the evolution of consumer driven health plans

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THE EVOLUTION OF CONSUMER DRIVEN HEALTH PLANS

5 RECOMMENDATIONS FOR BENEFIT DESIGN OPTIMIZATION

January 2016 © 2016 Paladina Health, LLC. All rights reserved. Proprietary and Confidential.

Overview Key Drivers and Growth of CDHP Movement

CDHP Impact

Recommendation and Conclusion

Agenda

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What are Consumer Driven Health Plans (CDHPs)?

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High Deductible Health Plan

Tax-Free Health Savings Account CDHP

Goal: drive smart healthcare consumerism by making consumers more responsible for the economic consequences

of their healthcare decisions

CDHPs are insufficiently addressing healthcare cost and quality needs

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Plan design alone is insufficient for consumers. Employers need to offer innovative solutions that go beyond shifting costs.


CDHP Impact


Agenda

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The U.S. has higher incidence of chronic disease and lower life expectancy than other countries

The average family household now spends 20% of their

income on healthcare

The Catalyst for CDHPs

The CDHP solution has gained momentum with employers over the last decade

CDHPs aim to solve the problem that consumers have: Limited understanding healthcare decision economic impact

Little incentive to question advice they receive from providers

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CDHP Impact


Agenda

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Healthcare avoidance and dissatisfaction

CDHP participants utilize less healthcare services, including acute and preventive care, in

order to save on out-of-pocket costs.

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Potential benefits of CDHPs are unsustainable

Cost Savings

Health Outcomes

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Patient Satisfaction

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1 Low utilization with unknown health impact

Short-term savings, but unsustainable if long-term health declines

Low satisfaction; less than 30% CDHP enrollees would recommend to others

IMPACT OF CDHPs

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CDHP Impact


Agenda

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Focus on the 5 Key Priorities for Health Care Consumerism

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Empower Primary Care Providers (PCPs) 1

Better access to health services

Improved quality of care

Emphasis on prevention

Identification and early management of chronic conditions

Reduction in unnecessary specialist care

Lower PCP panel sizes (~1,000 patients) to allow time for patient-physician relationship

Paladina Health Solution

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VS.

Create a culture of transparency 2


Transparency database built from claims cost data, quality data, patient perception and physician feedback made available to all physicians

$3,296 per Procedure

$1,203 per

Procedure

Two colonoscopy providers: ~6 miles apart

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Improve access to care 3


24/7 access to physicians’ personal cell phones and secure virtual care delivery through patient portal and Healow app

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Improve cross-provider collaboration 4


Physicians empowered by closed-loop referral management system to quarterback all downstream care

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Align incentives through value-based compensation 5

Alternative methods of payment create incentives to encourage preventive care and better care coordination:


Physicians receive incentive compensation based on patient health and satisfaction

Bundled or capitated payments

Patient-centered medical homes

Accountable care

organizations (ACOs)

1 2 3

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Refined, comprehensive delivery models drive greater value

Cost Savings

Health Outcomes

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Patient Satisfaction

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1 Appropriate utilization of healthcare system Drive prevention Manage chronic diseases Improve health

Enhance value Reduce claims cost and drive short- and long-term savings

Arm patients with transparency Create access to the right care in the right setting

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“I became a Paladina Health physician because my philosophy really aligns with Paladina's philosophy. I'd like to see a change in healthcare in the United States. I'd like to see more prevention, more effective and efficient disease management.”

- Dr. Crocker-Sabbagh, AZ Paladina Health Physician

The Paladina Patient Experience

Lower healthcare costs

“I like that if I have something come up, I can reach out to my doctor outside of business hours and she can help me over the phone…It’s also a great benefit financially because all of my encounters have been covered. Relationships are important and I feel very strongly about this relationship with my new Paladina Health doctor.”

- Clarke, Paladina Health Patient

Improved healthcare experience

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Higher quality care

Better access to a physician

Appendix

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U.S. percent of GDP spent on healthcare more than

doubled since 1980, while other nations have

experienced increases more in line with economic growth

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Factors driving an increase in healthcare spending: Fee-for-service reimbursement Fragmentation of care delivery Provider consolidation Administrative burden on provider,

payers and patients Aging population Increasing incidence of chronic

disease Advances in medical technology Rising drug costs Overall lack of transparency Overuse of emergency services


Crisis of Access

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Clinical quality metrics for chronic conditions

Percent of members compliant

Notes: 1) Diabetic patients (n=665), Hypertensive patients (n=1752) and 2) All members must be active >180 days to be eligible for the measures 3) Source: NCQA HEDIS 2014 Benchmarks. * HEDIS uses >40 for Breast Cancer Screening and Paladina Health follows updated evidence-based medicine of >50 yrs.

72% 71% 68%

84% 79%

70%

58% 53%

59% 57%

0%

20%

40%

60%

80%

100%

Breast Cancer Screening(>50 yrs)*

Colorectal CancerScreening

Diabetes HbA1C <8.0 Diabetes BPManagement

Blood Pressure Control

Paladina Results 2015 PPO Average 2014

Our Results: Clinical Quality Measures

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Service Excellence Is Integral To Our Care Delivery

30%

49% 53%

12%

71% 73% 76% 72%

0%

25%

50%

75%

100%

Computer Hardware Grocery Online Shopping Healthcare

Industry Average NPS "Star"

Apple Trader Joe's Amazon.com

Net Promoter Score: outperforming the healthcare industry

Notes: Paladina NPS as of 2014; All Industry NPS scores from Satmatrix.com; Healthcare Industry score from: http://www.prnewswire.com/news-releases/kaiser-permanente-again-ranks-no-1-in-customer-loyalty-in-the-2015-satmetrix-net-promoter-benchmark-study-300061421.html

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References

Refer to the Paladina Health White Paper: The Evolution of Consumer Driven Health Plans for all data sources

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