1. Engaging Consumers to Purchase Value Commonwealth of Virginia Department of Human Resource Management State Employee Health Benefits Virginia Chamber of Commerce 3 rd Annual Virginia Health Care Conference Richmond Convention Center, Richmond, VA June 6, 2013

2. $1 Billion State Employee Health Plan Cost Drivers June 20132  Expensive procedures  Treatment of chronic conditions  Prescription drug therapy cost  Employee lifestyle  Smoking  Physical activity level  Overweight  Average employee age Top Ten Claims Expense Medical Procedures Chronic Conditions Prescription Drugs 47.3% of All Claims Expense 6.7% of All Claims Expense 5.0% of All Claims Expense Note: These areas may not be mutually exclusive

3. Consumer-Focused Plan Design Maternity Weight Watchers Smoking Cessation Flu Shots Bariatric Surgery Diabetes Coronary Artery Disease 3June 2013

4. Maternity 4 Consumer Action Participate in the Maternity Program Begin the program in the first trimester Get extra dental cleaning Plan Incentive Waive $300 inpatient or $125 outpatient co-pay June 2013

5. Weight Watchers Consumer Action Participate in 75% of the classes Plan Incentive Receive 50% reimbursement of class fees paid 5June 2013

6. Smoking Cessation Consumer Action Participate in the program Plan Incentive No charge for program 6June 2013

7. Flu Shots January 26, 20127 Consumer Action Get a flu shot Plan Incentive No charge for shot

8. Bariatric Surgery Consumer Action Participate in the year-long coaching program Attend a Weight Watchers or similar program Plan Incentive Eligible for plan coverage Receive health coaching pre-surgery and post-surgery at no charge Eligible for Weight Watchers 50% reimbursement Waive $300 inpatient hospital or $125 outpatient co-pay 8June 2013

9. Bariatric Surgery January 26, 20129 Lifestyle Changes  Improved nutrition  Smaller food portions  Better beverage choices  Increased activity/exercise  More positive coping skills  Increased confidence  More health care engagement  Stopped smoking 80% 81% 78% 65% 62% 59% 57% 8% Health Condition Improvements  Diabetes  Blood Pressure  High Cholesterol *All results from post 12-month survey 50% 46% 15%

10. Diabetes January 26, 201210 Consumer Action Annual physical Under the care of a physician for diabetes Annual A1C test Comply with medications Plan Incentive Tier 1 and Tier 2 medications at no charge Testing supplies at no charge Receive coaching at no charge

11. Coronary Artery Disease Consumer Action Participate in the 6 month Health Diagnostic Lab program Receive initial health screening Biometric measurements Blood draw Share results with physician Meet with clinical health consultant Get follow-up health screening ~ 6 months later Plan Incentive Receive HDL tests at no charge Receive health coaching based on results at no charge 11June 2013

12. Summary Data driven Value-Based Insurance Design (VBID) Short-term cost investment for long-term health improvement resulting in lower cost Continuous improvement 12June 2013