1. EXPERTISEPARTNERSHIP VALUE January 26, 2011 2 ND QUARTER UTILIZATION REVIEW – 7/1/2010 TO 12/31/10 TRENDSANALYSISSTATISTICSPLANNINGTOOLS

2. Premera – Medical

3. Premera Medical – Inpatient & Outpatient 3  Inpatient − Paid claims per member per month for Inpatient services increased significantly from $75.50 for 2 nd Qtr FY10 (7/09-12/09) to $100.58 for the 2 nd quarter FY11 (7/10- 12/10)  Greater intensity and severity of large claims in 2 nd Qtr FY11 compared to FY10 − The average length of stay for inpatient services decreased from 4.52 to 4.45 and 2 nd Qtr FY 11 was below the Premera Norm  Outpatient − Visits per 1,000 members for Outpatient services decreased from 1,071 for 2 nd Qtr FY10 (7/09-12/09) to 1,058 for the 2 nd quarter FY11 (7/10-12/10)  FY11 was below the Premera Norm − Services per 1,000 members for Outpatient services decreased from 4,222 for 2 nd Qtr FY10 (7/09-12/09) to 4,154 for the 2 nd quarter FY11 (7/10-12/10)  FY11 was below the Premera Norm

4. Premera Medical – Emergency Room 4  Emergency Room − Paid claims per member per month for ER services increased from $15.68 for 2 nd Qtr FY10 (7/09-12/09) to $16.87 for the 2 nd quarter FY11 (7/10-12/10) and the paid claims per visit increased from $1,122.19 to $1,386.04 − Visits per 1,000 members for ER services decreased from 167 for 2 nd Qtr FY10 (7/09-12/09) to 146 for the 2 nd quarter FY11 (7/10-12/10)  FY11 was significantly below the Premera Norm  The increase in the ER per member per month cost coupled with the decrease in the number of ER visits for the 2 nd Quarter FY 2011 compared to 2 nd Qtr FY 2010 implies that members are going to the ER for more appropriate services.  Large Claims − The number of large claimants over $100k increased from 18 in FY 10 2 nd Qtr to 28 in FY 11 2 nd Qtr − Top 30 claims for FY10 2 nd Qtr were $4,039,411 compared to $6,428,623 in 2 nd Qtr FY11, which is a 50% increase − 30% of the Top 30 Large Claimants in FY11 2 nd quarter are lifestyle related claims compared to 20% for the FY10 2 nd quarter

5. Medical Utilization 5 2010 Norm is based on Premera’s Alaska large group book of business

6. Top 30 Claimants – 2 nd Qtr FY 2011 6

7. Major Diagnostic Category 7 Circulatory system jumped from #4 in 2 nd Qtr FY 10 to number #2 in FY 11

8. Caremark - Pharmacy

9. Pharmacy Observations 9  The number of total scripts/claims from FY11 2 nd quarter (7/1/10 to 12/31/10) increased 4% compared to FY10 2 nd quarter (7/1/09 to 12/31/09)  The number of mail order scripts/claims increased 9% from FY 10 to FY11 2 nd quarter − The University as well as the member receives costs savings with the utilization of mail order  The total gross cost increased 8% from FY10 2 nd quarter to FY11 2 nd quarter − Pharmacy trend is currently around 10% nationwide and 14.5% for Premera Alaska  The total amount paid by members decreased 1% and the average amount paid per member per claim decreased from $12.87 to $12.21, a 5% decrease from the FY10 2 nd quarter  The generic dispensing rate increased from 58.9% to 62.1%, a 5% increase − Caremark’s book of business is 66.1% and its Colleges and Universities benchmark is 65.2% − The increased utilization of generic drugs provides cost savings to the University and its employees

10. Pharmacy 2 nd Qtr Comparison 10

11. Appendix

12. Medical Utilization Definitions 12  Contract Months – Number of enrolled employees for a 12 month period  Medical Total PMPM – Total medical cost on a per member per month basis  Inpatient – Services provided to patients who are hospitalized  Outpatient – Hospital based services where the employee is not admitted  Professional – Primary Care or Specialist Care Physician services  Average Contract Size – The average number of dependents (Spouse and Children) for each enrolled employee

13. Top 30 Claimants – 2 nd Qtr FY 2010 13

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