1. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. 1

2. Opportunities for Value Creation June 9, 2016 Tom Simmer, M.D. Senior Vice President & Chief Medical Officer Blue Cross Blue Shield of Michigan

3. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. Root causes of performance issues in healthcare Poorly aligned payment model. Must support population management infrastructure and sustain a more pro-active and effective model of care. Lack of population focus. Identify population served (ACRS), routine outreach and point of care intervention (Registry and Patient Portal Function), performance measurement and improvement. Fragmented healthcare delivery. Information shared across settings of care to achieve an integrated care process. (ADT, Medication Reconciliation) Weak primary care foundation. Patient Centered Medical Homes with proactive, data-driven care process and care teams coordinate care across settings. (ACRS, Registry, Patient Portal, ADT, Med Rec) Lack of focus on process excellence. Value stream management within and across settings of care (Link data to process) Passive role of the patient in healthcare. Informed, activated patients adopt healthy lifestyle and self manage medical conditions guided and supported by a healthcare team. 3

4. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. Payment Based on Population Outcomes Accountable Care Organizations: Payments are based on costs and quality measured on an attributed population compared to prior performance. Capitation: Payments are fixed for a population; financial performance entirely based on population level costs compared with capitation pool, based on the population size, generally adjusted for disease burden and quality performance. BCBSM Value-Based Reimbursement: Based on population level results using a “weighted average” performance formula. Focus on PMPM cost and HEDIS / Stars Quality Measures. Fee for Service: The wheel is still turning but the hamster is dead. 4

5. Coordinated, Pro-active Care Model Patient role changes from passive user of services to an informed, activated health steward. Patient Centered Medical Home Teams care for patients across time and settings of care. 5 (4)

6. Why a “Statewide” Service? 6

7. New PCP VBR Opportunities – Effective 7/1/16 7

8. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. “Through the hoop, Bob! Through the hoop!” 8

9. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. Information Flowing Facilitate the creation of Active Care Relationship Files (ACRS) which includes extensive information for the provider directory as well as defining and maintaining all of the care relationships. Facilitate implementation of the Admission, Discharge, and Transfer notification system to drive clinical processes that reduce ED visits and re-admissions. 9

10. Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association. Information Flowing Facilitate development and use of the point of care and outreach systems to assure consistent delivery of services. Create a process to close gaps in care. Promote capture of “supplemental information” to support HEDIS/Stars/PQRS data collection through the MSMS-MiHIN collaboration process. Care of patients across time and settings of care requires much more process management and implies team-based care. 9