pursuant project_0503_final draft

Pursuant Health and Anthem Inc.

Indiana University Student Project

Team 9Michael Crawford, JuanJun Gu, Nikita Kanal, Neha Paranjape,

Elizabeth Thompson, Yunfeng Wen, Lishan Xiao

Agenda

Risks & MitigationFinancialsIncentives,

EngagementCommunication, Kiosk Locations

Customer Profiles

Opportunity & Objective

2

Project Objective

3

73% Response Rate

Increase Awareness

Create Access

Incentive

4

Medicaid Customer Profile 1Jane

• 32 years old, single female• High-school graduate• Retail clerk• Earns ~$850/month• Resides in Marion County, IN• Assigned to Anthem as her MCO• Has access to HNS, but has not completed it

5

Medicaid Customer Profile 2George & Mariana

• 55 & 52 years old; married w/ adult children• Construction worker & homekeeper • Earn ~1900/month• Reside in Greene County, IN• Chose Anthem as their MCO• Do not have easy access to complete their

HNS screening

Current Communication Process

6

Recommended Communication Channels

Traditional Media Digital

7

PartnersSocial Media

Strategy to Identify Additional Kiosk Locations

>1000 HIP enrollees

Populous county

Kiosk paucity or non-

accessibility

8

Ideal Locations For Additional Kiosk Installations

CLARK COUNTY

LAKE COUNTY

GREENE COUNTY

9

Kiosk Locations: RecommendationsExisting New

10

Incentive-Economic StimulationProvide convincing economic incentive

Establish sense of urgency

Introduce other incentives as needed

Phase 4$ Bottom Player Growth Rate

o No Partnership- U.S. HQ

Phase 1aCustomer Portal

and Rewards Program

Phase 3$ Mid Player

Growth Rate Partnership

- U.S. HQ

Customer Portal & Rewards Program

Giftcard Limitations

Appointment via Kiosk

TARGET To motivate

ongoing health promotion

STRATEGYImplement

Build CredibilityExpand

Ongoing Measures for Health Promotion

11

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Financials: Pursuant Health• Key drivers:• Kiosk investments• Enrollment level• Response rate

3,000 3,500 4,000 4,500 5,000 69% 72,883$ 82,599$ 92,315$ 102,031$ 111,746$ 70% 73,728$ 83,585$ 93,441$ 103,298$ 113,154$ 71% 74,573$ 84,570$ 94,568$ 104,565$ 114,562$ 72% 75,418$ 85,556$ 95,694$ 105,832$ 115,971$ 73% 76,263$ 86,542$ 96,821$ 107,100$ 117,379$ 74% 77,108$ 87,527$ 97,947$ 108,367$ 118,787$ 75% 77,952$ 88,513$ 99,074$ 109,634$ 120,195$ 76% 78,797$ 89,499$ 100,200$ 110,901$ 121,603$ 77% 79,642$ 90,484$ 101,327$ 112,169$ 123,011$ 78% 80,487$ 91,470$ 102,453$ 113,436$ 124,419$ 79% 81,332$ 92,456$ 103,579$ 114,703$ 125,827$ 80% 82,177$ 93,441$ 104,706$ 115,971$ 127,235$

100% 99,074$ 113,154$ 127,235$ 141,316$ 155,397$

Enrollment

Response Rate

Pursuant

Risk mitigation (Pursuant Health)Risk Mitigation

Expanding too quickly Choose location kiosks according to long-term growth strategy

Probability

Impa

ct

14

14

Financials: Anthem• Key drivers:• Incentive amount• Enrollment level• Response rate

3,000 3,500 4,000 4,500 5,000 69% (313,647)$ (342,795)$ (371,942)$ (401,089)$ (430,237)$ 70% (290,065)$ (319,635)$ (349,204)$ (378,774)$ (408,344)$ 71% (292,599)$ (322,592)$ (352,584)$ (382,576)$ (412,568)$ 72% (295,134)$ (325,549)$ (355,963)$ (386,378)$ (416,792)$ 73% 1,989,211$ 1,969,167$ 1,949,123$ 1,929,079$ 1,909,035$ 74% 1,987,564$ 1,967,245$ 1,946,927$ 1,926,608$ 1,906,290$ 75% 1,985,917$ 1,965,323$ 1,944,730$ 1,924,137$ 1,903,544$ 76% 4,166,965$ 4,146,097$ 4,125,230$ 4,104,362$ 4,083,494$ 77% 4,165,318$ 4,144,175$ 4,123,033$ 4,101,891$ 4,080,748$ 78% 4,163,670$ 4,142,253$ 4,120,836$ 4,099,419$ 4,078,002$ 79% 8,527,415$ 8,505,723$ 8,484,032$ 8,462,340$ 8,440,649$ 80% 8,525,767$ 8,503,801$ 8,481,835$ 8,459,869$ 8,437,903$

100% 8,492,818$ 8,465,361$ 8,437,903$ 8,410,445$ 8,382,988$

Response Rate

AnthemEnrollment

Risk mitigation (Anthem)Risks Mitigation

Incentives unsuccessfulUnable to achieve target response

Use response rate data to identify underperforming groups and target

additional communications & incentives

Customer confusion Clear communications

Probability

Impa

ct

Probability Im

pact

15

Questions?

16

Appendices

17

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Appendix: Walmart Locations in Indiana

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Appendix: Innovation Research Links• Participate rate stimulation link: http://

www.surveygizmo.com/wp-content/uploads/2015/08/guide-to-survey-incentives.pdf• The video creating cost link: http

://grumomedia.com/how-much-a-typical-promo-video-costs/

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Appendix: Anthem Financial ModelAssumptions: 4,000 enrollment/quarter, 73% response rate, $10.00 incentive

2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4HIP Withholding/Incentive Payment 596,200$ 596,200$ 596,200$ 596,200$ 596,200$ 596,200$ 596,200$

Advertising Expenditures (20,000)$ (20,000)$ (20,000)$ (20,000)$ (20,000)$ (20,000)$ (20,000)$ Member Incentives (29,200)$ (29,200)$ (29,200)$ (29,200)$ (29,200)$ (29,200)$ (29,200)$ Pursuant Payments (14,600)$ (14,600)$ (14,600)$ (14,600)$ (14,600)$ (14,600)$ (14,600)$ EBITDA 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ Depreciation Expense -$ -$ -$ -$ -$ -$ -$ EBIT 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ 532,400$ Tax Provision 186,340$ 186,340$ 186,340$ 186,340$ 186,340$ 186,340$ 186,340$ NOPAT 346,060$ 346,060$ 346,060$ 346,060$ 346,060$ 346,060$ 346,060$ + Depreciation -$ -$ -$ -$ -$ -$ -$ - change in NWC -$ -$ -$ -$ -$ -$ -$ - CapEx -$ -$ -$ -$ -$ -$ -$ FCF 346,060$ 346,060$ 346,060$ 346,060$ 346,060$ 346,060$ 346,060$

NPV $1,949,123.37

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Appendix: Pursuant Health Financial ModelAssumptions: 4,000 enrollment/quarter, 73% response rate, 3 additional kiosks in 2016-Q3

2016-Q2 2016-Q3 2016-Q4 2017-Q1 2017-Q2 2017-Q3 2017-Q4Screening Revenue 14,600$ 14,600$ 14,600$ 14,600$ 14,600$ 14,600$ 14,600$ Advertising Revenue 60,375$ 61,950$ 61,950$ 61,950$ 61,950$ 61,950$ 61,950$ Total Revenue 74,975$ 76,550$ 76,550$ 76,550$ 76,550$ 76,550$ 76,550$

Fixed Costs 43,250$ 43,250$ 43,250$ 43,250$ 43,250$ 43,250$ 43,250$ Kiosk Maintenance Expense 5,750$ 5,900$ 5,900$ 5,900$ 5,900$ 5,900$ 5,900$ Kiosk Internet Connections 2,300$ 2,360$ 2,360$ 2,360$ 2,360$ 2,360$ 2,360$ New Kiosks -$ 24,000$ -$ -$ -$ -$ -$ Total Costs 51,300$ 75,510$ 51,510$ 51,510$ 51,510$ 51,510$ 51,510$

EBITDA 23,675$ 1,040$ 25,040$ 25,040$ 25,040$ 25,040$ 25,040$ Depreciation Expense 46,000$ 47,200$ 47,200$ 47,200$ 47,200$ 47,200$ 47,200$ EBIT (22,325)$ (46,160)$ (22,160)$ (22,160)$ (22,160)$ (22,160)$ (22,160)$ Tax Provision -$ -$ -$ -$ -$ -$ -$ NOPAT (22,325)$ (46,160)$ (22,160)$ (22,160)$ (22,160)$ (22,160)$ (22,160)$ + Depreciation 46,000$ 47,200$ 47,200$ 47,200$ 47,200$ 47,200$ 47,200$ - change in NWC- CapEx (24,000)$ -$ -$ -$ -$ -$ FCF 23,675$ (22,960)$ 25,040$ 25,040$ 25,040$ 25,040$ 25,040$

NPV $96,820.66