03A Transitioning From Health Care Volume to Value...Performance Analytics Cost & quality, risk measures, outliers, action planning, network steerage, referrals, cost management Revenue

The opinions expressed in this presentation are those of the speaker. The International Society and International Foundation disclaims responsibility for views expressed and statements made by the program speakers.

Transitioning From Health Care Volume to Value: Better Quality, Better Cost, Better Patient Experience

Dick Salmon, M.D., Ph.D.Vice President and National Medical DirectorCignaHartford, Connecticut

Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2013 Cigna

3A-1

ACHIEVING THE IMPOSSIBLE DREAM:

A HIGH QUALITY, AFFORDABLE HEALTH CARE

SYSTEM

3A-2

U.S. COMMERCIAL INTERNATIONAL SENIORS

ContinueGo Deep in core markets

Go Deep in Korea; customer insights; corporate expatriate

In‐market and adjacent service area expansion

AcceleratePreferred relationships with physicians and hospitals; customer engagement

China; direct‐to‐consumer; leveraging expat capability

Organizing physician groups; distribution

BuildCustomer insights India and Turkey Seniors also covered by

Medicaid (“Duals”);physician enabling services

CUSTOMER FOCUSED GROWTH

STRATEGY

As a global health service leader, headquartered in Bloomfield, Connecticut, Cigna is one of the largest health service companies in the U.S.—with $29.1 billion in annual revenues.

Since its founding as a United States insurance company, Cigna has grown—expanding across the world, with sales capability in 30 countries and jurisdictions.

Today our 35,000-person international team serves 80 million customer relationships in virtually every corner of the globe.

3A-3

DISRUPTIVE FORCES IN HEALTH CARE

IMPROVEMENT OPPORTUNITIES

LANDSCAPE OF VALUE BASED REIMBURSEMENT PROGRAMS

EARLY RESULTS

IMPORTANCE OF EMPLOYER AND CONSUMER ENGAGEMENT

REASONS FOR CAUTIOUS OPTIMISM

AGENDA

3A-4

Economic pressure

Evolving customer

Newregulations

Rising costs

Physician accountability

Delivery Systemconsolidation

HEALTH CARE MARKETPLACE FACING EXTRAORDINARY CHALLENGES

Enhanced Customer Incentives

New Entrants

3A-5




EARLY RESULTS



AGENDA

3A-6

REDUCING THE $900 BILLION IN WASTE IN THE US HEALTH CARE SYSTEM

$ Billion in Waste

Core Network Management

Health Coaching

Value Based Reimbursement

Value Based Network benefits

Failure of Care Delivery $$ X X X

Failure of Care Coordination $ X X X

Over-Treatment $$$ X X X

Administrative Complexity $$$ X X

Pricing Failures $$ X X

Fraud and Abuse $$$ X X

Estimates of waste were taken from an article by Berwick and Hackbarth published in the Journal of the American Medical Association in 2012.

3A-7

OLD MODEL

NEW MODEL

Moving from VOLUME to VALUE

Consumers Delivery system partners

Carriers/Payers

Employers

Passive users

Paid on volume

DiscountsFinance benefits

Sick care

Population health

Rewardedfor health outcomes

Partnership-driven; balanced value proposition

Health and

productivity

Engaged, value

conscious

THE EVOLUTION OF THE CARE DELIVERY MARKETPLACE

3A-8

CT Scans Per Capita Spending* (2011)National Average = $76

Fort Myers, FL$117 per capita

Honolulu, HI$49 per capita

Ratio to the national average

*includes institutional and professional spending

WIDE VARIATION IN SPENDING ACROSS THE COUNTRY

3A-9




EARLY RESULTS



AGENDA

3A-10

VALUE BASED REWARDS

I N T E N S I T Y

Process P-4-P EPISODETOTAL POPULATION HEALTH

INC

EN

TIV

E

UPSIDEPCMH, PQRS, EHR (hospital and physician)

Hospital, Physician

CMS and Commercial

CMS—MSSPCommercial

UP AND DOWN PQRS and EHR CMS and

Commercial CMS—PioneerCommercial

PARTIAL OR FULL RISK

CMS and commercial

CMS—MACommercial (HMO)

Health CareProfessionals All All

Focused integrated physician and hospital

Integrated physician and hospital

3A-11

PHYSICIAN COLLABORATION/ECOSYSTEMCAPABILITIES OBJECTIVES

Connectivity(make Cigna data available)

Analytics(identify actions and results)

Services(fill in gaps for success)

Internal HIE—The PlugGateway, XDS repository, patient

registry, IHE profiles, MPI, certificate management, CONNECT and

DIRECT connectivity readiness for Cigna value added data

Data AggregationData mapping, semantic mapping and data warehouse capabilities to

integrate data across physician, hospital and health plan

ACO EnablementGovernance, contract management, networks, practice re-engineering,

workflow, call triage, etc.

“Last Mile” ConnectivityTwo-way connectors to most common

EMR and third party population management tools

Clinical Analytics/MeasuresQuality measures, gaps in care,

evidence based medicine

Risk/Case/Care Management & Care Extension

Disease management, care management & patient engagement

Alternative PathsMobile applications, social network approaches and other mechanisms

to move information from point A to point B and return

Performance AnalyticsCost & quality, risk measures,

outliers, action planning, network steerage, referrals,

cost management

Revenue Optimization/CodingTools for claims management,

billing, service

Governance/Culture ChangeConsulting services and practice management to adapt to value based, population management; preparing to take risk

3A-12

Source: ACO Assignment Summary Reports (2012 for January starts and 2012Q3 for April/July Starts).

All ACOs Assigned Beneficiaries by County (4.0 million total)

ACO PARTICIPATION IS GROWING RAPIDLY

3A-13

Improved results

Patient Care Collaboration

(PCC)

Specialty Care

Collaboration

Hospital Care

Collaboration

Collaborative Accountable Care (CAC)

Information

Clinicalresources

Incentives

Optimal engagement• Optimal health• Optimal cost• Optimal satisfaction

Triple reward• Improved satisfaction• Higher financial rewards• Increased patient volume

Majority of at-risk customers will be

managed by physicians with an

WORKING BETTER TOGETHER TO ACHIEVE MORE

incentive relationship

3A-14

DEMOGRAPHICS:Active Initiatives 66States 26PCPs 12,500+Specialists 14,500+Customers 700,000+ Active CAC Initiative CAC Prospect (30)

CIGNA’S COLLABORATIVE ACCOUNTABLE CAREINITIATIVES & PROSPECTS

3A-15

Source: P.H. Conway and Clancy C. Transformation of Health Care at the Front Line. JAMA 2009 Feb 18; 301(7): 763-5

TRANSFORMATION OF HEALTH CARE AT THE FRONT LINE

At least six components

Quality measurement

Health information technology

Aligned payment incentives

Quality improvement collaboratives and learning networks

Comparative effectiveness and evidence available

Training of clinicians and multi-disciplinary teams

Q

3A-16

A PHYSICIAN’S PERSPECTIVE

Dr. Jim Sams

3A-17




EARLY RESULTS



AGENDA

3A-18

CMS Pioneer ACO

32 groups, 670K aligned participants

Aggregate TMC trend 0.8% vs. market of 0.3%

13/32 produced shared savings

2/32 resulted in shared losses

Primary improvement drivers: reduced admissions and readmissions

Better than market average quality

Cigna CollaborativeAccountable Care

Overall: 55% achieved TMC goalstrend and 82% achieved quality goals

On average, TMC is 3% below market and quality is 2% above market

Demonstrated a more than 4% lower TMC trend compared to market

EARLY RESULTS

Source: CMS, 2013 Source: Cigna Internal Analysis, 2013

3A-19

Evidence Based Measures

19-25% better compliance rate with diabetes measures compared to market

Closing Gaps in Care

21%more gaps in care closed through the electronic gaps in care information from Cigna

HCP Referrals

70%better than market referral rate to Cigna Care Designated specialists

Pharmacy

52% conversion rate to lower cost drugs through engagement with embedded care coordinator

ER visits

50%fewer frequent ER users compared to market

RESULTS FROM COLLABORATIVE ACCOUNTABLE CARE

Results from select CAC initiatives are very positive

Source: Cigna Internal Analysis, 2013

3A-20

Mail Personalized notice mailed

to home

Combines cost-savings opportunities to streamline mailings sent to customers

Coaches and Pharmacists Cost saving options

discussed as part of condition coaching session—customers with adherence risk

Health Care Professionals CAC pilot1

Embedded Care Coordinator collaborates with doctor then contacts customer

90% of doctors approve therapy change

Average annual savings per conversion: $1,406

• Separate pilot yielded 82%physician switch approval rate2

1. Dartmouth-Hitchcock, NH and WestMed, NY2. Kelsey-Seybold Clinic, TX

6.5% conversion rate

14% conversion rate

52% conversion rateCare collaboration drives unprecedented pharmacy results

RX SAVINGS MESSENGER RESULTS

Source: Cigna Internal Analysis, 2013

3A-21




EARLY RESULTS



AGENDA

3A-22

HCP PERSPECTIVEIMPORTANCE TO HCP’S

Financial Reward

Administrative Relief

Patient Volume

PATIENT VOLUME LEVERS

Cost and Quality Transparency

Tiered Network

Limited Networks

IMPACT

ENGAGEMENT IN VALUE BASED REWARDS

3A-23




EARLY RESULTS



AGENDA

3A-24

NATIONAL MEDICARE 30 DAY READMISSIONS

Medicare All Cause, 30 Day Hospital Readmission Rate

Source: CMS, 2013

3A-25

Why the dream of a high quality, affordable health care system may be achievable.

1990s 2010s

Scope Limited—HMO products All payers including CMS, all products, all HCP’s

PhysicianLeadership

Isolated—most physicians reacted negatively

Broad recognition of unacceptable variation in quality and use of services. Importance of comprehensive, population based care and adherence to evidence based guidelines recognized.

Consumer Engagement

Emphasis on restriction in choice

Emphasis on engagement, information and incentives

Financial Models

Focus on risk transfer Focus on clinical accountability with gradual increase in financial responsibility

Enabling Technology

Little—First generation informatics

EMR’s, HIE’s, robust analytics

Federal Stimulus

HMO Act enabled new products

Incentives for EMR adoption and for participation in payment pilots. Payment incentive and penalties based on performance.

Urgency Economy recovered, easing financial pressure

Comprehensive coverage under ACA raises importance of affordable coverage; high costs will be global competitive disadvantage for foreseeable future.

7 REASONS FOR CAUTIOUS OPTIMISM

3A-26

Employer“The Triple

Returns”• Improved

population health• Improved per

capita cost• Improved

workforce productivity

Payer“Goals”• Improved health• Improved

well-being• Improved sense

of security

Health CareProfessionals“Triple Reward”• Improved professional

satisfaction• Improved financial

reward• Improved patient

volume

Consumers“Triple Aim” • Improved

population health

• Improved patient experience

• Improved per capita cost

CAUTIOUS OPTIMISM: ALIGNMENT OF INCENTIVESAND CAPABILITIES ACROSS ALL STAKEHOLDERS

3A-27

"Cigna,” the "Tree of Life" logo and "GO YOU" are registered service marks of Cigna Intellectual Property, Inc., licensed for use by Cigna Corporation and its operatingsubsidiaries. All products and services are provided by or through such operating subsidiaries and not by Cigna Corporation. Such operating subsidiaries include ConnecticutGeneral Life Insurance Company, Cigna Health and Life Insurance Company, and HMO or service company subsidiaries of Cigna Health Corporation and Cigna DentalHealth, Inc. All models are used for illustrative purposes only.

869807 08/13 © 2013 Cigna. Some content provided under license.

Questions?

3A-28

Documents

03A Transitioning From Health Care Volume to Value...Performance Analytics Cost & quality, risk measures, outliers, action planning, network steerage, referrals, cost management Revenue