Health Care System. Troyen Brennan, M.D., M.P.H. Executive Vice President & Chief Medical Officer

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1 Creating a More Connected Health Care System Troyen Brennan, M.D., M.P.H. Executive Vice President & Chief Medical Officer

2 Agenda Our Role in the Changing Health Care System CVS/minuteclinic: Growth and Connectivity Better Outcomes through Patient Engagement Supporting Providers in the New Risk Landscape 2

3 Before Reform, Our System Was Disconnected: Uncoordinated Care and Stakeholders in Silos CONSUMERS Doctor Hospital System Health Plan Pharmacy 3

4 New Outcomes-based Environment Demands Greater Coordination of Care and Connectivity CONSUMERS Doctor Hospital System Health Plan Pharmacy All stakeholders need visibility ibilit into consumer health behaviors plus the ability to impact those behaviors 4

5 CVS Health Can Help Connect the System and Meet Patient Care Goals CONSUMERS Doctor Hospital System Health Plan Pharmacy 5

6 Agenda Our Role in the Changing Health Care System CVS/minuteclinic: Growth and Connectivity Better Outcomes through Patient Engagement Supporting Providers in the New Risk Landscape 6

7 Strong Growth for CVS/minuteclinic Continues Net Revenue ($, millions) 32% CAGR ~300 ~ E 2015E 7

8 2010: 454 CVS/minuteclinic Locations 454 Full-time clinics in

9 2014: More than 960 CVS/minuteclinic Locations in 31 States and Growing ç 960+ Full-time clinics in

10 2014: More than 960 CVS/minuteclinic Locations in 31 States and Growing ç Target of 1,500 locations in

11 CVS/minuteclinic is Building a Strong Brand CVS/minuteclinic Net Promoter Scores 84% 82% 80% 2014 Net Promoter Scores USAA Home Insurance 84% CVS/minuteclinic 84% Amazon.com 64% Integrated Delivery Network 40% Medicare 27% Health Insurance Sector Avg. 17% Sources: 1. Press Ganey, report Satmetrix Net Promoter Industry Benchmarks Report, Satmetrix Net Promoter Health Insurance Report,

12 CVS/minuteclinic Delivers High Quality Care % Compliance with Optimal Quality Care Performance Standards 71.9% 51.9% 49.4% CVS/minuteclinic Ambulatory Visit Emergency Department Source: Weighted average of results. Quality of Care at Retail Clinics for 3 Commons Conditions, Shrank, W., et. al., American Journal of Managed Care, Oct

13 CVS/minuteclinic Suite of Services Acute Care Diagnose, treat and prescribe for common illnesses Allows physicians to focus on more complex patient needs After-hours and weekend care Telehealth for expanded access Preventive Access for chronic disease screenings and vaccinations Complete health review for risk assessment 13

14 CVS/minuteclinic Suite of Services: Extended to Enable Better Population Management Acute Care Diagnose, treat and prescribe for common illnesses Allows physicians to focus on more complex patient needs After-hours and weekend care Telehealth for expanded access Preventive Access for chronic disease screenings and vaccinations Complete health review for risk assessment Chronic Condition Monitoring Support clinical quality improvement and close gaps in care Monitoring services for diabetes and hypertension with patient education Wellness Smoking cessation and weight loss programs Biometric screening Connecting members to primary care Complementary primary care working with other providers 14

15 Epic EMR: Broader Scope and Connectivity Epic Will Enable Close, Real-time Connectivity with Health Alliances EpicCare TM 54% of U.S. population will be cared for by provider using EpicCare 1 Health System Alliance Patient record exchange platform Advantages Laboratory and registry data and decision support Pharmacy messaging Enables co-management of chronic condition care Infusion Services Visit and discharge summary sharing Source: Epic Systems Corporation, Copyright 2014 Epic Systems Corporation. All rights reserved 15

16 Agenda Our Role in the Changing Health Care System CVS/minuteclinic: Growth and Connectivity Better Outcomes through Patient Engagement Supporting Providers in the New Risk Landscape 16

17 Better Pharmacy Care: Investing in Adherence Reduces Overall Costs Healthcare Savings from Improved Adherence (PMPY) Lipid id Lowering Diabetes Hypertension Net savings: $2,710 Net savings: $5,227 Net savings: $5,047 $601 $656 $629 Added Rx Spend Medical and Productivity Savings Sources: Roebuck MC, Liberman JN, Gemmill-Toyama M, Brennan TA. Medication adherence leads to lower health care use and costs despite increased drug spending. Health Affairs. 2011;30(1): Carls GS, Roebuck MC, Brennan TA, Slezak JA, Matlin OS, Gibson TB. Impact of medication adherence on worker productivity: an instrumental variables analysis in five chronic diseases. JOEM,

18 Only Half of Patients Adhere to Evidence-based Drugs Prescribed by Physicians t (%) Adherence is a ~$300B problem nationally ent Persisten Perce Three Six Twelve Months following initiation Oral antidiabetic ARB Statin Source: Yeaw J, Benner J, et al. J Manag Care Pharm 2009;(9): Choudhry, Shrank. NEJM

19 Building on a Solid Foundation of Pharmacy Advisor to Engage More Patients Pharmacy Advisor One-on-one pharmacist support Launched for PBM members with diabetes Expansion to Cardiovascular conditions and rest of top 10 conditions Expansion to Medicare and Medicaid Additional conditions: behavioral health 30- to 90-day, comprehensive medication reviews Predictive adherence index Note: 1. Conditions addressed vary by line of business. 19

20 Improving Adherence to Maximize Stars Performance % Patients with At Least 80% Adherence to Medications Diabetes 70% 74% High Blood Pressure 69% 73% High Cholesterol 60% Results Ability to impact 80% of overall Medicare Part D Star rating Helped improve plan s overall 65% Star ratings from 3 to 4 Stars in 2013 Worth $20 to $30 PMPM to a health plan 20

21 And We Are Aggressively Pursuing New Programs to Further Boost Adherence Digital Adherence Advantage: Adherence support integrated into daily life Multi-dose Calendar and Packing Advantage: Organize dosing to reduce complexity Synchronize Rxs Advantage: Fill all medications i with fewer trips to the pharmacy Comprehensive Medication Review Advantage: Pharmacist review to help patients with complex regimens avoid major drug related events Predictive Analytics Advantage: Knowing which patients will have medication problems, when and which channel is best to contact them 21

22 Our Health Engagement Engine Connects Our Enterprise and Links Us to Providers and Insurers Nurse Pharmacist Provider Hospital Health Plan Health Engagement Engine Insights from clinical collaborations Medical visit records at CVS/minuteclinic Registered web user data Data from EMR CVS Health Research Institute Pharmacy customer data Pharmacy claims from members Insurance claims from health plan 22

23 Health Engagement Engine Enables More Effective Interventions to Support Patient Care Goals Health Engagement Engine 23 2

24 Our Solutions Can Integrate with Points of Care to Help the Patient Get Back on Track Example: John Intervention Path to Better Health Patient identified Because of a missed prescription pickup system is alerted Medication reminders sent to patient via text Pharmacist prompted at CVS/pharmacy when patient picks up medication and discusses importance of taking medications Message sent to provider and available for alert upon patient s next visit Health Engagement Engine 24

25 Improving Care for a Fragile Patient: CareFirst Patient (Member) Example: Mary Intervention Path to Better Health Patient identified as at risk may benefit from comprehensive medication review Comprehensive medication review performed, and multi-dose packaging recommended Rx pick-up & Multi-dose packaging to simplify daily meds Follow-up call from pharmacist to discuss multidose packaging experience Refill reminder call from pharmacist 10 days before next refill Health Engagement Engine 25

26 Agenda Our Role in the Changing Health Care System CVS/minuteclinic: Growth and Connectivity Better Outcomes through Patient Engagement Supporting Providers in the New Risk Landscape 26

27 CVS Health Can Support Health Systems Across the Payment Continuum Birmingham, AL Evolving Contracting Arrangements Sacramento, CA Fee for Service (FFS) FFS with Pay for Performance Bundled Payments Shared Savings Shared Risk Global Capitation Our Goal: To improve pharmacy care and complement primary care to help providers and patients reach their health goals 27

28 For Insurers and Providers at Risk, Improving Pharmacy Care Creates Financial Benefits Pharmacy Care Economic Model: 100,000 Life Medicare Example ($, millions) 1, Total Health Care Spend Annual Savings From Better Pharmacy Care Net Cost After Savings At least 50% of these savings are attainable today Notes: 1. Projections based on CVS/caremark data. Individual results will vary based on plan design, formulary status, demographic characteristics and other factors. 2. This is a forward-looking statement based on total cost of care, and actual results may be different. Source: CVS Health Internal Analysis 28

29 Connecting with At-Risk Provider Groups to Achieve Population Health Goals Data exchange Doctor Group in shared risk model Health Engagement Engine CVS Health identifies and acts on patient opportunities Patient intervention ti data 29

30 Connectivity Can Enable Coordinated Care with Health System Alliances, Preventing Readmissions Intervention Path to Better Health Bedside delivery before patient is discharged Patient identified as at risk may benefit from medication reconciliation Pharmacist calls patient for medication reconciliation Coordinated infusion CVS/minuteclinic for follow-up high blood pressure and smoking cessation counseling Continuous coordination and monitoring between provider, pharmacist, and case manager EMR messaging sent to provider about medication reconciliation and MinuteClinic visit Health Engagement Engine 30

31 CVS Health s Readmission Prevention Solution Offers Significant Cost Savings 30-day Readmission Rates (%) % Reduction Cost Reduction per Targeted Patient ($) 5,108 65% Reduction ,785 Control Intervention Control Intervention Reduction in readmission rate Readmission costs avoided Note: 1. CVS/caremark pilot data

32 Our Full Range of Programs Add Value for Providers Better Specialty Hospital Population Pharmacy Care Management Transitions Health Adherence interventions Wellness and chronic care support EHR connectivity and clinical messaging Convenient medication dispensing Effective care management for rare conditions Bedside delivery of medications Home infusion services Onsite CVS/pharmacy Targeted interventions Data analytics Shared savings Shared risk Comprehensive reporting Fee for Service (FFS) Progress toward population management Global Capitation 32

33 Our Health System Alliances Demonstrate the Value of CVS Health s Unique Offering 33

34 Our Solutions Offer Joint Value for the Health Systems and CVS Health Example: 500,000 Lives System and $2 Billion in In-Patient Revenue Value to CVS Health Increased dispensing volume Improving Adherence Increased MinuteClinic volume Supporting Providers Strategies Strong CVS channel preference Quality measure bonuses $8 million to $15 million Unique High Quality Service Offerings Avoid re-admission penalties $10 million to $25 million Savings for at-risk population $50 millionto $100 million Value to Health System Affiliate 34

35 Positioned for Today, Preparing for Tomorrow Made the Right Moves Acquired and rapidly expanded MinuteClinic Built Health Engagement Engine/adherence programs Still Only CVS Unmatched, integrated assets and consumer expertise Unique ability to connect the system/improve health Looking Ahead Continued Innovation Continued research and innovation Unparalleled role in rapidly-changing environment Sustainable Growth Ability to support providers with new risk models Can pivot to meet evolving needs of payors/providers 2014 CVS Creating Health a More Connected Health Care System 35

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