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ENGAGINGPAYERSTOCREATENEWVALUEFORLABSANDESTABLISHCOLLABORATIVECARERickVanNess,MSDirector,ProductManagementTriCoreReferenceLaboratories

InformationcontainedinthismaterialisconfidentialandproprietarytoTRICOREanditsaffiliatesandmaynotbemodified,copied,published,disclosed,distributed,displayedorexhibited,ineitherelectronicorprintedformatswithoutwrittenauthorizationofanofficerofTRICORE.

April30,2019

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•  Grant/ResearchSupport:None•  Salary/ConsultantFees:

–  TriCoreReferenceLaboratories•  Board/Committee/AdvisoryBoardMembership:

–  UNMMainInstitutionalReviewBoard,CommunityScientificReviewer–  NewMexicoBiotechnologyandBiomedicalAssociation,President

•  Stocks/Bonds–  Mozak,LLC(CEOandCo-Founder)

•  HonorariumExpenses:None•  IntellectualProperty/RoyaltyIncome:None

FINANCIALDISCLOSUREINFORMATION

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•  Background–  TriCoreReferenceLab

–  ClinicalLaboratory2.0

•  CustomerExample–  PainPointsandLabSolutions

–  ProductFeedbackandEnhancements

•  ValueofLaboratoryInformation

•  RoadMapforyou!

AGENDA

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DEMING

GALLUP

ROSWELL

ARTESIA

TRICOREREFERENCELABORATORIESServices12clinicalspecialties

2,900highlyspecializedtests11,100,00+diagnostictestsperyear

Generate~60%ofNewMexico’sclinicallaboratorydata98.6%ofalltestsareperformedinTriCorefacilities

Footprint1300+employees30courierroutesacrossNewMexico

60+drawsitesthroughoutNewMexico50+pathologistsandscientists99%patientsatisfaction

15hospitallaboratories3cancercenters

LaboratoryNationallyrecognizedHematopathologyconsultservice

Thefirstmulti-siteCAP15189accreditation

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TRICOREREFERENCELABORATORIES

TriCoreVisionTobeanationallyrecognizedlaboratoryfocusedonindividualandpopulationhealth.

PopulationHealthMajorityofmedicaldecisionsarederivedfromlaboratoryresults1ClinicalDataprovidesthebestinsightintohowtoimproveoverallhealthandhealthcare2,3

AnalyticspoweredbyRhodesGrouptechnology

•  Accesstorealtimedata•  Uniquepatientidentifier•  Longitudinaldatarepositoryacrosscarecontinuum

1.  Forsman,R.W.WhyistheLaboratoryanAfterthoughtforManagedCareOrganizations?(1996)ClinChem.42:813-8162.  Adler-Milstein,JandJha,A.K.Healthcare’s“BigData”Challenge.(2013)AmJManagCare.19(7):537-5383.  Hartman,C.Healthcare’sGrowingDataOpportunity.LeveragingClinicalIntelligencetoElevatePopulationHealthManagementStrategies.(2014)HealthManagTechnol.35(5):24v

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BRIEFHISTORYOFMEDICALLABORATORYMEDICINE

LeeHJ,OhSH,ChangCL.OriginsandHistoryofLaboratoryMedicine.(2017)LaboratoryMedicineOnline.7(2):53-58DelwicheFA.MappingtheLiteratureofClinicalLaboratoryScience.(2003)JMedLabrAssoc.91(3):303-310

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BACKGROUND:NATIONALMEDICALSPEND(2017)=$3.5TRILLION1

HospitalCare

PhysicianandClinicalServices

RetailPrescriptionDrugs

OtherHealth,Residential,andPersonalCare

NursingCareandContinuingCare

Dental

HomeHealthCare

OtherProfessionalServices

Othernon-durableMedicalProducts

ProtectingAccesstoMedicareAct

1.  CenterforMedicaidandMedicareServices.NationalHealthExpenditures2017Highlights.https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf(Accessed:March1,2019)

Year CMS2,3 %ofSpend

2017 $9.7B 1.71%2,3

2018 $8.7B 1.54%

2019 $7.9B 1.38%

2020 $7.1B 1.34%

2021 $6.0B 1.06%

2022 $5.1B 0.90%

2023 $4.3B 0.76%

Year TriCore

2017 -

2018 2.9%

2019 1.9%

2020 ?!

2021 ?!!

2022 !!

2023 WTF!

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STRATEGYSHIFT:LABORATORY2.0Lab1.0–Volume-based•  SamplecentricinaFFSmarket•  Measuredbycostperunit•  Unfulfilledneedforprimarycareproviders•  Limitedcarecoordination•  Complicatedhealthcareenvironmentinsilos

Lab2.0–Value-based•  Patientcentricinabundledmarket•  Costperlife-population•  Increasedaccesstocare/primarycare•  Enhancedfocusedcoordinatedcare•  Actionableinterpretativeresults

Pre-Analytical Result Post-Analytical

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SAMECUSTOMER,NEWPRODUCT

MarketDevelopment

ProductDevelopment

Diversification

MarketPenetration

ExistingMarkets

New

Markets

ExistingProducts NewProducts

TheAnsoffMatrix

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CUSTOMER:NEWMEXICOMCO

•  Integrateddeliverysystemcomposedofmedicalgroup,hospital,andinsurance

•  950+providersacrossNewMexico

•  8hospitals•  100clinics

•  12,000employees

•  Insures595,298(~25%ofstate)

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CUSTOMERBACKGROUND•  RecentAccomplishments:

•  AwardedManagedCareContractforNewMexicoMedicaid

•  Deliverysystem-wideinstallationofEpic

•  PainPoints•  NewMexicoisarural,diverse

population•  Prenatalcaremanagementissues•  HepatitisCcomplexities

0

10

20

30

40

50

60

70

80

90

100

%ofP

atientsC

ompliant

PrenatalCarein1stTrimesterbyYear1

NewMexico UnitedStates

1.  CompleteHealthIndicatorReportofPrenatalCareintheFirstTrimester.NewMexico’sIndicator-BasedInformationSystem(NM-IBIS).NewMexicoDepartmentofHealth.https://ibis.health.state.nm.us/indicator/complete_profile/PrenCare.html(Accessed:October18,2018)

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MCOEligibilityFile MatchwithinTriCore’sPatientRepository

MembershipBackground

HealthConditionAlgorithms

•  ApproachedMCOunder“HEDIS”datafeed(nearreal-time,resultoriented,outsideofEpicetc.)•  MCOagreedtosendviaSFTPdaily•  KeymemberidentifiersmatchedwithTriCorepatientrepository1

1.  Just,B.H.,Fabian,D.P.,Webb,L.L.,andHjort,B.M.ManagingtheIntegrityofPatientIdentityinHealthInformationExchange.(2009)AHIMA.80(7):62-69

PRODUCTDEVELOPMENTPHASE:MEMBERSHIPINFORMATION

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PRODUCTDEVELOPMENTPHASE:PRENATALCARE&LAB

1stTrimester 2ndTrimester 3rdTrimester

Mother&FetusBloodTyping,Rubella,HIV

1stMaternalSerumScreen 2ndMaternalSerumScreen

GestationalDiabetes

GroupBStrep

•  Identifyingandmonitoringpotentialmothers

MaternalBirthScreen

•  Identificationofbirthstoestablishpostpartumcare

Age,Previousdx,Diabetes

•  Identifyingandmonitoringprenatalrisks

UrinaryTractInfection(<3m&after) AbnormalPrenatalScreens

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OPPORTUNITYREVIEW:MCOMEMBERSHIPEPIC/NON-EPIC

TestresultsonlyavailableinEpic:41%TestresultsonlyavailableoutsideofEpic:36%TestresultsinEpicandoutsideofEpic:23%

0

50

100

150

200

250

0 50 100 150 200 250 300

WithinEpic(#ofuniquetestcodes)

Externalto

Epic

(#ofu

niqu

etestcod

es)

RandomSampleof2,000MCOMemberswithTriCoreOrders

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OPPORTUNITYREVIEW:MCOMEDICAIDOBLIGATIONS

•  NMMedicaidinstalledPerformanceMeasures(PMs)toincentivizecarecoordinationefforts

•  PMsrequire2%increaseaboveHEDISRegionalAverage,failureresultsin2%oftotalcapitationwithhold1

1.  NMHSDAmendment#8totheMedicaidManagedCareAgreementAmongNMHSDandHCSChttp://www.hsd.state.nm.us/uploads/files/Looking%20For%20Information/General%20Information/Contracts/Medical%20Assistance%20Division/MCOs%20-%20Centennial%20Care/BCBSNM_CONTRACT_AMENDMENT_%238_SIGNED.pdf(Accessed:June7,2018)

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MINIMALVIABLEPRODUCT

•  Excelspreadsheetsentviasecureencryptedemail

•  Clearlystatedmemberneeds•  CareGaps•  Risks

•  Updatedcontactinformationandfollowedpatientsthroughprenatalcare

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CUSTOMERFEEDBACKCustomerAdvice ProductResponse

NMHSDrequiresustoquicklyidentifyandaddressrisk? Efficienteffectiveriskstratificationmethod

Claimdatadoesn’tsufficefortimeliness Attempttomaptrimesterstatus

Claimdatadoesn’tdelineatebetweenERandbirth Innovativeabirthalgorithm

Difficulttoascertainwhoisnotintegratedintocare AlignwithACOGtobringlightoncare

OutsideofEpicisactuallyproblem Utilizeorderingclienttoidentifynon-Epicclients

Latencyofclaimisanissue Algorithmanalyzesevery24hours

Workallocationvaries,canwedownloaddata? Extractionfeaturemethodneeded

PrenatalpatientsdiagnosedoraccessingER DrawlocationshouldbehighlightedforERaccess

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PRODUCTENHANCEMENT:RISKSTRATIFICATIONMETHOD

Elevated Patient Risk Factors

Elevated Patient Risk Factors

AND Care Gaps

Optimal Care Gaps

Riskcreated

from

patient

riskfactors

Riskcreatedfromgapsinhealthcare

2016

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ACTUALPRODUCT:PRENATALCARE

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ACTUALPRODUCT:PRENATALCARENOTINEPIC

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ACTUALPRODUCT:PRENATALCARE(PATIENTLOCATION)

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ACTUALPRODUCT:PRENATALCARENOTINEPIC

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HEPATITISC:LABKNOWSALL

SCREEN DIAGNOSE TREATMENT/MONITORING

HepatitisCAntibody HepatitisCQuantitation

HepatitisCGenotype

HepatitisCQuantitation(SVR)

Platelets

•  Identifyinglevelofcirrhosis

AST/ALT BIL,ALB

HIV

•  Identifyingriskofcomplications

HBV Diabetes(HA1c,Glucose)

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MEDICAIDOBLIGATIONSFORHEPATITISC–OPPORTUNITYREVIEW

•  NMMedicaidinstalledDeliverySystemImprovementTargetsandprovidedadditionalassistance

•  DSIMforHepatitisCrequired90%ofallpatientseligibleforHepCtreatmentbetreated1

1.  NMHSDAmendment#8totheMedicaidManagedCareAgreementAmongNMHSDandHCSChttp://www.hsd.state.nm.us/uploads/files/Looking%20For%20Information/General%20Information/Contracts/Medical%20Assistance%20Division/MCOs%20-%20Centennial%20Care/BCBSNM_CONTRACT_AMENDMENT_%238_SIGNED.pdf(Accessed:June7,2018)

2.  MedicaidEnrollmentReportByManagedCareOrganizationFee-for-Servicehttp://www.hsd.state.nm.us/uploads/FileLinks/5bc82a76689a437682dbd68988331f79/March_By_Managed_Care_Organization_Fee_for_Service_2.pdf(Accessed:June7,2018)

3.  HealthNotes.ProgramEvaluationUnite.LegislativeFinanceCommittee.January13,2017https://www.nmlegis.gov/Entity/LFC/Documents/Health_Notes/Health%20Notes%20-%20Medicaid%20managed%20care%20rates.pdf

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ACTUALPRODUCT:HEPATITISC

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HEPATITISCMEMBERSNOTINEPIC

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HEPATITISCMEMBERSNOTINEPIC

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CUSTOMERFEEDBACK

CustomerAdvice ProductResponse

Wehavecarecoordinatorswhoaddressriskchangesonly Track,trend,andalertriskchanges

Yourdataistootimely,canweidentifyabettertimetocall? Delayednotificationuntiladditionaltests

NMHSDprovidesatransitionofcarefile,butlacksdetail

NewstratificationgridResourcesarelimited,canyoutelluswhomissedcare?

EDIEdoesn’ttelluswhyERaccessoccurredorwhatisneeded

OnenursefocusesonNICUcare NICUreport

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PRODUCTENHANCEMENT:FUTURESTRATIFICATION

Risk Status Change ER Visit within 7 Days

Onboarded Prenatal Stopped Receiving Care

Birth within 56 Days

2016

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PRODUCTENHANCEMENT:TRENDSANDCAREALLOCATION

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PRODUCTENHANCEMENT:AUTOMATEDREPORTING

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DETERMININGVALUE-PRENATAL

•  NMMedicaidinstalledPerformanceMeasures(PMs)toincentivizecarecoordinationefforts

•  PMsrequire2%increaseaboveHEDISRegionalAverage,failureresultsin2%oftotalcapitationwithhold1

1.  NMHSDAmendment#8totheMedicaidManagedCareAgreementAmongNMHSDandHCSChttp://www.hsd.state.nm.us/uploads/files/Looking%20For%20Information/General%20Information/Contracts/Medical%20Assistance%20Division/MCOs%20-%20Centennial%20Care/BCBSNM_CONTRACT_AMENDMENT_%238_SIGNED.pdf(Accessed:June7,2018)

2.  MedicaidEnrollmentReportByManagedCareOrganizationFee-for-Servicehttp://www.hsd.state.nm.us/uploads/FileLinks/5bc82a76689a437682dbd68988331f79/March_By_Managed_Care_Organization_Fee_for_Service_2.pdf(Accessed:June7,2018)

3.  HealthNotes.ProgramEvaluationUnite.LegislativeFinanceCommittee.January13,2017https://www.nmlegis.gov/Entity/LFC/Documents/Health_Notes/Health%20Notes%20-%20Medicaid%20managed%20care%20rates.pdf

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DETERMININGVALUE–“HARD”NUMBERS(CONTRACTS)1.  DeterminehowmucheachMCOisgettingpaidwithinMedicaid

2.  DeterminehowmemberstheMCOcurrentlycovers

3.  Identifycompensation:$312*373,369=$1,399,911,552

4.  IdentifythetotalpotentialPM:2%*$1,399,911,552=$27,998,231

A.  DetermineeachPerformanceMeasurePenalty:1/14*$27m=~$2m

5.  DeterminetotalpotentialDSIMPenalty:1.5%*$1,399,911,552=$20,998,673

A.  DetermineeachDSIM(HepC):20%*$20,998,673=~$4.2m

1.  MedicaidEnrollmentReportByManagedCareOrganizationFee-for-Servicehttp://www.hsd.state.nm.us/uploads/FileLinks/5bc82a76689a437682dbd68988331f79/MER_By_Managed_Care_Organization_Fee_for_Service_13.pdf(Accessed:June7,2018)2.  HealthNotes.ProgramEvaluationUnite.LegislativeFinanceCommittee.January13,2017https://www.nmlegis.gov/Entity/LFC/Documents/Health_Notes/Health%20Notes%20-%20Medicaid%20managed%20care%20rates.pdf3.  NMHSDAmendment#8totheMedicaidManagedCareAgreementAmongNMHSDandHCSChttp://www.hsd.state.nm.us/uploads/files/Looking%20For%20Information/General%20Information/Contracts/Medical%20Assistance%20Division/MCOs%20-

%20Centennial%20Care/BCBSNM_CONTRACT_AMENDMENT_%238_SIGNED.pdf(Accessed:June7,2018)

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DETERMININGVALUE–PRETERMOUTCOMES

Study Control

PretermRate 11.1% 20.3%

2018ProjectedNo.ofPretermBirths(N=3,076) 342 431

FirstYearofPretermCosts $33,096/year1 $33,096/year1

TotalFirstYearPretermCosts $11,311,964 $14,253,075

TOTALPOTENTIALSAVINGS $2,941,111

ADJUSTMENT 50%

TOTALSAVINGS $1,470,550

1.  ThanhNXetal.HealthServiceUseandCostsAssociatedwithLowBirthWeight-APopulationLevelAnalysis.(2015)JPediatr.167(3):551-556

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DETERMININGVALUE–NICUOUTCOMES

N=3,076 Study Control

NICURate 11.3% 19.0%Projected2018DeliveriesNeedingNICUCare 916 1,535AverageLOS 12.3days 12.3daysProjected2018NICUDays 11,272 18,884Avg.CostperDayinNICU $1,500 $1,500TotalNICUCosts $16,908,037 $28,325,820

TOTALPOTENTIALSAVINGS $11,417,783ADJUSTMENT 50%

TOTALSAVINGS $5,708,892

•  NICUclaimdatarangeofcostswas$711/dayto$7,083/day:–  Conservativeaveragecost/day=$1,500/day

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PROPOSALTOMCO

HealthCondition Measure/Outcome 2017MCOPerformance1

TRLClinicalAnalyticsResult2 ROI

Prenatal

TimelinessofPrenatalCareNMHSDPM#5 75% 77% $1,999,8743,4

Post-PartumCareNMHSDPM#5 58% (35%) -

FrequencyofPrenatalCareNMHSDPM#6 56% 73% $1,999,8743,4

NICUOccupancy 19% 11% $1,470,5553

PretermDeliveryOutcome 20% 11% $5,708,8922,5

Diabetes HemoglobinA1cTestingPM#4 82% 92% $1,999,8743,4

NephropathyScreeningPM#4 87% 91% $1,999,8743,4

HepatitisC NMHSDHepatitisCDSIM 350members 1,577members $4,199,7354

TOTAL $19,378,676

1.  BCBSNMAuditReviewTable.http://www.hsd.state.nm.us/uploads/FileLinks/485263ae1ad040ea9d52673aef6109b4/2016_HEDIS_BCBS.pdf(Accessed:March21,2018)2.  ResultsprojectedfrompilotperformedwithBCBSNMSpecialBeginningsSeptember2017throughApril20183.  AssumesBCBSNM’srevenueforCentennialCareisapprox.$536,736,096.HealthNotes.ProgramEvaluationUnite.LegislativeFinanceCommittee.January13,2017https://www.nmlegis.gov/Entity/LFC/Documents/Health_Notes/Health%20Notes%20-

%20Medicaid%20managed%20care%20rates.pdf4.  NewMexicoHumanServicesDepartment.RequestforProposals.RFP#13-630-8000-0001CentennialCarehttp://www.hsd.state.nm.us/uploads/FileLinks/c06b4701fbc84ea3938e646301d8c950/Centennial_Care_RFP_and_Contract__8_28_12__FINAL_.pdf(Accessed:

August11,2017)5.  ThanhNXetal.HealthServiceUseandCostsAssociatedwithLowBirthWeight-APopulationLevelAnalysis.(2015)JPediatr.167(3):551-5566.  CenterforDiseaseControlandPrevention.Health,UnitedStates,2016.https://www.cdc.gov/nchs/data/hus/hus16.pdf#093(Accessed:August29,2017)

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TRICORE’SCLINICALANALYTICSPIPELINECustomer(NM) LineofBusiness Pricing Objective Status

DeliverySystem#1 Commercial PM/PM PatientOutreach Executed

MCO#1 Medicaid PM/PM CareCoordination&Compliance Executed

IVD#1 InfectiousDisease TI Investigatesepsisbiomarker Executed

MCO#2 Medicaid PM/PM CareCoordination&Compliance Executed

MCO#2 Commercial PM/PM CareCoordination&Compliance Negotiation

Provider#1 AllPatients PM/PM CapitatedArrangement Negotiation

MCO#3 Medicaid PM/PM CareCoordination&Compliance Proposal

Provider#2 AllPatients PM/PM CapitatedArrangement Alignment

Provider#3 AllPatients PM/PM CapitatedArrangement Alignment

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1.  Identifyyourmarket’scontracts,incentives,andpatientneeds

2.  Startaconversationwithyourinsurancecompaniesbyaskingthem:–  Whatareyourpainpoints?

–  WhatifyoucouldhaveHEDISdatanearreal-time?

–  Pitchforeligibilityfile(orperforma270/272eligibilitybounce)

3.  Withthefile,createaHEDISreportwhilereviewingtheirpopulation–  No.ofdiabetics,location,care-gaps,risk

–  Returnwithalivedemonstrationoftheirdataandpitcha“freestudy”

4.  Presentresultsofstudy,ROI,andprice

ANYLABCANDOTHIS