Horizon Healthcare Innovations’ Medical Home Pilots

1. Horizon Healthcare Innovations’ Medical Home Pilots Presentation to NJBGH October 12, 2010

2. Contents • Introduction to Horizon Healthcare Innovations • Brief overview of care model pilots • Primary Care Patient-Centered Medical Home • Oncology care model

3. Horizon Healthcare Innovations, (HHI) • Born Sept 2010 • HHI is a subsidiary of Horizon Blue Cross Blue Shield of New Jersey, founded in 2010 to energize the transformation of healthcare deliveryand create a system markedby quality and effective care, greater efficiency and increased affordability. We acknowledge that the status quo is broken. • To achieve our long-term aspirations, HHI will innovate, create and collaborate with our partners including physicians, hospitals, community leaders, employers, patients and other individuals who want to make a difference. We are looking for partners in our quest.

4. Horizon Healthcare Innovations (HHI) Overview • Vision • We will boldly innovate, in collaboration with others, to foster exemplary healthcare in the communities we serve • Mission • To catalyze transformation that creates an effective, efficient, and affordable healthcare system • Long-term Aspirations • Achieve a sustainable trajectory in healthcare spending • Improve quality, access, and population health care • Ensure more positive, collaborative relationships with providers • Strive for improved overall consumer satisfaction and engagement

5. Contents • Introduction to Horizon Healthcare Innovations • Brief overview of care model pilots • Primary Care Patient-Centered Medical Home • Oncology care model

6. We are in the process of developing 6 potential pilots, with the goal to launch 2-4 by the end of 2010 • Population management • Creating a truly patient-centric model of care delivery supported by a care team of heath professionals: • HHI is driving physician practices to transform to take on greater accountability, activity and responsibility for health • Is inclusive of all members, but focuses on early and late stage chronic patients • Primary Care Patient Centered Medical Home (PCMH) • Accountable Care Organization (ACO) • Improving quality and reduce costs through local accountability, standardized performance measurement, and innovative reimbursement structures • Acute procedural episodes • Efficient Episodes • Reimbursing a single individual or entity for all the components of a patient’s care related to a specific procedure or an acute episode of a medical diagnosis within a defined period around that procedure or episode • Inpatient Management • Encouraging eligible physicians to achievecompliance with theprogram goals for quality of care and efficient delivery of inpatient care • Chronic care management • Oncology Medical Home • Transforming oncology practices to deliver treatment and patient guidance that is evidence-based, consistent, and in the best interest of the patient • Consumer engagement • Transforming the management of chronic disease – leveraging technology to create consumer ownership of health and healthcare thereby improving medication / treatment protocol adherence and self-monitoring / healthy activities post diagnosis

7. 1 • Promote high quality, ‘best in class’ evidence based care • 2 • Tie actions to results, tracking clinical decisions and quality performance • 3 • Establish closer payor/provider collaboration • 4 • Support providers to increase affordability • 5 • 6 • Encourage patient ownership and responsibility • Be easily scalable over the longer term Guiding principles of the care model pilots

8. Planned 2011 pilots • Potential later pilots Horizon’s medical homes aim to address both the system-wide and condition-specific issues that patients experience Primary Care Specific Issues Oncology Specific Issues • Current models promote transactional interactions, not prevention and holistic care • Little incentive and infrastructure to support coordination among physicians • Difficulty getting appointments scheduled without long lead times • High level of patient anxiety • No physician identified as responsible for the patient’s overall care • Significant side effects from treatment • Difficult end of life decisions Common Issues Addressed by Care Models • No single physician accountable for total health care needs and costs • No system accountability for inefficiency and waste • Lack of patient / member accountability for their own health care • Little non-clinical support causes patient confusion • Lack of focus on overall patient health and wellness • Fragmented delivery system with misaligned incentives Pregnancy Specific Issues Cardiology Specific Issues • Above average number of high-risk patients in NJ (e.g., diabetics, obese, 40+) • High rate of multiple birth pregnancies and cesarean sections • Lack of support for mother and child throughout and after the pregnancy • Older patients with a high rate of co-morbidities • Lack of support and guidance for necessary lifestyle changes • Multiple potential treatment options

9. Contents • Introduction to Horizon Healthcare Innovations • Brief overview of care model pilots • Primary Care Patient-Centered Medical Home • Oncology care model

10. Accountability & Responsibility The Horizon Healthcare Innovations Primary Care Medical Home uses a team based approach to execute four patient-centered strategies, transforming the care experience for patient and practice Access &Availability of Care Personalized Care Management Prevention & Health Status Mgmt EmpoweredDecision Making Team Based Care Patient Centered Strategies Evidence Based Medicine Information & Infrastructure Systems AppropriateReimbursement Member Benefits & Incentives Measurement & Reporting MedicalHome Enablers

11. PCP appointments often scheduled when patients deem necessary • PCMH and patient collaborate to ensure timely and appropriate outreach and f/u appointments • Care focus determined by immediate episodic problems and presence of patients (face to face time) • Care collaboratively managed by team with a proactive plan to meet patients’ needs • Members build on-going relationship with care team through increased communication • Variation in Quality between and within practices - scheduled time and practice’s or physician’s tracking mechanisms • Care standardized according to evidence-based guidelines and measured on quality, patient experience and utilization • Patients left to coordinate their own care, including visits to specialists • Referrals are coordinated by care team, information is shared with specialists. • PCMH co-creates care plan and educates / engages patients to obtain positive outcomes • Inconsistent reporting / documentation from hospital and specialist visits • PCMH tracks tests / consultations, and follows up on ED / hospital visits The PCMH model transforms delivery of primary care From PCP care model… …to Patient Centered Medical Home model

12. Patients will have a new experience with increased engagement and participation throughout the care process Patient Access • Practice uses physician extenders to increase capacity and availability • Strong links with providers facilitates access (e.g., behavioral health network) • Patient and case coordinator communicate to ensure compliance • Practices use technology to identify gaps in care • Practice monitors performance • Practice proactively engages consumers to schedule visits • Case coordinator determines need and type of visit with patient (1) Before the Visit Patient-Centered Coordinated Care (4) Ongoing (2) During the Visit • Practice tracks and monitors referrals, ensuring exchange of relevant clinical information • Practice coordinates with relevant medical community actors • Case coordinator reviews and updates care plan with patient • NP and PA address majority of less complex patient issues (3)After the Visit

13. Primary Care PCMH – Value Proposition • For Patients • Improved experience. Individualized patient centric care • Navigation through the Health Care System • Prevention, wellness, optimization of health status through coordinated, evidence based care • For Primary Care Physicians • Specialty Revival through demonstration of the added value of comprehensive primary care • Greater Income opportunities • Professional satisfaction • For Employers • Lower Health Care Costs • Improved Wellness and Productivity • More satisfied employees engaged in co-managing their care, armed with better choices of aligned provider care teams.

14. Detail follows HHI will provide operational support to facilitatethis transformation 2013 Optimizing performance outcomes with tools and informatics 2012 Formalizing processes and products 2011 • Consider PCMH network-based product • Savings sharing introduced with reimbursement tied to shared savings • Personalized tools and informatics • Technology enabled access • Individual provider-based portals for members to make appointments, download lab results, access health content, etc. Building the critical infrastructure • Value-based products tailored to PCMH initiatives • Increased population management and information provided to practices • Pooled supporting resources • HHI-provided transformation coaching and case coordinators • Reimbursement aligned to process and quality scores • Improved access directly to care team • Population management with focus on chronic members • More defined relationships for access to specialists

15. Care planning Referral management Case coordinators will be embedded into the practice care team and will be integral to the PCMH model • Complete health assessment and individualized care plan for including self-management components • Conduct pre-visit planning for patients • Review and update care plan • Follow up with patients between visits • Use electronic system to track referrals • Ensure exchange of clinical information into EMR • Follow up with specialist/patient on referrals Community management • Create formal agreements with diagnostics, hospitals, EDs, pharmacies, and community resources • Ensure real-time exchange of clinical info into EMR • Collaborate on discharge activities from Hospital and ED to PCMH • Evaluate and tighten network based on quality and cost

16. Savings sharing • Outcomes-based • Case coordination • FFS Payment structure will evolve over time –with a vision for savings-sharing in the future Today Phase 1 Phase 2 vision • Savings sharing • Outcomes-based • Case • coordination • Case • coordination • FFS • FFS • FFS • Fee-for-service only • FFS as paid today • Case coordination payments (PMPM) • Outcomes-based payments • Case coordination payments (PMPM) • Savings sharing between practice and plan

17. HHI support HHI will use tiers in the near term to encourage stepwise improvement Advanced Medical Home Early Stage Medical Home HHI goals • Engage practices and incent medical home development • Encourage broad participation in medical home initiative • Reward full transformation with higher reimbursement for higher value care Practice requirements • Attainment of any level of recognition • Demonstrated integration of case coordination activities into practice workflows beyond • Demonstrated commitment to become an advanced medical home • Attainment of additional Advanced Medical Home requirements as agreed upon by Horizon Healthcare Innovations • Demonstrated commitment to improving quality, process, and utilization metrics • Direct funding of infrastructure development (e.g. care team members) • Case coordination fee to support process improvements • Outcome based payments to reward performance • Significant upside for quality and process improvements • Opportunity for savings sharing long term Horizon Healthcare Innovations goes beyond existing standards in defining the Patient Centered Medical Home

18. 6+ practices • 4-5 practices Initial target practices for PCMH pilot rollout are based oncurrent diabetes pilot • 2-3 practices • 1 practice • Initial PCMH pilot rollout targets 33 practices spanning North and South NJ • Phased-rollout will leverage geographic proximity of practices • Aggressive recruitment plan with priority to unrepresented areas • no practice Geographic distribution of target practices

19. Contents • Introduction to Horizon Healthcare Innovations • Brief overview of care model pilots • Primary Care Patient-Centered Medical Home • Oncology care model

20. Our goal is transformed practice focused on patient-centered coordinated care Current Care Management Future Oncology Medical Home Radiation onc. Medical oncologist Radiation oncologist Pharmacy Medical onc. Pharmacy ? Patient support & guidance Surgical onc. Patient & CareTeam Behavioral Health Behavioral Health Patient Hema-tologist Surgical oncologist Urologist PCP Urologist Hema-tologist Fragmented and variable care without full use of EBM guidelines reduces quality and creates waste Care coordinator serves as the “patient navigator” coordinating care and guiding patients through treatment Patients very anxious given their cancer diagnosis and lack a single non-physician point of contact and guidance Realigned incentives reward practices for care coordination, member support and use of evidence based guidelines

21. Clinically appropriate Am I receiving care consistent with best practice? • Improved experience HHI will measure performance against goals • Evidence based care and high quality standards • Patient focused outcomes • Following clinical guidelines • Creating and following a care plan • Safe • Preventing avoidable harm to the patient • Avoiding preventable admissions to the ER or IP • Delivering a care experience that patients view positively • Ensuring patient concerns are addressed • Encouraging appropriate dialogue surrounding end-of-life decisions

22. Savings sharing • Outcomes-based • Case coordination • FFS Over time, the reimbursement structure will focus more on rewarding quality of care Payment structure will gradually evolve and be refined to drive behavior Today Phase 1 Phase 2 vision • Outcomes-based • Savings • CC • CC • FFS • FFS • FFS • Fee-for-service only • FFS as paid today • Case coordination payments (PMPM) • Outcomes-based payments • Case coordination payments (PMPM) • Savings sharing between practice and plan