Change Health Care Now

Denise ChristyPresident Humana Michigan

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In “Redefining Health Care,” Michael Porter points the way to health care transformation – Health care represents zero-sum competition– Contrasts with the rest of the economy

Value is key – Products improve – Costs go down over time

In health care, quality and cost never both improve This is health care’s main challenge

From Zero-Sum Competition To Value-Creation

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Fragmentation 473,000 doctors practice in small settings

Investment constraints 85% of acute care hospitals are not-for-profits

Investment orientation Hospital/physician reimbursement structures favor revenue-producing duplication over cost-saving efficiency– IT underuse – Most industrialized countries have between

50-90% of medical records in electronic form compared to 5% for the U.S.

– Equipment overuse – MRI growth is 9% annually with $100 billion in total expenditures

Closed competition Health benefits companies are selected on size and scale, not innovation and value

Challenges To Value-Creation

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Creating value in a $1.8 trillion non-system is challenging

A “system” will never create value until everyone changes roles

Building Health Care Value

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Any plan has to include consumer empowerment, productivity, best practices, quality, transparency and technology

Three principles– Value for money, regardless of who’s paying– Value for consumers, in terms of who’s in control– Value for everyone with better products and lower

costs

The Key Principles

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Standardization

Consumer responsibility

Business leadership

Three-Pronged Approach

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Standardization

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Standardization can lead to value and efficiency

Encourage all payers to join Availity, a web-based information exchange system

Developed by Humana and BCBS of Florida in 2001 Designed to allow real-time administrative processing

– Eligibility, referrals, authorizations and claims

Adopted in Florida by 100% of hospitals and 93% of physicians

Estimating more than 400 million transactions in 2007 Expanding into Texas, New Mexico and Illinois September 24th, Availity Presenting to Michigan

Standardization

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Evolving from administrative efficiency to consumer value Ongoing payer impact

– Reduced transaction costs– Call center savings– Medical cost savings

Growing consumer benefit– Transferability of comprehensive medical history– Real-time claims processing

HSA administration

Standardization

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Consumer Responsibility

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Financial Analysis and Forecasting

Product and Network Design

Consumer Education

Clinical Programs and Forecasting

Financial Analysis and Forecasting

The Humana

Guidance Solution

• Traditional plans• Real-time operating platform • SmartSuite®

• CoverageFirst® PPO • HumanaAccessSM card• RxImpact• Wellness programs• Medical spending accounts• HDHP with Health Savings Account • Humana Preferred• 90-Days-at-Retail Program• RightSourceSM

• Online Enrollment Center and Wizard• MyHumana personal Web page• Physician Finder Plus• Transparency tools • Healing Kitchen• Family Health Budget• Comparative Pricing by Pharmacy• YourHumana Handbook• SmartSummarySM

• Disease Management• Transplant Management• Utilization Management• Concurrent Review• Case Management • HumanaBeginnings• HumanaFirst®• Humana Health Assessment • Personal Nurse® • MyHumana personal web page • Maximize Your Benefit• Predictive modeling • Health Agent• Pharmacy MEDS Team

• SmartStart• Customer Reporting Package• Benefit Utilization Director for brokers• Employer portal tools• RxCalculatorSM

• Pharmacy Repricing and Formulary• Verisight Analysis• MD Consultation

Product and Network Design

Consumer Education

Clinical Programs and Forecasting

A Robust Set Of Consumer-Focused Tools And Programs

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Become a passionate self-advocate– 45% of Americans get the wrong care –

don’t be one of them– Be skeptical, question everyone

Use a Family Health Budget tool– Gain control by knowing how much you spend

on health-related expenses (checkups, vaccinations, routine prescriptions etc.) Humana’s Family Health Budget tool is a

simple seven-step process

Guidance for Becoming a Better Health Care Consumer

Consumer Responsibility

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Find health information online– Become proficient on a Website that can answer most

of your health questions

Take a Health Assessment– Analysis of your daily habits and family history

can provide you with clearer understanding of your health status

– Tool available to general population summer, 2007

Guidance for Becoming a Better Health Care Consumer

Consumer Responsibility

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Business Leadership

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Leadership leads to value-creation Reward consumer engagement Insist on transparency and accountability Facilitate reform through business partnerships

and alliances

Business Leadership

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Business Health Care Group of Southeast Wisconsin– Formed in response to Milwaukee’s health care

costs averaging 25% higher than comparable Midwest cities

– Includes 200-plus companies of all sizes and 75,000 members

– Exclusive use of Humana Preferred “high-performance” network

– ASO clients saw health costs decline by 15% in 2006 versus 2005

Business Leadership

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Going Forward

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Going Forward

Stay connected New changenow4health.com Website in mid-April

– Consumer program updates– Availity growth and progress– Employer coalition results– Avenue to share best practices

Business action summit 2007 Initiatives advanced by supporters

It’s about change now

Our commitment to change health care now begins today