1. A Blue Cross and Blue Shield Association Presentation Quality in Practice: The BCBS Blue Distinction ® Program Iowa Health Buyers Alliance Annual Conference Robert Krause, Director National Labor Office Blue Cross and Blue Shield Association

2. 280535 2 Blue Cross and Blue Shield Association  A national federation of 39 independent, community- based and locally operated Blue Cross and Blue Shield companies  Collectively we provide healthcare coverage for more than 102 million individuals – 1 in 3 Americans  For more information, visit www.BCBS.com www.BCBS.com

3. 280535 3 Mission The mission of the National Labor Office (NLO) is to position the Blues as Labor’s healthcare partner of choice.

4. 280535 4 Plans Organized Labor  Marketing tools  Database  Education  Conferences  New healthcare products Affordable and accessible healthcare Mission

5. 280535 5 Our Charge The National Labor Office represents the Blue Cross and Blue Shield System with organized labor for the ultimate purpose of acquiring and retaining contracts for Blue Cross and Blue Shield Plans

6. 280535 6 NLO Sponsor Plans – Voluntary Arkansas BCBS Alabama BCBS BS of California Anthem/Wellpoint, Inc.(14 states) –Empire BC – East Region –BC of California – West Region BCBS of Delaware BCBS of Florida BCBS of Illinois BCBS of Massachusetts BCBS of Michigan BCBS of Minnesota BCBS of Montana BCBS of Nebraska Wellmark BCBS Regence BCBS Excellus BCBS Western New York BCBS CareFirst BCBS Horizon BCBS Premera Blue Cross BCBS of Oklahoma Capital BC Independence BC Highmark BCBS BCBS of Rhode Island BCBS of South Carolina BCBS of Tennessee Mountain State BCBS HMSA - Hawaii

7. 280535 7 NLO Governance Structure NLO Board of Directors Executive Committee Labor Advisory Committee (including LAC Liaison to the Board) Early Retiree/VEBA Education and Training Revenue Strategic Alliance Market Research Distribution Channel/Partners National Labor College Blue Labor Basics Labor Certification Program Labor Prospects Plan Market Survey

8. 280535 8 Blue Assets and Programs

9. 280535 9 Blue Assets and Programs: Maximizing the Value of Your Customer’s Healthcare Dollar Your Customer’s Critical Healthcare Needs Target healthcare dollars Better overall health outcomes and quantifiably lower costs Increasing member health engagement at the worksite The Strength that The Blues ® Deliver ®

10. 280535 10 Quality-based designation for facilities with better overall outcomes for high cost, high variability health conditions Evidence-based selection criteria developed in collaboration with expert clinicians and leading professional organizationsEvidence-based selection criteria developed in collaboration with expert clinicians and leading professional organizations Broad, inclusive scope allows quality choices in four specialties for your members nationwide (with more coming)Broad, inclusive scope allows quality choices in four specialties for your members nationwide (with more coming) Simplified member-directed access minimizes need for employer involvementSimplified member-directed access minimizes need for employer involvement Results in quantifiably better overall health outcomes and lower costsResults in quantifiably better overall health outcomes and lower costs Provides a quality-based, cost-effective means for flexible benefit designProvides a quality-based, cost-effective means for flexible benefit design Better Outcomes and Better Value for Specialty Care Note: Designation as Blue Distinction Centers means that these facilities’ overall experience and aggregate data met objective criteria established in collaboration with expert clinicians’ and leading professional organizations’ recommendations. Individual outcomes may vary. ®

11. 280535 11 Bariatric SurgeryCardiac Care Complex & Rare CancersTransplants Evidence-based selection criteria developed in collaboration with expert clinicians and leading professional organizations Criteria are transparent, available to the public on BCBS.com Better Outcomes and Better Value for Specialty Care These organizations have provided information and input, but do not formally endorse the Blue Distinction Centers program. American Society for Metabolic & Bariatric Surgery (ASMBS) Surgical Review Corporation (SRC) American College of Cardiology (ACC) Society of Thoracic Surgeons (STS) National Comprehensive Cancer Network (NCCN) Center for International Blood and Marrow Transplant Research (CIBMTR) Scientific Registry of Transplant Recipients (SRTR) Foundation for the Accreditation of Cellular Therapy (FACT) ®

12. 280535 12 Broad, inclusive scope allows quality choices in four specialties for your members nationwide We will expand specialty areas and increase the number of Blue Distinction designated facilities Better Outcomes and Better Value for Specialty Care More than 800 Designations across 45 states ® Blue Distinction Centers for Cardiac Care ® Blue Distinction Centers for Bariatric Surgery ® Blue Distinction Centers for Transplants ® Blue Distinction Centers Complex and Rare Cancers SM

13. 280535 13 Simplified member-directed access minimizes need for employer involvement DRAFT members can easily learn more about Blue Distinction with a click of a mouse National Doctor & Hospital Finder enables hospital comparisons based on Blue Distinction status Better Outcomes and Better Value for Specialty Care Memorial Hospital 324 W. Main Southpaw, MI 32012 (313) 777-6329 St. Joseph’s Hospital 123 Beach St. Lakeview, MI 32779 (313) 777-1234 Lake County Medical Center 5734 First Ave. Quinipshaw, MI 32968 (313) 723-5681 North Central Hospital 1 North Central Blvd. Pikesville, MI 32553 (316) 878-5885 ®

14. 280535 14 Results in quantifiably better overall health outcomes… Better Outcomes and Better Value for Specialty Care Source: Based on claims data from BlueCross BlueShield Plans in eleven states 5% Cumulative Readmissions (0-90 Days) Coronary Artery Bypass Graft BDC Other 11% Angioplasty (CABG)(PCI) ®

15. 280535 15... and quantifiably lower costs Better Outcomes and Better Value for Specialty Care Average Cost Savings per Procedure (1) (per 90-day episode) x = $65,512 Potential Savings per Year 8.3 Average Number of Procedures per Year (2) (per 5,000 member group) Procedure: CABG Procedure: Angioplasty x = $30,996 21.6 $1,435 Assumes members are not currently utilizing Blue Distinction Centers for these procedures. Source: (1) Based on claims data from BlueCross BlueShield Plans in eleven states, based on 90-day episode (2 ) American Heart Association: Heart Disease and Stroke Statistics—2008 Update $7,893 ®

16. 280535 16 Provides a quality-based, cost-effective means for flexible benefit design National employers using and promoting Blue Distinction for member education and highlighting facilities offering better overall outcomes Others developing differential benefit designs to encourage or require use of Blue Distinction Centers Better Outcomes and Better Value for Specialty Care ®

17. 280535 17 Provides a quality-based, cost-effective means for flexible benefit design Example of Benefit Design driven by Blue Distinction Better Outcomes and Better Value for Specialty Care 52,000 members 2,500 branch offices across 24 states Tailored benefit design to compensate for bariatric surgery only at Blue Distinction Centers, added supporting travel benefit Effectively steered members to higher quality care …[BCBS] established bariatric centers of excellence. That’s helped us from the standpoint of making sure it’s a high quality service that’s provided." – Bruce Wilson Senior Vice President, Compensation and Benefits …[BCBS] established bariatric centers of excellence. That’s helped us from the standpoint of making sure it’s a high quality service that’s provided." – Bruce Wilson Senior Vice President, Compensation and Benefits ®

18. 280535 18 High incidence of cardiac care need in SIC classification, particularly among older, male workers in Upper Midwest BCBS aggregate claims data triggers targeted education materials and resources to at-risk worksites –Biometric screenings –Health fairs/ workshops –Distribution of Blue Distinction Provider Directory Members who require specialty care and select Blue Distinction facilities experience better overall outcomes, with fewer complications and lower overall costs ABC Manufacturing Better Outcomes and Better Value for Specialty Care ®

19. 280535 19 Blue Assets and Programs: Maximizing the Value of Your Customer’s Healthcare Dollar Your Customer’s Critical Healthcare Needs Target healthcare dollars Better overall health outcomes and quantifiably lower costs Increasing member health engagement at the worksite The Strength that The Blues ® Deliver ®

20. 280535 20 Questions??