1. The Industrialization of Healthcare:
Driving Value Through Technology & Analytics
Brad Ryan, M.D. General Manager IMS Payer and Provider Solutions
Oct. 16, 2012

2. 1 in 5 Medicare FFS patients readmit within 30 days of discharge1
Market opportunity
Readmissions
Coordination of Care
Pharmacy
20%
$300B
$500B
1 in 5 Medicare FFS patients readmit within 30 days of discharge1
Treating 60% of high-cost chronic condition patients yields $300B in savings over 10 years3
8% of total health expenditure = $500B globally can be avoided with optimized use of medicines5
21K
$62B
50%
Organized into categories of Compliance/Readmissions …Coordination of care….Pharmacy….
20%- Research shows that nearly one in five Medicare patients in the Fee-for-Service (FFS) program had readmissions within 30 days of discharge from a hospital stay.1
21K- Roughly 13.4% of acute myocardial infarction Medicare admissions were followed by a readmission within 15 days, accounting for nearly 21,000 admissions at a cost of $136 million. 2rdination of Care
$300 Bn - Reducing the cost of treating 60% of high-cost patients with chronic conditions could yield savings of $300 billion over 10 years. 3
$62Bb - A total of 1.1% of global total health expenditure (THE), or 62bn USd worldwide, can be avoided if timely treatment is provided.4
$500bn -8% of total health expenditure or about $500Bn per year globally, can be avoided with optimized use of medicines, which would prevent avoidable Hospitalizations’ and improve medicine use.5
50% - Over 50% of prescriptions are not taken as directed6 estimated to drive up to $290 billion in additional care costs per year7
All sources in footnotes
FYI -- Others (Adherence, chronic Disease, etc.)
$3 - Of every $4 spent on health care is attributed to patients with chronic diseases, or nearly $7,900 for every America with a chronic disease
32 million – Additional individuals that may gain coverage as a result of legislative changes due to health care reform
25% - Proportion of revenue that 40% of hospitals believe will be tied to performance- based reimbursement
140 million – People who live with chronic conditions and disabilities that require complex care coordination across multiple providers in the US.
20% - Proportion of Medicare patients that are readmitted within 30 days after a hospital discharge, and over half of these patients don’t see a physician between discharge and readmission
25% - Patients with coronary artery disease who discontinued drug therapy within 6 months
30% - The one-year risk of hospitalization for diabetes patients with low adherence versus 13% for patients with high adherence
$290 Bn – The current annual; cost of poor adherence
75% - Proportion of US healthcare spending that goes towards the treatment of chronic disease
21% - Better adherence for diabetes patients who received bi-weekly automated assessment calls and self-care training by a nurse than those patients that received usual care
AMI readmissions
13.4% or 21,000 AMI Medicare admissions readmit within 15 days, at a cost of $136M2
1.1% of global total health expenditure or 62B worldwide, can be avoided with timely treatment4
Prescriptions not taken as directed6 drive $260B in additional care costs7
Sources:
1—Jencks SF, Williams MV, Coleman EA. Rehospitalizations among Patients in the Medicare Fee-for-Service Program. New England Journal of Med. 2009;360(14):1418–28
2— MedPAC. Report to Congress: Promoting Greater Efficiency in Medicare, Oct 2008
3— David Blumenthal, MD, “More focus on high-cost patients could save $300B,” Healthcare Finance News, Apr. 2012
4,5,7— IMS Institute, Advancing the Responsible Uses of Medicines, October 2012
6— Lars Osterberg and Terrence Blaschke, “Adherence to Medication,” New England Journal of Medicine, 2005
IMS Provider & Payer Solutions – StrataRx Conference
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3. In·dus·tri·al·i·za·tion
3 bar treatment
In·dus·tri·al·i·za·tion 1
a historical phase, producing overall change in circumstances and resources of production or industry
characterized by individual judgment; manual labor replaced by mechanized mass production, use of technological innovation to solve problems, as well as more efficient division of labor
the large-scale introduction of manufacturing, advanced technical enterprises, and other productive activity into an area, society or country
A historical phase, producing overall change in circumstances and resources of production or industry 2
Characterized by individual judgment; manual labor replaced by mechanized mass production, use of technological innovation to solve problems, as well as more efficient division of labor
Explain session title and set-up for next slide on intelligent hc systems
Touch on color key points
Modified slightly from Dictionary.com and 3
The large-scale introduction of manufacturing, advanced technical enterprises, and other productive activity into an area, society, country
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4. New expectations of what’s possible
Intelligent
People
Intelligent
Tools
Intelligent
Systems
Point-in-time
Apprentice model
Judgments
“Art of medicine”
Highly specialized
Technology & clinical advances
Vast treatment options
Disparate patient experiences
Limited comparisons
Patient-centered
Technology-enabled
Clinical evidence driven
Guidelines & protocols
Reduced treatment variation
Updates:
Intelligent Tools – pacemaker image in icon
System – connected network icon image
Script notes:
Use transportation analogy….History of healthcare is much like the history of other industrialized functions, take transportation for example.
Intelligent individuals
The early days of healthcare and even into the mid-20th century, we had smart doctors – highly intelligence individuals, highly skilled, but limited in capabilities and tools – not to mention the populations’ limited access to these highly sought out professionals – who relied upon trial and error judgments to determine what the best treatment was for their patients – highly influenced by personal perspectives, experiences, education, geographic location, available assistance, medication and techniques – etc.
Point-in-time view
Knowledge and experience via apprentice model
Trial-and-error and cost-benefit judgments
“Art of medicine”
Superstar Mechanisms/Tools
In the late 20th century, we found ourselves racing from the model T to highly-specialized Formula One race cars – or in Healthcare terms, highly specialized physicians, high-tech machines/robotics, in highly specialized facilities – with networks of renowned specialists – yet still dependent on human judgment. When to use which treatment and on which patients — still matters of judgment, not measurement. The decision is, once again, left to a doctor’s informed intuition. As a result, different doctors frequently end up coming up with different answers to the same question. Making our HC system vastly more expensive than any other country’s, but our results are not vastly better.
Highly specialized professionals; advanced tools
Technology & clinical advances using evidence produced and consumed by the community
Vast number of options; informed intuition and best available information
Disparate patient experiences; limited ability to compare
Intelligently Run Healthcare Systems – system of the near, not distant, future
Based on analytics – total patient views, outcomes tracking, measurement and benchmarking, -- real word evidence, etc.
What healthcare could look like.
Patient-centered view across treatments, sites, providers
Technology enabled
Based on clinical evidence, driven by guidelines & protocols
Reduced treatment variation and greater efficiency
Interesting source material: –
Foundation of Any Industry
+ Quality + Safety + Cost
+ Quality + Safety - Cost
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5. What would it take to create this intelligent system?
Audience interaction question
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6. Insights at Right Time, Right Place
Mobile Tools
Patient Centric Data
Insights at Right Time, Right Place
Technology
What would it take to create this intelligent system?
Physician Engagement
Potential audience answers
Big Data Capabilities
Incentives
Collaboration
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7. Comprehensive, connected healthcare data & analytics
Medical Claims
Integrate 7 Billion Transactions / Year
Prescribers
1 Million Tracked Weekly
Rx Information 3.0 Billion / Year
Healthcare Visits 9M Inpatient & 96M Outpatient / Year
Longitudinal Rx
2.4 Billion / Year
A SINGULAR VIEW
Near-census treatment insights
Dynamic representation of total patient care
Disparate data sources integrated
Privacy protected, encrypted
Groups/IDNs
760 Entities
Clinical Specialties
All, including cardiology, neurology, oncology
Treatments
70+% Dispensed Prescriptions
Payers / Plans
8,000 Plans
Providers
1M+ professionals,
1M organizations
& 2M affiliations
Consumers 130M Consumer Profiles
Unique Patients
260 Million / Year
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8. The power of linked, real-world patient data
What is known about patients outside a facility? membership? episode?
Pharmacy/ Prescription Retail OTC
Medical Office
/Clinic
Behavioral & Demographics
Hospital Inpatient/ Outpatient
Laboratory/ General EMR Labs
Long–Term Care
Patient/ Consumer ID
Patient ID
Patient ID
Patient ID
Patient ID
Patient ID
Physician IDs (referring & rendering)
Prescriber IDs
Physician IDs
Physician IDs (referring & rendering)
Physician IDs
Physician IDs
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Copyright ©  2012 IMS Health.  All Rights Reserved.

9. “Big Data,” more than a data warehouse
Data Lifecycle
Stage 0:
Data Preparation
Stage 1:
Data Collection
Stage 2: Data Transformation
Stage 3: Building Intelligence
Stage 4: Application Delivery
Stage 5: Knowledge Management
Identification
Qualification
Preparation
Implementation
Quality Assurance
Validation / Certification
Product Integration
Training
Medical / RX
EMR
Wholesaler
Hospital
Survey Data
On-Site Clinic
OTC
Dental / Vision
Lab Results Data
Privacy Protection
Standardization
Customization
Enhancement
Quality Assurance
Quality Improvement
Integration
Proprietary Methods
Episodes of Care
Performance Measures
Disease Staging
Norms / Benchmarks
Market Scan
Provider
Clinical Measurement
SFE
Commercial Analytics
R&D
Pharmacy
Pharmacy Benefit
Strategies
Consumer
Program Integrity
Government
Data
Analytics
Consulting
Services
Emphasizes our unique ability to handle industrial-strength data and convert to intelligence
GLOBAL
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10. In what ways can big data add system intelligence?
Audience interaction question
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11. Convergence of unmet need
Manufacturers & Distributors
Pharmacies, Other Suppliers
Hospitals
& Health Systems
PBM Care/Disease Management
QUALITY
ACCESS
Clinicians
COST
UNCERTAINTY
Patients, Consumers, Caregivers
Health Plans
Employers
HIT, HIE, EMR, Portals
Government
Players and roles differ by geography or construct Common themes across stakeholders and geographies
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Copyright ©  2012 IMS Health.  All Rights Reserved.

12. Key applications for advanced analytics
Four areas of greatest impact to improve value
Coordinate Integrated
Patient Care
Reduce Wasteful Variations
Engage Physicians and Patients
Support Pay-for-Performance
Measure, benchmark,
and track performance to reduce wasteful variations and achieve best practice in care delivery
Profile,
segment, attract,
and engage at the physician and patient level
Recognize
and reward performance for risk sharing, value-based purchasing and other alternative incentive models
Influence and optimize site, channel and resources
with a longitudinal view of the patient journey
Narrow today to just four key applications with the greatest future impact on healthcare delivery:
Reduce wasteful variations in clinical practice
Engage the right physicians and patients to improve outcomes
Drive increased transparency to support pay-for-performance and risk-sharing models
Coordinate integrated patient care across sites and channels
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Copyright ©  2012 IMS Health.  All Rights Reserved.

13. Reduce Wasteful Variations
Increasing quality and efficiency in prescribing, ensuring appropriate Rx use and spend
A large national health plan’s pharmacy program
Identify opportunities to optimize cost and utilization
Demonstrate quality & efficiency
Gain insight from comparative benchmarks – national, state, local
Inform formulary strategies to drive cost savings and improve patient outcomes
Issues:
Pinpoint drivers of high prescription utilization and costs and inappropriate Rx use to demonstrate quality and efficiency gains
Identify appropriate local comparative benchmarks, had none
Identify non-compliant, high cost patients
Monitor prescribing patterns
Data: Views into network doctors and prescribing near-census patients to measure patient Rx compliance
Analysis:
Monitor and analyze overall Rx utilization and costs
Track utilization & costs for Generic Switch/Formulary Change specific to lipid-lowering agents
Generate/analyze quality metrics (e.g., therapy gaps, Rx possession ratio) to ensure appropriate Rx use
Monitor & manage chronic care Rx:
Diabetes medication dosing
High-risk med use among elderly
Drug-drug interactions
Medication therapy for asthmatics
Cholesterol Management
Inform formulary strategies
Insight for continued cost and efficiency strategic objectives
Patient-level information to support quality reporting and communication to stakeholders
Multiple doctors and patients, prescribing and compliance behavior
Generic switch/formulary change impact
Compliance and adherence, care gaps
Integrated pharmacy and medical view for chronic management
Specialty
Identified over $10M in savings in program’s first year
Efficiencies via more informed decisions and management of analytics
IMS Provider & Payer Solutions – StrataRx Conference
Copyright ©  2012 IMS Health.  All Rights Reserved.

14. Engage Patients
Align resources and engage patients with targeted solutions to reduce readmissions
A multi-state health system
Hundreds of daily discharges
Multiple local pharmacies
18-25% readmits within 30 days of AMI, HF, PN admit
Monitor Rx fills, compliance, refill history
Utilizing IMS proprietary Rx datasets and technology to:
Follow patients across the care continuum post-discharge to determine when prescriptions should be filled based on discharge instructions
Monitor patient-level prescription fill activity on a daily basis
Allow provider to re-identify high-probability sources of Rx-related readmissions via the patented de-identification technology
Issue:
18-25% readmit within 30 days of original AMI, HF, PN admission
Significant penalties beginning FY2013
Hundreds of daily discharges all go to their local pharmacy post-discharge
Data
Track Rx fulfillment, compliance, history
Analysis
Match de-ID’d patients against comprehensive population Rx data
Refresh daily, post-discharge
By DRG, service line, procedure, case, manager, drug class, etc.
Pair Rx compliance data with de-identified patient data to track behavior against discharge instructions
Identify high potential readmits, increase patient safety and reduce preventable readmissions
Case Mgrs
Under-staffed case managers, limited follow-up
Reduced follow-up calls by 53% post day 1; + 23% by day 3
Outreach, interventions
Targeted interventions with week 1 non-fillers
Concentrated time-strapped case mgt resources
Improved outcomes for drug-drug adverse effects
Reduce readmissions, improve care quality/patient satisfaction and avoid re-admission penalties
Improve patient outcomes
& avoid readmissions
Outreach, engagement, intervention
Case managers target right 50% day 1; target additional 25% day 3
Prioritized at-risk patients refreshed daily, post-discharge census
Identify patients at high risk for post-discharge non-compliance
Reduce readmissions for FY2013-focus DRGs by 34%
Increase case management efficiency and resource allocation
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Copyright ©  2012 IMS Health.  All Rights Reserved.

15. Engage Physicians
Track physician referral and prescription patterns to empower alignment strategies
Prominent health system, competitive market
Doctors affiliation, referral relationships, patient flows, practice patterns/profiles
Target right physicians with tailored messaging for engagement and education
Lack of visibility into highly complex physician/patient networks
PCP-to-specialist
Key management relationships
Translation to inpatient/outpatient procedures
Issue:
Scope Primary Care and Specialist relationships across a target market to identify key service line drivers and propel growth in a highly complex, competitive network; Strong appetite for physician employment and alignment
Data & Analysis
Gain insight into referrals and affiliations via claims data
Track PCP-to-Specialist relationships via sample of 80%+ of all U.S. office claims
Identify key medical management relationships that eventually translate to hospital inpatient or other outpatient procedures
Track referrals through continuum of care within hospital
Rx data to track chronic medical management of high-impact patients
Target
Identify market-defining relationships/future patients and target tailored messages to physician stakeholders
Results:
Allows establishment of meaningful, quantitative goals for Physician Liaisons function
Enables targeted campaigns, tracked effectiveness; meet service-line P&L targets via market share analytics
Meaningful, quantitative goals
Targeted campaigns, tracked effectiveness
Enhance relationships with key market champions Drive nearly $6M of annual top-line growth for target service lines
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Copyright ©  2012 IMS Health.  All Rights Reserved.

16. Pay-for-Performance
Align payers, providers, manufacturers around real-world performance value
Integrated smoking cessation service - Germany
Order to deliver service & treatment to the patients
Understand utilization & success
Demonstrate drug value
Reduce total utilization
Impact study, care delivery, collection of real-world performance data, predictive analytics & modeling
IMS
Requests administration services & reimbursement
Reimbursement on behalf of manufacturer
Pharmaco
SHI
Issues:
Value-based drug pricing based on longitudinal therapy benefit assessment
Understand utilization & success of smoking cession drug & program
Demonstrate value of drug based on real-word data
Reduce utilization of healthcare by patients who quit smoking
Pharma Company: Manager Investor
Acquisition of provider & SHI
NI Study
Clinical pathways & quality
Product delivery
Legal compliance
IMS Service Center
Impact study on cost of smoking
Data collection & measurement: Aggregate, manage, analyze data from ALL providers in fund
Custom methodology & service solution
Neutral party determining performance & payments, administer contracts
Patient management: Manage patient engagement and behavior modification, orchestrate patient care delivery
Reimbursement of service (SHI) & equity contribution
Payment of provider
Reporting
Predictive analytics and modeling
Measures over 4-year period
SHI
Marketing & Referral of patients
Reimbursement of service
Evaluation of outcome
Public authority compliance
Provider
Acquisition of patients
Acquisition of referral centers
Treatment & performance
Documentation of patient data
Results
Patients, payers, providers and manufacturers have real- world evidence of impact of smoking cessation
Provider
Requests patient treatment
Referral of patients
Data processing and project management on behalf of provider
Win. Win. Win.
Reduced HC utilization savings and insight into customer health needs and strategies
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Copyright ©  2012 IMS Health.  All Rights Reserved.

17. Outcomes-based payment - economics
Client perspective
Both cessation service and drug sales generate revenue streams
Volume
Manufacturer Revenue & Brand Sales
Service Center Revenue
Third party perspective The service center generates revenues on patient base
Patients
Payer perspective Reduced utilization by patients who stop smoking expected to generate considerable savings
SHI Savings from Better Outcomes
Patients
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Copyright ©  2012 IMS Health.  All Rights Reserved.

18. Actively managing patient care quality and reducing cost per patient
Coordinate Patient Care
Actively managing patient care quality and reducing cost per patient
PCMH of a large regional health plan
Improve patient quality, reduce spend
Support provider care management
Measure outcomes, ROI
Patient history & benchmark treatment paths
73 performance KPIs
Objective analytics and
benchmarks
PCP grades improve outcome and share financial benefits
Issue:
PCMH pilot expansion wanted to give physicians the information they need to coordinate care.
Also wanted to improve quality and reduce total medical spend; Support information transparency at the point of provider decision making; measure outcomes and ROI
Data & Analysis:
Use view of patient history to assess care effectiveness, benchmark appropriate use of services with structured approach to patient and care quality management
Measure 73 performance indicators
Highlight high/low performing providers
Calculate illness burden scores
Highlight and disseminate care gaps and patient information to MDs with detailed patient level results back to practioners’ online tool
Results/Grades
Deliver patient-level results to physicians, care coordinators and disease managers in terms of star grades or %s with credible transparent detail they can drill into
Aggregated care alerts & patient registries available online
Operational efficiencies, optimized resources result in shared financial benefits
ID high/low performers
Calculate illness burden scores
Disseminate care gaps, care alerts
Patient-level results to practitioner
Online tool to track and understand performance, manage real-time appeals
Achieved 2% admissions reduction & saved over $500k annually
Actively managed catastrophic & multiple chronic conditions to save >$35k per patient
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Copyright ©  2012 IMS Health.  All Rights Reserved.

19. Examples of IMS proprietary research to improve healthcare
IMS Institute: Unbiased information for policy and decision makers
Global health research program
Treatment/drug utilization trends and expenditures
Comparative effectiveness research
Geographic variations in care
Real-world practice
Script:
Overtly mention why only IMS can produce this level of report and link back to breadth of data assets
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20. Interconnected view across healthcare
If we did these 4 things well…what would be different?
Government & Employers
Hospitals & health systems
Treatment sites: pharmacies, labs, imaging, etc.
Manufacturers
& distributors
Patient
Script Notes:
Illustration for future state…
If we did this right, all segments of healthcare would be connected across the continuum of care and all would be focused primarily on the patient
Isn’t that the highest level, uber-goal for all of us?
Consumers, caregivers
Health plans
Physicians &
HC Professionals
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