1. 2007 Health Care Leaders Forum The Value Chain Case for Health Care Reform Detroit Regional Chamber Federal Reserve Bank of Chicago – Detroit Branch April 24, 2007 Comments by Dean G. Smith, Ph.D.

2. Professor of Health Management & Policy Senior Associate Dean for Administration, School of Public Health Director, Center for Value-Based Insurance Design (V-BID) Board of Directors, Molina Healthcare of Michigan, Inc. * Opinions are mine alone Comments: Dean G. Smith, Ph.D.

3. “The purpose of the health care system is not to minimize costs but to deliver value to patients, that is, better health per dollar spent.” Porter and Teisberg. JAMA. 2007;297:1103. Opinions Abound

4. Selected Health Cost Options Improving efficiency and reducing unnecessary care: disease management, wellness Limit medical technology growth Limit what we pay for services Cost-sharing, including consumer-directed approaches (increases in out-of-pocket payment) Improve the value chain

5. Value-Based Insurance Design A “Fiscally Responsible, Clinically Sensitive” Approach to Preserve Quality and Contain Cost

6. Compliance with Statin Therapy Stratified by Mean Prescription Copayment Ellis JJ. J Gen Intern Med 2004;19:639-646. $0 to <$10 $10 to <$20 >$20

11. Government Employers Individuals Coalitions Connection to the Value Chain Payers Fiscal Intermediaries ProvidersPurchasersProducers Insurers HMOs PBMs Hospitals Physicians Pharmacies Wholesalers Mail-Order GPOs Pharma Device Med Equip