Academic, Provider, and Health System Merger: Opportunities for

Academic, Provider, and Health System Merger: Opportunities for Population Management, Research, and Pharma Collaborations Brian L. Strom, MD, MPH Chancellor Rutgers Biomedical & Health Sciences Executive Vice President for Health Affairs Rutgers, The State University of New Jersey

Disclosure Declaration Dr. Strom does have a vested interest in or affiliation with a corporate organization offering financial support or grant monies for this CE activity. Dr. Strom does have an affiliation with an organization that has a specific interest in the therapeutic areas under discussion. Research grants provided by private industry: Merck and Company, Novartis Pharmaceuticals Corp. Pharmacoepidemiology training program support: Johnson and Johnson, Merck and Company, Inc, Novartis Pharmaceuticals Corp., Sanofi Aventis Consultant: Boehringer Ingelheim Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

What is Population Health Population Health – “the health outcomes of a group of individuals, including the distribution of such outcomes within the group.” * Payors are turning away from traditional physician-centric, volume/fee-based, incidental models of care to patient-centric, interprofessional coordinated care, and management of the health of entire populations Defining health as holistic well-being versus disease-free focusing on health care inequality, social determinants of health, etc. Accelerated by the Affordable Care Act Kindig D, Stoddart G (Mar 2003) “What is population health?” American Journal of Public Health. 93 (3): 380-3. Ernest Mario School of Pharmacy

Aggressive Movement Toward Value January 26, 2015 “For the first time we [Health and Human Services] are going to set clear goals and establish a clear timeline for moving from volume to value . . .” - Sylvia Mathews Burwell (HHS Secretary) By 2016 By 2018 30 % of Medicare reimbursement through alternative payment models 85 % of all Medicare payment tied to quality or value 50 % of Medicare reimbursement through alternative payment models 90% of all Medicare payment tied to quality or value Ernest Mario School of Pharmacy

Changes to Physician Reimbursement PHYSICIAN FEE SCHEDULE (PFS) UPDATES 0.5% 0.0% 0.25% Annual Update Annual Update Annual Update MIPS 2015–2019 2020–2025 2026 and beyond MERIT-BASED INCENTIVE PAYMENT SYSTEM (MIPS) LAST YEAR OF PQRS, EHR, MU, AND PHYSICIAN VALUEBASED MODIFIER 2018 MAX PENALTY: -4% MAX PENALTY: -5% MAX PENALTY: -7% MAX PENALTY: -9% MAX REWARD: 12% MAX REWARD: 15% MAX REWARD: 21% MAX REWARD: 27% 2019 Ernest Mario School of Pharmacy 2020 2021 2022 and beyond

The New Value Equation V Q PE C V Value Q Quality (patient outcomes and safety) PE Patient Experience C Cost (total expense to all purchasers of healthcare) Ernest Mario School of Pharmacy

Key Challenges Facing AMCs Post-Reform Academic Medicine Dec 2015 » Balancing institutional missions » No more open-ended funding (i.e., greater scrutiny of teaching and research investments) » Developing an integrated, interprofessional vision » Shifting beyond clinical care to population management and community health » Broadening institutional perspective to include programmatically “other” disciplines (e.g., social work) » Finding the right leadership Source: Steven A Wartman, Yingying Zhou, Anthony J. Knettel, “Health Reform and Academic Health Centers: Commentary on an Evolving Paradigm”, Academic Medicine, December 2015. Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers & Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

Rutgers University More than 67,000 students: – 48,000 undergraduate students – 9,000 graduate students 470,000 alumni 8000 full- and part-time faculty Established 251 years ago as 1 of 9 original colonial colleges founded before the American Revolution Named the land grant college for New Jersey in 1864 Designated the State University of New Jersey in 1956 2013 combined with most of UMDNJ to form a new powerhouse comprehensive university Ernest Mario School of Pharmacy

Rutgers University (2) 658.1 million annually in research R&D expenditures, among the top 20 in the nation 430 million annually in life sciences R&D expenditures, among the top 25 in the nation Rutgers brings more federal research dollars to New Jersey than all other New Jersey colleges and universities combined 684 million annual patient care services revenue 350 clinical trials supported at any given time Over 1,000 health care professionals Ernest Mario School of Pharmacy

Rutgers University (3) One of 62 members of the prestigious of the American Association of Universities (AAU) – top research universities in North America Rutgers ranks #27 worldwide for U.S. Patents – Nat. Academy of Inventors & Intellectual Property Owners Assn. #1 public national university in the NYC/NJ Metropolitan Region (US News & World Report) US News/College Factual ranks Rutgers as: #2 in the nation, Best Colleges to Study Health Professions # 17 Nursing–Doctor Nursing Practice # 19 Nursing–Master’s Degree # 30 Pharmacy # 31 Public Health Ernest Mario School of Pharmacy

Ernest Mario School of Pharmacy

Rutgers Biomedical & Health Sciences Established by the 2012 New Jersey Medical and Health Sciences Education Restructuring Act, Rutgers Biomedical and Health Sciences (RBHS) became the health care education, research, and clinical division at Rutgers University on July 1, 2013. Ernest Mario School of Pharmacy

RBHS Status Report Rutgers University–Newark Rutgers University–New Brunswick Theoretical and applied research Large, land-grant, AAU campus Public / private partnerships Broad distinction in research and scholarship First-rate education in urban setting Close working relationship between students and faculty Physical & life sciences hub Diverse metropolitan campus, proximity to NYC International recognition in arts and humanities Rutgers University–Camden Personalized campus environment High-impact civic engagement Distinct areas of research excellence Engine of opportunity for families and communities Comprehensive offerings Educational and economic impact in South Jersey and Delaware Valley Globally Acclaimed Brand Interdisciplinary & Cross-Campus Offerings Integrated Graduate & Professional Education Academic Rigor Broad Strength in Arts and Sciences Organizationally aligned with New Brunswick Leader in medical, dental, and health sciences RBHS Clinical and research excellence Public / private partnerships Inter-professional collaboration Deep engagement with community Ernest Mario School of Pharmacy Collaborative programs with all three campuses and a major Biological and Health Sciences component that is distributed geographically but aligned with the AAU campus

My Goal as RBHS Chancellor To build one of the best academic health centers in the country, with an emphasis on one. Ernest Mario School of Pharmacy

RBHS Entities Schools Centers/Institutes Ernest Mario School of Pharmacy New Jersey Medical School Robert Wood Johnson Medical School Rutgers School of Dental Medicine School of Graduate Studies (joint with RU – New Brunswick) School of Health Professions School of Nursing School of Public Health Brain Health Institute Center for Advanced Biotechnology and Medicine Environmental and Occupational Health Sciences Institute Institute for Health, Health Care Policy and Aging Research Institute for Infectious and Inflammatory Diseases Rutgers Cancer Institute of NJ Rutgers Institute for Translational Medicine & Science Behavioral Health Care Unit University Behavioral Health Care Rutgers Health Ernest Mario School of Pharmacy Rutgers Health Rutgers Health Group Established in 2016

RBHS Strategic Plan Goal: build one of the best academic health centers in the country Focus on RBHS-wide complementary activities Developed with input from more than 5,000 faculty, staff, and students (surveys and working groups) 2017 is the midpoint of the five-year plan (2014–19) Ernest Mario School of Pharmacy

RBHS Strategic Plan: Key Initiatives Signature programs Cancer Environmental and occupational health Infection and inflammation Neuroscience Community health and health systems (emerging) Complementary programs Clinical research Drug discovery and development Informatics Public health, including global health Ernest Mario School of Pharmacy

Our Goal: To be recognized as one of the best academic health centers in the United States, known for its education, research, clinical care, and commitment to improving access to health care and reducing health care disparities. This will be achieved through dedication to elevated standards of excellence and innovation, interprofessional collaboration and integration, and deep engagement with the community. Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

AMCs Are Repositioning “ . . . 31% of [AAHC] respondents are changing their governance structures or significant reporting relationships. The key theme is unquestionably the need for alignment amongst the various components.” - Association of Academic Health Centers (AAHC) Member Profile Survey 2014 Ernest Mario School of Pharmacy

AAMC Advisory Panel Recommendations “AMCs have four options: form a new system (if they have capital and wherewithal to do so), partner with others in a collaborative network model, merge into a system, or be prepared to shrink in isolation.” “The Panel recommends a true group practice [Integration] will provide the basis to address cost and productivity issues, implement service line programs, make strategic investments needed to create networks, and develop capabilities to succeed as systems of care.” — Association of American Medical Colleges (AAMC), 2014 Source: Thomas Enders, Joanne Conroy, “Advancing the Academic Health System for the Future," AAMC, 2014. Ernest Mario School of Pharmacy

IOM Perspective “As centers of convergence for health care, biomedical research, and workforce training, Academic Health Systems are critical drivers of innovation and are uniquely positioned to lead the health system toward a new standard of care delivery To succeed in meeting the full potentials and obligations of our stewardship responsibilities, we will need to do better in assessing, developing and organizing shared strategies across the AHS community .” — Institute of Medicine, September 2014 Source: Victor Dzau, Gary Gottlieb, Steven Lipstein, Nancy Schlichting, Eugene Washington, “Essential Stewardship Priorities for Academic Health Systems," Institute of Medicine, National Academy of Sciences, September 2014. Ernest Mario School of Pharmacy

What Do These Organizations Have In Common? 2015–2016 Best Hospitals Honor Roll 2014 Top NIH Funding 1. Massachusetts General Hospital 1. UCSF 2. Mayo Clinic 2. Johns Hopkins University 3. Johns Hopkins Hospital (tie) 3. University of Pennsylvania 3. UCLA Medical Center (tie) 4. Washington University 5. Cleveland Clinic 5. Stanford University 6. Brigham and Women’s Hospital 6. Yale University 7. New York Presbyterian Hospital 7. University of Pittsburgh 8. UCSF Medical Center 8. University of Washington 9. Penn Medicine 9. UCSD 10. Barnes-Jewish Hospital 10. Vanderbilt University Sources: U.S. News & World Report, 2015–2016 Best Hospitals, http://health.usnews.com/best-hospitals. Blue Ridge Institute for Medical Research, 2014 Top NIH Awards, http://www.brimr.org/NIH Awards/2014/NIH Awards 2014.htm. Ernest Mario School of Pharmacy

Organizational Model for Rutgers › › › Rutgers Health Clinical brand of Rutgers. Advisory body to EVP-HA. Shapes key policies impacting all health professionals. Hospitals Rutgers Health Group Rutgers Health Network Community Practices › › › › › › Large, integrated multispecialty medical, dental, and nursing practice. New Rutgers-affiliated nonprofit entity; single infrastructure. Accountability for clinical practice performance. Ernest Mario School of Pharmacy Clinically integrated network. Will include affiliated hospitals and groups that meet network requirements. Value-based contract infrastructure and support.

RBHS Status Report Rutgers Health: Opportunity Matrix Innovative Delivery Episodic /Acute Care Population Care/ Wellness Ernest Mario School of Pharmacy Conventional Delivery

Vision To be a state-wide, integrated Rutgers faculty practice that attracts and retains the best providers and serves as the foundational component of a premier academic health center; an effective partner to patients, hospitals, community providers, and other affiliates; and a leader in delivering consistent, value-based healthcare that improves our patients’ well-being. Ernest Mario School of Pharmacy

Rutgers Health – University Dental Associates New Rutgers Health Group dental practice site opened at 135 Somerset Street, New Brunswick State of the art dental care in a private practice setting Faculty provide services from family dentistry to complex, specialty care Open to new patients - 732-235-5050 Ernest Mario School of Pharmacy

Rutgers Health Locations Throughout New Jersey Essex County New Jersey Medical School School of Dental Medicine School of Nursing School of Health Professions University Behavioral Health Care Cancer Institute of New Jersey (satellite) Camden County Rutgers Camden School of Nursing School of Nursing School of Health Professions Middlesex County Robert Wood Johnson Medical School School of Health Professions School of Nursing Ernest Mario School of Pharmacy School of Social Work Graduate School of Applied and Professional Psychiatry University Behavioral Health Care Cancer Institute of New Jersey Rutgers Health Over 1000 clinical providers located in 16 of the 21 New Jersey Counties and over 50 municipalities. Ernest Mario School of Pharmacy Note: Counties in bright red major clinical locations, counties in dark red host clinical care offices and other sites.

RBHS Status Report Rutgers Health Branding Strategy: Positioning Forging Forgingthe the Future Futureofof Health Healthand and Wellness Wellness Brand Positioning Statement Rutgers Health is revolutionizing health and wellness by combining an unprecedented scope of education, research and clinical care with a single focus: to help people and populations get well and stay well. Ernest Mario School of Pharmacy

Health. Discovery. Revolution.

http://www.rutgershealth.org/ Ernest Mario School of Pharmacy

Rutgers Health Brand Launch Launch of public-facing Rutgers Health Brand within New Jersey and beyond Defines Rutgers Health as leading provider of academic health care throughout NJ Develops awareness and builds reputation Media outlets include billboards, train stations, buses, radio, print magazines, and digital Ernest Mario School of Pharmacy 35

Benefit to Rutgers Network Hub – Rutgers Health serves as highly valued centerpiece of the new network. Geographic Reach – This statewide practice along with other Rutgers Health entities will have a significant geographic reach that benefits patients and demands attention from the marketplace. Cost/Value Driver – Large physician/provider organizations have unmatched control in achieving cost efficiency and value for patients. Premier AMC – Anchored by an integrated FGP and revamped hospital partnerships, this model will put Rutgers on a path to becoming a premier AMC that is attractive to future recruits. Financial Strength – RHG and Rutgers Health will demand the best contracts and benefit from the cost efficiency of a shared cost structure. Ernest Mario School of Pharmacy

Advancing the Social Good Improve access to health care services through outreach and the provision of uncompensated care and other vehicles Relieve or reduce the burden of community effort through community benefit programs (e.g. education, community health services) Ernest Mario School of Pharmacy Improve Access Enhance Health Reduce Burden Advance Knowledge Enhance the health of the community through the identification of essential needs and providing high quality care Advance medical or health care knowledge and translate research into new cures; become an innovation hub

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

Letter of Intent Agreement between RBHS and RWJBarnabas Health to collaborate to form a world-class academic health center that functions as one system Ernest Mario School of Pharmacy

Clinical Partners – RWJBarnabas New Jersey’s largest health care system and the state’s largest private employer One of the largest health care systems in the United States 4.5 billion revenues 260,000 inpatient visits; 2 million outpatient visits; 26,000 births 9,000 physicians, 1,000 residents & interns Ernest Mario School of Pharmacy

Clinical Partners – RWJBarnabas (2) Viewed system-wide the enterprise will include a multispecial group practice of 2,500 physicians one of the largest medical groups in the nation Eleven acute care hospitals, plus University Hospital in Newark – affiliated with RBHS Newark Campus State’s only NCI designated cancer center – CINJ One of the nation’s largest behavioral health care delivery units - UBHC Ernest Mario School of Pharmacy

Clinical Partners – RWJBarnabas (3) Current Initiatives: – Groundbreaking for RWJBarnabas Athletic Performance Center - 18 million investment – Joint Recruitment of CINJ Director, Chairs of Surgery and Pediatrics, and Chief of Gastroenterology (completed) – Joint Recruitment of Chair of Neurosurgery – Academic enrichment initiatives in clinical & translational research and health care quality Ernest Mario School of Pharmacy

RWJBarnabas Health and Rutgers locations offer a vast network of clinical providers in 17 of New Jersey’s 21 counties.* * The dark areas of this map represent the combined geographic coverage of RWJBarnabas Health and Rutgers which have signed a Letter of Intent to partner Ernest Mario School of Pharmacy

Letter of Intent The new system aims to be nationally recognized for: – Education – training tomorrow’s workforce – Leading edge research – High quality clinical care – Commitment to improving patient access, and – Reducing health care disparities Ernest Mario School of Pharmacy

Shared Goals Recruitment of leading academic, research, and clinical practitioners Advancement of health science innovation Development of centers of excellence Alignment and optimization of clinical services Functional integration of practices Enhancement of the delivery and access to advanced evidence-based health care Ernest Mario School of Pharmacy

Shared Goals (2) Dedication of shared resources to health professions education Strategic investment in innovation Coordinated operation to the maximum extent possible Consistent measurement of performance across the organizations A shared commitment to health improvement through patient and community outreach Ernest Mario School of Pharmacy

Proposed Structure RBHS, RWJBH, and RHG will remain separate institutions each with their own employees RBHS, RWJBH, and RHG will maintain separate finances RWJBH will designate up to four seats for Rutgers on its governing board 2 RWJBH representatives will participate in the Health Affairs Committee of the Rutgers Board of Governors Rutgers will support the appointment of 1 RWJBH appointment to the Rutgers Board of Governors (appointments governed by New Jersey State Statute) Joint Committee with equal representation formed to advise collaboration Ernest Mario School of Pharmacy

Proposed Structure (2) RWJBH will take the lead in the clinical enterprise purchasing professional services from Rutgers Health Group RBHS will take the lead in the academic enterprise including all research and education Rutgers faculty remain Rutgers faculty Rutgers retains exclusive rights over faculty appointments Ernest Mario School of Pharmacy

Key Initiatives Cooperation in Graduate Medical Education Right of first refusal for training sites for RBHS programs in pharmacy, nursing, health professions, etc. at RWJBH facilities Joint Clinical Management Committee & Executive Director Provides statewide platform to assume risk-based payor contracts – Diverse patient population – Enterprise scope and scale with hospitals and providers – Risk management Ernest Mario School of Pharmacy

Key Initiatives (2) Mission support - investments in research: – Recruitment of principle investigators – Packages for department chairs – Capital investment and infrastructure improvements – Consolidated IRB and Clinical Trials Management System Statewide expansion of CINJ across health system Ernest Mario School of Pharmacy

Next Steps Due diligence Planning – development of joint strategic and business plans Development of agreements: – Master affiliation agreement between RBHS and RWJBH – GME agreement – Professional Services Agreement with RHG Timeline Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

RBHS Research Leadership Appointments Director of the Cancer Institute of New Jersey – Steven Libutti, MD Director of the Brain Health Institute – Gary Aston Jones, PhD Vice Chancellor for Clinical & Translational Research, and Director of a new institute for clinical and translational research – Reynold A. Panettieri, Jr., MD President & CEO University Behavioral Health Care - Frank Ghinassi, PhD Director of Global Health for RBHS and Henry Rutgers Professor of Global Health – Richard Marlink, MD Dean School of Public Health – Perry Halkitis, PhD Ernest Mario School of Pharmacy

RBHS Research Leadership Searches Director Environmental & Occupational Health & Science Institute – search reinitiated Director of the Institute for Health, Health Care Policy, and Aging Research – finalists selected Director of the Center for Advanced Biotechnology and Medicine – search initiated Ernest Mario School of Pharmacy

Recruits are coming to RBHS from: Ernest Mario School of Pharmacy

Academic, Provider, and Health System Merger Introduction Rutgers and Rutgers Biomedical & Health Sciences Rutgers Health & Rutgers Health Group System Partners/Letter of Intent Research & Research Infrastructure New Initiatives Ernest Mario School of Pharmacy

Office of Research and Economic Development Led by SVP Chris Molloy, PhD, RPh Formerly Dean of the RU Ernest Mario School of Pharmacy Held senior research and management posts at J&J, 3-D Pharmaceuticals, and BMS Implementing a major overhaul of research support infrastructure to create an efficient, paperless, userfriendly system for grant and contract submissions Installation of best-in-class software for pre- and postaward processes Ernest Mario School of Pharmacy

New Initiatives Clinical & Translational Medicine & Science Precision Medicine Expanding Clinical Trials Participation Physical Master Plan Ernest Mario School of Pharmacy

Clinical & Translational Medicine & Science Clinical and translational science is performed by multidisciplinary teams “translating” discoveries into effective interventions Interventions can be new drugs, therapies, devices, clinical guidelines, best practices, or population-based interventions Activities are supported by the NIH through coveted Clinical and Translational Science Awards (CTSA) The goal of the NIH CTSA program is to, “Get more treatments to more patients more quickly” Ernest Mario School of Pharmacy

Clinical & Translational Medicine & Science (2) There are only 62 CTSA institutions in the US By definition, these are the top institutions conducting clinical research New York State hosts 7 Pennsylvania hosts 3 New Jersey, ironically headquarters of the global pharmaceutical industry, hosts 0 Our goal is to fix this - Rutgers CTSA grant submitted to NIH Ernest Mario School of Pharmacy

Rutgers Institute for Translational Medicine and Science

Precision Medicine The Right Diagnosis The Right Patient The Right Therapy The Right Time Paving the Way For Personalized Medicine. Food and Drug Administration (FDA) Report. October 2013. http://www.fda.gov/downloads/ScienceResearch/SpecialTopics/PersonalizedMedicine/UCM372421.pdf. March 8, 2016 Ernest Mario School of Pharmacy

Expanding Clinical Trials Participation New Jersey is the most densely populated and one of the most diverse states in the nation Yet, New Jersey lags behind smaller, less diverse, less densely populated states in clinical trial availability and enrollment Rutgers is developing technology and software to inform and educate patients about clinical research and enroll new patients in available clinical trials across the State Collaboration with major industry partners, and health system Ernest Mario School of Pharmacy

RBHS Physical Master Plan A component of Rutgers 2030 university-wide master plan Envisions development over a 15 year time frame, 2015 – 30 An opportunity to envision the future campus environment to support the goals of the RBHS Strategic Plan Ernest Mario School of Pharmacy

The Virtuous Cycle Ernest Mario School of Pharmacy

Our Shared Goal To build one of the best academic health centers in the country, with an emphasis on one. Ernest Mario School of Pharmacy

Ernest Mario School of Pharmacy