0 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Ira Klein, MD, MBA, FACP Senior Director, Health Care Quality Strategies Strategic Customer Group, Johnson & Johnson Health Care Systems Inc. November 17, 2015 Evidence-Based Oncology Care Management: Solving the Scalability Problem November

1 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Cancer care delivery is a significant healthcare challenge for reasons beyond technology Challenge #1: Expense Cancer treatments cost $157B in medical spend and growing. 1 The bulk of costs are driven by outpatient medical and inpatient cost. 2 Challenge #2: Delivery Despite more effective community care at lower costs, changes in reimbursement and rising administrative costs make community practice economics unsustainable. 3 New economic models, like medical homes, can enable sustainable community care, yet oncologists lack the knowledge and finances to transform. 1. NCI Cancer Prevalence and Cost of Care Projections. Accessed November 4, OptumRx, Oncology Insight Report, Kallen, M., Terrell, J., Lewis-Patterson, P., Hwang, J. Improving Wait Time for Chemotherapy in an Outpatient Clinic at a Comprehensive Cancer Center. J Oncol Pract. 2012;8(1):e1-e7

2 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson This is what most people know about cost and quality in oncology care: It’s a black box because of a lack of transparency, facilitated by inadequate data exchange. If the capability to exchange data freely existed, we would know how to use it in the ways described through the rest of this presentation.

3 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson What Strategies are available to Private Payers that meet business and regulatory needs in Controlling the Cost of Oncology Care? We would advocate for focusing on the bottom two responses, but to be effective would require advanced data exchanges  Pay less for clinical care and services  Manage more (prior authorizations)  Shift responsibility to member (co-payments, value-based insurance, reference pricing)  Pay for performance/value (gain-sharing)  Risk shifting (ACO, IDN risk contract)

4 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson What Strategies has CMS put forth to inform the analytics to drive towards clinical outputs that meet business and regulatory needs? Affordable Care Act Scalable Success in Value-Based Care World Triple Aim Goals/NQS 2015 SGR Fix/MACRA Advanced Analytics/Data Sharing* Measureable Clinical Outputs

5 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The NQS pursues three broad aims to guide and assess local, state and national efforts to improve health and the quality of health care. 3 Goals ADOPT Provide better, more affordable care for the individual and the community 6 Priorities FOCUS Guide efforts to improve health and healthcare quality Performance Programs INCENTIVIZE Incentivize stakeholders through Accountable Care Organizations (ACOs) and Bundled Payments ProvidersHospitals/IDNs Payers

6 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The six priorities are the quality domains used by CMS to drive payment reform. Patient Safety: Making care safer by reducing harm caused in the delivery of care Patient Experience: Ensuring that each person and family members are engaged as partners in their care Care Coordination: Promoting effective communication and coordination of care Population/Community Health: Working with communities to promote wide use of best practices to enable healthy living Clinical Care: Promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease Total Overall Costs: Making quality care more affordable for individuals, families, employers, and governments by developing and spreading new healthcare delivery models

7 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The “Priorities” represent the six quality domains used by CMS to drive value-based care Clinical Care Promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease Appropriate Use Clinical Outcomes/Intermediate Outcomes Medication Adherence Patient Reported Outcomes Patient Experience Ensuring that each person and family members are engaged as partners in their care AHRQ CAHPS – Patient Experience of Care Shared Decision Making Care Plan Creation Patient Activation Population/ Community Health Working with communities to promote wide use of best practices to enable healthy living Screening/Preventive Services Patient Safety Making care safer by reducing harm caused in the delivery of care Health Care Acquired Conditions Potentially Avoidable Complications Care Coordination Promoting effective communication and coordination of care Communication of Care Plan Hospital Readmissions Medication Reconciliation Total Overall Costs Making quality care more affordable for individuals, families, employers and governments by developing and spreading new healthcare delivery models Global/Capitated Costs/Medicare Spending Beneficiary Episode of Care Costs for: 3 - Acute & 3 - Chronic Conditions Priority/DomainDefinitionSub-domains

8 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Providers  Physician Quality Reporting System  EHR Meaningful Use  Physician Value- Based Modifier Hospitals/IDNs  Inpatient Quality Reporting  Hospital Value- Based Purchasing  Hospital Readmissions  Medicare Shared Savings *NCQA - National Committee for Quality Assurance, HEDIS - Healthcare Effectiveness Data and Information Set † If participating Payers  NCQA – HEDIS *†  Medicare Star †  Managed Medicaid †  Health Insurance Exchange Quality Program † Accountable Care Organizations (ACOs) & Bundled Payments CMS Performance Programs: Lots of data traffic, but no “mass transit” available yet on the management of scalability issues

9 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson 9 V =V = Q C Private Payer Performance Program: assess overall value in oncology care based on total cost of care and care experience evidence Best Supportive Care Avoidance Hospital Days Avoidance ED Visits Site of Service Costs ↓ Medically Unnecessary Care ↓ at EOL Guideline-Based Therapies Targeted Impact Low Toxicities Improved Survival Improved QOL

10 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Drive efficient use of evidence-based medicine – Leverage technology platforms that provide content and workflows – Integrate those platforms into multiple payer and provider systems – Simplify the administrative processes for providers – Improve the care experience for the members with cancer Avoid waste and misuse of medical services – Align provider incentives, which includes transparency & reporting (e.g., Oncology Medical Home) – Improve network configuration (using measurement tools and analytics) to drive improved cost and quality – Implement better decision support strategies – Provide improved patient support in active treatment and care transitions Leverage and integrate the many current (and future) HIT cancer-care initiatives – Create a seamless, end to end clinical treatment experience for all patients and providers What’s a Winning Strategy for both Public and Private Payers in Oncology Care Management?

11 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Problem: We don’t know the granular information about patients in real time, those that give clinical insight, and depend on information exchange. Is data liquidity the missing puzzle piece?

12 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson “A good oncology practice is a good oncology practice…. So how do you define good?” Quote from a former colleague well-known in this space In the Absence of Data, Definitions become Difficult

13 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Increased adherence to evidence-based guidelines lowers cost without negatively impacting treatment efficacy No change in overall survival between the study groups Source: Neubauer MA, et al. Cost Effectiveness of Evidence-Based Treatment Guidelines for the Treatment of Non– Small-Cell Lung Cancer in the Community Setting. J Oncol Pract. 2010;6(1): Significantly lowered cost in the case group vs. 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.

14 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Proof that you don’t have to sacrifice quality for efficiency in cancer care management *Treatment that meets the following criteria: maximized survival benefit, minimum toxicities, cost savings advantages Neubauer MA, et al. Cost Effectiveness of Evidence-Based Treatment Guidelines for the Treatment of Non–Small-Cell Lung Cancer in the Community Setting. J Oncol Pract. 2010;6(1): $18,042 $27,737 Lower costs and comparable survival rates

15 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Do physicians follow pathways? Towle MA, et al. The National Practice Benchmark for Oncology, 2013 Report on 2012 Data. J Oncol Pract. 2013;9(6s):20s-38s.

16 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Example of an ethical program: pathways are derived from a focus on high-quality, cost-effective regimens  Eligible for Instant Authorization Eligible for:  Instant Authorization  Quality Performance Plan

17 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson 17 The Pathways Cross-walk to Provider Level Analytics

18 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Keeping score Minimal standards Training Relationship Pathways are an important first step in evidence-based care management at the oncology medical condition level

19 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The Oncology Medical Home is the next step: Requires Analytics over multiple domains

20 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Measureable Outputs in Quality reporting: clinical process and financial measures from private payer example Clinical measures 1.Adherence to evidence-based treatment guidelines (including treatment exceeding lines of therapy and documentation of off-pathways reasons) 2.Cancer staging 3.Performance status 4.Pain assessment 5.End of life metrics (ACP documentation, hospice enrollment, hospice length of stay) 6.Patient satisfaction Financial measures 1.ER visits (and costs) 2.Hospitalization rate (and costs) 3.Chemotherapy costs NOTE: These measures form the basis for the shared savings calculation

21 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Oncology Medical Home programs can manage members, streamline care delivery, reduce costs for Private Payers 10% 14% 18% 24% Fewer cancer-related ER visits and in-patient admissions Fewer cancer-related in-patient hospital days Greater adherence to Pathways regimen 76% 63% Hoverman JR, et al. Opening the Black Box: The Impact of an Oncology Management Program Consisting of Level I Pathways and an Outbound Nurse Call System. J Oncol Pract. 2014;10(1):63-68.

22 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson CMMI OCM 1 Oncology-Focused Model 2 WellPoint Cancer Care Quality Program 3 Select Oncology Alternative Payment Models—Similar Key Themes in the CMS Payer world vs. Private Payer example CMS WellPoint Key Themes: Clinical Benefit, Safety, Cost, Improved Quality Select oncology alternative payment models CMMI=Center for Medicare & Medicaid Innovation; OCM=Oncology Care Model. 1. Centers for Medicare & Medicaid Services, Innovation Center. Oncology care model. Accessed August 19, American Society of Clinical Oncology. The State of Cancer Care in America, 2015 A Report by the American Society of Clinical Oncology. J Oncol Pract. 2015;11(2): Medscape. Medical News ‒ WellPoint offers oncologists incentives to follow pathways. Accessed August 26, 2015.

23 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson  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 Expected benefits to healthcare consumers

24 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The CMMI Oncology Care Model  The Oncology Care Model is a voluntary program that encourages participating practices to improve care and lower costs through episode-based, performance-based payments that financially incentivize high-quality, coordinated care  Participating practices will also receive monthly care management payments for each Medicare fee-for-service beneficiary during an episode to support oncology practice transformation, including the provision of comprehensive, coordinated patient care  Encourages both Medicare and commercial payers to participate

25 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson The CMMI Oncology Care Model (cont’d) The Oncology Care Model is a 5-year model, beginning in spring  Approximately 48 private payers and approximately 443 practices signed letters of intent to participate 2,3  The model for Medicare beneficiaries uses a fee-for-service plan 1  An episode is 6 months in length and is triggered by chemotherapy (given by any route, with the exception of topical administration) 1.Centers for Medicare & Medicaid Services, Innovation Center. Oncology care model request for applications. Accessed August 19, Centers for Medicare & Medicaid Services, Innovation Center. OCM payer list. Accessed August 28, Centers for Medicare & Medicaid Services, Innovation Center. OCM practice list. Accessed August 28, 2015.

26 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson OCM-Required Documentation for the 13 Components in the Institute of Medicine Care Management Plan 1,2 1. Institute of Medicine. Delivering High-Quality Cancer Care: Charting a New Course for a System in Crisis. Washington, DC: The National Academies Press; Centers for Medicare & Medicaid Services, Innovation Center. Oncology care model request for applications. Accessed August 19, Patient information 2. Diagnosis 3. Prognosis 4. Treatment goals 5. Treatment plan and proposed duration 6. Expected response to treatment 7. Treatment benefits and harms, including common and rare toxicities and how to manage these toxicities, as well as short-term and late effects of treatment 8. Information on quality of life and a patient’s likely experience with treatment 9. Who will take responsibility for specific aspects of a patient’s care 10. Advanced care plans 11. Estimated total and out-of-pocket costs of cancer treatment 12. A plan for addressing a patient’s psychosocial health needs, including psychological, vocational, disability, legal, or financial concerns and their management 13. Survivorship plan 26

27 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson No Difference if Oncology Medical Home is funded through CMMI or a Private Payer: Analytics become the same essential Goals of Process 1.Standardize practice benchmarking 2.Identify opportunities for improvement 3.Basis for shared savings 4.COMMUNICATE

28 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson How do you meet clinical quality of care demands (knowledgeable and empowered patients) and financial demands (reduced ER and inpatient use)?  Triage reform  Patient education  Extended office hours  Standardized processes of care  Working smarter, not harder  Have a better, smarter, real time data exchange pipeline

29 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson What other aspect of care, in which we desperately need to reduce costs, could we address? End-of-life costs of care Source: Chastek MA et al. Health Care Costs for Patients With Cancer at the End of Life. J Oncol Pract. 2012;8(6s):75s-80s

30 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Where we are today: End-of-life use of medical services Source: Trends in Cancer Care Near the End of Life, A Dartmouth Atlas of Health Care Brief

31 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Quality Dashboard empowered by Data Liquidity: Clinical Process Measures of Evidence-based Oncology Care Management  Adherence to evidence-based treatment guidelines, including treatment exceeding lines of therapy and documentation of off-pathways reasons  Cancer staging  Performance status  Pain assessment  End of life metrics, e.g., ACP documentation, hospice enrollment, hospice length of stay  Patient satisfaction

32 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Schilsky R., Implementing Personalized Cancer Care, Nature Reviews Clinical Oncology,2014 ;11, Other solvable issues with improved Data Liquidity: A logical manner in which to use genomic information to inform the science

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34 Providing Services for Janssen Pharmaceutical Companies of Johnson & Johnson Thank You!