Cancer Care Delivery Reform: The Payer’s Perspective Quality health plans & benefits Healthier living Financial well-being Intelligent solutions Michael Kolodziej, MD, FACP National Medical Director, Oncology Solutions, Aetna

Aetna Inc. We put people at the center of everything we do This presentation outlines how we can help members and providers optimize cancer care 2

The rising cost of cancer care is everyone’s problem Cancer care is the leading edge of medical cost trend Medical Rx 30.8% 1.5 B Aetna’s top cost drivers in cancer care Radiology 22.4% 1.1 B Inpatient 23.3% 1.1 B Specialist physician 9.4% 483 M Annual increase Cancer drugs 20% Cancer medical 12-18% Health care 9% US GDP 3% % 1000% $55 B $123 B Cumulative percentage increase *2010 CY Claims; Commercial & Medicare; All Funding; Excludes AGB/SH/SRC Aetna Inc. 3

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Principles of our proposed strategy Drive efficient use of evidence-based medicine –platform that provides content and workflows –integrate into the Aetna and provider systems –simplify the administrative processes for providers Avoid waste and misuse of medical services –better provider alignment (e.g., Oncology Patient Centered Medical Home), –better network (narrow, tiered) –better decision support strategies Leverage and integrate the many current (and future) medical and pharmacy cancer-care initiatives –seamless, end to end cancer experience for Aetna members and providers Aetna Inc. 5

Increased adherence to evidence based guidelines lowers cost without negatively impacting treatment efficacy Study: “Cost Effectiveness of Evidence-Based Treatment Guidelines for the Treatment of Non–Small-Cell Lung Cancer in the Community Setting” Published: Journal of Oncology Practice (ASCO Peer Reviewed Journal), 1/19/2010 No change in overall survival between the study groups Source: “Cost Effectiveness of Evidence-Based Treatment Guidelines for the Treatment of Non–Small-Cell Lung Cancer in the Community Setting”. Journal of Oncology Practice. January Volume 6. No.1. p Significantly lowered cost in the case group vs. The control group Purpose: Evaluate the cost effectiveness of evidence-based treatment pathways for NSCLC patients Conclusion: Results of this study suggest that treating patients according to evidence-based guidelines is a cost-effective strategy for delivering care to those with NSCLC. Overall survival by Pathway status. 6

Medical management Pathways and evidence based medicine Clinical pathways are treatment roadmaps of best care practices Developed through research and medical evidence Provide physicians a more precise approach to cancer care Pathway treatment comparison ─Efficacy ─Toxicity (side effects) ─Cost (utilizing generics ) Pathway lines of therapy ─Combination of drugs used and the sequencing of how they are given ─Appropriateness of when to begin treatment and when to discontinue treatment ─A new line of therapy is generally used when a pathway did not meet clinical outcomes or the cancer progresses Medical management model* Pharmacy strategy Commun- ications Plan design Network design Customer service Aetna Inc. 7

Platform: Enable administrative easing of prior authorization/pre-certification for practices on the platform iNexx Platform eviti app Physician accesses vendor CDS EBM treatment plan is built Oncology clinical decision support Vendor payer portal Automated “CDS-code” is delivered notification in near real-time to Aetna UM Locate CDS code information Enter CDS code information etums/ ATV EDI Claims processing Pended via 278 transaction a3b Vendor clearing house 270/271 transaction Local administrator in claims processing can be established 8

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What are the PCMH joint principles? Personal physician — Each patient has an ongoing relationship with a personal physician —Personal physician leads a team of individuals that takes responsibility for the ongoing care of patients —Personal physician is responsible for providing for all the patient’s health care needs or arranging care with other qualified professionals Care is coordinated across health care system Quality and safety are hallmarks of the medical home Enhanced access to care is available through systems such as open scheduling, expanded hours and new options for communication Payment recognizes the added value provided to patients who have a patient-centered medical home Aetna Inc. 10

Expected benefits to health care consumers Improved health outcomes supported by doctors’ use of clinical decision- support tools to improve care management, tracking and adherence to evidence-based guidelines Reduced hospitalizations and ambulatory care —Includes primary and readmissions —Includes sensitive specialty/facility and other costs Improved transition of care Shared decision making Increased engagement in preventive health and wellness Aetna Inc. 11

Aetna Inc. Medical management What about Oncology medical homes? Measurements would be those defined initially by the Community Oncology Alliance group such as: Percentage adherence to clinical pathways Percentage of patients with documented clinical or pathologic staging prior to treatment Percentage of ER visits per patient per year Percentage of Hospital admissions per patient per year Percentage of patient deaths occurring in an acute setting Average number of days in hospice prior to death Percentage of patients with stage IV that have end-of-life care discussions Define the components and measurement criteria for designating a provide practice as an Oncology Medical Home (OMH). Basic components include: Enhanced communication/patient education Coordination and easy patient access to care Case management responsibilities Improved patient tracking of compliance to medications and follow up activity Reporting capabilities NCQA recognition Aetna Inc. 12

Aetna Inc. Emerging Businesses We have the capabilities to equip oncologists with the tools to transition to a medical home Care Management Support Financial Alignment Oncology Medical Home Solution Information Technology  Value based contracting and benefit steerage to drive adoption  Clinical decision support tools to optimize care plan  Automated prior-authorization to reduce administrative burden  IT platform for care transitions and holistic view of patients  Optimal Staffing Model to provide leverage and coordinate care  Oncology-tailored patient applications to support patients Provider Tools Patient Tools HIT Platform 13

Aetna Inc. Impact of a cancer management program: an Innovent/Aetna pilot Study Design Prospective, non-randomized evaluation of patients enrolled in the Innovent Oncology Program Location Patients seen by Texas Oncology physicians Study period Innovent Oncology Program 6/1/2010-5/31/2012; Program yr 1: 6/1/ /31/2011; Program yr 2: 5/1/2011-4/31/2012 Inclusion Aetna eligible pts diagnosed with an Innovent diagnosis initiating chemotherapy during program year 1 or year 2 Drug costs ER and in-patient admissions and costs Exclusion Patient eligible for the program in the last month of each program year Patients with a chemotherapy claim in the month prior to the program year Patients without a chemotherapy claim within each program year ASCO Quality,

Aetna Inc. Pathways Compliance ASCO Quality,

Bundles are likely the end result Aetna Inc. 17

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Bach, Health Affairs, 2011 Aetna Inc. 19

Aetna Inc. Emerging Businesses ACO We can also look to leverage ACS to serve oncology practices seeking shared savings through an ACO model Oncology MH Solution: Community Oncology Practice + Text Oncology Practice Hospital Payor Primary Care Practice Aetna contracts with community oncology practices to become medical homes 1 Aetna leverages ACS to facilitate relationships between enabled oncology practices and ACOs 2 Enablement of oncology-specific component for ACOs B 20

The goal Aetna Inc. 21 Better quality Lower cost More value

The current (sorry) state of affairs The Oncologist and his/her office is stuck in a 20 th Century communication and Data exchange environment Aetna Inc. 22

Aetna Inc. Focus on the patient Place the patient at the center of enhanced care delivery facilitated through the platform. As practices invite other providers to join their collaboration network, communication and services around their patient’s care are streamlined and simplified. 23

Aetna Inc. Privately or Publicly-Sponsored Medicity Technology Connects Systems to Transform Data Into Action Patient Portal Analytics, Clinical Decision Support, Risk-stratified Populations & Quality Measures Data Aggregation Community Health Record Identity Management Bio Surveillance Registries Patient Consent Framework 24

iNexx ® gives you the power to connect and create the care delivery system that you want iNexx® Result Referral Order Creating a more collaborative network of care givers VCTR Aetna Inc. 25

Success will require multiple steps 1.Transformation of the clinical practice. 2.Evolution of the hospital into an integrated delivery system. 3.Adoption of a culture that espouses performance measurement and process improvement. 4.Modernization of the IT platform, focused on payer, provider and patient integration. 5.Reformation of the reimbursement platform. 6.Partnership. Aetna Inc. 26

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