Accelerating E-Prescribing Kevin Hutchinson, President and CEO Presentation to the Wisconsin E-Health Initiative June 12, 2008 Copyright © 2008 Prematics, Inc. All rights reserved.

The Building Momentum for E-Prescribing A look back at the rapid progress of recent years and A look at today’s building momentum 2

Building Toward Transparent, Coordinated Care Greater Connectedness: Medication Adherence Personal Health Record Payer-Based Health Record Patient-Centered Medical Home Greater Value: Efficiency Cost-Savings Safety Patient Empowerment Transparent Coordinated Care Physician Connectivity Back-End Infrastructure Technology Vendor Certification Standards / Legislation / Regulation 3

Standards Development 2003 - Medicare Modernization Act (MMA) standards HHS developed and adopted initial uniform standards for e-prescribing 2005 - CMS standards under Medicare Part D Adopted “foundational” e-prescribing standards under Medicare Part D NCPDP SCRIPT Standards V. 5.1 Fax exemption 2007 – Additional rules for MMA Eliminated fax exemption NCPDP SCRIPT 8.1 National Provider Identifier Standards

Legislation and Regulation E-MEDS Legislation One-time physician bonus for e-prescribing Ongoing incentives under Medicare Eventual reduced reimbursement for physicians not e- prescribing Expected $3 billion Federal savings Sec. Leavitt: “Mandate e-Rx for Medicare patients” FDA regulations require tamper-resistant paper for all paper scripts for controlled substances DEA – rules for e-prescribing of controlled substances Committed to publish proposed rule before September 2008 Legislation Regulation

Legislation and Regulation Regulatory framework in all 50 states CA: E-Prescribing standards and requirements for all providers contracting with California Medicaid. MA: Proposes creating a change management toolkit to prepare practices to EHR and E-Rx. AZ: Gov. Napolitano Executive Order directs AZ’s regulatory agencies coordinate with Arizona Health-e Connection and EAzRx initiative. Also educates providers, payers and patients on e-Rx benefits. PA: Gov. Rendell’s Executive Order created Pennsylvania Health Information Exchange (PHIX). Support statewide use of e-prescribing. Legislation Regulation

Creating Back-End Infrastructure and Certifications RxHub – Major health plans and PBM’s Secure access to 200 million US covered lives Increase PBM consolidation, automation Emphasis on mail order Payers SureScripts – Over 95% of retail pharmacies Increasing automation within pharmacy Consolidation of retail pharmacies 2007 – Over 35 million prescriptions Retail Pharmacy 7

Connecting the Physician Practice ONLY 2% OF ALL RXs ARE E-PRESCRIBED National Progress Report on E-Prescribing. Dec. 2007.

Connecting the Physician Practice ONLY 6% OF ALL PRACTICES E-PRESCRIBE National Progress Report on E-Prescribing. Dec. 2007.

Opportunities for Accelerating E-Prescribing Different Needs Across the Physician Landscape A Comprehensive Approach to E-Prescribing How Payers are Getting Involved 10

The highest prescribers are concentrated in the smallest physician practices 252,000 250,000 High prescribers Physicians Script Volume 15% 50% 30% 83% 225,000 200,000 175,000 Source: SureScripts (2005) 132,000 150,000 Number of Physicians 125,000 100,000 75,000 50,000 31,000 24,000 70,000 19,000 25,000 26,300 7,100 5,300 14,200 Group Size 1–2 3–4 5–6 7–9 10+ High prescriber share: 28% 85% 59% 37% 4% Source: “Medical Group Practices in the U.S.,” AMA, 1999 edition; Major pharmaceutical company analysis 11

29. 2% of physicians (est. 150,000) use some form of an EMR with 12 29.2% of physicians (est. 150,000) use some form of an EMR with 12.4% having some access to e-prescribing functions Percentage of office-based physicians using electronic medical records and using comprehensive electronic medical record systems: United States, 2001–2006 Percentage of physicians using electronic medical records and using comprehensive electronic medical record systems by practice size: United States, 2006 Electronic Medical Record Use by Office-Based Physicians and Their Practices: United States, 2006, Esther S. Hing, et al, Division of Health Care Statistics, CDC 12

Different Practices. Different Needs. Large Practices Small Practices High EMR adoption Chart Pull Efficiencies Group-Based $$ Power Full-Time IT Staff Connectivity and Infrastructure Lagging in IT adoption Process Automation Limited $$ for HIT Adoption No In-House IT Staff Little to No Connectivity or Infrastructure

E-Prescribing Is a Multi-Stakeholder Relationship Rx History Access Clinical Alerts Practice Efficiency Safety and quality Med adherence Less wait Safer Rx Med Record Doctor Relationship Physician Patient Pharmacy preferences Patient education Update PHR New scripts Renewals Changes Retail history Payer Rx history Eligibility / formulary Member portals Update PHR Retail history to PHR Reminders Refills Better Outcomes Point of Care Benefit Design Safety / ADEs Efficient Care No transcription Share Rx history Increase 1st fill rate Payer Pharmacy Eligibility / formulary Adjudication 14

Electronic Prescribing Is A Complete Toolkit Bundled Technology Service and Support Hardware Software Connectivity Installation Training Tech Support 15

How Payers are Accelerating E-Prescribing Investing in e-prescribing that delivers value in a number of categories Initiatives limiting payer risk Initiatives tied to / generating ROIs Part of pay-for-performance strategies that create a “win-win” for all stakeholders Payers favor programs with: Focus on prescriber utilization Low or no provider costs High-touch ongoing support Ability to coordinate with existing clinical programs Ability to message physicians/patients Insights into prescriber behavior Value Category Value Contributor Patient-physician relationship Patient-pharmacist relationship Improves individual’s self-efficacy and intrinsic motivation relative to medication therapies Lowers individual’s out of pocket costs Increases patient satisfaction with the healthcare experience (e.g., shorter pharmacy waits) Improves clinical outcomes Improves patient safety Improves functional outcomes (e.g., absenteeism / presenteeism) Improves medication adherence Streamlined/transparent care process Increases availability of an individual’s pharmacy benefit at the point of care Decreases therapy duplication or unnecessary therapies (e.g., prior authorization, step therapy) Improves Individual Empowerment and Satisfaction Improves Health Outcomes Improves Efficiency and/or Lowers Costs Electronic Prescribing: Becoming Mainstream Practice. eHealth Initiative and the Center for Improving Medicaion Management. June 11, 2008. 16

How E-Prescribing fits into larger HIT trends An on-ramp to the journey of patient-centered care for smaller practices 17

Major industry initiatives are informed by electronic prescribing Patient - Patient-centered medical home - Payer-based health record - Personal health record - Medication adherence and care management Physician Practice Payer Retail Pharmacy

Patient-centered medical home Addressing the fragmentation of care into silos of "organologists“ Focusing on the patient; bringing all care into a transparent model Incentivizing primary care physicians to manage the electronic patient record Organize around care teams; current med list is key Leading the charge TransforMed (AAFP) Patient-Centered Primary Care Collaborative (ERIC) Founding Principles Personal physician Physician directed medical practice Whole person orientation Care is coordinated and/or integrated Quality and safety Enhanced access to care Payment appropriately recognizes added value

Payer-based health record Leveraging the information assets of employers, health plans and PBMs Applying business and clinical rules to patient data to identify opportunities for best care Communicate to physicians and patients about gaps in care, clinical alerts, diagnostic screening, medication adherence, etc. Promote the use of PHRs; clinical decision support Effective medication management is key Predictive Models Medical Claims PBM Rx Data Clinical Decision Support Guidelines Care Mgmt. Physician Patient Personal Health Record

Personal health record Modern platforms from major players are bringing energy to the PHR market Once tethered solutions from health plans are now positioning as interoperable and patient-controlled Physician practice solutions, such as electronic prescribing, can connect to patients through standardized protocols such as the Continuum of Care Record (CCR) Making prescription information transparent across providers can help with medication safety and adherence

Medication adherence and care management Electronic prescribing can be an on ramp to medication adherence and care management Medication history information from retail pharmacies and PBMs can be used to calculate adherence Physicians using electronic prescribing can be alerted when the patient is in the office Patient PHRs can be synched with prescribing databases to confirm a current med list Benefits information and interaction checking can create additional alerts Electronic Prescribing Personal Health Record Rx History Clinics MTM Rx History Formulary HRA

Perspectives from AHIC Advancing Patient-Focused Health Care 23

Health Information Technology Deployment Coordination Health Care Industry Biosurveillance Consumer Empowerment Chronic Care Electronic Health Records Breakthroughs Standards Harmonization (HITSP) Compliance Certification (CCHIT) NHIN Privacy / Security Health IT Adoption Infrastructure Industry Transformation Consumer Value Coordination of Policies, Resources, and Priorities Office of the National Coordinator -Health IT Policy Council -Federal Health Arch. AHIC -Workgroups Technology Industry 24

AHIC Workgroups Workgroups initially formed to pursue breakthroughs in four areas: Consumer Empowerment Electronic Health Record Population Health Chronic Care Three additional workgroups have been formed: Confidentiality, Privacy & Security Quality Personalized Healthcare 25

AHIC Transition Plans are now underway to transition the AHIC to a public-private partnership. The AHIC successor will be an independent and sustainable public-private partnership. The proposed scope for the AHIC successor includes: Accelerate and coordinate current AHIC interoperability initiatives Prioritize stakeholder requirements for nationwide health IT interoperability Advance the harmonization of technology standards and policies Oversee and facilitate the Nationwide Health Information Network Advance the certification of products, network participants, and/or operations The AHIC successor will be designed and ready for initial operation by Spring 2008. 26

Q & A 27