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

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

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

Standards Development Medicare Modernization Act (MMA) standards -HHS developed and adopted initial uniform standards for e-prescribing CMS standards under Medicare Part D -Adopted “foundational” e-prescribing standards under Medicare Part D -NCPDP SCRIPT Standards V Fax exemption – 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 Payers Retail Pharmacy -SureScripts – Over 95% of retail pharmacies -Increasing automation within pharmacy -Consolidation of retail pharmacies – Over 35 million prescriptions -RxHub – Major health plans and PBM’s -Secure access to 200 million US covered lives -Increase PBM consolidation, automation -Emphasis on mail order 7

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

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

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 ,000 50,000 75, , , ,000 1–2 3–4 5–6 7–9 Group Size Number of Physicians 252,000 31,000 24,000 19, , ,000 5,300 7,100 28%85%59%37%4% High prescriber share: 70,000 26,300 14, High prescribers Source: “Medical Group Practices in the U.S.,” AMA, 1999 edition; Major pharmaceutical company analysis 175, , ,000Physicians Script Volume 15%50% 30%83% Source: SureScripts (2005)

29.2% of physicians (est. 150,000) use some form of an EMR with 12.4% having some access to e-prescribing functions 12 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

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

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

Electronic Prescribing Is A Complete Toolkit Bundled Technology Service and Support  Installation  Training  Tech Support  Hardware  Software  Connectivity 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 16 Electronic Prescribing: Becoming Mainstream Practice. eHealth Initiative and the Center for Improving Medicaion Management. June 11, 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

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 18 Physician Practice Retail Pharmacy Patient Payer - Patient-centered medical home - Payer-based health record - Personal health record - Medication adherence and care management

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 ) 19 - 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 Founding Principles

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 20 Personal Health Record Predictive Models MedicalClaimsPBM Rx Data Clinical Decision Support PatientPhysician Payer Guidelines Care Mgmt.

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 21

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

27 Q & A