1. Health Care Reform – the Purchasers Experience in Market Driven Solutions Prepared for the Health and Human Services Reform Committee February 2, 2011

2. The Buyers Health Care Action Group A coalition of public and private purchasers of health care working together to change the health care system so consumers will get the care they need in the right place, at the right time and at the right price.

3. BHCAG Members Employer Members Best Buy Company BlueCrossBlueShield of MN Cargill Carlson Companies G&K Services General Mills Health Partners Honeywell Jostens Land O’ Lakes 3M Company Medica Medtronic MN Gastroenterology MN Management and Budget Olmstead County Park Nicollet Health Services Rosemount, Inc. Resource Training and Solutions Employer Members Securian Financial Group SUPERVALU Target Corporation University of Minnesota University of Minnesota Physicians US Bank Wells Fargo Affiliate Members Abbott Laboratories Accuray AstraZeneca GlaxoSmithKline Merck&Company Novartis NovoNordisk Pfizer, Inc. sanofi-aventis

4. BHCAG - Defining VALUE in Health Care Using our collective influence, BHCAG advocates for change using market forces…. Aligns purchasers around value based decision making when buying health care Requires that health plans demonstrate unique value in the supply chain Holds providers accountable for quality of care and allows them to compete based on the value of that care Gets consumers engaged and empowered to value good health and make sound health care decisions

5. Purchasers Government Medicare Medicaid State, County, Local Private Employers Individuals Brokers Agents Health Care Administrators Pharmacy Primary Care Doctors Specialty Care Doctors Hospitals Diagnostic Imaging Laboratory Tests Health Care Providers Buyers Health Care Action Group Bridges to Excellence (Pay for Performance) Leapfrog Survey Adverse Events eValue8 Survey Health Care System Transparency ₋ Quality ₋ Cost Health Plans Cost Management Tools Disease Management Health Coaching Shared Decision Making Care Management Behavioral Health Management Biometric Testing Health Assessment Past Market Drivers Choice Plus Health Plan National Data Cooperative Smart Buy Alliance Services Purchased Physician – 30.6% Inpatient Hospital – 17.9% Outpatient – 13.3% Other Health Professional – 3.6% Pharmacy, Non-Durables – 14.7% Mental Health/Chemical Dependency – 3.1% Emergency – 2.4% Skilled Nursing Facilities – 1.1% Home Health Care – 1.1% Administrative Expenses & Taxes – 9.4%

6. Goals of MN Bridges to Excellence Improve the quality of care for patients with diabetes, vascular disease and/or depression Raise the level of purchaser and consumer awareness about the variation in the quality of care Spark provider competition based on quality outcomes Provide people with information so they can get the best care for their condition

7. Impact on Clinical Outcomes: Optimal Diabetes Care Scores (2005 – 2010) FairviewAllinaMN Average % of Patients @ Optimal 2004 & 2005 – Medical Group Level Data from Health Plans 2006, 2007, 2008, 2009 – Clinic Level Data through DDS; 2009 A1c<8; all others years A1c<7

8. Goals of eValue8 Survey Provide Consistent, Evidence-based, Health Plan Assessment – Allow for comparisons within and across markets – Measure factors that drive downstream direct and indirect costs – Reveal best practices and set benchmarks Align Purchaser Standards and Expectations – Increase the signal strength for desirable plan capabilities and investments – Reduce the chaos of hundreds of purchaser requests for information – Align with major public purchasers: Medicare, Federal Employees Pay for Performance – Basis for year-over-year improvements for selected plans – Basis for performance guarantees, contract monitoring – Basis for employee incentives (payroll contributions) Impetus for Community-Based Improvement

9. eValue8 Results Nat’l

10. eValue8 Results Nat’l

11. Goals of Leapfrog and Adverse Events Reporting Reduce preventable medical mistakes and improve the quality and affordability of health care Encourage hospitals to publicly report their quality and outcomes so that consumers can make informed health care choices Reward hospitals for improving quality, safety and affordability of health care Help consumers reap the benefits of making smart health care decisions

12. Leapfrog Results

13. Other market driven successes Choice Plus - the first consumer directed plan in the nation using consumer choice, increased provider competition and improved quality as core tenets. Current State Employee Plan is modeled after Choice Plus. Also offered as part of Medica’s product portfolio and an innovative offering by health plans across the country. Seen as a model for health care delivery reform. National Data Cooperative – a collaborative created to aggregate health information on behalf of purchasers for more rational and informed purchasing. Now a national employer initiative managed by Towers-Watson. Smart Buy Alliance – originally the Broad Alliance of Purchasers, the group was formed to unite all purchasers- public, private, small, large, non-profit, for-profit and Taft-Hartley plans – around a common purchasing goal: VALUE.

14. Using purchasing behavior to move the market The State of Minnesota is the largest purchaser of health care Purchasers, through Value Based Purchasing, can hold the “system” accountable for efficient, high quality and transparent performance Purchasers, public and private, must align performance expectations to eliminate waste and redundancy Require transparency at all levels in the supply chain – Bridges to Excellence – 593 clinics reporting; significant performance improvement in 5 years – Leapfrog – 100% hospital participation in 2004. 16% reporting in 2010 – eValue8 – 100% participation in 2008. 50% reporting in 2010

15. For more information Carolyn Pare CEO Buyers Health Care Action Group 7900 International Drive Suite 1080 Bloomington, Minnesota 55425 cpare@bhcag.com 952 896 5185