Empowerment to Control Your Healthcare & Related Costs

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  • 1. Empowerment To Control Your Health Care & Related Costs November 2008 CONSUMER CARE SOLUTIONS, INC. CONTACTS 50 HARRISON STREET – SUITE 312 PAT DILEO (PatD@CCSHealthcare.com) HOBOKEN JERSEY 07030 ADAM H. GOODFRIEND TELEPHONE: (201) 233-4000 (AdamG@CCSHealthcare.com) LORRAINE SPIOTTA (LorraineS@CCSHealthcare.com) 0 For Discussion Purposes Only - Not For Further Distribution or Use
  • 2. OVERVIEW – Consumer Care Solutions, Inc. (“CCS”) empowers members to control and manage health care and related spending by offering a combined insurance and savings/ cost management suite of services CCS Offers members these 3 Bundled Healthcare Services: •  Customized High Deductible Health Insurance (“HDHP”)   Premium reductions more than offset increases in deductible   Significant savings combined with full catastrophic protection   “Guaranteed” savings •  Health Savings Account (“HSA”) / Account Management   Employer / employee may share in savings   Premium savings fund deductible via pre-tax contributions to a portable employee owned HSA •  CCS’ Product Suite:   DirectAccess is a highly evolved web-based platform offering CCS members access to tools, goods and services to help them managed and direct their healthcare choices and spending   Completely HIPPA compliant CCS: •  Helping members understand, control & manage healthcare and related costs •  Positioned to be a dominant Consumer Directed Health Care (“CDHC”) player 1 For Discussion Purposes Only - Not For Further Distribution or Use
  • 3. HDHP & HSA Basics There are a number of benefits of CDHC for both the employer and the employee •  HDHPs:   A low-premium insurance policy that features higher annual deductibles than other traditional health plans   Qualifying 2009 deductibles start as low as $1,150 (individual) and $2,300 (family)   Higher deductibles produce dramatically lower premiums more than offsetting increased deductible exposure   Employers can share all or portion of these savings with employees •  HSAs:   A banking / investment account funded with pre-tax contributions   2009 pre-tax contributions of $3,000 (individual) and $5,950 (family)   Savings can be withdrawn - tax-free - to use for qualified medical expenses   Employee owned and portable from job to job   Unused funds accumulate tax-free •  Qualified HDHPs with an HSA   Helps to build savings for future medical expenses, and all money saved is portable and transferable to an estate   Allows greater flexibility and control over use of health care dollars   Premiums are paid with pre-tax dollars & funds grow tax free 2 For Discussion Purposes Only - Not For Further Distribution or Use
  • 4. Democratic Administration: HSA Views Bush authorized HSAs in 2003 Medicare bill. Legislation was enhanced in 2006 •  President Obama and CDHP   Obama’s Universal Health Care Plan Public insurance program for those without access to Medicaid, SCHIP or employer plans   Create a National Health Insurance Exchange to help Americans purchase private health insurance   Require all employers to contribute towards health coverage for their employees (public or private plans)   Mandate that all children have health care coverage   Expand eligibility for the Medicaid and SCHIP programs   Allow flexibility for state health reform     HSAs   President Obama: “HSAs may be a helpful way of saving taxpayers money but HSAs don't do enough”   May limit income levels for HSA participants   Primary Care & Preventive Medicine   Increased spending on high-value preventive services (i.e. cancer screening and immunizations)   Health care plan will include coverage of all essential medical services, including preventive, maternity and mental health care   Will require that plans that participate in a new public plan, Medicare or the Federal Employee Health Benefits Program (FEHBP) to cover proven disease management programs   Universal Coverage   Every American should have access to affordable, high-quality health coverage   No mandated coverage except for children Obama has signaled support for more consumer choice, wellness and greater expense management Source: Response to survey of American Academy of Family Physicians 3 For Discussion Purposes Only - Not For Further Distribution or Use
  • 5. Recent CDHP News CDHP Usage is on the Rise •  WellPoint finds CDHPs yield cost savings to employers   Employees with CDHPs spend more on preventive care than those with traditional plans   Based on Oct. 2008 survey of 7,977 employer groups •  Canopy’s recent HSA Market Report shows 43% of surveyed employers will offer HSAs or HRAs   Results from 2Q08 Canopy study: Indivual Family Indivual Family HSA Balance $ 969 $ 1,663 Transfer to Investments $ 1,901 $ 2,897 HDHP Deductible $ 1,805 $ 3,279 Transfer From Investments $ 665 $ 1,216 Employer Contribution (Mo.) $ 57 $ 116 Amounted Invested (Age 25-40) $ 2,827 $ 356 Employee Contribution (Mo.) $ 347 $ 173 Amounted Invested (Age 41-50) $ 1,065 $ 2,437 Monthly Spend $ 78 $ 97 Amounted Invested (Age 51+) $ 1,040 $ 3,011 Accountholder Age 41 45 Source: Canopy 2Q08 HSA Report Source: WellPoint Institute of Health Care Knowledge Releases Study on the Value of Consumer-Directed Health Plans (Oct. 2008) 4 For Discussion Purposes Only - Not For Further Distribution or Use
  • 6. Consumer Directed Health Care CCS + HSA + HDHP: Working together for the CDHC Solution •  HDHP   HDHP premium savings fund HSAs   Vanishing deductibles   Employer may keep or pass on savings   Same quality of service with enhancements   During deductible period, “any doctor” can be used   No “additional” co-payments   Savings may be targeted to HSAs to reap tax benefits •  HSA   Medicare Modernization Act of 2003 establishes pre-tax accounts to be used for medical expenses   HDHP premiums and deductibles were specifically allowed   Attempts to promote “Stay Healthy, Get Wealthy” Mentality No “use it or lose it” feature   Portable   Employee owned   HSA is employee owned, transportable between jobs and does not expire   •  CCS – Tools for Transparency Broad physician network   Dual purse Visa Card and other HSA administration tools   Rx and medical discounts (including Medicare Part D Administration)   Wellness, patient advocacy and health management tools   Tools to manage and control all their short and long-term health care needs and related spending   The better the employee cares for himself, the more money he saves (gets to keep)   “Stay healthy & get wealthy” 5 For Discussion Purposes Only - Not For Further Distribution or Use
  • 7. DirectAccess.com – Products & Services DirectAccess.com is CCS’ proprietary member based web portal, tying our services together •  INSURANCE   To lower costs, CCS offers major medical insurance, through a customized qualified HDHP from the nation’s best-rated and financially sound insurance companies   HDHPs finance expensive and chronic medical needs while HSA sourced funds cover the routine costs including expenditures incurred to advance wellness   HDHP insurance, with its high deductible, produces an enormous premium reduction, which can be used to fund HSA deposits, which are tax-advantaged •  HSA MANAGEMENT   HSA funds can be invested through CCS’ FDIC insured bank (or any other FDIC bank) and also, if elected, through a self-administered investment fund manager, carried over year-to-year and could, if unused, be used like a retirement account for future health needs   No time restrictions on funds’ use   Funds are fully employee owned and become part of the owner’s estate   Unlike other health flexible spending accounts, HSAs are portable and can be taken from job to job   HSA spending can be managed using CCS’ dual purse Visa card 6 For Discussion Purposes Only - Not For Further Distribution or Use
  • 8. DirectAccess.com – Products & Services DirectAccess.com is CCS’ proprietary member based web portal, tying our services together •  MEDICAL DISCOUNTS   In conjunction with a CCS sponsored HDHP plan, members and their families receive the DirectAccess discount card   Significant discounts on Rx & vision, hearing and dental care, chiropractic service and medical/laboratory testing through LabCorp   These negotiated savings are passed to members so HSA dollars may be invested longer •  PHYSICIAN NETWORK   CCS is expanding its nationwide network of 500,000 doctors and 5,000 medical service providers   CCS’ provider network is PHCS   PHCS offers >500,000 doctors, services 40 million consumers   Expands your “in-network” coverage   Members can choose from this network or may make a request to have their own choice of doctors added   Members can search for doctors based on location, education/credentials or other members’ ratings   E-visits enhance access to doctors   CCS is the only company that offers and administers a private provider network for its members. •  PATIENT ADVOCACY   Members have 24/7 access to someone who can help with a referral, solve a problem or deal with the financial administration   CCS’ Chief Medical Officer has 30 years of CDHC experience working with scores of physicians around the country 7 For Discussion Purposes Only - Not For Further Distribution or Use
  • 9. Combined Program Savings HDHP savings are significant •  CCS helps contain costs and manage care allowing for managed spending from HSA or similar accounts   The savings in premium more than offsets the increase in deductible   During the deductible phase, there are no co-payments and doctor choices are “unlimited”   $5,800 HSA annual funding, unused amounts carry forward Employee HSA Asset (Based on $5,800 Contribution) HDHP
vs.
Traditional
Coverage:

Family
Plan.

Based
on
Actual
Customer
Quote
 Traditional
Health
 HDHP
Plan HDHP
Savings Plan 50+% Savings Employee
Asset Yes No Allowable
Expenses Broad Narrow Permitted
Physicians quot;Any
Doctorquot; quot;In
Network
Onlyquot; $9,360
 Savings
can
be
shared
between
Employer
and
Employee
 Annual
premium
 $7,920
 $17,280
 

Monthly
premium $660
 $1,440
 $780
 Estimate
of
10
visits
+
Rx
+
$1,000
of
quot;otherquot;
expenses Estimated
medical
expenses
 $2,750
 $1,400
 ($1,350) 12
monthy
payments
of
$39.95 DAW
Membership $479
 $0
 ($479) HSA
funds
the
cost
of
medical
expenses
and
DAW
membership Estimated
HSA
withdrawals
 $3,229
 $0
 $1,984
 28%
federal
rate
+
6.2%
FICA
tax
savings
on
HSA
Contribution Estimated
HSA
tax
savings
 $1,984
 $0
 $9,514
 Premium
+
HSA
Withdrawel
(or
Medical
Expense)
+
HSA
Tax
Savings Total
annual
cost
 $9,166
 $18,680
 

Total
monthly
cost
 $764
 $1,557
 $793
 $2,571
 This
carry‐over
balance
is
an
employee
asset Unused
HSA
Account
Balance $2,571
 $0
 8 For Discussion Purposes Only - Not For Further Distribution or Use
  • 10. Partners / Vendors / Customers CCS has negotiated several important contracts •  An exclusive contract with the Credit Union National Association (“CUNA”) to co- brand CCS’ offering to all of CUNA”s 90 million credit union members •  Other exclusive customer contracts: •  Usana, Tahitian Noni, Baptist National Convention •  CCS partners are quality branded suppliers delivering Best of Breed products to its members   CCS members access these products an services primarily through a proprietary and easy-to-use web portal: www.MyDirectAccess.com 9 For Discussion Purposes Only - Not For Further Distribution or Use
  • 11. Web-Based Tools Members access CCS and through a suite of powerful, yet friendly web-tools 10 For Discussion Purposes Only - Not For Further Distribution or Use
  • 12. Member Tools Membership has its benefits….The DirectAccess Card •  CCS is one of the first to offer a “dual purse” Visa debit card   Helps manage HSA spending   Private label / branding opportunities exist   Debit card administered by Visa 11 For Discussion Purposes Only - Not For Further Distribution or Use
  • 13. The Bottom Line CCS – Ready to fulfill America’s healthcare needs, one family at a time •  No implementation risk   Fulfillment outsourced to large and well established vendor partners (Visa®, Rx America, etc.) •  Proven market demand with exceptional growth fundamentals   Employee / employer stated demand   Federal, state and local support •  Products / services delivered through easy-to-use proprietary patented web portal   Unique / fully open architecture   Private label ready •  Membership driven revenue, significant margin and highly variable cost model   Monthly membership is $39.95   Offered in conjunction with HDHP / HSA services or on a stand-alone (uninsured/ under insured) basis   Month-to-month commitment   Revenue sharing opportunities exist 12 For Discussion Purposes Only - Not For Further Distribution or Use
  • 14. Your Team 13 For Discussion Purposes Only - Not For Further Distribution or Use
  • 15. Your Team Consumer Care Solutions has a broad team with deep experience •  Gerald Tsai, Jr. – Former Chairman   Consumer Care Solutions mourns the passing of its Chairman, Mr. Gerald Tsai in the summer of 2008   As a true visionary, Jerry saw Consumer Care Solutions as a company with the potential to be a significant player in the consumer directed healthcare industry. He saw CCS as having similar potential to what he saw in Primerica as he turned it from American Can to a financial services giant. •  Pasquale (“Pat”) Dileo – President / CEO   Pat has 20 years of proven entrepreneurial and management experience in both guiding his own companies and providing strategic advice and guidance to the CEOs of various corporations. As a founder and principal of Select Business Implementation Group, he has spent over a decade negotiating and closing complex corporate acquisition and merger business transactions for several start-up and early-stage development companies, one of which he took public. Areas of expertise include health care development and operations, environmental municipal waste management and real estate/recreational businesses. He served as Commercial Real Estate Director of Merrill Lynch Realty until they sold the subsidiary to Prudential Real Estate.   Throughout his business career, he has both participated in and managed the daily operations of the various businesses he owned. Such participation included raising significant amounts of capital and closing numerous equity and debt financing transactions.   He is one of the founders of Consumer Care Solutions, Inc, a company he created in August 2006. A U.S. Navy veteran, he graduated from the College of New Jersey. 14 For Discussion Purposes Only - Not For Further Distribution or Use
  • 16. Your Team Consumer Care Solutions has a broad team with deep experience •  Erol Y. Beker - Vice Chairman of the Board of Directors:   Erol Beker has been involved in the management of public and private companies since 1982, when he became the then youngest CEO of a public company (Beker Industries) to be listed on the New York Debentures Exchange. Subsequently, Erol headed Cedar Holdings, a firm that specialized in commodities trading and leverage buyouts in the chemical business, and one that eventually purchased Royster Company, an agribusiness pioneering company that today is known as Royster-Clark. Over his 28 years of experience, he has performed workouts for large banks, been a private investor and done consulting work.   Erol holds BA and MBA degrees from Babson College and Columbia University respectively. •  Adam Goodfriend – Executive Vice President – Director of Operations & Finance   Adam Goodfriend has approximately 20 years of investing, investment banking and capital markets experience. He has acted as both principal and agent and has managed portfolio assets for hedge funds. His principal focus has been on the high yield and bank debt finance markets for middle market companies.   Adam began his finance career at Chase Manhattan Bank in 1990, and in 1992, co-founded its high yield finance group. In 1997, he moved to SG Cowen as a founding member of its high yield underwriting franchise and was made responsible for the firm's European high yield effort. In 2000, he was hired to help re-build Bank of America's high yield finance group as a Managing Director. In 2003, Adam left banking to become a co-founder of Airlie Opportunity Group, a multi- billion dollar multi-strategy hedge fund.   He holds an MBA from the Wharton School of Business and a BA from Johns Hopkins University. 15 For Discussion Purposes Only - Not For Further Distribution or Use
  • 17. Your Team Consumer Care Solutions has a broad team with deep experience •  Michael C. Cassady - Chief Marketing and Strategy Officer   Michael, a serial entrepreneur, is a proven leader with multiple successes in launching and building profitable businesses.   Michael was a co-founder of Beach Rock Inc. and a Director of Operations with LoneStar Hospitality. From 2993 - 2005, he was CEO/President of Global Affiliates Inc. (d.b.a. GlobalFit), a health benefits company that operated in 49 US major markets with over 70 employees and a rapidly growing client base of more than 2,000 of the nation's top employers, insurance carriers and organizations representing more than 60 million employees and members.   Michael sits on the advisory board of Oceanus Partners, a consulting firm focusing on strategic plans for expanding businesses. He is also an active member and supporter of the International Health, Racquet & Sportsclub Association, the HRC Federal Club and the Sapphire Fund.   He holds a BA degree in Biology and Chemistry from the University of Houston, and a JD Corporate Law from the University of Houston Law School. •  Robert B. Hyte - Chief Technology Officer   Over 20 years ago, Bob became aware of the need for medical data processing services and created the first healthcare service bureau in the Intermountain West. After growing his business to several million in revenues and serving most hospital and medical clinics in a three state region. He sold this business to a large hospital service company.   Bob subsequently joined Control Data Corp. in their healthcare technology division where he became one of the chief designers of the National Blue Cross/Blue Shield back office and claim administration systems. Bob has served as CEO/President of several technology corporations in the public and private sectors and is an author/patent holder/creator of Direct Access Worldwide. 16 For Discussion Purposes Only - Not For Further Distribution or Use
  • 18. Your Team Consumer Care Solutions has a broad team with deep experience •  Dr. Alan J. Iezzi - Chief Medical Officer   Dr. Iezzi is the Chief Medical Officer of Consumer Care Solutions ('CCS') and is the founder and president of Patient Directed Care, Inc. ('PDC'), which is a health network, patient advocate, and a discounted medical care organization recently acquired by Consumer Care Solutions. He is responsible for medical supervision and patient advocacy, as well as health plan design.   Dr. Iezzi has operated a successful family practice in Tampa, FL since 1986. He has served as Chief of Family Medicine for both St. Josephs and University Community Hospitals in Tampa, is a member of Quality Assurance Committees for St. Josephs Hospital and several major insurance companies. He is active in many advisory boards for Florida insurance companies, and he has extensive experience in healthcare service quality on both the physician and insurance side. Florida is among the three states in which he holds licenses. •  Anthony Cipollone - Chief Financial Officer   Anthony Cipollone, a CPA, worked as a senior accountant for a large New York CPA accounting firm early on in his career. He subsequently held positions as controller, treasurer and chief accounting officer with both private and public NJ companies, including Unified Environmental Services Group, LLC of New York and VRH Construction Company of Englewood, NJ. During his ten-year employment as Controller with VRH Construction, he made significant staff and programs changes in the accounting department.   Anthony received a B.S. in accounting from Herbert H. Lehman College in Bronx, NY and an A.A.S degree in Data Processing from Westchester (NY) Community College. 17 For Discussion Purposes Only - Not For Further Distribution or Use
  • 19. Your Team Consumer Care Solutions has a broad team with deep experience •  Lorraine Spiotta - VP, National Sales   Lorraine Spiotta, since 1997, has become a widely recognized and acknowledged spokesperson for the Long-Term Care Insurance industry in NJ. The president and founder of Senior Long- Term Care Insurance Brokerage, Inc., she has completed the advanced training and educational requirements for the prestigious Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC), and her Certified Long-term Care Designation (CLTC).   Lorraine participates actively in numerous community and professional organizations, and was the past president of the NJ Chapter of Women Life Underwriters Confederation. She is also highly regarded in the long-term care insurance field, serving as a lecturer, keynote speaker and panel moderator and has authored several articles and a Care-giving Handbook. She has served as a Commissioner with the NJ Commission on Aging. •  Jeffrey Resnick - VP Marketing   25 years ago, Jeff co-founded an integrated Strategic Marketing/Sales Promotion/ Packaging agency in northeast Ohio. The company grew to over 30 people and handled full- service national accounts such as Glidden/ ICI Paints, British Petroleum, The Scotts Company, Marzetti Salad Dressings, Moen and General Mills.   Jeff subsequently established a sales promotion and marketing partnership with accounts such as, American Express, Sherwin-Williams, National City Bank, Key Bank, Levi-Strauss, American Greetings and General Electric. Jeff’s has historically emphasized driving sales through aggressive targeted incentive programs, focusing on Strategic/Integrated Marketing that ties the channels of marketing and distribution to the end user. 18 For Discussion Purposes Only - Not For Further Distribution or Use
  • 20. Your Team Consumer Care Solutions has a broad team with deep experience •  William H. White - VP Administration/Assistant to the President   For over 30 years, Bill White headed a major reference book publishing company, and after brief stints in real estate and consulting, he subsequently joined Pat Dileo as a founder and principal of Select Business Implementation Group   Bill is an active participant in a number of community organizations and affairs, and is actively been involved as an alumnus of his alma mater, Dartmouth College. •  Bradley J. Hendricks - Assistant to the Chief Technology Officer   Since receiving his undergraduate degree from Brigham Young University and his Doctor of Chiropractic from Los Angeles College of Chiropractic, Brad Hendricks has continued to practice with and promote an integrative medicine approach to healthcare, working alongside family practice physicians, neurologists, orthopedists, physical therapists, acupuncturists, massage therapists and other specialists. •  George W. Connley - VP Insurance Relations   George has over 37 years experience in the insurance industry and holds licenses for both Property & Casualty and Life & Health for the state of Florida. He served as president and CEO of Southeastern Staffing, Inc., managing $227 million in revenue. George held several positions with Wausau Insurance, including Sales Manager for the North and South Carolina territories.   He holds a BA Degree from Morehead State University. 19 For Discussion Purposes Only - Not For Further Distribution or Use