Presented by Cyndy Nayer at the Detroit Regional Chamber 2010 Health Care Forum

1. Cyndy Nayer Co-founder and CEO Leveraging Health: Linking HPM to VBD

2. Disclosure Nayer is on the speakers’ bureau for Merck Nayer consults for Merck, Novo Nordisk, GSK, and several emerging health plans April-May 2010 ©VBHEALTH.ORG

3. New Board of Directors Jan-Feb 2010 ©VBHEALTH.ORG

4. Our Mission Our mission is to drive the value of every dollar invested in health Our goal is to identify and link innovators and innovation that broaden the boundaries of health value Our work is focused on defining value, creating relevance to shareholders and stakeholders, and improving the health and economic viability of communities. Jan-Feb 2010 ©VBHEALTH.ORG 4

5. Center publishes the first book on levers of VBD; white papers, evidence Jan-Feb 2010 ©VBHEALTH.ORG Also publishes evidence on sectors, innovation, outcomes www.vbhealth.org 5

6. Just released Jan-Feb 2010 ©VBHEALTH.ORG 6

7. Peer-Reviewed Calls to Action:Outcomes-Based Contracting Jan-Feb 2010 ©VBHEALTH.ORG 7

8. The Value of Health is Our Economic SurvivabilityOur agenda must be: How much health is that dollar delivering? VBD is an ENGAGEMENT TOOL that engages the EMPLOYEE (consumer) and the EMPLOYER (plan sponsor) and the PROVIDER VBD focuses on OUTCOMES VBD has remarkably changed and matured Data Design Delivery DIVIDENDS VBD is driven by data that drives the suite of performance tuners: LEVERS VBD can be tracked along the Health Value Continuum© VBD is sustainable and applicable at the small-large employer AND at the community level VBD builds the Health-Wealth-Performance Portfolio© Nov 09 ©VBHEALTH.ORG 8

9. What Changed? Distress x Vision x First Steps > Resistance April-May 2010 ©VBHEALTH.ORG 9

10. Evolution of the Health Value Continuum© 2007 Jan-Feb 2010 ©VBHEALTH.ORG 10

11. September 6, 2009 April-May 2010 ©VBHEALTH.ORG 11

12. Pew Benchmarks States’ Financial Positions v CA http://www.pewcenteronthestates.org/report_detail.aspx?id=56044 accessed 11.15.09 Changes based on budget gap, unemployment and foreclosures

13. The Economy Affects Health Behaviors 26% have had problems paying medical/health bills 6 out of 10 have skipped recommended treatment, exams, etc. 1 out 5 workers is uninsured Pressure at public level is increased NOV 09 ©VBHEALTH.ORG 13 Compliance, Adherence and Persistence Is at Risk

14. What Changed?HPM defined VALUE andVALUE-BASED DESIGNS accelerated momentum April-May 2010 ©VBHEALTH.ORG 14

15. Objective: Understand the experience of companies with value-based designs in place for 2 or more years Over 100 companies responded Represent over 1 million employees Jumbo to small, public/private, non-profit and governments-as-employers Levers cover all 3 domains 87% Use levers in prevention and wellness 60% Use levers for chronic care management 26% Use levers for guidance to appropriate care delivery 54% use levers for Depression management NOTE: some numbers may not add up to 100: this could be due to rounding errors or because companies were allowed to choose more than one response Center contracts with Buck consultants to verify our work April-May 2010 ©VBHEALTH.ORG

16. What We Now Know… No VBD succeeds without a primary focus on prevention and wellness All successful adoptions and accelerations of VBD are linked to the level/timing of communications And no one succeeds when only communicating 1 time per year Acceleration occurs when aligned incentives drive outcomes This includes patient-centered coordinated care This includes use of community-based assets This includes communication no less than quarterly to keep stickiness of behavior change across all stakeholders Sustainable and measurable value occurs across silos, into the community (when providers achieve improvement in health and financial outcomes) and into families April-May 2010 ©VBHEALTH.ORG 16

17. If Value Is Built on Outcomes, then Purchasing Must Be Built on Outcomes for Alignment Outcomes can be measured by determinants Clinical Financial Operational (Process) Community Outcomes-Based Contracting must align incentives between or across the signers of the contract Health Plan/Plan Sponsor Manufacturer/Service Organization April-May 2010 ©VBHEALTH.ORG 17

18. VBD Are Economically Sustainable… April-May 2010 ©VBHEALTH.ORG 18 79% said no changes were made in 2009-2010 due to economic downturn

19. …VBD Are Economically Sustainable April-May 2010 ©VBHEALTH.ORG 19 56% said no changes due to the economic downturn were anticipated for the next plan year

20. What Could They Have Done Better?Better Employee Communication and Communication with the Physicians/Pharmacists/Clinicians for Aligned Messaging April-May 2010 ©VBHEALTH.ORG 20

21. Where are we now? Levers Accelerate Adoption, Integration, Efficiency and Outcomes April-May 2010 ©VBHEALTH.ORG 21

22. Fundamentals of Value-Based DesignValue-based design is an ENGAGEMENT TOOL for the CONSUMER AND PLAN SPONSOR AND PROVIDER April-May 2010 ©VBHEALTH.ORG 22 VBD is focused on OUTCOMES April 2008

23. Decision Matrix Follows the Health Value Continuum examples of levers Jan-Feb 2010 ©VBHEALTH.ORG 23

24. Application Value-Based Design: Modeled Savings with Applied Data April-May 2010 ©VBHEALTH.ORG 24 Adherence will drive value through productivity gains, reduced financial trend Modeled with IBI

25. Value-Based Design Is Sustainable When It’s Mapped to Productivity Example: Back Pain 20% loss in productivity in high risk group Waster Reduction Lever: mandatory fitness/rehab Chronic Care Lever: EAP/Behavioral health coach Care Delivery Lever: Physical Therapy Example: Smoking 9% loss in productivity in high risk group Waste Reduction Lever: mandatory cessation classes Chronic Care Lever: reduction in Txcopays Care Delivery Lever: Weekly IVR/ phone calls with counselor April-May 2010 ©VBHEALTH.ORG 25

26. Data, Design, Delivery, Dividends Update on Our Work April-May 2010 ©VBHEALTH.ORG 26

27. Behavioral Change Has Emerged as the Key to Improving Health Status

28. Mercer 2009 Recession and Reform Survey 80 percent will increase employee communication/ education aimed at reducing cost or improving health 45 percent will implement programs to improve treatment and medication compliance 29 percent will introduce contribution-based incentives 21 percent will implement consumer-directed health plans

29. Alignment: If Value Is Built on Outcomes, then Purchasing Must Be Built on Outcomes Outcomes can be measured by determinants Health (clinical) Wealth (financial) Performance (operational) Outcomes-Based Contracting must align incentives between or across the signers of the contract Jan-Feb 2010 ©VBHEALTH.ORG 29

30. Alignment: If Value Is Built on Outcomes, then Purchasing Must Be Built on Outcomes Outcomes can be measured by determinants Health (clinical) Wealth (financial) Performance (operational) Outcomes-Based Contracting must align incentives between or across the signers of the contract Jan-Feb 2010 ©VBHEALTH.ORG 30

31. Innovator DNA Innovators embrace a mission for change. Make mistakes Take risks Display courage Transform ideas into powerful impact Provide to the general community in order to change the ecosystem HBR Vol 87 #12, Dec 2009

32. Jack Mahoney MDCyndy Nayer www.vbhealth.org info@vbhealth.org April-May 2010 ©VBHEALTH.ORG 32