Consumerism in Health

1. March, 2007 Consumerism in Health

2. Consumerism: One Company’s Definition and Philosophy Successful consumerism happens when individuals take informed action on their own behalf in the health care marketplace. CONSUMERISM Consumer transformation occurs over the following axes: The Consumer Is: The primary change agent in the healthcare marketplace Financing:incentive alignment, expanding awareness beyond “annual” health care planning/ awareness, enabled consumer health transactions Responsible for managing their own health Activation:emergence of services/institutions motivating individual informed action Rewarded by obtaining good value for the healthcare dollars they spend Marketplace:value transparency, quality and service availability that enable consumer value determinations and provider innovations

3. A History of Consumerism • Serving the consumer-driven product market since 2000 • Acquired Definity Health, the pioneer of CDH in 2004 • CDH membership exceeds 2 million at January 2007 • Driving best practices of CDH across all our health care products • 10 million consumers benefit from activation services and coaching in 2007 • Committed to the future of health care as an advanced consumerism market

4. Consumer Driven Health TodayUnitedHealth Group Clients, March 2007 • HSAs lead growth • + 408,000 HSA • + 307,000 HRA • (12/05 – 12/06) • 2.1 million members • 1.1 million in HRA plans • 1.0 million in HSA plans • 200,000 are individual HSA plans • 18,000+ employer clients • 167 large, national employers • 17,000 small businesses • 1,200 mid-sized companies • Large employer CDH penetration: 11% • Mid-sized employer CDH penetration: 10% • Full replacement • 12 large employer clients • 330,000 members • Option-based enrollments • HRA: 32% of eligibles • HSA: 19% of eligibles • Fun Fact • Just 4.5 years ago: • Industry leader Definity Health: • 50,000 members • 28 clients • ICDC’s first issue

5. What We’ve Learned • Consumer Driven Health changes behavior, reducing costs • (Myth: CDH is just cost-shifting in disguise) • CDH, well-constructed, can work for all income groups • (Myth: CDH is a playground for the healthy and the C-suite) • Enrollees in CDH plans continue to get • evidence-based and preventive care • (Myth: CDH is killing the chronically ill, low-income, and children) • Activation correlates to positive changes in: • trust/satisfaction • behavior. (Myth: All health plans are created equal.)

6. CDH changes behavior, reducing costs • CDH delivers lower costs, sustained over time • First year savings 5 – 12% • Three-year trends CDH vs. PPO: -5% vs. 8% (2005 vs 2003) • Total employer cost trend improves • CDH + PPO trend over 3 years: 5% • Consumer scrutiny and engagement observed: reduced utilization of acute health services. • 25% fewer hospitalizations • 12% fewer emergency room visits • Fewer admissions and ER visits among the chronically ill. • 3 to 5% more CDH members seek preventive care than PPO. Source: Definity Health CDH Impact Study, 2003 - 2005

7. CDH, well-constructed, can work for all income groups Employer Funding 68% fund ee HSAs 90% HSA uptake w/funding 45% HSA uptake w/o funding • Employer decisions directly influence program success • Integrated plan - better experience • Employer funding - higher uptake • Full replace strategy - higher uptake, use, balances • HSAs engage all income groups • 67% add their own money not just the wealthy • 80% of low-income participants open HSA, if funded • Only 25% without it • Lifestage is an important predictor of savings behavior • Mature couples, families lead participation/savings • People earning <$25,000 contribute less Source: Definity Health Integrated HSA Analysis, 2007 Average Employer HSA Contribution: Small co. $1,109 Mid-sized $1,178 Large $ 680 HSA Participants 85% carry balance to Year 2 Ave. carry-over: $815

8. CDH enrollees continue to get care Preventive Care On virtually all measures, CDH enrollees seek care at rates equivalent to, or better than, traditional plan members. Source: Definity Health Quality of Care Study April 2007

9. CDH enrollees continue to get care Evidence-based care CDH enrollees with chronic conditions seek evidence-based care at rates equivalent to, or better than, traditional plan members Source: Definity Health Quality of Care Study April 2007

10. 2006 Consumer Attitude SurveyKey Findings • Activation influences satisfaction • Satisfaction higher in plans with activation services (+10 pts.) • Satisfaction increases when activation added (+10 pts) • The basics are still important • Cited drivers of satisfaction = coverage/cost of plan and service • Likelihood to recommend or renew are comparable to traditional plans • CDH participants are more attuned to costs of care • CDH members are more likely than traditional counterparts to: • Research cost of prescription drug options • Compare the cost of different physicians, hospitals • There is not yet a corollary connection to researching quality of care

11. 2006 Consumer Attitude SurveyKey Findings • CDH participants exhibit a stronger sense of health ownership They agree more frequently that they: • Investigate alternatives before making a health care decision • Know how to choose health insurance best for self/family • Acknowledge ways to get prescription drugs for less • Have more control over their health care than their doctor or health plan • Traditional plan participants are more likely to cede control They agree more frequently that their: • Doctor should have more control over their health care than self or plan • Plan has more control than they do over health care • All plan members acknowledge differences in care available Similar results across all plans for: • Agreement that some medical treatments are more effective than others • Agreement that some doctors provide better care than others • Agreement that I can find a better doctor if not happy with mine • Agreement that I review the health care bills I receive • About half agree that “you get what you pay for” in medical care

12. For More Detail….. ……..please visit our web site for summaries of these studies. www.unitedhealthgroup.com 2006 Releases for CDH Impact Study 2007 Releases for HSA Study 2007 Releases for Quality of Care in CDH (April )

13. Appendix

14. Quality of Care Methodology • DH Data 99 employers 500,000 DH members, narrowed to 230,000+ (continuous enrollment, age <65, no COB) • Benchmark Data 10 million+ members No CDH members • Data Sets Distribution of age and chronic disease remarkably similar • Quality Metrics As defined by: U.S. Preventive Services Task Force, NCQA, HEDIS Must also be measurable through claim data (results not comparable to HEDIS, etc) Er visits and admissions included as potential indicators of uncontrolled disease

15. Key FindingsQuality of Care Definity enrollees: • Seek preventive care at rates equivalent to, or higher than, traditional plan members • With chronic conditions seek evidence-based care at rates equivalent to, or higher than, traditional plan members Performance was as good or better than traditional plans in virtually all measures. Areas for improvement include: • ER and admits for young asthmatics • Well-baby visits • Results pre-date innovative developments such as Rewards for Action, deep online wellness resources.

16. Diabetes Measures by Year by Age Group.

17. Asthma Measures by Year by Age Group. *DH: Definity Health Bold blue font indicates statistical significance.

18. CAD Measures by Year Congestive Health Failure (CHF) Measures by Year