Corporate Healthcare Ideas:Thinking Outside the Box withEmployer Sponsored Clinics

WAHU

John NeubergerVice President Operations

September 19, 2008

The Problem

Healthcare Cost and Quality

CRISIS

PCPSpecialist

A Lack of Coordination & Integration

A Crisis in Healthcare

Our Healthcare System

• Costs $7,000/person, twice as much as other industrialized countries spend to cover every citizen

• 30% of dollars and up to half of doctors and nurses time spent on paperwork

• Only 1/3 of time is evidence-based medicine practiced

• Healthcare costs to businesses up 140% in the last 10 years, 5x wage growth

• But primary care real incomes are down

Overstressed PCP

No System Integration

No Universal EMR

No Financial Incentives

Lack of Care Coordination

A Crisis in Healthcare

One Employer’s Solution to the Healthcare Crisis

Who is Quad/Graphics?

• Founded in 1971 • The world’s largest privately held printer of magazines and catalogs• 10 printing plants in 6 states• International partnerships with printers in Poland, Argentina and Brazil• More than 10,000 employees• $2.0 billion in annual sales

A Sample of Quad/Graphics Clients

Advertising Age

Cargo

Entertainment Weekly

Elegant Bride

Golf Digest

Health

JC Penney

Life

National Geographic

Newsweek

People

Self

Time Inc.

U.S. News & World Report

Victoria’s Secret

Williams-Sonoma

Why Is Quad/Graphics In The Health Care Business?

• Control costs by providing a full range of healthcare services

• Focus on wellness and preventive medicine

• Enhance quality through best practice guidelines and Evidence-Based Medicine

• Offer benefits that attract, retain staff

• Maintain flexibility in benefit design

• Improve patient access with onsite facilities

Who Is QuadMed?

Quad Med – A Medical Subsidiary of Quad Graphics

• Opened first clinic in 1990

• Currently manages 8 clinics

– 5 Quad Graphics

– 2 Briggs & Stratton (2002 & 2004)

– 1 Miller Brewing Company (2005)

• In 2007 Quad Med Provided

– 120,500 Clinic Visits

– 122,100 Prescriptions

– 21,800 Dental Visits

– 17,600 Rehab Visits

– 230,000 Adjudicated Claims

Briggs & Stratton Health Center

Miller Health & Fitness Center

Comprehensive integrated on-site services: Requires balance

Risk Management

MedicalManagement Health Transformation/

Population Management

OSHAReporting

Acute careInjuries and

Illness

Workers Compensation

DisabilityManagement

Absence

Management

Case Management

Primary Care

ReferralManagement

Health Advocacy

Wellness/Prevention

Chronic Disease

Management

On-site pharmacy

QuadMed Strategy

• Provide onsite primary care & selected specialty care

• Focus on prevention and wellness

• Restructure the delivery of primary care– Focus on patient centered care– Salaried providers, not “production” based reimbursement– Incentives based on quality – customer satisfaction, adherence to guidelines,

preventive services, collegiality, committee participation– Provide ample “face time” with patients– Provide resources supporting quality care

• Provide specialty care & hospital care through direct contracting “Narrow Networks”

• Remove waste and improve quality - LEAN

• Integrate workers’ compensation into primary care services

The Power of Integration & Coordination

Health Plan Design

Workers

Compensation

Occupational

Health

On-Site

Primary

Care Clinic

Pharmacy

Prepackaged

meds

Prevention &

Wellness

Fitness Centers

Physical &

Occupational

Therapy

EAP & AODA

Counseling

TPA

Case Management

Disease Management

Electronic

Medical

Record

Direct Contracting

High Performance

Networks

Data Warehouse

The Savings of Employer Managed Healthcare

QuadMed Track Record

0

1

2

3

4

5

6

7

8

9

10

11

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

$ Thousands

Midwest Quad/Graphics

Average healthcare cost per employee

Actuarial Study

Quad/Graphics’ healthcare costs are consistently below the benchmark,

when adjusted for demographics and benefit design:

• 18% below in 1998• 19% below in 2000• 17% below in 2002 • 26% below in 2004• 32% below in 2006

Potential Savings for an On-Site Clinic and Pharmacy

Onsite care can provide the following

additional savings

Lab – 94% Savings

Rehab – 54% Savings

Pharmacy- 8% Savings

Direct Contracting – 11% Savings

Average Healthcare Cost Trend

2000-2007 per employee per year

4.9%

Briggs & Stratton Per Employee Cost Comparison

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

FY04 (7/03-6/04) $7,400 $7,096 $3,818

FY05 (7/04-6/05) $8,537 $7,823 $4,222

FY06 (7/05-6-06) $8,508 $6,936 $6,259

FY07 (7/06-7/07) $7,417 $5,726 $7,398

Milwaukee (Salaried) Poplar Bluff Murray

Steinhafels Experience at Quad

21

$343

127

$369

154

$318

0

50

100

150

200

250

300

350

400

Avgerage participation perMonth

Average Claim Cost perPartipant per Month

The Alliance Network(Madison)

PHCS Network

Quad Med Network

PHCS VS Quad shows 16% savings per month per participant

Based on 2007 Data

The Health Plan

Preferred

Quad/Clinics400 Specialists

9 Hospitals

$6 Co-Pay

$30 Co-Pay

$25-200 Co-Pay

100% 84%

Network 98 Hospitals

6,650 Doctors

$300/500$2,300 max

80% 9%

Nonnetwork $400/800 70% 7%

Power Of Benefit Design

Weekly Premium of $11 per single, $22 per couple, $32 per Family

Providers Deductible/

Copay

Coverage Dollars Spent

Quality of Care Measures

Quality of Care – Reporting Tools

• Satisfaction Surveys– Patient – Staff– Provider

• Data Warehouse (Ingenix)– Key Indicator Report – Comparative Activity Report– Evidence-Based Medicine Report– Ad Hoc Reports

• EMR/PM (GE Centricity)– Focused EBM Reports – Individually Actionable

Key Indicator Report – National Experience

Metrics Current Norm Difference Status I npatient

Admissions per 1,000 45.2 45 0.30%

Average Length of Stay 3 3.8 -21.00%

Type of Admission:

Medical Admissions per 1,000 15.5 16.7 -7.30%

Medical Average Length of Stay 3.3 3.9 -15.10%

Surgical Admissions per 1,000 10 8.2 22.10%

Surgical Average Length of Stay 2.8 3.5 20.60%

Maternity Admissions per 1,000 16.6 16 3.50%

Maternity Average Length of Stay 2.4 3.1 -21.80%

Outpatient

Outpatient Surgeries per 100 Members 6.6 9 -26.90%

Physician Office Visits per 100 Members 236 305.3 -22.70%

X-Ray Services per 100 Members 57.4 76.7 -25.20%

Lab Services per 100 Members 276 353 -21.80%

Prescription Drug

Prescriptions per Member 5.1 6.2 -17.90%

Average Paid per Prescription $38 $54 -29.60%

Evidence-Based Medicine Compliance

Condition WI Compliance Rate National Compliance Rate Benchmark

Depression 84.4% 84.3% 88.7%

Diabetes Mellitus 74.1% 55.6% 56.0%

Epilepsy 82.4% 53.9% 69.4%

Hyperlipidemia 93.6% 71.3% 74.9%

Hypertension 89.2% 73.0% 75.8%

Obesity 75.5% 46.1% 46.1%

Ingenix Database

Quality of Care Analysis - EMR

Immunizations

Up-to-date on all immunizations at age 2• QuadMed - 98%• NCQA - 68%

Up-to-date at age 13• QuadMed - 88%• NCQA - 50%

In Summary

• QuadMed has developed a program that has been successful in controlling cost and improving quality of care for QuadGraphics.

• The program focuses on:– Patient Centered Care– Empowered Primary Care– Wellness and Prevention– Practice of Evidence-Based Medicine– True Integration of Healthcare Across Disciplines

• The program can be successfully implemented at a myriad of industries and organizations with similar results.