Better Care, Better Health and Lower Cost James E. Pope, MD, FACC Chief Science Officer, Healthways September 16, 2010

What is Driving Cost Mozaffarian, Wilson and Kannel, Circulation 2008 $$$$$ Chronic Disease is driving increasing morbidity and cost… …. and then you die. But good news: There are treatments!

Bruckert,E Eur Heart J Suppl 2005;7:L16-L20 © The European Society of Cardiology Relative odds reduction according to number of years in trial and reduction in LDL-c Meta-analysis of 49 Clinical Trials Ischemic Heart Disease Risk Reduction

Lifestyle Changes and Risk Reduction 4 4

“Exercise, exercise, exercise. It's the only wonder drug we have.” Adults who are physically active not only have a lower risk of disease, depression and chronic pain from conditions like arthritis and back pain but are also less vulnerable to dementia than their inactive peers. -- Dr. Rosanne Leipzig, vice chair of the department of geriatrics at Mount Sinai School of Medicine - Time Magazine, June 22, 2009 It’s All About Prevention

Proven Solutions Silver Sneakers Senior Fitness Solution Lower total health care costs Lower hospitalization rate Cost & hospitalization rates lower for individuals participating > once a week Newly diagnosed depression lower in individuals participating > once a week 6 Nguyen, H.Q., Ackermann, R.T., Maciejewski, M., Berke, E., Patrick, M., Williams, B., LoGerfo, J.P. (2008). Managed-Medicare Health Club Benefit and Reduced Health Care Costs Among Older Adults. Preventing Chronic Disease, 5(1), Huong, H.Q., Maciejewski, M.L., Gao, S., Lin, E,Williams, B., & LeGerfo, J.P. (2008). Health Care Use and Costs Associated with Use of a Health Club Membership Benefit in Older Adults with Diabetes. Diabetes Care, 31(8), Huong, N.Q., Koepsell, T., Unuetzer, J., Larson, E.,& LoGerfo, J.P. (2008). Depression and Use of a Health Plan-Sponsored Physical Activity Program by Older Adults. American Journal of Preventive Medicine 35(2),

10% Risk Reduction $434 BILLION 7 The Call to Action Actuarial model that can score the value of health risk reduction Demonstrates the potential savings from: Prevention Health Promotion Chronic Care Management Enormous value to be gained by Helping Medicare beneficiaries stay healthy and/or progress more slowly in disease severity Getting people to Medicare entry in a better health status Source: Center for Health Research, Ingenix Consulting Analysis (2009) Medicare Beneficiaries starting number as of May 2010 (Kaiser Family Foundation) 10% Risk Reduction $652 BILLION

Chronic Disease Driving Cost Percent of U.S. population with chronic conditions by age group Anderson, G. Chronic Conditions: Making the case for ongoing care. Johns Hopkins University. November Percent of Medicare expenses by beneficiary chronic condition status Number of chronic conditions Prevalence increases with age Cost increases with Prevalence

Medicare Health Support (MHS) Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) 1 Few Key Points Three year randomized controlled studies of chronic care management Beneficiaries with diabetes and / or heart failure Selection of sicker individuals than average FFS Medicare HCC 2 score of 1.35 or greater (actual range 2.2 – 2.5) Eight pilots, assigned specific geographies Different approaches selected to maximize learning Allowed to modify program design based on learning Participants needed to consent to receive program interventions Lag time between program start and engagement of population 1 Title VII – Sec. 721 Under Traditional Fee for Service, Subtitle C – Voluntary Chronic Care Improvement 2 Hierarchical Condition Code

Population Attributes PBPM Cost per beneficiary per month 3 X Hospital Admission Rate 2.5 X Hospital Bed-Days 2.5 X Skilled Nursing Facilities SNF admit rate 1.5 X MHS vs. FFS Medicare Older, sicker, higher mortality Seeing ~ 7-10 physicians on average Take ~10-20 medications at any point in time About 1% dying each month Source: Healthways MHS program experience

11 CMS Findings Government Reports on Healthways MHS Performance Source: Final Liability for Performance Monitoring Report; Mathematica Policy Research Submission to CMS (April 2009) Final Reconciliation for Healthways Medicare Health Support Program; Actuarial Research Corporation Submission to CMS (April 2009) Evaluation of Phase I of Medicare Health Support Pilot Program Under Traditional Fee-for-Service Medicare, McCall et al. Report to Congress (October 2008) Evaluation of Phase I of the Medicare Health Support Pilot Program Under Traditional Fee-for-Service Medicare: 18-Month Interim Analysis Report to Congress (June 2007) Process of Care Improvement in all 5 process of care measures: Engagement Consent rate of 89% 65% continuous participation after consent Physician support All randomly-selected community-based physicians reported that program could benefit beneficiaries with chronic conditions Improved key clinical metrics Gross savings created in both 1 st and 2 nd clinical cohorts Net cost savings created in 2 nd cohort 94% beneficiary satisfaction CMS Scorecards on Healthways Reports to Congress (re Healthways)

Help people adopt and maintain healthy lifestyle Help reduce and where possible, eliminate health risk Optimize care for people with chronic conditions Three Simple Aims How Not To End Up Here Prevalence of Chronic Disease

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14 Engagement Reduces Hospital Readmissions The Impact of Post-Discharge Telephonic Follow-Up on Hospital Readmissions 14 Accepted (in press) Harrison,P; The Impact of Post-Discharge Telephonic Follow-Up on Hospital Readmissions, 2010 Submitted Population Health Management

15 Emory Study: Analysis of the Treatment Effect Greater Impact Observed for Active Participants “… statistically significant decrease in spending among those who fully participated in the program. Total annual Medicare costs were 15% lower in 2007 for active participants, controlling for age, gender, race and baseline risk. ” Atherly, AJ, Thorpe, KE; Analysis of the Treatment Effect of Healthways’ Medicare Health Support Phase I Pilot ; Submitted Health Affairs, Jun 2010 DRAFT Submitted Journal of Population Health Management “The Healthways study offers more proof that we know what works, and have the ability to improve health and lower costs by engaging people and providing them with the support they need. " Kenneth E. Thorpe, PhD Chair, Department of Health Policy and Management Emory University Rollins School of Public Health

16 MHS Outcomes in Important Subgroups Impact of Predictive Model–Directed End-of-Life  Randomized control with treatment & control cohorts per CMS design  Focused on those in greatest need  Based on predictive model  Top 10% death rate: 333 per 1000  Bottom 70% death rate 7 per 1000  Demonstrated statistically significant savings in the last 6 months of life for a total savings of $5.95 million. Hamlet, K; Am J Manag Care. 2010;16(5): Impact of Predictive Model–Directed End-of-Life Counseling for Medicare Beneficiaries