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

$1 Billion State Employee Health Plan Cost Drivers June  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

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

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

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

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

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

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

Bariatric Surgery January 26, 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%

Diabetes January 26, 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

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

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