1. University of Alaska July 2010 - June 2012

2. Demographics

3. Demographics - Overview 2  The University of Alaska has fewer men than the norm with a greater male and female concentration from ages 40 – 59 (36% compared to norm of 31%)  Overall age/gender factor of 1.13 and based on age/gender mix we would anticipate the University to be 13% more costly  Employee age/gender factor of 1.37 compared to the norm of 1.17, and increased from the previous Fiscal Year  Spouse age/gender factor of 1.42 compared to the norm of 1.34, and increased from the previous Fiscal Year  Employees drove 45% of the plan costs and were 43% of the population  Spouses drove 40% of the plan costs and were 25% of the population  Dependents drove 15% of the plan costs and were 32% of the population  10% of the University’s population has 3 or more chronic conditions with the norm at 8%  University’s PMPY cost for these members is $17,331 compared to norm of $14,558  Approximately 69% of the current members have been enrolled in the medical plan for 3 or more years and 80% more than 2 years

4. Demographics – Total Members Norm from Lockton InfoLock Book of Business. Length of Enrollment (For Current Members)Members by Gender 3

5. Demographics - Total Members Norm from Lockton InfoLock Book of Business. PMPY Paid by RelationshipMember Percentage by Relationship 4

6. Health Cost Analysis

7. Medical Financial Analysis Overview 6  Inpatient average allowed per admission decreased 19.4% from $30,111 to $24,263 and the average length of stay decreased from 6.6 days to 4.4 days  Decrease in the severity of inpatient claims due to shorter stays  Preventive office visits per 1,000 decreased 10.5% from 454 to 406  Emergency Room visits per 1,000 decreased from 176 to 172 and the cost per visit decreased  Non-emergent like condition ER visits increased from 7% to 14%  Members with 3 plus ER visits accounted for 10.3% of all ER visits. This was 7.4% in the last InfoLock report from 7/10-6/11.  28 members with 4 ER visits (38% on weekends)  46 members with 5+ ER visits (30% on weekends)

8. Utilization Summary Norm from Lockton InfoLock Book of Business. Utilization is provided on an incurred basis and lagged three months. 7

9. Claim Expense Distribution Norm from Lockton InfoLock Book of Business. Includes members who were enrolled or had a claim paid during the time period. Norm from Lockton InfoLock Book of Business. 8  0.3% of members drove 13.7% of the University’s costs  1.6% of members (181) drove 36.7% of the University’s costs

10. Emergency Room Demographics ER Visits by Relationship 9

11. Emergency Room Utilization ER Visits by Type Injury and Potential Non Emergent Visits per 1000 by Service Date 10

12. Prescription Drug Analysis

13. Pharmacy Financial Analysis Overview 12  Generic usage increased from 65% to 69%  Estimated savings of $300,000 to $370,000  For each 1% increase in generic usage the pharmacy plan costs should decrease 1%  Nexium per script usage decreased from 1,101 to 680 with Omeprazole scripts decreasing from 1,023 to 987  Lipitor per script usage decreased from 2,257 to 913 with Simvastatin scripts decreasing from 1,269 to 1,037 and Atorvastatin Calcium at 863  Crestor decreased from 855 to 642  Potential savings of $95,313, if 50% of cholesterol scripts moved to Simvastatin  Potential savings of $80,221, if 50% of PPI scripts moved to Omeprazole  Humira’s total Rx spend was $249,762 (3% of total University pharmacy spend) and Enbrel’s total Rx spend was $101,716 (1% of total University pharmacy spend)

14. Brand versus Generic Analysis Norm from Lockton InfoLock Book of Business. Brand and Generic Drugs by Scripts and Plan Paid Cost per Script 13

15. Prescription Drugs - Top 20 Drugs by Paid Amount 14

16. Prescription Drugs - Top 20 Drugs by Script Count 15

17. Members included in this section were active plan participants as of the last month of the reporting cycle and enrolled for more than three months. Retirees and COBRA members are excluded from this section. Each individual member is assigned a relative risk score indicating disease burden and a care gap score quantifying appropriate medical care. Depending upon the prevalence of disease and the extent of gaps in medical care, the population is stratified into low, moderate, and high risk for disease burden, and compliant or non-compliant for disease management. Current Member Chronic Condition Analysis

18. Chronic Conditions per Member PMPY by Number of Chronic Conditions Paid Amount by Number of Chronic Conditions 17

19. Top 5 Chronic Conditions Chronic Conditions per Member 18

20. Cost of Non-Compliance This exhibit excludes high cost claimants. PMPY costs include co morbidities. Only members with at least one chronic condition are included. PMPY Costs by Chronic Conditions 19 Prevent heart attack Prevent Chronic Renal Failure

21. Cost Adjustment 20  1 In the ACCRA Cost of Living Index, health care costs in Alaska’s cities (Fairbanks, Anchorage and Juneau ranged from 39.4% to 49.8% more costly than the average U.S. city in 2011  The Norm has not been adjusted for the higher costs in Alaska  Analysis Summary will compare UA costs to adjusted norm of norm plus 42.0% 1 http://labor.alaska.gov/research/col/col.pdf

22. Asthma Summary & Observations 21  Asthma  Prevalence is above the norm with UA costs of $6,161 per member per year (pmpy) compared to the adjusted norm of $6,552 pmpy  67% of the members with asthma are compliant in medication and doctor visits, decreased from 80% in the InfoLock report for 7/10 to 6/11  Patients with more than one asthma-related emergency room visit is higher than the norm  20.5% of members with Asthma are without inhaled corticosteroids or leukotriene inhibitors compared to the norm of 29.5% without inhalers  Recommendation:  Alere send communications and out-reach to members with emergency room visits for Asthma  Provide information on free generic program if actively engaged in Alere DM Asthma program

23. COPD Summary & Observations 22  COPD (Chronic Obstructive Pulmonary Disease)  Prevalence is below the norm with UA costs of $8,202 pmpy compared to the adjusted norm of $13,127 pmpy  80% of the members with COPD are non-compliant due to lack of doctor visits and increased ER visits  43% have three or more co-morbidities  The percentage of hospitalizations due to COPD increased from 2.8% to 10.0%  The number of members with COPD with an ER visit was above the norm  The most common cause of COPD is smoking. The condition is associated with significant lost work time and high health costs. It is progressive and remains the fourth leading cause of death in the U.S. and there is no cure. Treatment is aimed at managing exacerbations of the disease. The most important step in treatment is to encourage those who are still smoking to stop. This can be aided by implementing a smoking cessation program that combines behavioral modification with medication.

24. CAD Summary & Observations 23  CAD (Coronary Artery Disease)  Prevalence is below the norm with UA costs of $9,073 pmpy compared to the adjusted norm of $13,801 pmpy  High Risk members make up 34% of the group  High Cost Claimants make up 26% of the group  40% have 3 or more co-morbidities  Patients with obesity are above the norm  There was significant non-compliance with only 35% of members being compliant  CAD can be minimized or ameliorated by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. Medications also play a significant role, so compliance with a medication regimen is important

25. Depression Summary & Observations 24  Depression  Prevalence is significantly above the norm and UA costs are $5,957 pmpy compared to the adjusted norm of $7,932 pmpy  Employees make up 57% of the depressed population  Back and Neck pain are the top two co-morbidities  There is a high compliance rate of 87%  Lower than the norm for hospitalization and depression-related ER visits  Patients without an office visit in the last 12 months is above the norm  Several studies indicate that regular sleep and exercise, combined with a strong social network can reduce the incidence and severity of depression and also reduce the need for medication.

26. Diabetes Summary & Observations 25  Diabetes  Prevalence is above the norm with UA costs of $8,542 pmpy compared to the adjusted norm of $9,895 pmpy  84% of the population is non-compliant  There is significant non-compliance in this population with 57% in the moderate and high risk category and 11% are High Cost Claimants  There were no patients with a diabetes-related ER visit  Obesity is an issue within the University as the percent of the diabetic population that is obese is greater than the norm (4.3% to 2.0%)  Continue to promote Disease Management, IHP and vision exams  Promote biometric screenings to keep pre-diabetic from becoming diabetic

27. Hyperlipidemia Summary & Observations 26  Hyperlipidemia (High Cholesterol)  Lower prevalence to the norm with UA costs of $5,808 pmpy compared to the adjusted norm of $7,235  64% of the population are employees  22% of the population is high risk but has a significant compliance rate of 80%

28. Hypertension Summary & Observations 27  Hypertension  Prevalence is lower the norm and UA costs of $5,910 pmpy compared to the adjusted norm of $7,542 pmpy  23% of the population is high risk but with a high compliance rate of 72%  Hypertension related ER visits are in line with the norm

29. Cancer & Screenings Summary & Observations 28  Malignant Neoplasms & Cancer Screenings  Cancer screenings (e.g. colonoscopy) are better than the norm  56% of the cancers as a percentage of total paid for cancer are early-identifiable cancers such as breast and colon  Recommendation:  Continue communication to all members that there is no cost for preventive care and screenings

30. Malignant Neoplasms/ Cancer Screenings Norm from Lockton InfoLock Book of Business. 29

31. Back & Neck Pain Summary & Observations 30  Back & Neck Pain  57% of the members with back pain were employees  18% of the members with back pain are categorized as high risk  Approximately 53% of back pain members had associated neck pain  Significantly higher utilization of chiropractic and physical therapy care compared to the norm  Chiropractic visits/1,000 are 633 compared to the norm of 383  Physical Therapy visits/1,000 are 790 compared to the norm of 341  MRI Scans and CT Scans are below the norm on visits/1,000  Paid per visit for CT Scans are at the adjusted norm  Paid per visit for MRI Scans are significantly above the norm

32. Musculoskeletal Back Pain, Neck Pain, and Intervertebral Disc Disorders Utilization Norm from Lockton InfoLock Book of Business. 31

33. Osteoarthritis Summary & Observations 32  Osteoarthritis  Prevalence is above the norm and UA costs of $9,253 pmpy compared to the adjusted norm of $12,573 pmpy  60% of the members with osteoarthritis were employees  33% of the members with osteoarthritis are categorized as high risk  21% of the members with osteoarthritis  73% of the members are compliant

34. Pregnancy & Neonates Summary & Observations 33  Pregnancy  Per capita pregnancy inpatient costs increased 6.1% from $10,939 to $11,612  Pregnant women delivering with fewer than 6 prenatal visits is significantly worse than the norm  83.7% of the pregnant women in the UA population had less than 6 prenatal visits  20.8% of pregnant women had a pregnancy related ER visit which is above the norm  Neonates  Per capita inpatient neonate costs decreased 5% from $4,329 to $4,158

35. Recommendations 34  Medical  Emergency Room - Specific communication on using alternative care setting for non-emergent care  Depression – communication campaign on how to reduce depression and use of EAP services  Neonates – provide communication on importance of prenatal vitamins and visits  Communicate to employees no cost preventive care and screenings  Explore patient advocacy and transparency vendor to assist members in choosing the lowest cost service provider/facility  Pharmacy  Covering generic only PPIs – was not supported by JHCC for FY 2012  Continue generic usage communication to members and enrollment in disease management programs

36. Current Member Risk Analysis Members included in this section were active plan participants as of the last month of the reporting cycle and enrolled for more than three months. Retirees and COBRA members are excluded from this section. Each individual member is assigned a relative risk score indicating disease burden and a care gap score quantifying appropriate medical care. Depending upon the prevalence of disease and the extent of gaps in medical care, the population is stratified into low, moderate, and high risk for disease burden, and compliant or non-compliant for disease management.

37. Population Risk 36  High Risk members made up 9.3% (878) of the population and accounted for 25.1% of the costs  High Risk - Non-Compliant members on average cost $838* more per year than Compliant members  Moderate Risk members made up 12.5% (1176) of the population and accounted for 15.7% of the costs  Moderate Risk - Non-Compliant members on average cost $439* more per year than Compliant members  Low Risk members made up 75.4% of the population and accounted for 19.4% of the costs  Top 5 Chronic conditions are back pain, neck pain, hypertension, depression, and hyperliperdemia *Norm from the Lockton InfoLock Book of Business.

38. Claims Based Population Stratification Population High Cost Goal Manage high costs Help members navigate system Close gaps in care Steerage Manage risk factors Reinforce and monitor compliance rates Manage risk factors Intervention Case Management Disease Management and Health Promotion High Risk Moderate Risk High Risk Moderate Risk Low Risk PRIORITY Non-Compliant Compliant DxCG Risk Model 18 37

39. Utilization Metrics by Claims Based Population Risk 38

40. Appendix

41. Demographics – Total Members Norm from Lockton InfoLock Book of Business. 40

42. Demographics - Total Members Norm from Lockton InfoLock Book of Business. 41  Routine Care Gap Index- RCGI  Relative Risk Score- RRS

43. Demographics – Current Year Total Members Norm from Lockton InfoLock Book of Business. 42

44. Financial Summary Norm from Lockton InfoLock Book of Business. % Pharmacy of Total Paid % Employee Paid 43

45. Utilization Summary Current Incurred Year Allowed by Place of ServiceCurrent Incurred Year Employee Paid by Place of Service 44

46. Emergency Room Demographics Current Year ER Visits by Age and Gender 45

47. Prescription Drug Changes Top 20 Drugs with Script Count DecreasesTop 20 Drugs with Script Count Increases 46

48. Prescription Drugs - Top 20 Therapeutic Classes Current Year Top 20 Therapeutic Classes by Plan Paid Amount 47

49. Prescription Drugs - Top 20 Therapeutic Classes 48

50. Top 10 Medical Pharmacy Rx Spend - Top 10 Medical Pharmacy Drugs 49

51. Prescription Drugs - High Cost Scripts (>$1,000) Number of High Cost ScriptsPMPM Paid for High Cost Scripts Year 1 Rx PMPM PaidYear 2 Rx PMPM Paid 50

52. Anti-Hyperlipidemics Generic Analysis If 50% of scripts for: Lipitor, Crestor, and Lescol XL Simvastatin last year costs would have been reduced by approximately: Potential Savings moved to 51

53. Peptic Ulcer Generic Analysis Potential Savings If 50% of scripts for: Prevacid, Nexium, Aciphex, Protonix, Kapidex, Prilosec, Axid, and Zantac moved to Omeprazole last year costs would have been reduced by approximately: 52

54. Asthma Excludes High Cost Claimants Asthma Members Annual CostTop 5 Co morbidities by Number of MembersAsthma Prevalence Norm from the Lockton InfoLock Book of Business. 53

55. Asthma Quality and Risk Measures Quality Care Measures Risk Measures Norm from the Lockton InfoLock Book of Business. 54

56. COPD Excludes High Cost Claimants Norm from the Lockton InfoLock Book of Business. COPD Prevalence Top 5 Co morbidities by Number of Members COPD Members Annual Cost 55

57. COPD Quality and Risk Measures Norm from the Lockton InfoLock Book of Business. Risk Measures Quality Care Measures 56

58. CAD Excludes High Cost Claimants Norm from the Lockton InfoLock Book of Business. CAD PrevalenceTop 5 Co morbidities by Number of MembersCAD Members Annual Cost 57

59. CAD Quality and Risk Measures Norm from Lockton InfoLock Book of Business. Risk Measures Quality Care Measures 58

60. Depression Excludes High Cost Claimants Norm from Lockton InfoLock Book of Business. Depression PrevalenceTop 5 Co morbidities by Number of MembersDepression Members Annual Cost 59

61. Depression Quality and Risk Measures Risk Measures Quality Care Measures Norm from Lockton InfoLock Book of Business. 60

62. Diabetes Excludes High Cost Claimants Norm from Lockton InfoLock Book of Business. Diabetes Members Annual Cost Top 5 Co morbidities by Number of MembersDiabetes Prevalence 61

63. Diabetes Quality and Risk Measures Norm from Lockton InfoLock Book of Business. Quality Care Measures Risk Measures 62

64. Hyperlipidemia Excludes High Cost Claimants Norm from Lockton InfoLock Book of Business. Hyperlipidemia Members Annual CostTop 5 Co morbidities by Number of Members Hyperlipidemia Prevalence 63

65. Hypertension Excludes High Cost Claimants Norm from Lockton InfoLock Book of Business. Hypertension Members Annual CostTop 5 Co morbidities by Number of MembersHypertension Prevalence 64 825

66. Hypertension Quality and Risk Measures Risk Measures Quality Care Measures Norm from Lockton InfoLock Book of Business. 65

67. Musculoskeletal Back Pain Norm from the Lockton InfoLock Book of Business. Excludes High Cost Claimants Back Pain Members Annual Cost Back Pain PrevalenceTop 5 Co morbidities by Number of Members 66

68. Musculoskeletal Back Pain Quality and Risk Measures Norm from the Lockton InfoLock Book of Business. Risk Measures Quality Care Measures 67

69. Musculoskeletal Neck Pain Excludes High Cost Claimants Norm from the Lockton InfoLock Book of Business. Neck Pain Members Annual Cost Top 5 Co morbidities by Number of MembersNeck Pain Prevalence 68

70. Musculoskeletal Osteoarthritis Excludes High Cost Claimants Norm from Lockton InfoLock Book of Business. Osteoarthritis Members Annual CostTop 5 Co morbidities by Number of MembersOsteoarthritis Prevalence 69

71. Musculoskeletal Osteoarthritis Quality and Risk Measures Risk Measures Quality Care Measures Norm from Lockton InfoLock Book of Business. 70

72. Pregnancy Norm from Lockton InfoLock Book of Business. Risk Measures Quality Care Measures Pregnancy Related Claimants of Total Childbearing Aged Females Pregnancy Related CostPregnancy Related Claimants Pregnancy as a % of Total Paid 71

73. Neonates Neonates as a % of Total PaidNeonates Related CostNeonates Related Claimants 72

74. Low Risk Members Demographics Length of Enrollment (For Current Members) Members by Gender Members by Age Group Members by Relationship 73

75. Low Risk Members Chronic Conditions Number of Chronic Conditions per MemberTop Ten Chronic Conditions by Prevalence 74

76. Moderate Risk Members Demographics Length of Enrollment (For Current Members) Members by Gender Members by Age Group Members by Relationship 75

77. Moderate Risk Members Chronic Conditions Number of Chronic Conditions per MemberTop Ten Chronic Conditions by Prevalence 76

78. High Risk Members Demographics Length of Enrollment (For Current Members) Members by Gender Members by Age Group Members by Relationship 77

79. High Risk Members Chronic Conditions Number of Chronic Conditions per MemberTop Ten Chronic Conditions by Prevalence 78

80. High Cost Claimants Demographics Length of Enrollment (For Current Members) Members by Gender Members by Age Group Members by Relationship 79

81. High Cost Claimants Chronic Conditions Number of Chronic Conditions per MemberTop Ten Chronic Conditions by Prevalence 80

82. Claims Based Population Risk Norm from Lockton InfoLock Book of Business. Percent of Members compared to Percent of Cost Members and Cost Compared to Norm 81

83. Chronic Condition Reference Asthma Asthma is quite common. It can be triggered by environmental triggers such as allergies to pets or pollens, infections, cold temperatures, stress, and sometimes exercise. It is a common reason for emergency room visits and sometimes hospital admissions. It is best managed by avoidance of triggers when possible and regular use of medication. The number one reason for poor asthma control is lack of adherence to a medication regimen that includes an inhaled steroid in addition to a bronchodilator. Educating patients about the triggers and the importance of medication compliance are key to controlling this condition. Back Pain and Neck Pain Back injury prevention programs and core strengthening programs are effective in preventing injury and getting individuals back to work. In the workplace, attention to ergonomics of workstations is important in reducing back and neck pain. Monitoring the trend in high cost radiology for back pain, and surgery for herniated discs is important to establish the need for low back pain condition management programs and pre-certification programs in high cost radiology. Evaluation along with proper treatment of back pain and neck pain should limit the early use of high cost radiology including MRI and CT scans and early back surgery for herniated discs and other back ailments. Preventive practices in postural alignment, availability of therapeutic alternative treatments such as PT, acupuncture, pain treatment, and steroid injections help promote lower cost, higher efficacy solutions. COPD The most common cause of COPD is smoking. Unfortunately about 23% of American adults still smoke. COPD commonly includes chronic emphysema and bronchitis. The condition is associated with significant lost work time and high health costs. It is progressive and remains the fourth leading cause of death in the U.S. There is no cure. Treatment is aimed at managing exacerbations of the disease. The most important step in treatment is to encourage those who are still smoking to stop. This can be aided by implementing a smoking cessation program that combines behavioral modification with medication. CAD This the most common type of chronic heart disease. It is caused by the build up of plaque in the arteries supplying oxygen and nutrients to the heart muscle. Plaque consists of a number of substances, including cholesterol, other fats, and calcium. CAD can result in chest pain (angina), heart attacks, abnormal heart rhythms, and congestive heart failure. It can be minimized or ameliorated by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. Medications also play a significant role, so compliance with a medication regimen is important. Depression Depression is common, whether it is mild, moderate, or severe. It is often associated with other chronic conditions such as heart disease, diabetes, and chronic pain. It is most commonly managed with medication. These drugs are expensive so employees should be aware of several good generic antidepressants that are now available. Several studies indicate that regular sleep and exercise, combined with a strong social network can reduce the incidence and severity of depression and also reduce the need for medication. 82

84. Chronic Condition Reference (continued) Diabetes Type 2 diabetes continues to increase in the U.S. The prevalence is a direct result of poor lifestyle choices including inactivity and poor dietary choices that result in obesity and diabetes. This a particularly serious chronic disease because it affects so many different body systems including the heart, the eyes, the kidneys, and the blood vessels. Poorly controlled diabetes results in accelerated decline in these body systems, a decline in quality of life, and high health costs. Like many of the other chronic conditions, it is best managed by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. For those with established type 2 diabetes, it is very important that regular monitoring of the condition is done in order to avoid some of the serious complications. Hyperlipidemia An abnormally elevated lipid profile is a risk factor for heart disease. The lipid profile includes measurement of cholesterol, triglycerides, and LDL and HLD cholesterol. There is a genetic component to lipid levels that can make it more challenging for some individuals to control their lipid levels. But for most people lipid levels can be managed by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. But many people now are prescribed medication to help control lipids. These medications are called “statins” and a variety of medication options are now available. Hypertension High blood pressure is very common. Sometimes there is an increased risk for an individual due to genetic makeup. For most people blood pressure gradually rises with age. Hypertension is a significant risk factor for heart attack, stroke, impaired vision, kidney damage, and congestive heart failure. Hypertension can be ameliorated by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. Also for many a diet low in sodium is helpful. There are many medications that can help control blood pressure. As with any treatment for chronic disease, compliance is essential for effective management. Osteoarthritis About 21 million Americans have osteoarthritis. The incidence increases with age. It is associated with a breakdown of cartilage in joints and can occur in almost any joint in the body. It most commonly occurs in the weight bearing joints of the hips, knees, and spine. Factors associated with its onset include obesity, injury, joint overuse, and heredity. Osteoarthritis generates a lot of medical expense due to the cost of pain medications, diagnostic imaging, and surgical procedures (especially of the hip and lower back). Exercise and physical therapy are important restorative and preventive measures. Weight management and good nutrition are often helpful as well. 83

85. Glossary Allowed Amount Total paid amount, this includes both the employee and employer paid amount. Chronic Conditions Chronic Conditions included are Asthma, Atrial Fibrillation, Back Pain, Bipolar Disorder, Cerebrovascular Disease, Chronic Obstructive Pulmonary Disease, Chronic Pancreatitis, Chronic Renal Failure, Cirrhosis, Coagulopathy, Congenital Anomalies, Congestive Heart Failure, Coronary Artery Disease (incl. MI), Cystic Fibrosis, Demyelinating Diseases, Depression, Diabetes, Eating Disorders, Headache, High Risk Pregnancy, Hyperlipidemia, Hypertension, Immune Disorders, Inflammatory Bowel Diseases, Neck Pain, Osteoarthritis, Osteomyelitis, Osteoporosis, Parkinson's Disease, Rheumatoid Arthritis, Schizophrenia, Sickle Cell Anemia, Tuberculosis Co-morbidities A medical condition that exists simultaneously with and usually independently of another medical condition. Compliant Members Members with a Care Gap Index of 4 or less. Current Members Individuals who are eligible with the plan as of the end of the reporting period. Employee Paid Employee paid consists of co-pays, coinsurances, and deductibles paid by an enrollee, the spouses, and their dependents. Employer Paid Employer paid includes total paid by the plan for enrollee, the spouses, and their dependents. Emergency Room Visit Distinct service dates for members with claims that have HCFA (Health Care Financing Administration) Place of Service code of 23. Emergency Room Visits, Potential Non Emergent – Potential non emergent ER visits are visits which based on the diagnoses potentially should have been treated in a physician’s office. These include visits for general symptoms, sinusitis, influenza, general medical examinations, etc. Full Cycle Time period that corresponds to date range of data included in the data warehouse (typically 36 months). High Cost Claimants (HCC) Claimants with plan payment of $50,000 or more during either the current or previous 12 months. High Risk Claimants Claimants with plan payment of less than $50,000 during the most recent 12 months and Relative Risk Scores predicted costs greater than $10,000. 84

86. Glossary (continued) Incurred Basis Claim expenses reported based on the service date. Inpatient All claims paid for hospital inpatient services base on HCFA Place of Service code 21, 51, and 61. Low Risk Claimants Claimants with plan payment of less than $50,000 during the most recent 12 months and Relative Risk Scores predicted costs less than $5,000. MDC Major Diagnostic Category Member Months Total number of members eligible for the time period. Moderate Risk Claimants Claimants with plan payment of less than $50,000 during the most recent 12 months and Relative Risk Scores predicted costs between $5,000-$9,999. Non-Compliant Members Members with a Care Gap Index of 5 or more. Norm Norms from the Lockton InfoLock Book of Business are derived from claims paid for the 12 months ending 12/31/2011 from Lockton’s Normative Database comprised of 2 million member lives from self-insured, commercial plans. Office Visit Distinct service dates for members with claims that have HCFA Place of Service code of 11. Outpatient Services which take place outside of an inpatient place of service are defined as outpatient. Paid Basis Claim expenses reported based on the date the claim was paid. PEPM Per Employee per Month. 85

87. Glossary (continued) High Cost Script Script with a plan paid amount of $1,000 or more. Homegrown Codes Non-standard codes found in the dataset being reported PMPM Per Member per Month. Plan Payment Plan payment includes total paid by the plan for enrollee, the spouses, and their dependents. Also referred to as Employer Paid. Quality and Risk Measures The Quality and Risk measures are designed to identify potential gaps in care and care management opportunities. Relative Care Gap Index (RCGI) The Care Gap Index (CGI) is used to determine compliance for care management. A numeric score assigned to each individual calculated by summing the weights assigned to each care gap present. Care gaps are derived from evidence-based guidelines, the primary medical literature, standard medical practice, and the Verisk Health Medical Advisory Board. The Relative Care Gap Index is the Care Gap Index / the Lockton Book of Business norm. Relative Risk Score (RRS) A Relative Risk Score (RRS) is a measure of resource use, in total cost or count of outcomes events, relative to an average person. A relative risk score of 1.00 means that the person's risk burden (and predicted cost) is equal to the mean (average) in the development sample. Predictions in the DxCG main output file are relative to an average person in the datasets used to develop the models. For example, using a commercial risk adjustment model, a person with an RRS of 1.50 is predicted to spend 50% more in resources compared to the average person in the Thomson Reuters® MarketScan based benchmark sample. Similarly, an RRS of 1.50 in an event model predicts the member will incur 50% more such events (such as hospitalizations) as the average. All DxCG risk models predict one year of risk. Therapeutic Class Grouping of drugs into categories defined by the American Hospital Formulary Service. The AHFS Pharmacologic-Therapeutic Classification was developed and is maintained by the American Society of Health-System Pharmacists. Total Members Number of unique members in the time period. Units per 1,000 The average number of units (days, members, emergency room visits, etc.) per 1,000 members per year. 86

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