1. Robert S. Galvin, MD January 28, 2004 Medicare Prescription Drugs Improvement and Modernization Act of 2003: What Do Employers Think? Medicare Prescription Drugs Improvement and Modernization Act of 2003: What Do Employers Think?

2. 2 What The Bill Isnt Perfect

3. 3 What The Bill Is The Triumph Of Experience Over Hope Apologies to Samuel Johnson Government Can Act on Health Care Employers Included in Dialogue Favors Competitive / Market Approach... But With Safety Net Pushes Transparency / Quality Agenda Encourages Consumerism... Creates Possibility of New Solutions

4. 4 The Devil (And The Angel) Is In The Details Details of Actuarial Equivalency FASB Guidance HSA Design Rules for PBMs and Health Plans Policy Community: Please Keep Employers Engaged in 04 Policy Community: Please Keep Employers Engaged in 04

5. 5 Wall Street Journal December 4, 2004

6. 6 Quality Costs Less: One Example Source: Premier Healthcare Informatics CABG Performance Wage and Severity-Adjusted Average Cost$16,043$20,123$26,321 Risk-Adjusted Inpatient Mortality2.78%2.92%3.29% Return to OR0.62%2.12%2.43% Severity-Adjusted Average Length of Stay8.508.259.24 InnovationPerformanceOpportunity GroupGroupGroup

7. 7 Presentation To BRT Health Committee: Wheres The Leverage in Better Purchasing? Presentation To BRT Health Committee: Wheres The Leverage in Better Purchasing? (Gross Savings By Year 3, While Preserving or Improving Quality of Care) Mercer Human Resource Consulting

8. 8 A Market Approach to Costs Employers believe that consumer pressure is a powerful, underutilized lever for improving quality and efficiency. They believe that higher quality and lower cost will result if consumers spend more of their own money for services they believe are high quality, and if providers respond by improving their performance. For this strategy to succeed, consumers will have to be activated to seek more efficient, higher quality care and physicians will have to be rewarded for delivering it. Sounding Board NEJM, September 19, 2002 Transparency Incentives and Rewards Focus on Quality and Efficiency

9. 9 What Policies Will Accelerate Us Getting To The Right Lower Quadrant? Efficiency and Quality Create Value Hospital B Hospital A Hospital G Hospital E Hospital F Hospital D Hospital C

10. 10 Final Thoughts Public and Private Sectors Are In This Together... And Health Care Will Benefit When We Work Together Improving What Happens Within the System Is Key to How Many People Get Into the System Consumers Have the Right to Know... And Payers Have the Obligation to Reward Quality