Aetna December 2011 investor conference presentation (final) copy

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Aetna December 2011 investor conference presentation (final) copy

  1. 1. Mark BertoliniChairman, CEO andPresident Aetna’s  Strategy  for  Success December 15, 2011
  2. 2. What We Believe HealthAccess and Employers Consumerism Providers InformationAffordability Technology Source: Premieris a universal demand more in charge of transforming the helping issue cost-effective their own network model people live solutions health care healthier lives Our strategy is designed to capitalize on the changing external environment AETNA INVESTOR CONFERENCE The Changing Environment 13
  3. 3. What We Believe Access and Affordability The ACA addresses access without providing for affordability Supreme Court Opportunity to improve the ACA Currently implemented Deficit Reduction changes likely to remain Efforts Employer sponsored insurance will continue 2012 Elections to thriveACA = Affordable Care ActPhoto: Bloomberg News AETNA INVESTOR CONFERENCE The Changing Environment 14
  4. 4. What We Believe Employers Employers need more cost-effective solutions 1990’s 2000’s 2012 ConsumerIndemnity Open Innovative Strong- Directed Medical Access Network form HMOs Health Plans Plans Models Plans We  are  developing  new  products  based  on  … Tiered networks Narrow networks Accountable Care Solutions AETNA INVESTOR CONFERENCE The Changing Environment 15
  5. 5. What We Believe Consumers Consumers will continue to bear higher health care cost increases $19,393  Employees have borne +7.5% half of the dollar increase $14,500 in medical costs since +9.4% 2007  The annual rate of increase in Employee +6.3% costs has been almost 50% higher than CAGRs Employer cost increases shownSources: Milliman Medical Cost index2007-2011: Average medical cost for a familyof four shown. AETNA INVESTOR CONFERENCE The Changing Environment 16
  6. 6. What We Believe Providers Provider systems are increasingly institution-based Changing Hands Medical practice ownership 100% Less than one-third of US Hospital- medical practices are truly 75% owned independent 50% The ACA and shifting economics 25% Physician- are forcing providers to re- owned evaluate their business models 0% 02 04 06 08 10 Source:  “MGMA  Physician  Compensation  and  Production       Survey  Report” Accountable Care Organizations are the future business model for provider/plan collaborationSources: MGMA and Wall Street Journal. AETNA INVESTOR CONFERENCE The Changing Environment 17
  7. 7. What We Believe Health Information Technology (HIT)Today’s  technologies  enable  a  360º  view  of  the  patient AETNA INVESTOR CONFERENCE The Changing Environment 18
  8. 8. What We Believe Health Information Technology (HIT) Consumers ProviderMeaningful Use + Consumer Connectivity Accountable Care + Solutions Incentive Alignment Intellectual = Property Paradigm Shift Medical Membership AETNA INVESTOR CONFERENCE The Changing Environment 19
  9. 9. Our Unique Capabilities Can Meet State and Local Needs Unique and Configurable Aetna Capabilities Medicare / Retirees Medicaid State Employees Accountable Care ActiveHealth Medicity Solutions Patient Centered iTriage Care Management Medical HomePositions Aetna as a solutions provider to address full set of State and Local needs AETNA INVESTOR CONFERENCE Advancing the Core 27
  10. 10. Our Unique Capabilities Can Meet State and Local Needs North Carolina Patient Centered Medical Home Unique and Configurable Aetna Capabilities Medicare / Retirees Medicaid State Employees Accountable Care ActiveHealth Medicity Solutions Patient Centered iTriage Care Management Medical HomePositions Aetna as a solutions provider to address full set of State and Local needs AETNA INVESTOR CONFERENCE Advancing the Core 28
  11. 11. Our Unique Capabilities Can Meet State and Local Needs Carilion Clinic Unique and Configurable Aetna Capabilities Medicare / Retirees Medicaid State Employees Accountable Care ActiveHealth Medicity Solutions Patient Centered iTriage Care Management Medical HomePositions Aetna as a solutions provider to address full set of State and Local needs AETNA INVESTOR CONFERENCE Advancing the Core 29
  12. 12. Customer Experience: Enhanced for a Digital Age Leveraging technology to redefine quality as convenience Our new customer models target:  Installing cases in days, not weeks  Rate and product availability in minutes, not days  Online provider availability and scheduling  Online adjudication and payment estimation  Payment online, rather than by check or wireAetna’s  consumer  platform  will  be  a  competitive  advantage  in  the   changing environment AETNA INVESTOR CONFERENCE Commercial Insured 67
  13. 13. Charles E. Saunders, MDHead of StrategicDiversification Accountable Care Solutions — Collaborating To Transform Health Care December 15, 2011
  14. 14. Agenda Accountable Care Solutions Customer Testimonial AETNA INVESTOR CONFERENCE 86
  15. 15. The Market is Demanding More Value HealthAccess and Employers Consumerism Providers InformationAffordability Technology Source: Premier Aetna believes Accountable Care Solutions will power the next transformative network model to help meet the needs of the changing external environment AETNA INVESTOR CONFERENCE Accountable Care Solutions 87
  16. 16. Rate Pressures are Forcing Providers to Re-evaluate the Network Model S&P Healthcare Economic Composite Index The growth in health care 120% Commercial Health cost is ultimately Care Cost Index unsustainable Medicare Health Care 115% Cost Index Cost Shift Pressure It is estimated that Medicare 110% and Medicaid account for 55% of hospital revenues* 105% Source: S&P Healthcare Economic Composite Index Commercial payors are 100% unable to continue to subsidize cost shifting Health Care Reform is forcing providers to re-evaluate their revenue and profit model* New York Times, July 4, 2011 AETNA INVESTOR CONFERENCE Accountable Care Solutions 88
  17. 17. Changing the provider focus from Volume to Value Volume ValueProvider revenues contingent on Re-aligned financial incentivesvolume of care services provided create diversified revenue sources Encourages additional capacity Improved cost structure and and unnecessary care efficiency increases profitability Denied claims, un-reimbursed Quality improvement increasesadmissions and other penalties as performance-based reimbursement payors manage utilization Payors and providers as Aligned incentives to provide adversaries appropriate care in the best settingProviders recognize the value offered through Accountable Care Solutions Collaborations AETNA INVESTOR CONFERENCE Accountable Care Solutions 89
  18. 18. We see Accountable Care as a Broad, Transformational Commercial Model Aetna Perspective All patient model – Medicare, Medicaid, Commercial All payor model – not limited to Aetna members Committed to quality and total cost management Symmetrical risk sharing CMS Model Medicare only Defined network Shared savings Quality measures and reportingAetna’s  Accountable  Care  Solutions  offering  is  a  sustainable   long-term model for change AETNA INVESTOR CONFERENCE Accountable Care Solutions 90
  19. 19. Driving Change and Creating Value Through Accountable Care Solutions Empower AccountableAetna  Capabilities… Driving… Care  Solutions… Improved Medical Cost Structure Membership Growth Intellectual Property Service Fee Source: Premier Revenue AETNA INVESTOR CONFERENCE Accountable Care Solutions 91
  20. 20. Connecting Providers and Patients with Powerful, Personal Technology  Clinical Data Integration  Secure Data Exchange  Intelligent provider Leading consumer interface mobile app  Cloud-based Symptom-to- application store Provider pathway  Rapid / viral Navigation, access, distribution appointments, registration Accountable Care Solutions  Population-based clinical intelligence, decision  Risk management support, disease registries and alerts  Health plan services  Care Management,  Network and member communication and management Intellectual Property workflow technology  Distribution  Personal Health Record AETNA INVESTOR CONFERENCE Accountable Care Solutions 92
  21. 21. Medicity Transforms Data Into Action Analytics, Risk-stratified Populations & Quality Measures Clinical Decision SupportHIS • Data Aggregation • Community Health Record Patient Portal • Identity Management • Semantic Interoperability • Security Framework • Patient Consent Framework AETNA INVESTOR CONFERENCE Accountable Care Solutions 93
  22. 22. Aetna provides a Path to Accountable Care at Any Stage of Provider Readiness Accountable Care Risk Clinical Integration Management Workflow Workflow Management Management Outcomes Data Outcomes DataMeaningful Use Analytics Analytics HIE HIE HIE EMR EMR EMRClinical Decision Clinical Decision Clinical Decision Support Support Support Manage Manage Coordinate performance populations AETNA INVESTOR CONFERENCE Accountable Care Solutions 94
  23. 23. ACS is aligning its Market Opportunities to its Core Business Network Strategy ACO PCMH  Large integrated Systems  Mid/large Group  No Provider-owned Plans  IPA / MSO  Critical Mass Locally ~330(a) ~230(b) ACO / PCMH Network Strategy High Presence Current Plan Aetna Sponsor Presence Coverage Low Presence Needs(a) Ideal candidate Independent Delivery Network Current pipeline is > 150 health systems(b) Ideal candidate groups AETNA INVESTOR CONFERENCE Accountable Care Solutions 95
  24. 24. In Addition to New Growth ACS Creates Synergies to the Core Network enhancement Improved value proposition to plan sponsors Improved provider discounts Reduced cost of care / MBR Provider relationship enhancement Differentiation of the Aetna brand AETNA INVESTOR CONFERENCE Accountable Care Solutions 96
  25. 25. Road to Competitive Product Rates and Membership Growth: Illustrative Market broker study Health System and Aetna ACS concluded that small group collaborate to identifynarrow network product would opportunities and implementneed to be priced ~10% lower technology tools and care than competitors to attract management initiatives to close members the gap Unit Price 10-25% Cost Goal: 10% Better than Concessions = Parity Reduction from Competitors with Competitors Collaboration and IT Health System unit cost concessions of ~10% put collaboration on par with local competitors Aetna’s  new  network  model  is  creating  high-quality, low-cost options in local markets AETNA INVESTOR CONFERENCE Accountable Care Solutions 97
  26. 26. Select Customer Examples Experience  52 MA CollaborationsBreadth of Populations Served  6 Multi-payor PCMHs  1 Medicaid PCMH  2 Statewide ACOs  10+ bundled payment models  26 multi-line, multi-payor ACOs being contracted or launched  >150 health systems in pipeline ACO Scope AETNA INVESTOR CONFERENCE Accountable Care Solutions 98
  27. 27. Case Study  Headquartered in Roanoke, VA  More than 1,200 licensed beds and net revenues of $1.25B in FY2009 Background  600+ physicians in a multi-specialty group practice and 8 not-for-profit hospitals  Serves approximately 1 million people in Western Virginia  Employees Targeted  CommercialCustomer Markets  Medicare Advantage (MA)  Medicaid  Improving  profitability  of  Carilion  Clinic’s  MA  health  plan  using,  in  part,  Aetna’s  MA   provider collaboration model Collaboration  Building a co-branded Carilion Clinic/Aetna suite of products for commercial market Model(s)  Transitioned employees off cycle to be Aetna members and manage them in the ACO  Launching a provider-driven managed Medicaid program with CarilionPayment Reform  Risk sharing (up and down) – cost saving based on clinical and financial efficiencies Highlights  Care management: Exploring use of ActiveHealth care management platform, PHR, Other health management programs and staff support Collaborations  Health plan services: Aetna insurance license, customized enrollment support, etc. AETNA INVESTOR CONFERENCE Accountable Care Solutions 99
  28. 28. Accountable Care Solutions Can Play a Transformational Role in Health Care Accountable Care Solutions is becoming the marketplace leader in enabling population health management for providers … And it puts Aetna on a path to play a transformational role in health care Aetna is uniquely positioned to drive benefit from this new model for health care finance and delivery … And fundamentally change the value proposition for purchasers and patients AETNA INVESTOR CONFERENCE Accountable Care Solutions 100

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