1. Achieving Affordable and Effective Health Care Reform Karen Ignagni President & CEO April 27, 2009

2. National Expectations: What does the public want? Increased affordability, especially for working families and small businesses Guaranteed access to coverage, especially for those with pre-existing conditions Improved quality, safety and effectiveness

3. Committing to Reform: What health plans have proposed Bending the cost curve Covering everyone Keeping everyone covered Providing predictability, security, and transparency Improving quality and value Establish goal of reducing future trend by 1.5 percentage points per year Blueprint for meaningful change established by stakeholder group Series of reforms to promote value & affordability Guarantee issue (Eliminate pre- existing condition exclusions) Eliminate medical underwriting (No health status rating) Personal coverage requirement Portability Continuity of coverage Expand safety net programs Targeted assistance to low and moderate income individuals, families and small businesses Essential benefits plan available nationwide for individuals and small businesses Create a standard platform for consumers in each state to compare coverage options Build on health plans strategies to reward value not volume Ensure patients get the right care at the right time in the right setting Promote consumer decision making w/ clear concise information about safety and effectiveness Administrative simplification

4. Determining Which Architecture Meets the Publics Objectives What is the best blend of public and private sector responsibilities? Can comprehensive market reforms and consumer protections solve the problem? What can we learn from FEHBP? What can we learn from European models? What are true administrative costs?

5. Comparing Design Choices Key elements Cost containment Ensure access to quality coverage Keep your plan if you like it Administrative savingsEncourage competition Government-run plan added to the offerings Market reforms and fundamental regulatory changes ??

6. Impact of a government-run plan Employer provided coverage (small and large) 120 million people moved into government-run plan Providers ? Federal Budget ? Families/ Individuals ? 100 million + people moved Individual market

7. Assessing the Potential to Achieve 21 st Century Reforms Public Sector Today Administered pricing Fee-for-service platform Volume vs. value Rejection of SGR cap Political aspect to demos, and difficulty moving to market adoption Political impact on coverage decisions Inability to assess high risk patients and target supportive programs Private Sector Today Infrastructure to identify health risk, coordinate outreach and track outcomes Encourage healthy behaviors: health coaching/wellness, smoking cessation, physical fitness Access to health information & performance transparency Nurse call lines – trouble shooting, respond with timely information Flexibility to tailor DM programs to meet individual needs Nurse case managers to monitor patient adherence, complications and provide tools and support to manage care Use information technology to improve care coordination (PHRs, registries) Hi-touch tools: phone/web based innovations, state of the art interactive voice response to support self management Assess/reduce social and home factors that contribute to poor health care Alerts to physicians and patients, re: drug interactions and missed opportunities Training in cultural competency and translation services High quality service facilities (e.g. radiology) and Centers of Excellence Payment models that incentivize value not volume At-risk and pay for performance type arrangements with manufacturers and providers of specialty services

8. Assessing Private-Sector Performance MA HMO Performance Relative to FFS

10. True Administrative Costs If a government-run plan were to perform functions of health plans… Prevention and wellness programs Care coordination and management Disease management Develop and monitor performance of provider networks Health information technology investment Claims processing Regulatory compliance and reporting Fraud and abuse detection and prevention Cost of capital Reserve requirements $?

11. Cost Containment Potential associated with bending the cost curve

13. Achieving Affordable and Effective Health Care Reform Karen Ignagni President & CEO April 27, 2009