Vestar HR Leadership C Conference f Health Costs: A Major - PowerPoint PPT Presentation

Equity Healthcare Status Update November 9, 2010 Vestar HR Leadership C Conference f

Health Costs: A Major C-Suite Concern Pre miums a re Outpa c ing Wa g e s Why Costs Inc re a se 100% ■ Wa ste a nd une ve n qua lity ■ Unhe a lthy life style s 87% 80% ■ L a c k of e ng a g e d e mploye e s 73% 60% 60% ■ Gove rnme nt c ost shifting G t t hifti 59% ■ Ma lpra c tic e 43% 40% ■ Provide r pa yme nt syste ms p y y 20% 25% 15% 20% He a lth re form will incr e ase c osts ■ 12% 18% 10% 7% 14% 11% 4% 10% 7% 5% 3% 0% 2000 2001 2002 2003 2004 2005 2006 Premiums Wages Inflation Solution: Cre a tion of E Solution: Cre a tion of E quity He a lthc a re quity He a lthc a re Sourc e : KF F / HRE T 2006 E mploye r He a lth Be ne fits Surve y, BL S Consume r Pric e Inde x. Know More, Feel Better, Stay Healthy 2

The Equity Healthcare Value Proposition A Private Equity Initiative focused on helping portfolio companies manage ■ health care costs EH uses volume to get below-market rates AND: ■ ◘ Customized clinical model outreaches to at-risk employees  Decreases unnecessary care  Increases employee engagement in lifestyle choices   Separate unit dedicated to EH….clinical team dedicated to each company Separate unit dedicated to EH clinical team dedicated to each company  Increased staffing ratios with higher and broader skill sets  More robust utilization management process ◘ ◘ Integrated data base points to company-specific risks and opportunities Integrated data base points to company-specific risks and opportunities ◘ Offers other turn-key products and services (biometrics and eligibility audit) Plug-and-play approach: ■ ◘ P Portfolio company designs its own benefit plans tf li d i it b fit l ◘ Continues to use brokers/consultants of its choice ◘ Can stay in after divestiture EH f EH fees are a not-for-profit model with income returned to portfolio companies t f fit d l ith i t d t tf li i ■ Know More, Feel Better, Stay Healthy 3

Strategic Focus Growth…. will look for compatible PE firms, other partners  Evolution of the core product…. move earlier and later in the  health-illness spectrum, more focus on wellness and provider choice Expanded EH services…. more use of the integrated data base, g , p  more customized recommendations, more proactive best practice sharing Benefit design…. enhance incentive strategies to drive engagement enhance incentive strategies to drive engagement Benefit design  and steerage + benefit design optimization Private sector-driven reform …drive health plans to innovate in  measurement, consumerism, payment reform---help shape marketplace Know More, Feel Better, Stay Healthy 4

Equity Healthcare Integrated Clinical Model Member and Provider Outreach Behavioral 24-Hour Health / EAP EH Model Vendors External Vendors Nurse Line Centers of D Medical provided Excellence Claims A through through T Personal Health Advocate P Aetna Pharmacy Maternity A R Claims Preadmission calls and Health and E Pharmacy Enhanced Discharge Planning Anthem Wellness W Lab Post Discharge Calls D Programs Data with A Case Management HRA I Integration with Vendor Partners Integration with Vendor Partners R R Telephonic dedicated C Demo- Medical Director/Support Staff Coaching E T clinical graphics Care Alerts Customer Service H I and O Behavioral O claims/CSA Disease Health U N Management Claims teams teams Online Coaching S S & Modules E Integration of data with Health Risk Assessment/ Health Risk Assessment Biometrics Know More, Feel Better, Stay Healthy 5

Equity Healthcare Reaches Critical Mass  One of the Largest Private Employer Purchasers  6 Participating Private Equity Companies  300,000 members and $1.5B annual spend 34 Portfolio Company Members as of 1/1/2011 TOTAL ENROLLMENT: EMPLOYEES – 144,362 MEMBERS – 298,212  Welcome New Vestar Member W l N V t M b ◘ Consolidated Container Company Know More, Feel Better, Stay Healthy 6

Equity Healthcare Model Results  Overall aggregate EH ROI of 13:1 which includes ASO fee reductions and claims savings  3-5% decrease in cost trends due to: ◘ Higher identification and engagement results than standard models ◘ Double digit improvement in population health ◘ Double digit improvement in population health ◘ Improvement in utilization statistics ◘ Increased network utilization ◘ Significant improvement in population risk scores  Even better trend results demonstrated for portfolio companies with incentive based programs  Good operational service statistics  Outstanding satisfaction results from EH Employer Summits ◘ Educational, networking opportunities, solution oriented Know More, Feel Better, Stay Healthy 7

EH Hospital Utilization is Down Days/1000 EH BO B 2009 Represents $8.1M EH BO B 2010 in Annual Savings Millima n 180 200 220 240 260 280 300 ER Visits/1000 EH BO B 2009 Represents $1.1M EH BO B 2010 in Annual Savings in Annual Savings Millima n 160 165 170 175 180 185 190 BOB and year over year results reflect employers enrolled in EH in 2009 and 2010. Current = Incurred 06/09 to 02/10 and Paid 06/09 to 05/10; Prior = Incurred 01/09 to 09/09 and Paid 01/09 to 12/09 Know More, Feel Better, Stay Healthy 8

What’s New with EH New CEO (Dr. Robert Galvin)  ◘ 20 years on employer side (GE): health benefits, CMO, policy ◘ Primary Care Physician – still doing clinical care Creation of Employer Advisory Group  ◘ 8 employers representing full diversity of size, industry, and PE Firms EH website used for networking and data sharing  Other products and services  ◘ Turn-key solutions with preferred pricing and enhanced services ◘ Biometric Initiative with Quest Diagnostics (fully integrated into model) ◘ Radiology Management with US Imaging ◘ Dependent Audits with Continuous Health ◘ Stop Loss with SunLife Future Initiatives Future Initiatives   ◘ Wellness ◘ Decision Support ◘ On-site flu shot programs p g ◘ e-second opinion program- (Cleveland Clinic, Harvard) Know More, Feel Better, Stay Healthy 9

Portfolio Company Due Diligence Process EH contract with vendors expires 12/31/11 ■ ◘ Currently in a RFP process with national carriers ◘ Anticipated finalization mid-February 2011 A ti i t d fi li ti id F b 2011 EH portfolio company marketing process to begin late February 2011 ■ ◘ Determine if portfolio company is eligible for EH (i.e., self insured) ◘ Provide deeper overview of EH ◘ Analyze company’s current health benefits and cost performance ◘ Present EH evaluation (i.e., fees, services, guarantees, discounts, disruption) Portfolio company provides Go/No Go decision ■ Sign contracts with EH, insurers, data base vendor ■ Implementation begins Implementation begins ■ Activities Occur in Conjunction with Renewal Schedule Activities Occur in Conjunction with Renewal Schedule Know More, Feel Better, Stay Healthy 10