Texas Primary Care and Health Home Summit 11/14/2018 Texas Primary Care and Health Home Summit Health Plans and Primary Care Practices: Partnerships Yield Benefits for Both Austin, TX April 5-6, 2018 Steven R. Peskin, MD, MBA, FACP Executive Medical Director Horizon Blue Cross Blue Shield of New Jersey

Health Plan and Primary Care Practices: Partnerships Yield Benefits for Both

The Triple Aim Learning Objectives Describe core elements of Horizon BCBSNJ patient centered care models Explain collaboration between payer and clinical organizations and contrast to traditional model Analyze quality and efficient performance of patient centered modes Reduce Per Capita Cost of Care Enhance the Patient Experience 3

Improve the Health of the Population The Triple Aim The Triple Aim Through collaboration, we are helping to create an effective, efficient and affordable health care system. We are achieving better health and better care at lower costs. Innovative programs: Patient-Centered Medical Homes (PCMHs). Accountable Care Organizations (ACOs). Episodes of Care (EOC). Pediatric Patient Centered Program OMNIA Alliance 1 2 Improve the Health of the Population Reduce Per Capita Cost of Care Triple Aim Enhance the Patient Experience 3 4

Improving Quality to Drive Down Costs Working with clinical organizations to reward care quality, not quantity $ Flexible, value-based programs: one size does not fit all Approaches and solutions that ensure affordable, sustainable, desirable products Meaningful collaboration that maximize data and technology Since 2010, Horizon Blue Cross Blue Shield of New Jersey has partnered with providers and employers on value-based care arrangements. This was a true shift in our collaboration efforts and began the transformation of health care delivery. Our geographic area has the highest premiums in the country, even after subsidies, with a level of quality that does not reflect the high costs we pay. By shifting to a value-based approach, there is more collaborative/less unsynchronized care, and a focus on total cost, quality and patient experiences Our value-based programs are centered on our ability to collaborate with participating doctors and hospitals, not just contract with them. These types of programs provide financial incentives for medical professionals to deliver the right care, at the right time, in the right setting. Proprietary and Confidential

Shift to Value-Based Contracting From fee-for-service To pay-for-value Focus on unit cost Payment for unit cost and units of service Adversarial Focus on total cost of care, quality process and outcomes measures, and member experience Payment for mutually agreed upon measures of value Collaborative Horizon BCBSNJ is committed to moving from a fee-for-service to a fee-for-value payment model. Fee-for-value refers to a health care system that reimburses doctors, hospitals and other health care professionals for the quality of care they deliver and improved patient outcomes. The transition within the health care industry from a fee-for-service model to accountable care structures aligns incentives and created the framework for the fundamental shift in who manages risk. This shift requires providers to understand the risks associated with the populations they manage and adopt tools and processes currently used by insurers to manage risk.   Proprietary and Confidential

Population Health Management Care Delivery Physicians at front line of care delivery across most specialties, sites of care Care Planning Various levels of providers work with physicians to determine care plans, transitions Care Coordination Communication between specialties essential to treating complex patients Population Health Management is the next generation of patient-centered care. It is a model of care where doctors, hospitals and other health care professionals are responsible for the outcomes of a group of patients (or populations). If, on average, the doctors deliver high quality, efficient care to a population, they are rewarded for their high performance. Encourages doctors and other health care professionals to keep their patients healthy, thereby reducing unnecessary utilization of expensive services, like Emergency Room visits, hospitalizations and multiple office visits. This requires better organized, more personalized, coordinated and proactive care that leverages shared information systems and care processes. This helps us achieve the Triple Aim When doctors are incentivized to provide this level of care, patients are more likely to avoid unnecessary treatments or procedures. Providers began to work with us to improve population health management and invest in the technology and reporting to see tangible results. Proprietary and Confidential

Population Care Coordinator Program Support Better Health, Better Care, Lower Costs Population Care Coordinator Data & Technology Engage, Educate & Empower Patients Playbook/ Program Support Payment Reform Proprietary and Confidential

Program Support – Practice Engagement Engaged Practice Team Onboarding/ Training Programs Web Portal – Calendar & Updates Biweekly Email Updates Monthly Webinars/ Weekly Data Exchange Calls In-person Meetings/ Conf. Calls Quarterly PCC Meetings Quarterly Physician Advisory Meetings Annual Summit Proprietary and Confidential

January 2014 vs 2015 PCMH, ACO, and EOC Attributed Members by County Map Source: Attributed Members are based on January 2014/2015 attribution. Practice Locations are based on zip codes and there maybe more than one practice per zip code. For PCMH, Pediatrics and ACOs, practices' zip codes are based on the Primary Site file from innovations. For EOC, practices' zip codes are based on the file from innovations. There is no EOC attribution/episode count on these maps. 10

Outcomes from Existing Value-Based Programs 67% 1.5M+ Paid in care coordination and shared savings payments in 2016 Of total medical spend paid to physicians/hospitals participating in value-based programs Of total enrollment covered through value-based programs 3% 16 Lower rate of emergency room visits Distinct episodes of care programs 3% 4% Lower rate of hospital admissions Improved control of diabetes cost Proprietary and Confidential

Accountable Care Organization Patient-Centered Medical Home Transformation Continuum Episodes of Care Accountable Care Organization Patient-Centered Medical Home Expansion of value-based programs to include entire continuum of care Horizon’s Episode of Care (Bundled Payment) model is retrospective, meaning costs are reconciled against a target price after an episode of care. All providers throughout the continuum get paid at fee-for-service rates as their care is delivered. All episodes are reviewed against quality benchmarks and patient experience thresholds. Then, if costs come in below budget, savings are shared with the provider who is contracted for the episode management. Since its inception in 2010, our EOC program has experienced explosive growth and impressive outcomes. 2014 - Horizon BCBSNJ paid $3 million to 51 specialty medical practices as part of the shared savings the groups produced across five episodes in 2014, while treating 8,000 Horizon BCBSNJ members.   PCMH vs ACOs – PCMH is solely for Primary Care Doctors ACOs include multi=specialty and can be hospital based We have seen great success for these models individually, but we have to take to the health care system level to help manage the full spectrum of care. ACOs are comprised of hospitals and/or health care professionals who are responsible for achieving specific patient quality outcomes and avoiding unnecessary and duplicative medical tests and treatments. Participating physician groups help create a healthier patient population through a coordinated approach to care among providers within the ACO. ACOs are designed to increase accountability to achieve measured patient quality outcomes and decrease unnecessary and duplicative medical tests and treatments. We have signed 20 ACOs, over the years and, as you would expect, some of them are now transitioning to Organized Systems of Care.  Shared-savings arrangements: rewards ACOs, advanced PCMH practices and EOC providers for lower health care costs while meeting performance standards on quality of care and enhancing the patient experience. Proprietary and Confidential

Transformation Continuum To address the challenging market dynamics and deliver market-leading value to New Jersey residents, Horizon BCBSNJ will… Promote Population Health Management Collaborate with Committed Providers Engage Members in Care Management Reward achievement of Quadruple Aim objectives Strengthen capabilities in medical management and care coordination through sharing of data, technology and expertise that enhances clinical decisions at point of care Engage members by actively supporting positive health behaviors and preventive care Horizon BCBSNJ is working with specific hospitals and physicians that have advanced data- sharing technology. The doctors, hospitals and other health care professionals who use these tools can focus on improved clinical outcomes and enhanced efficiencies and member service, which should result in increased revenue and membership. Horizon BCBSNJ will collaborate with hospitals and physician groups to develop the capabilities and expertise necessary to deliver population health management to our members. Consumers are increasingly demanding better quality of care and improved health care outcomes at lower costs. As the industry shifts to individual coverage and expanding coverage to those who were previously uninsured, our outreach had to improve. Building strong connections among the patient, physician, and office team can help patients feel a sense of ownership and empowerment when it comes to their health and health care decisions. Distribute value created that includes all stakeholders Proprietary and Confidential

Shared Vision and Commitment Transformation Continuum Shared Vision and Commitment Leading Market Share & Consumer Insights Clinical Expertise Network of Physicians & Facilities Advanced IT & Analytical Capabilities Clinical Population Health Infrastructure Care Management Programs and Resources Horizon is working together with our partners that have the same vision and commitment. We are ringing our expertise and they are bringing their clinical expertise to improve the health care system throughout the continuum. Proprietary and Confidential

Virtual, Integrated Delivery System is Positioned to Align Incentives and Capabilities New Jersey provider partners Virtual Integrated Delivery System Patient Management Expertise Leading Consumer Insights Hospital System Care Management Programs and Resources Leading Brand Equity Network of Physicians & Facilities Sales & Marketing Capabilities Non-Hospital Facilities Employed & Affiliated Physicians Clinical Population Health Infrastructure IT & Analytical Capabilities Health Plan Provider Capabilities Joint Governance Horizon BCBSNJ Capabilities Value to Health Care Consumer Improved Management of High-Risk Members Simplified Navigation of Health Care System Controlled Growth in Health Care Costs Enhanced Service Levels for Consumers These arrangements are a win for all those involved, including the consumer: Improved Management of High-Risk Members Simplified Navigation of Health Care System Controlled Growth in Health Care Costs Enhanced Service Levels for Consumers Proprietary and Confidential

Enablement Capabilities: Horizon’s Focal Areas Horizon has made significant investments to evolve our capabilities and resources in order to establish and grow our large-scale, value-based models with our provider partners. Clinical & Network Operations Dedicated Alliance support teams Care Management transformation Practice transformation expansion Technology & Data Analytics Health Information Exchange Automated Attribution models Big Data & Consumer Analytics tools Product, Sales & Marketing Innovative network product launch Broker engagement & education Cost transparency tools Clinical Transformation is key to changing the way care is delivered in New Jersey The Clinical Transformation Team will focus on: Network Optimization Pharmacy Management At-Risk Care Coordination ER Use Reducing Avoidable readmissions All partners will focus on these initiatives based on the specific opportunities that we have jointly identified. Working groups have been working together for several months on developing initiatives. Proprietary and Confidential

Key Lessons Learned to Date Strategic Execution Payers should consider a portfolio approach to value-based programs Models must work in tandem with Provider’s other value-based contracts Value-based partnerships must be considered more than a contract Payers & Providers must collaboratively prioritize early-stage initiatives Governance & Communication Provider compensation/incentive models must be designed to drive change Payers must leverage the existing assets/structure of Provider partners Payers must promote programs through provider education & engagement Technology & Operations Payers require material investments to enable value-based models Technology solutions should be staged to allow for an evolution of data sharing and integration Payer data must be meaningful and actionable for Providers Proprietary and Confidential

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