A Blue Cross and Blue Shield Association Presentation

Consumers Take Consumers Take Center StageCenter Stage

2007 Health Leaders Forum2007 Health Leaders ForumFederal Reserve Bank of Chicago and Federal Reserve Bank of Chicago and Detroit Regional ChamberDetroit Regional Chamber

Detroit, Michigan Detroit, Michigan April 24, 2007April 24, 2007

Scott P. SerotaPresident & CEO

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Meet MeredithMeet Meredith

Building a Better System

Building a Better System

ConsumersTake CenterStage

ConsumersTake CenterStage

The BluesThe BluesThe BluesThe Blues

Agenda Agenda

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Blues are the strongest Brand in healthcare across AmericaBlues are the strongest Brand in healthcare across America

#1 Brand #1 Brand #1 Brand #1 Brand

Solid FinancialsSolid Financials Solid FinancialsSolid Financials

Quality Provider Quality Provider NetworksNetworks

Quality Provider Quality Provider NetworksNetworks

Record EnrollmentRecord EnrollmentRecord EnrollmentRecord Enrollment

The BluesThe Blues

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Blues EnrollmentBlues Enrollment

87.879.3

70.565.2

80.1 82.6 85.3 88.892.3

98.694.4

0

25

50

75

100

'80 '85 '90 '94 '00 '01 '02 '03 '04 '05 '06

Cus

tom

ers

(in

mill

ions

)

Blues member enrollment is at an all-time record highBlues member enrollment is at an all-time record high

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Extending the Brand into high-profile international marketsExtending the Brand into high-profile international markets

International MarketsInternational Markets

• BlueCard Worldwide offers U.S. customers BlueCard Worldwide offers U.S. customers access to medical assistance worldwide access to medical assistance worldwide

• 7,000 physicians in 200 countries7,000 physicians in 200 countries

• 850 hospitals in 84 countries850 hospitals in 84 countries

• BlueWorldwide Expat provides specialized BlueWorldwide Expat provides specialized insurance product for expatriatesinsurance product for expatriates

• 100+ accounts100+ accounts

• 700 lives700 lives

• Blue Brands licensed to independent companies Blue Brands licensed to independent companies in 50 countries in Europe, Central America and in 50 countries in Europe, Central America and South AmericaSouth America

• 5.5 million international subscribers5.5 million international subscribers

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Agenda Agenda

MeetMeredithMeetMeredith

Building a Better System

Building a Better System

ConsumersConsumersTake CenterTake CenterStageStage

ConsumersConsumersTake CenterTake CenterStageStage

The BluesThe Blues

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A New Healthcare Model for the FutureA New Healthcare Model for the Future

A true consumer-centric healthcare system for the future A true consumer-centric healthcare system for the future should clearly focus on the wants and needs of consumersshould clearly focus on the wants and needs of consumers

Current ModelCurrent Model

ProviderProvider ConsumerConsumer

EmployerEmployer PayerPayer

GovernmentGovernment

Future ModelFuture Model

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With more than 75 million lives, BHI leads in data scope and With more than 75 million lives, BHI leads in data scope and depth and is helping shape a future healthcare delivery modeldepth and is helping shape a future healthcare delivery model

Shaping a Future Healthcare ModelShaping a Future Healthcare Model

• Shaping new care delivery modelShaping new care delivery model– Partner with providers on Partner with providers on

outcomes and care patternsoutcomes and care patterns

– Robust information for consumer Robust information for consumer decision-makingdecision-making

– Support policy development Support policy development

• State-of-the-art informaticsState-of-the-art informatics– Precise dataPrecise data

– More statistically valid measuresMore statistically valid measures

– Benchmark data across Benchmark data across geographiesgeographies

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Bank supports new Consumer-Directed Health Plans and Bank supports new Consumer-Directed Health Plans and HSAs, offering consumers integrated and easy-to-use serviceHSAs, offering consumers integrated and easy-to-use service

• Support growing number of Support growing number of Blue Plan CDHPs and HSAsBlue Plan CDHPs and HSAs

• Easy-to-use, seamless and fully Easy-to-use, seamless and fully integrated consumer serviceintegrated consumer service

• Simplify healthcare spendingSimplify healthcare spending

• Full line of financial servicesFull line of financial services

• Chartered to serve all 50 statesChartered to serve all 50 states

Serving Consumer Healthcare Financial Needs Serving Consumer Healthcare Financial Needs

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Agenda Agenda

MeetMeredithMeetMeredith

Building Building a Better a Better System System

Building Building a Better a Better System System

ConsumersTake CenterStage

ConsumersTake CenterStage

The BluesThe Blues

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Better Knowledge for Healthier LivesBetter Knowledge for Healthier Lives

Engaging consumers to enable more

informed healthcare decisions

Collaborating with Collaborating with providers to improve providers to improve quality outcomes and quality outcomes and

affordabilityaffordability

Helping consumers make more informed decisions while Helping consumers make more informed decisions while helping providers improve health outcomes and affordabilityhelping providers improve health outcomes and affordability

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Collaborating with Providers to Raise StandardsCollaborating with Providers to Raise Standards

Primary Care Medicine

Specialty Care Medicine

Raise standards, ensure more consistent quality careRaise standards, ensure more consistent quality care

Other Organizations

Surgical Care

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Higher Standards Mean Better CareHigher Standards Mean Better Care

• Bariatric surgery

• Cardiac care

• Transplants

• Cancer care

Specialty Care Centers focus on most challenging conditionsSpecialty Care Centers focus on most challenging conditions

Developed in close collaboration with leading Developed in close collaboration with leading medical providers and specialty organizationsmedical providers and specialty organizationsDeveloped in close collaboration with leading Developed in close collaboration with leading medical providers and specialty organizationsmedical providers and specialty organizations

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Centers for Specialty Care: Centers for Specialty Care: TransplantTransplant

There are 70 evidence-based Blue Distinction Centers There are 70 evidence-based Blue Distinction Centers for Transplants in local communities nationwidefor Transplants in local communities nationwide

Blue Distinction Centers for Transplants

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… … and 125 Blue Distinction Centers for Bariatric Surgeryand 125 Blue Distinction Centers for Bariatric Surgery

Blue Distinction Centers for Bariatric SurgeryBlue Distinction Centers for Transplants

Centers for Specialty Care:Centers for Specialty Care: Bariatric Surgery Bariatric Surgery

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Blue Distinction Centers for Cardiac CareBlue Distinction Centers for Bariatric SurgeryBlue Distinction Centers for Transplants

… … and 375 Blue Distinction Centers for Cardiac Careand 375 Blue Distinction Centers for Cardiac Care

Centers for Specialty Care:Centers for Specialty Care: Cardiac Care Cardiac Care

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Higher Standards Yield Better CareHigher Standards Yield Better Care

5%7%8%

37%

Blue DistinctionCenters for Bariatric

Surgery

Denied Facilities

7% 9%

15%

40%

Blue DistinctionCenters for Cardiac

Care

Denied Facilities

Short-Term Major Complications for Bariatric Surgery

Short-Term Major Complications for Bariatric Surgery

Inpatient Mortality(Heart Attack)

Inpatient Mortality(Heart Attack)

SMSM

Mean Maximum

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Investing in Patient Quality and SafetyInvesting in Patient Quality and Safety

• Blues contributed $5M to “5 Million Lives” campaign

• Campaign aims to protect five million lives through:

– Proven infection control practices

– Evidence-based practices for congestive heart failure

– Deployment of rapid response teams

– Reduction of adverse drug events

Example: Partnership with Institute for Healthcare Improvement Example: Partnership with Institute for Healthcare Improvement

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MeetMeetMeredithMeredithMeetMeetMeredithMeredith

Building a Better System

Building a Better System

ConsumersTake CenterStage

ConsumersTake CenterStage

The BluesThe Blues

AgendaAgenda

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Meet MeredithMeet Meredith

• ““I weigh more than I should”I weigh more than I should”

• ““I have a family history of heart disease”I have a family history of heart disease”

• ““My doctor just told me I need a My doctor just told me I need a coronary bypass”coronary bypass”

Meredith is confronting several serious health problemsMeredith is confronting several serious health problems

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Meredith’s DilemmaMeredith’s Dilemma

A few years ago, Meredith would have had limited options A few years ago, Meredith would have had limited options for help in deciding what to do about her health problemsfor help in deciding what to do about her health problems

• Get advice from friendsGet advice from friends

• Ask her doctor for recommendationsAsk her doctor for recommendations

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More Options TodayMore Options Today

With programs like Blue Distinction, Meredith has access to With programs like Blue Distinction, Meredith has access to more pertinent information to make informed decisionsmore pertinent information to make informed decisions

• Compare bypass centersCompare bypass centers

• Identify success criteria of several Identify success criteria of several hospitals for treating heart diseasehospitals for treating heart disease

• Manage costs while seeking best Manage costs while seeking best possible carepossible care

• Connect with and learn from the Connect with and learn from the experiences of other bypass patientsexperiences of other bypass patients

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More Useful Consumer Tools on the HorizonMore Useful Consumer Tools on the Horizon

• Market testing with hundreds of employees of Fortune 100 Market testing with hundreds of employees of Fortune 100 companies nationwidecompanies nationwide

• Testing a broad range of cost and quality measuresTesting a broad range of cost and quality measures

• Identifying consumer preferences for display designIdentifying consumer preferences for display design

• Measuring impact on consumer decision-makingMeasuring impact on consumer decision-making

Meredith and other consumers like her are helping shape Meredith and other consumers like her are helping shape healthcare decision-making tools to enhance transparencyhealthcare decision-making tools to enhance transparency

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Simplifying Information for MeredithSimplifying Information for Meredith

Offer consumers valuable information that is easy to useOffer consumers valuable information that is easy to use

Note: this picture is hypothetical and strictly for illustrative purposes

Benchmarks and

thresholds

Benchmarks and

thresholds

Care-specific clinical quality metrics

Care-specific clinical quality metrics

Accessible logistical

information

Accessible logistical

information

Robust patient satisfaction dataRobust patient

satisfaction data

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Collaborating with stakeholders to create consumer PHRs Collaborating with stakeholders to create consumer PHRs

Blue Cross and Blue Shield Companies Plan PHRs for 2008Blue Cross and Blue Shield Companies Plan PHRs for 2008Blue Cross and Blue Shield Companies Plan PHRs for 2008Blue Cross and Blue Shield Companies Plan PHRs for 2008

Personal Health Records for ConsumersPersonal Health Records for Consumers

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In the Future, Consumers Are Center StageIn the Future, Consumers Are Center Stage

Picture a Picture a consumer-centric, information-driven systemconsumer-centric, information-driven system

Hospitals

Health Plans

Financial services / tools

Rx

Pharmacy

Other Providers (e.g. care managers)

Physicians

Labs Health and Wellness

ConsumerConsumer

A Blue Cross and Blue Shield Association Presentation

Consumers Take Consumers Take Center StageCenter Stage

2007 Health Leaders Forum2007 Health Leaders ForumFederal Reserve Bank of Chicago and Federal Reserve Bank of Chicago and Detroit Regional ChamberDetroit Regional Chamber

Detroit, Michigan Detroit, Michigan April 24, 2007April 24, 2007

Scott P. SerotaPresident & CEO