Quality in Practice: The BCBS Blue Distinction ® Program Iowa Health Buyers Alliance Annual Conference

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

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

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

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

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. 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. NLO Governance Structure NLO Board of Directors ExecutiveCommittee Labor Advisory Committee(including LAC Liaison to the Board) Market Research Distribution Channel/Partners Educationand Training StrategicAlliance Early Retiree/VEBA Revenue Labor Prospects National LaborCollege Plan Market Survey Blue Labor Basics LaborCertification Program

8. Blue Assets and Programs

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

10. ® Better Outcomes and Better Value for Specialty Care • Evidence-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) • Simplified member-directed access minimizes need for employer involvement • Results in quantifiably better overall health outcomes and lower costs • Provides a quality-based, cost-effective means for flexible benefit design Quality-based designation for facilities with better overall outcomes for high cost, high variability health conditions 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. ® Better Outcomes and Better Value for Specialty Care Evidence-based selection criteria developed in collaboration with expert clinicians and leading professional organizations Bariatric Surgery Cardiac Care • American Society for Metabolic & Bariatric Surgery (ASMBS) • Surgical Review Corporation (SRC) • American College of Cardiology (ACC) • Society of Thoracic Surgeons (STS) Complex & Rare Cancers Transplants • Center for International Blood and Marrow Transplant Research (CIBMTR) • Scientific Registry of Transplant Recipients (SRTR) • Foundation for the Accreditation of Cellular Therapy (FACT) • National Comprehensive Cancer Network (NCCN) Criteria are transparent, available to the public on BCBS.com These organizations have provided information and input, but do not formally endorse the Blue Distinction Centers program.

12. ® WA ME VT ND MT Blue Distinction Centers for Cardiac Care® NH MN OR NY MA WI SD ID RI MI PA WY CT IA NJ OH NE IN DE IL NV WV MD VA UT CO KY CA KS MO NC Blue Distinction Centers for Bariatric Surgery® TN SC OK AZ AR NM AL GA MS TX LA FL AK Blue Distinction Centersfor Transplants® HI PR Blue Distinction Centers Complex and Rare CancersSM Better Outcomes and Better Value for Specialty Care Broad, inclusive scope allows quality choices in four specialties for your members nationwide More than 800 Designations across 45 states We will expand specialty areas and increase the number of Blue Distinction designated facilities

13. ® Better Outcomes and Better Value for Specialty Care Simplified member-directed access minimizes need for employer involvement members can easily learn more about Blue Distinction with a click of a mouse Memorial Hospital 324 W. Main Southpaw, MI 32012 (313) 777-6329 DRAFT St. Joseph’s Hospital 123 Beach St. Lakeview, MI 32779 (313) 777-1234 National Doctor & Hospital Finder enables hospital comparisons based on Blue Distinction status 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. ® Better Outcomes and Better Value for Specialty Care Results in quantifiably better overall health outcomes… Cumulative Readmissions(0-90 Days) 5% 11% Coronary Artery Bypass Graft Angioplasty (CABG) (PCI) Other BDC Source: Based on claims data from BlueCross BlueShield Plans in eleven states

15. ® Better Outcomes and Better Value for Specialty Care ... and quantifiably lower costs Average CostSavings per Procedure(1)(per 90-day episode) Average Numberof Procedures per Year(2)(per 5,000 member group) Potential Savingsper Year $65,512 Procedure: CABG 8.3 x $7,893 = $30,996 Procedure: Angioplasty 21.6 x = $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

16. ® Better Outcomes and Better Value for Specialty Care 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

17. ® Better Outcomes and Better Value for Specialty Care Provides a quality-based, cost-effective means for flexible benefit design • Example of Benefit Design driven by Blue Distinction • 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

18. ® Better Outcomes and Better Value for Specialty Care ABC Manufacturing • 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

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

20. Questions??