Track III

1

• -Track III-
• Product/Network Innovation Changing the
  Landscape to Meet Customers Demands

2
Cultivating Effective Provider Relations in a
Sea of InnovationJanuary 30, 2007

• Curtis Terry
• President, Health Care Delivery
• Aetna, West Region

3
Growth in Consumer-Directed Health Plans (CDHPs)

• 3.2 million enrolled in HSA-qualified
  high-deductible health plans in 2005 (AHIP
  census)
• Aetna is the first national, full-service health
  insurer to introduce a CDHP in September 2001 and
  currently has 1.6 million members enrolled in its
  Aetna HealthFund products
• According to Mercer Health and Benefits LLC, by
  2007, 13 percent of the nations employers are
  likely to offer CDHPs. Among the nations largest
  employers, up to 31 percent could offer CDHPs in
  2007.

4
Consumer-Directed Plans Impact Consumer Behavior

• Aetnas study of four years of data on its
  consumer-directed Aetna HealthFund products
  showed
• Employer savings across all products offered.
  Those who offered an HRA option plan effective in
  January of 2003 experienced an average medical
  cost trend of 6.7 percent over a three- year
  period.
• Aetna HealthFund HRA and Health Savings Account
  (HSA) members with chronic conditions maintained
  or improved the level of care they received prior
  to joining the plan, including a 6 percent higher
  usage of inhaled steroids among asthmatics when
  compared to a similar population.
• Preventive care maintained or improved.
  First-year HSA members received cervical cancer
  screenings at a 13.8 percent higher rate than PPO
  members.
• Generic drug utilization for HRA members was 4.5
  percent higher than PPO members.

5
Arrival of Transparency

• Information on cost and quality is essential to
  enable members to make decisions in
  consumer-directed health plans.
• Earlier this year President Bush announced the
  Four cornerstones of value-driven health care
  support health care information technology,
  provide quality information, provide pricing
  information, promote quality and efficiency of
  care. Aetna was the first health plan to sign the
  statement of support for the Four Cornerstones.
• Aetna has led the industry in transparency
  initiatives in several ways
• Releasing physician-specific information on
  health care costs and clinical quality
• Introducing a Personal Health Record
• Building a high-performance network of specialist
  physicians
• Partnering with organizations committed to
  quality measurement and improvement such as the
  National Quality Forum (NQF), Ambulatory and
  Hospital Quality Alliances (AQA/HQA), the
  Leapfrog Group, Bridges to Excellence and the
  Care Focused Purchasing coalition.

6
Implications for PPO networks

• Transparency of Contract rates will increasingly
  be demanded by consumers.
• Demand for quality data and information will
  continue to grow and its utility will improve.
• Select performance networks continue to emerge as
  stand alone or sub-networks.
• Benefits design combined with better consumer
  information will drive network volume.
• Effective Provider/Health plan collaborations
  need to deliver greater value to the consumer.

7
CULTIVATING EFFECTIVE PROVIDER RELATIONS IN A SEA
OF INNOVATION

• AAPPO 2007 ANNUAL FORUM
• MARTHA LAWRENCE
• HOSPITAL CORPORATION OF AMERICA

8
CONSUMER TRENDS

• HEALTH CARE COSTS RISING FASTER THAN WAGES AND
  CORPORATE PROFITS
• HEALTH CARE THE MOST COSTLY AND VALUED BENEFIT
• EMPLOYEE COST SHIFTING RISING FASTER THAN TOTAL
  PLAN COSTS, CLOSE TO MAXING OUT
• QUALITY BASED ACTIVITY WITH MINIMAL IMPACT
• UNDERESTIMATE THE MD IMPACT

9
HOSPITAL INITIATIVES

• MEMBER FINANCIAL ACCOUNTABILITY
• QUALITY INITIATIVES
• eMAR BAR CODING
• PERI NATAL SAFETY INITIATIVE
• CASE MANAGEMENT REDESIGN

10
eMAR BAR CODING

• IT SOLUTION PAIRED WITH INDIVIDUAL ITEM BAR
  CODING
• RIGHT PATIENT, RIGHT DOSE, RIGHT ROUTE, RIGHT
  TIME, RIGHT MED
• 171 FACILITES
• MEDICATION CLAIMS REDUCED BY 30 35 IN THE
  FIRST SIX MONTHS OF 2005
• 97.9 OF PATIENT ARMBANDS SCANNED
• 93.4 OF MEDICATIONS SCANNED

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PERINATAL SAFETY INITIATIVE

• KERNICTERUS AS A NEVER EVENT
• UNIVERSAL ASSESSMENT SCREENING
• RAPID DESIGN TEAM CREATED HCA HOSPITAL TOOL BOX
• OF 124 HOSPITALS PROVIDING PERINATAL SERVICES,
  98 HAD UNIVERSAL SCREENING BY JANUARY 2005.

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CASE MANAGEMENT REDESIGN

• ED CASE MANAGEMENT
• MD ADVISOR
• OBSERVATION MANAGEMENT
• ST BED MANAGEMENT
• ADM CRITERIA SCREENING
• 5 PILOT SITES (SOFTWARE)

13
A Focus on the Sea of Innovation
14
Words of Wisdom/Warning
15
A Number to Worry About if Youre Canadian
16
Quantifying IT Innovation in Health Care
Is the word Sea the most appropriate
descriptorof IT innovation in health care? A
SEA of Innovation
Or should it be ..
Lake
Canal
Puddle
17
A Typical Description of IT in Health Care
18
Continued Pressure on IT Departmentss
Challenge To Innovate
19
Regulation Is a Challenge to Innovation
John Kenagy, MD,MPA Visiting Scholar, Harvard
Business School
Regulatory institutions can sap the innovative
energy out of an organization.
Disruptive innovations take route ( grow) in
marketswhere organizational regulatory
barriers are minimized
20
Is More (or less) Information the Answer ?
21
Categorizing Problems
22
Health Care is a Very Complex System
Paul Plsek Complexity the Adoption of
Innovation in Health Care
Health Care Organizations are Complex Systems .
Complex Systems are a collection of individual
agents who have the freedom to act in ways that
are not always predictable whose actions are
interconnected.
One agents actions change the context for other
agents
23
Research on Simplicity Innovation
The state of Nature is about SIMPLICITY. The
state of human thought has become progressively
complex because .. we seek sophistication over
simplicity. The most wonderful things in the
world are also the simplest.
24
IT Responses in Health Care Lag other Industries
IT Responses toChallenges