Coast to Coast Event San Francisco, CA 27 September 2017 Sam Ho, - PowerPoint PPT Presentation

Optum Life Sciences Coast to Coast Event San Francisco, CA 27 September 2017 Sam Ho, MD EVP, Chief Medical Officer

A Call to Action — • Unacceptable Quality Outcomes – US ranks 38 th in national health systems by the WHO – Patients suffer a 6% complication rate for every day of hospitalization – Solutions for eliminating preventable deaths, never events, & HACs aren’t universally adopted • Unwarranted Variation – 250% difference in Medicare spending across the US, adjusted for age, sex, race, underlying health, geography and prices — without evidence of better health outcomes – 55% of recommended care is being provided across all geographies, ages, and preventive, acute and chronic care – Case-mix adjusted hospital death rates vary 400% • Unsustainable costs – US has the highest per capita health care costs in the world & is 180% > the average of the next 10 countries – Dartmouth Center for Evaluative Clinical Sciences estimates that 30% of Medicare spending is wasted – There is no current positive correlation between quality and spending 2 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Why We Do What We Do — Achieve the Triple Aim Commitment we’ ve made to our customers, consumers, and care providers that we call the Triple Aim : Integrity Compassion Relationships Innovation Performance Reducing the per capita cost of health care Better Care Better Health Lower Cost 3

Value-based Compensation — Foundational to Collaboration $18B $18B Managing entire POPULATION HEALTH Capitation + PBC $6B $6B Shared risk Managing a specific Level of financial risk CONDITION Shared savings $23B $23B or SERVICE LINE Achieving specific Condition or METRICS Service-Line Programs Performance-based contracts Primary care incentives Fee-for-service Bu Bundles les & & Performan mance-based sed Episodes Epis Accountable Ac le Ca Care Degree of care provider integration and accountability 4 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Aligning Incentives with Clinical Accountability: Readiness Continuum 5 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Consumer Engagement and Network Alignment Evolution of Insurance Products Value Continuum – Medical Savings Realization Up to 19% savings achieved Getting to double-digit savings .8% Using Premium tiering as a foundation, markets can achieve double-digit savings when maximizing 2% .5% - 1% differentials and incorporating other levers onto either a gated or open access product 1.5% - + 4.6% 2.5% + 1.5% - 5.25% 4.6% + 1.5% - 4.5%* 5.25% + 2.5% - 4.5% Medical Savings Realization Gatekeeper PCP Tiering Specialist Tiering Place of Service Hospital No referral/no coverage  Ave difference between     Adding gating onto a 134,700 physicians are 16% lower costs Tier 2 hospitals can be freestanding vs. outpt. tiered benefit plan can Premium Tier 1 between Premium 30%+ more expensive hospital : MRI $837 ;  save 2.5%-4.5% 39% of members use Tier 1 and a non-Tier 1 on a unit-cost basis than Upper GI Endo. $1,354 Tier 1 physicians physicians Tier 1 hospitals Patient Centered Care 1% - 3% PCCM supports top tier providers via performance data for continued improvements in cost and quality Management (PCCM) Medical Savings Realization 6 * Plan 240 simulated pricing decrement per lever relative to a standard Choice/Choice Plus product/plan design Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Focusing on Value - Provider Value Pyramid 7 Better Care, Better Health, Lower Costs

FINISHING STRONG │ 2017 MBOs 2017 Weightings: Quality = 35%, Affordability = 25%, Relationships = 30%, Innovation = 10% 2017 MBO Name MBO Owner Category Target 1 2 3 4 5 YTD Result Improve at least 50% of Population Health HEDIS Measure Improvement - E&I Cohen / Hunt / Nguyen HEDIS Accreditation 30% 40% 50% 60% 75% TBD & Quality measures to 75th %tile Achieve 70% of state- Fuentevilla / Curtis / Population Health HEDIS Measure Improvement - C&S based quality incentive 49% 50% 60% 70% 75% TBD Nguyen & Quality dollars Castillo / Hagan / Population Health 80% of members in 4 + HEDIS Measure Improvement - M&R >70% 70% 75% 80% 85% TBD Nguyen & Quality star rated plans HEDIS Chase Supplemental Data Sources Population Health Nguyen / Allen 100% Auditor Approval 92% 94% 96% 98% 100% 100% Auditor Approved - E&I/M&R & Quality HEDIS Chase Supplemental Data Sources Population Health Nguyen / Allen 100% Auditor Approval 92% 94% 96% 98% 100% 100% Auditor Approved - C&S & Quality Improve 25% of plans to Population Health Health Plan Accreditation - E&I Improve Levels Cohen / Hunt Commendable/ Maintain 15% 20% 36% 33% 50% TBD & Quality 100% Accreditation M&R Hospitalization Measures (Plan All-Cause Castillo/Hagan/ Readmissions, Medication Reconciliation Post- Nichols/Coyle- Population Health 4+ Star Rating for each 3.0 Star 4.0 Star 4+ Star 3.5 Star Rating TBD Discharge, and Hospitalization for Potentially Ikemoto/Huckaby/ & Quality measure Rating Rating Rating Preventable Complications) Weiss/Nguyen Total Affordability Wilkerson Affordability $1,045M $832 $884 $936 $988 $1,045 $955M Inpatient Management Nichols Affordability $493M $256 $316 $375 $434 $493 $408M Outpatient Management Christian/Shelley Affordability $277M $221 $235 $249 $263 $277 $235M PCCM Savings - ACO Nguyen Affordability $60M <$55M $56 $58 $60 $61 TBD PCCM Savings - CCO Nguyen Affordability $75M <$70M $71 $73 $75 $76 TBD Activate 95% of ACOs that meet contracting PCCM/ACO Activation % Nguyen Affordability <90% 90-94% 95% 96%-99% 100% 96% guidelines within 30 days of contract effective date Analytics Insights Allen Affordability $25M $7.5 $10.0 $12.5 $18.8 $25.0 TBD Peer Comparison Reports Allen Affordability $11M $3 $4 $6 $8 $11 TBD Optum Programs Wilkerson Affordability $400M $320 $340 $360 $380 $400 $196M Emergency Department Transformation Wilkerson Affordability $39M $31 $33 $35 $37 $39 $19M Initiative Operating Cost Reduction Dewey/Foley Affordability $43M $34 $37 $39 $41 $43 On Track Achieve Provider NPS of Improve Provider Net Promoter Score - All LOB Christian/Shelley Relationships <-9 0 1 2 3 8 3.0 Complete [11-12] market Audit Compliance – E&I Coyle-Ikemoto Relationships conduct exams at 100% 80% 85% 90% 95% 100% On Track compliance 100% compliance to Audit Compliance – M&R Coyle-Ikemoto Relationships 80% 85% 90% 95% 100% 100% CMS audit requirements Complete [11] state HP audits with 100% Audit Compliance – C&S Coyle-Ikemoto Relationships 80% 85% 90% 95% 100% TBD compliance and no new Clinical CAPS Employee Engagement Harbin Relationships 80% 72% 74% 76% 78% 80% TBD Employee Attrition Harbin Relationships 12% 14% 14% 13% 13% 12% 10.1 Christian/Shelley (Prior All operational goals met Innovation/Health System Transformation (1- Auth Pilot), and on-time deployment M&R Hassle Free Prior Auth Pilot, 2- Weiss/Huckaby Innovation 80% 85% 90% 95% 100% On track for key 2017 Clinical Tradeables 11 Hospital Pilot, 3- 2nd MD Pilot) (Hospital Tradeables), pilots. Christian (2nd MD) 8 8 Better Care, Better Health, Lower Costs

Inspiration “There are those who look at things the way they are, and ask why…I dream of things that never were, and ask why not?” - Robert F Kennedy 9 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

How to Achieve the Triple Aim — Requires an Integrated Value Strategy Collaboration Amongst Providers, Plans, and Consumers Drives Value High Provider Payment Reform and VBC Quality V Delivery System Transformation A Population Health Management L Data Exchange and Advanced Analytics U Consumer Engagement and E Value-Based Insurance Design Low Evidence-Based Medicine Cost Clinically Appropriate Care Cost-Effective Options 10 Confidential Property of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Value-based Compensation — Foundational to Collaboration $18B $18B Managing entire POPULATION HEALTH Capitation + PBC $6B $6B Shared risk Managing a specific Level of financial risk CONDITION Shared savings $23B $23B or SERVICE LINE Achieving specific Condition or METRICS Service-Line Programs Performance-based contracts Primary care incentives Fee-for-service Bu Bundles les & & Performan mance-based sed Episodes Epis Accountable Ac le Ca Care Degree of care provider integration and accountability 11 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.

Aligning Incentives with Clinical Accountability: Readiness Continuum 12 Proprietary Information of UnitedHealth Group. Do not distribute or reproduce without express permission of UnitedHealth Group.