylland Filippo Monteleone Managing Director, General de Santé Prof. Dr. Udo Janssen Chairman, German Hospital Institute Prof. Anupam Sibal Medical Director, Apollo Hospital Dr. Terry McWade Deputy CEO, Royal College of Surgeons in Ireland Carlo Perucci Head of the National Outcomes Programme, National Healthcare Agency Dr. Giancarlo Ruscitti CEO Fondazione "Opera San Camillo" Paolo Rolleri Director General IRCCS San Raffaele Pisana – Istituto di Ricovero e Cura a Carattere Scientifico Dr. Masami Sakoi Planning Policy Director, Ministry of Health, Labour and Welfare Dr. Chul Lee CEO, Yonsei University Health System Prof. Dr. Hans Büller CEO, Erasmus Medical Centre Prof. Dr. Bastiaan Bloem Medical Director, Radboud University Nijmegen Medical Center Dr. Pieter Hasekamp CEO, Dutch Health Insurers Association (ZN) Unni Hembre President, European Federation of Nurses Associations (EFN) Isabel Vaz CEO, Espírito Santo Saúde Bala Krishnan Director of Development Office of Chairman, Aspetar Scientific Advisory Board Orsida Gjebrea Senior Policy Advisor, Supreme Council of Health Prof. Benjamin Ong CEO, National University Health System Dr Brian Ruff Head of Risk Intelligence and Access Innovating Divisions, Discovery health Martin Gerber CFO, Universitätsspital Basel Dr. Jennifer Dixon Director, Nuffield Trust Sir Ian Carruthers CEO, NHS South of England Sir Jonathan Michael CEO, Oxford University Hospitals NHS trust Sir Robert Naylor CEO, University College London Hospitals NHS Foundation Trust Valerie Michie Global Head of Health, SERCO Tim Harford Senior Columnist at the FT and Author of Adapt: Why Success Always Starts with Failure Sir Bruce Keogh Medical Director of the NHS and NHS Commissioning Board Gary Kaplan CEO, Virginia Mason Medical Center Dr. Arthur Southam Executive Vice President, Kaiser Permanente Ron Williams Former Chair & CEO of Aetna Inc. and member of President Obama’s Management Advisory Board Anne McElvoy Public Policy Editor, The Economist Paul Cummings Director of Finance, Northern Ireland Health and Social Care Board Lord Nigel Crisp Independent Crossbench Member of the House of Lords

7 7 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. European views Growing vacancy rates across countries Skills gaps emerging Cost cutting very short term Medical models of care changing slowly Need to stop ‘boom and bust’ workforce planning

8 8 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. The paradox. Most people believe that their health sectors need substantial change but think their own organisational plans are robust. They can’t all be right. Transformational changes requires the majority to have a new vision. That's why change is hard. Focus remains on transactional change not transformational reforms.

9 Leading hospitals, health plans and life sciences executives believe their business models are ‘somewhat sustainable ’ Source: Transforming Healthcare: From Volume to Value – New Research on Emerging Business Models KPMG 2012 Sustainability of current business models over next 5 years: From volume to value (USA):

10 But they don’t feel their industries will stay the same… …with moderate to major change coming in their sectors Extent of changes to your industry over next 5 years: Source: Transforming Healthcare: From Volume to Value – New Research on Emerging Business Models KPMG 2012

11 11 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Healthcare leaders in Rome also demonstrate the paradox. ‘Most (75%) think that current business models are somewhat sustainable but almost all (95%) expect moderate (30%) or major (65%) business model change in the sector’ Question – The current business models operated by hospitals are: Somewhat sustainable Question – How much change do you expect to see in the shape of the provider system and in their business models in the next 5 years? Major changes Source: Pre-conference survey Something to teach, Something to learn, KPMG Rome 2012

12 12 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Active strategies to manage are transactional. Question – Which strategies are providers likely to adopt to respond to these changes? Major cost reduction Lean and improvement methods More focus and specialisation Investment in Health IT New workforce models Extra income from existing payers 85% 81% 82% 78% 74% 44% Source: Pre-conference survey Something to teach, Something to learn, KPMG Rome 2012

13 13 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. …..but they expect payment systems to focus more on quality, value and risk. Question – I expect payment systems to: Become more integrated Contain more quality incentives Focus more on patient value Share more risk with providers Reduce prices & cap volumes Remain largely the same 78% 74% 55% 11% Source: Pre-conference survey Something to teach, Something to learn, KPMG Rome 2012

14 They do believe integrated care will.. Source: Pre-conference survey Something to teach, something to learn, KPMG Rome 2012 …offer new possibilities for quality and cost

15 15 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Consensus on major trends. Payers are becoming ‘activist’. Some hospitals are transforming into health systems. Patients becoming active partners. High growth health systems, providing new perspectives on health reform. Innovative integration and partnership. 1 2 3 4 5

16 16 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Passive funder to activist payer. Make the organisation capable of contracting for outcomes and value. Find new ways to connect with – and empower – patients. Increase focus on the management of overall population health, ‘moving care upstream’. Information, segmentation and stratification. Delivery must be integrated and coordinated. Payment reform is key; from volume to value.

17 Preperation of the programme: Getting acquinted Data collection and GAP analyses Exploring and developing scenarios Example, The Friesland Health Insurer: ‘Provide the right care at the right place at the right time, now and in the future’ In the Netherlands health insurer De Friesland Zorgverzekeraar (DFZ) has developed a series of agreed outcome-based ‘care plan’ pathways which are already delivering results. Phase 1 May – July 2011 Phase 2 July – November 2011 Phase 3 December 2011 – June 2012 Phase 4 & 5 July 2012 – February 2013 Business cases (regional level & multi annual budget per hospital) Decision makingConditions from governance perspective NrExpert groupFromTo 1ER/ICFour ER/ICOne regional ER/IC and two ER/IC with basic facilities 2Birth careFive locationsTentative four locations 3OncologyFive locationsOne location for complex oncology 4Complex vascular careFive locationsOne location for complex surgery 5Elective careFive locationsOne focused factory* 6Chronic carePrimary care & five hospital locations Development of integrated care, self-management, implementation of E-health and electronic patient record 7Elderly carePrimary care & five hospital locations Implementation of best practices; case manager, prevention, end of life care

18 18 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Providers: Transact or transform? In spite of fiscal crisis, many providers are still healthy and solvent. Uneven momentum for change. All face big strategic question – ‘do things better or do better things?’ Much to be done operationally: Lean, workforce, care system re-design, clinical informatics and quality improvement at scale e.g. Intermountain, Virginia Mason, Buurtzorg, Salford. Some hospitals are transforming into ‘health systems’ through integration or acquisition e.g. Geisinger, Apollo, Saskatchewan (Canada), Albert Einstein, Brazil. Some become narrow and focus using Lean, e.g. Aravind, Narayana Hrudayalaya, Fortis and Coxa in Finland. For some M&A and new international markets offer growth e.g. Ramsay, Fortis, SECOM, Netcare.

19 19 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. 21 st century healthcare is a chaotic combination of 20 th century acute care and 19 th century general practice. Competing and conflicting business and care models destroy value. Some hospitals are beginning to understand they need to change their value proposition and integrate. ■A clearly defined population ■The ability to do reliable risk stratification and develop registries ■Accountability for outcomes, supported by aligned contracts and incentives ■Systematic clinical care ■Staff and systems to support coordination ■Shared records ■Shared quality governance arrangements between participants ■Payment mechanisms that support these arrangements ■The development of a workforce with new skills including the ability to manage multiple morbidity including dementia and work in multidisciplinary teams Prerequisites for an integrated system Integration.

20 Kaiser Permanente: Coordinating care in every setting.

21 21 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Patients as partners: Patients are no longer passive recipients and new systems and ways of working are required to manage this change. It has taken a decade for us to realize that better care is usually less expensive care. It will take another decade for us to realize that patients are partners – either creating or compromising value. Techniques that allow patients to create more value include: shared decision making; Al Mulley’s ‘preference misdiagnosis’; amplified patient voice; informed care and (internet) coaching. End of life care and chronic care are the most important immediate areas to create better value. Tools that patients need to control and secure better value include: pathways, records, decision aids, social networks and technology e.g. PatientsLikeMe.

22 22 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. From God to Guide – ParkinsonNet: 5 design criteria: Helping to create an active patient able to manage their care and take key decisions Defining what value based care would look like from the perspective of the patient Changing the way that doctors and other clinicians work with patients by shifting to a partnership approach with patients Creating a network of experts Linking all of these together with information technology tools Bas Bloem created ParkinsonNet: a revolutionary partnership approach involving Parkinson’s patients in the Netherlands, has led to a 50% reduction in associated hip fractures and €20 million worth of savings.

23 23 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. High growth countries. ‘Something to teach, something to learn’’ isn’t a new form of Western Imperialism. High growth countries and emerging markets can be characterised by 3 words: speed, buzz and leapfrog. Many still have under-developed primary care platforms but entrepreneurs see this as ‘white space’. Much greater reliance on technology, smart operational processes and public-private partnerships. Growing middle class with increase in NCDs demands leap-frog over 20 th century care models. Asia, Africa and South-America all developing low-cost delivery models and point-of-care diagnostics. Reverse innovation.

24 24 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Need to transact and transform and move from volume to value. All parties need to agree and be brave enough to chart a 5-10 year vision. Targets are not an end; they are means to an end. Leadership is key:

25 25 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Leaders in Rome identified 10 characteristics: 1 2 3 4 5 6 7 8 9 10 Enduring Values Shared purpose Consistent and stable leadership Deep engagement with clinical staff Strong focus on front-line Set culture, hold professionals to account Align individual, team and organisational objectives Information transparency – internal and external Curiosity about high performance Authentic partnership

26 26 © 2013 KPMG Advisory N.V., ingeschreven bij het handelsregister in Nederland onder nummer 33263682, is een dochtermaatschappij van KPMG Europe LLP en lid van het KPMG-netwerk van zelfstandige ondernemingen die verbonden zijn aan KPMG International Cooperative (‘KPMG International’), een Zwitserse entiteit. Alle rechten voorbehouden. Gedrukt in Nederland. De naam KPMG, het logo en ‘cutting through complexity’ zijn geregistreerde merken van KPMG International. Final thoughts – Nurses lead pathways better than most There are more similarities than differences in global health. The future is with us, it is just unevenly distributed. Most people believe that health systems need fundamental change but believe that change starts with someone else. Be the change you want to see (Ghandi). Lets get started on the 1%, 3% and 5% integrate and coordinate and help patients move from volume to value.

27 Note PowerPoint 2007 has a problem with indentation in text tables and text boxes. Once text has been deleted from the cell the formatting of the bullets is also removed. To fix this you will need to use the format painter to copy the formats of each level (line by line) from the panel below: [For headings highlight from here to here] [For second level without bullet highlight from here to here] ■[For third level with bullet ■highlight from here to here] –[For fourth level with bullet –highlight from here to here] ■[For fifth level with bullet ■highlight to here] –[For sixth level with –bullet highlight to here] Launched at Davos... Necessity: the mother of innovation Low-cost, high-quality healthcare

28 This document is CONFIDENTIAL and its circulation and use are RESTRICTED. © 2013 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Printed in the United Kingdom. The KPMG name, logo and ‘cutting through complexity’ are registered trademarks or trademarks of KPMG International Cooperative (KPMG International).