1. Better Health, Lower Health Costs: An Overview of the Asheville Model Right Care Initiative Scott Sproull, Vice President GlaxoSmithKline

2. People in America having one or more chronic diseases: 69% elderly 50% middle aged 25%+ young adult 45% of the uninsured 1.Rundall T, et al. As good as it gets? Chronic care management in nine leading U.S. physician organizations. BMJ 2002;325:958-961. 2. Anderson G, Knickman J. Changing the chronic care system to meet people’s needs. Health Aff. 2001; 20 (6): 146-160; Hoffman, C., Rice, D. & Sung, H., Persons with chronic conditions: their prevalence and costs. JAMA. 1996; 276 (18): 1473-1479. Chronic Disease – Common and Costly49% 75% Percent of Health Care expenditure on chronic diseases: $5,300 per person spent on chronic disease $1.6 trillion overall

3. 1995 The problem is growing: Obesity in America (*BMI 30, or about 30 lbs overweight for 5’4” person) 1990 No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30% 2005 Source: CDC, “Overweight and Obesity: Obesity Trends: U.S. Obesity Trends 1985–2005” (2006)

4. Traditional Payer Response to Rising Costs Aggressive cost-control strategies –Cutting pharmacy budget –Restricting health services (coverage, formularies) –Cost-shifting to employees (higher co-pays for physician visits and medicines)

5. Impact of Cost Shifting

6. The Asheville Project - Diabetes Program Specifics Employees participated in a diabetes education program. Waived co-pays on prescription medications and medical supplies. Offered employees incentives to participate. Impact of Program Annual average insurance claims decreased by $2,704 per patient in the first follow-up year and by $6,502 per patient in the fifth year. Savings on annual direct medical costs ranging from $1,622 - $3,356 per patient. Absenteeism was cut by more than half – from 12.6 days to 6.2 days a year. Increased productivity valued at $18,000 per year.

7. The Asheville Project – Diabetes The Value of Medicines and Coordinated Care Reduced Healthcare Costs $7,250 $4.679 -35% Reduced Sick Days 12.6 Days 6.4 Days -50% Improved Behavior test last 6 mos

8. The BRiDGE Project – Lancaster County, PA Applying the Asheville Principles to Other Employers Reduced Healthcare Costs $19,318 $13,506 -30% Other Improvements $21,961 -39% Vs Projection Vs Baseline

9. Diabetes Ten City Challenge Health improved: Percent improvement in patients achieving national HEDIS goals: 23% Blood Glucose (HbA1c<7) 39%Blood Pressure (<130/80 mmHg) 11%Cholesterol (LDL-C <100 mg/dL) Prevention increased: Flu vaccinations increased from 32% to 65% Eye exams increased from 57% to 81% Foot exams increased from 34% to 74% Key elements: Pharmacist Health Coach Removed barriers to care by waving co-pays Patient self management Community based coordinated care Charleston/Spartanburg (SC), Chicago (IL), Colorado Springs (CO), Cumberland (MD), Dalton (GA), Honolulu (HI), Los Angeles (CA), Milwaukee (WI), Pittsburgh (PA), Tampa Bay (FL) Actual Projected 7.24% Total Cost / patient Average total per patient health care costs went down by $1079 compared to projected costs. Economic Evaluation of first-year data $14,909 $13,830 19.44% Tot. Prescription Costs 19.24% Tot. Medical Costs Health care costs dropped: J Am Pharm Assoc. 2009; 49:3; e52-e60 (May / June 2009)

10. Medication Adherence Source: 3 Sokol MC, McGuigan KA, Verbrugge RR, Epstein RS. Impact of medication adherence on hospitalization risk and healthcare cost. Med Care. 2005;43(6):521-530.

11. Program Specifics Education on cardiovascular and cerebrovascular (CV) risk reduction. Employees met regularly with trained community pharmacists who act as their health coach and partner. Waived co-pays on prescription medication. Impact of Program CV medication use increased nearly threefold. Rate of CV events dropped from 77 per 1,000 to 38 per 1,000. CV-related medical costs decreased by 46.5% ($1,362 PPPY to $734 PPPY). Total program showed a 12.6% positive return Source: 1 Source: The APhA Foundation, Asheville Cardiovascular Group Data - HealthMapRx, slides 2 and 12, 2007. The Asheville Project - Cardiovascular

12. Summary of Asheville Experience – Considerations for California It works in multiple therapeutic areas and is scalable It demonstrates positive clinical and economic outcomes through peer- reviewed studies Critical program requirements: –Coordinate care/multi-discipline approach (decreases variation in care) –Lower barriers to care through incentives (increases participation) –Health coach fuels patient self management (behavior modification) –Measure the program with clinical outcome endpoints

13. DTCC HEDIS Indicators J Am Pharm Assoc. 2009;49:e52–e60. doi:10.1331/JAPhA.2009.09015

14. Principles of Value-Based Health Management An approach to improve health, save on healthcare with other economic potential. The three principles of value-based health management: 1.Reduce Barriers: Barriers to access keep people from getting the care they need like high co-pays, coinsurance and limited formulary coverage 2.Coordinate Patient Care: Leverage the knowledge of multiple sources to educate, guide and monitor patients. 3.Focus on Prevention: Provide beneficiaries access to preventive care

15. APPENDIX

16. The storm of diabetes is brewing Diagnosed Diabetes Among Adults 19952005 Sources: CDC, National Diabetes Surveillance System; Diabetes Prevalence by State 2005; American Diabetes Association, Diabetes Statistics; CDC, SEARCH for Diabetes in Youth Fact Sheet (2006) (youth type-2 diabetes) 16

17. DTCC – University of Southern California USC is the largest private employer in the City of Los Angeles, with over 17,000 employees USC provides incentives to patient participants in the form of waived co-pays for diabetes-related medications and supplies Services are provided by USC clinical pharmacists: –Patient counseling and education –Self-management training –Medication therapy management Additional resources: –Diabetes nurses and Certified Diabetes Educators –Dietitians and lifestyle coaches –Local Endocrinologists USC Media Contact: National Media Contact: –Kukla Vera –kvera@pharmacy.usc.edu

18. Toll of diabetes calls for new approach Every day in the US, diabetes causes an estimated: - 220 amputations - 33-66 people lose their eyesight - 121 people start treatment for end-stage kidney disease Results of Type 2 diabetes in children increased as much as 10-fold over the past 20 years Source: CDC, “Complications of Diabetes in the United States,”; Ludwig DS & Ebbeling CB, “Type 2 Diabetes Mellitus in Children Primary Care and Public Health Considerations,” JAMA. 2001;286:1427-1430. 18