EXPERTISEPARTNERSHIP VALUE November 16, 2011 UNIVERSITY OF ALASKA 1 ST QUARTER FY12 UTILIZATION REVIEW – 7/1/2011 TO 9/30/2011 TRENDSANALYSISSTATISTICSPLANNINGTOOLS

Premera – Medical

Premera Medical – Inpatient & Outpatient 3  Inpatient − Paid claims per member per month for inpatient services decreased significantly from $85.94 for 1 st quarter FY11 (7/10-09/10) to $64.11 for 1 st quarter FY12 (07/11-09/11)  Large Claims stabilized between 1st quarter FY12 compared to FY11 − The average length of stay for inpatient services decreased from 4.03 to 3.61 and 1 st quarter FY 12 was below the Premera Norm of 4.19  Outpatient − Visits per 1,000 members for outpatient services increased from 1,069 to 1,116 from 1 st quarter FY11 to FY12 but was well below the Premera Norm of 1,155 − Services per 1,000 members for outpatient services increased slightly from 4,255 for 1 st quarter FY11 to 4,286 for 1 st quarter FY12 but was below the Premera Norm of 4,395 − Paid claims per service decreased 10.8% from 1 st quarter FY11 to 1 st quarter FY12

Premera Medical – Emergency Room & Large Claims 4  Emergency Room − Paid claims per member per month for ER services decreased from $17.81 for 1 st quarter FY11 (7/10-09/10) to $16.34 for FY12 (7/11-09/11) and the paid claims per visit decreased 16% from $1, to $1, − Visits per 1,000 members for ER services increased from 147 for 1 st quarter FY11 to 160 for 1 st quarter FY12 but are below the Premera norm of 209  Large Claims − Large Claims stabilized between 1st quarter FY12 compared to FY11  There are 7 large claimants over $100k for FY12 YTD  The average large claimant paid amount decreased from $195,549 to $129,591, a 33.7% decrease from 1 st Qtr FY 12 to 1 st Qtr FY11  Large claimants in the 1 st quarter FY11 made up 42.6% of the total medical and Rx claims whereas for 1 st quarter FY12 it is 22.4%  There were 10 large claimants over $100k in the first quarter FY11 − 2 of those 10 claimants were over $300k

Medical Utilization 5 Norm is based on Premera’s Alaska large group book of business

Large Claims Analysis 6

Top 30 Large Claimants– 1 st Quarter FY12 7

Top 30 Large Claimants– 1 st Quarter FY11 8 Claimant #’s 1, 2, and 4 dropped off in Claimant #3 remains #3 in 2012

Major Diagnostic Category 9 Musculoskeletal system continue to be #1 Genitourinary Systems jumped from #9 to #3 Neoplams dropped from #2 to #6

Caremark - Pharmacy

Pharmacy Observations 11  The number of total scripts/claims from FY12 1 st quarter (7/1/11 to 09/30/11) decreased 4.9% compared to FY11 1 st quarter (7/1/10 to 09/30/10)  The number of mail order scripts/claims increased 52.3% from FY11 to FY12 1 st quarter − Introduction of mail order for maintenance drugs at 7/1/2011  The total gross costs increased $205,641 from FY11 to FY12 1 st Quarter from $1,965,996 to $2,171,637  The generic dispensing rate increased from 65.1% to 68.1%, a 4.7% increase  Specialty drug gross costs increased 25.7% and made up 13.8% of the total gross pharmacy cost

Pharmacy 1 st Qtr FY 11 to FY12 Comparison 12

Top 25 Drugs by Gross Cost 13

Appendix

Medical Utilization Definitions 15  Contract Months – Number of enrolled employees for a 12 month period  Medical Total PMPM – Total medical cost on a per member per month basis  Inpatient – Services provided to patients who are hospitalized  Outpatient – Hospital based services where the employee is not admitted  Professional – Primary Care or Specialist Care Physician services  Average Contract Size – The average number of dependents (Spouse and Children) for each enrolled employee

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