university of alaska

University of Alaska

Analysis Period:January 2009 through December 2010 Paid Basis

Although this report is not intended to contain any individually identifiable health information, it is possible that some of the information might be considered protected health information under federal or state privacy laws. As such, you are strictly limited in your ability to use this information for anything other than plan administrative functions as described in your health plan document and HIPAA privacy and security policies, as applicable.

© 2011 Lockton, Inc. All rights reserved.

Agenda

2

Demographics Health Cost Analysis

− Financial Analysis Clinical Risk and Conditions

– Population Stratification– Disease States

Appendix

Demographics


Demographics - Overview

4

The University of Alaska has fewer men than the norm with greater male and female proportions from ages 50 to 64 Higher employee age/gender factor of 1.13 which translates to above

norm per member per year (pmpy) cost profile of approximately 13% Employees are driving the costs of the plan accounting for 46.6% of the

costs whereas the norm has the spouses driving the plan costs. 0.3% of the University population is driving 16.1% of the costs 20.0% of the University population is driving 84.4% of the costs

The University of Alaska has a lower than norm proportion of women in child-bearing age with lower pregnancy and neonatal related cost than the norm but neonate UA inpatient cost per neonate per year increased from $2,590 to $5,053

Approximately 83.6% of the current members have been enrolled for 2 or more years

© 2011 Lockton, Inc. All rights reserved.$7

,358

$7,9

77

$3,8

93

$5,2

81

$6,2

51

$5,2

50

$2,5

50

$2,8

75

$1,8

60

$-

$2,000

$4,000

$6,000

$8,000

$10,000

2009 2010 Norm

PMPY Costs by Relationship

Employee Spouse Dependent

43% 44% 45%

27% 26% 21%

30% 30% 34%

0%

25%

50%

75%

100%

2009 2010 Norm

Members by Relationship

Employee Spouse Dependent

Demographics – Total Members

5Norm from Lockton InfoLock Book of Business.

Employees Spouses DependentsAverage Age 46 48 12 % Female 57% 48% 50%Average RI 9.60 8.06 3.76Average CGI 1.98 2.17 0.79

Age Category Gender # of

Members# of

Employees# of

Spouses # of Deps % of Members

% of Members

Norm0-1 Female 118 - - 118 1% 0%0-1 Male 123 - - 123 1% 0%2-19 Female 1,249 1 - 1,248 11% 14%

Male 1,275 1 - 1,274 12% 15%20-29 Female 695 325 120 250 6% 6%2-29 Male 535 210 93 232 5% 6%

30-39 Female 930 602 327 1 8% 8%30-39 Male 739 457 282 - 7% 8%40-49 Female 1,011 651 360 - 9% 9%40-49 Male 882 522 358 2 8% 9%50-59 Female 1,234 828 406 - 11% 8%50-59 Male 1,028 564 464 - 9% 8%60-64 Female 356 233 123 - 3% 2%60-64 Male 409 212 197 - 4% 3%65+ Female 149 100 49 - 1% 2%65+ Male 231 110 121 - 2% 2%Total 10,964 4,816 2,900 3,248 100% 100%


729853

869

7,164

Length of Enrollment (For Current Members)

Less than 12 months

12-23 months

24 -35 months

36 months

47.7% 47.5% 50.7%

52.3% 52.5% 49.3%

0%

25%

50%

75%

100%

2009 2010 Norm

Members by Gender

Male Female

Demographics - Total Members


Jan 09 - Dec 09

Jan 10 - Dec 10 Norm

10,186 9,890 11,328 10,964 122,237 118,676 52,772 52,334

1.12 1.13 1.001.34 1.31 1.171.37 1.35 1.360.56 0.62 0.54

2.32 2.28 2.1736.1 36.7 32.72

52.3% 52.5% 49.3%39.2% 39.0% 41.2%

Employee Age Gender FactorAge Gender Factor

Member to Employee RatioAverage Age% Female% Female in child bearing years

Average Number of Members

Spouse Age Gender FactorDependent Age Gender Factor

Total Number of MembersMember MonthsEmployee Months

Health Cost Analysis


Medical Financial Analysis Overview

8

Medical and Pharmacy Costs Medical and Pharmacy costs are increasing below Premera Alaska trend of

14.5% for calendar year 2010 Inpatient

Average allowed per Admission increased 11.4% and the average allowed per day increased 32.8% from $3,910 to $5,194 from calendar year 2009 to 2010; whereas the average length of stay decreased from 5.6 days to 4.7 days Increase in severity of inpatient claims

Emergency Room ER visits per 1,000 decreased from 178 to 169 and the cost per visit

increased indicating that members are utilizing the ER for appropriate services Low percentage of (7.86%) of non-emergent like condition ER visits

Moderate rate of members with 2 ER visits (16.2%) and 3 plus ER visits (8.2%)

Recommendation: Care manage those with 3 or greater visits to develop solutions to determine cause and appropriate management thru Alere


Medical Financial Analysis Overview

9

Outpatient All office visits per 1,000 increased from calendar year 2009 to 2010

Mental health visits per 1,000 increased 5.7% Preventive visits per 1,000 increased 2.8%

Large claims were a major driver of University costs Large claims made up 33.7% of the total University medical/Rx costs

compared to the norm of 29.4% The average paid per high cost claimant increased from $111,444 to $126,649

The cost increase resulted predominately from a $2M increase in costs of claims greater than $150,000

52% of the large claimants had 3 or more conditions, e.g. high blood pressure, high cholesterol and diabetes

Four categories accounted for the higher costs: Cancer/Cancer therapy, cardiovascular disease, diabetes & renal failure and back/osteoarthritis


19.0%

9.7%

10.1%

0.0% 10.0% 20.0%

Norm

2010

2009

% Employee Paid

18.1%

12.7%

12.9%

0.0% 10.0% 20.0%

Norm

2010

2009

% Pharmacy of Total Paid

Financial Summary


J an 09 - Dec 09 Jan 10 - Dec 10 % Change Norm

Allowed Amount $52,424,298 $56,015,344 6.8%Plan Paid $47,421,509 $50,827,875 7.2%Plan Paid PMPM $387.95 $428.29 10.4% $246.59Plan Paid PEPM $898.61 $971.22 8.1% $534.70

Allowed Amount $8,138,416 $8,460,767 4.0%Plan Paid $7,011,056 $7,380,833 5.3%Plan Paid PMPM $57.36 $62.19 8.4% $53.80Plan Paid PEPM $132.86 $141.03 6.2% $116.65

Allowed Amount $60,562,715 $64,476,111 6.5%Employee Paid $6,118,046 $6,235,830 1.9%Plan Paid $54,432,566 $58,208,708 6.9%Plan Paid PMPM $445.30 $490.48 10.1% $300.38Plan Paid PEPM $1,031.47 $1,112.25 7.8% $651.35

Medical PMPM $137.58 $157.15 14.2% $83.01Rx PMPM $8.29 $8.27 -0.3% $5.05

Medical Costs

Total Costs

Rx Costs

High Cost Claimants (>50,000 in claims)


Utilization Summary


Utilization is provided on an incurred basis and lagged three months.

Oct 08 -Sep 09

Oct 09 -Sep 10 % Change Norm

Place of Service Allowed PMPMInpatient Hospital $93.27 $101.40 8.7% $93.92Outpatient Hospital $120.90 $126.48 4.6% $87.02Office $155.38 $153.66 -1.1% $74.02Emergency Room $30.30 $32.30 6.6% $25.65Other $20.21 $18.48 -8.6% $12.14InpatientIP Days/1000 287 237 -17.4% 361Admissions/1000 51 50 -1.5% 74Average Allowed per Admission $21,904 $24,411 11.4% $15,354Average Length of Stay 5.6 4.7 -16.1% 4.9Average Allowed per Day $3,910 $5,194 32.8% $3,134

ER Visits/1000 178 169 -5.0% 218Average Allowed per ER Visit $2,047 $2,297 12.2% $1,416All Office Visits/1000 4,108 4,225 2.8% 4,096

Mental Health Visits/1000 604 639 5.7% 348Preventive Visits/1000 415 427 2.8% 448

Average Allowed per Office Visit (includes ancillary) $475 $452 -4.7% $218

Prescriptions/1000 8,566 9,036 5.5% 9,616Average Allowed per Brand Script $162 $177 9.1% $183Average Allowed per Generic Script $32 $32 1.6% $29% Generic Scripts 53.6% 57.9% 4.3% 64.0%

Outpatient

Prescription Drugs


Claim Expense Distribution


Members Plan Payment

Count % Amount % Count % Amount % % %$0 or less 2,427 21.1% -$71,332 -0.1% 2,120 19.0% -$166,981 -0.3% 20.5% -0.2%$1-$1,999 5,269 45.7% $3,621,320 6.7% 5,064 45.5% $3,496,144 6.0% 55.3% 10.6%$2,000-$4,999 1,721 14.9% $5,556,920 10.2% 1,756 15.8% $5,704,336 9.8% 12.4% 13.1%$5,000-$24,999 1,677 14.6% $18,490,084 34.0% 1,731 15.6% $19,007,967 32.7% 10.0% 33.9%$25,000-$49,999 270 2.3% $9,004,524 16.5% 305 2.7% $10,536,606 18.1% 1.2% 13.2%$50,000-$74,999 71 0.6% $4,228,981 7.8% 57 0.5% $3,403,341 5.8% 0.3% 6.8%$75,000-$99,999 37 0.3% $3,190,091 5.9% 43 0.4% $3,706,810 6.4% 0.1% 4.2%$100,000-$149,999 26 0.2% $3,077,955 5.7% 27 0.2% $3,151,309 5.4% 0.1% 5.5%$150,000+ 26 0.2% $7,334,022 13.5% 28 0.3% $9,369,177 16.1% 0.1% 12.9%Members > $50,000 160 1.4% $17,831,049 32.8% 155 1.4% $19,630,637 33.7% 0.8% 29.4%All Members 11,524 100.0% $54,432,566 100.0% 11,131 100.0% $58,208,708 100.0% 100.0% 100.0%

Norm

Plan PaymentPaid Amount Range

Jan 09 - Dec 09 Jan 10 - Dec 10

Members Plan Payment Members


4%

21% 23%

52%

0%

10%

20%

30%

40%

50%

60%

Members with 0 conditions

Members with 1 condition


Members with 3 or more conditions

Number of Chronic Conditions per HCC

High Cost Claimants

13

High Cost Claimants Jan 09 - Dec 09 Jan 10 - Dec 10 % Change NormNumber of Members 160 155 -3%% HCC Medical Paid 35.5% 36.7% 1.2% 33.7%% HCC Rx Paid 14.5% 13.3% -1.2% 9.4%Medical Paid for HCCs $16,817,181 $18,649,536 10.9%Rx Paid for HCCs $1,013,867 $981,101 -3.2%Total Paid for HCCs $17,831,049 $19,630,637 10.1%Average Medical Paid per HCC $105,107 $120,320 14.5% $109,930Average Rx Paid per HCC $6,337 $6,330 -0.1% $6,687Average Total Paid per HCC $111,444 $126,649 13.6% $116,617

Norm from Lockton InfoLock Book of Business.


58% 57%

34% 32%

8% 11%

0%

25%

50%

75%

100%

Members Paid Amount

2010 HCC by Relationship

Dependent

Spouse

Employee

61% 59%

31% 31%

8% 11%

0%

25%

50%

75%

100%

Members Paid Amount

2009 HCC by Relationship

Dependent

Spouse

Employee

High Cost Claimants

14

Diagnosis Group Members Total PaidCancer Therapies 16 1,231,902 Pharmacy 148 981,101 Osteoarthritis 42 950,442 Leukemia 2 880,595 CAD 21 806,240 Renal Failure 7 723,532 Breast Cancer 13 722,328 Intracranial Hemorrhage 5 696,999 Intervertebral Disc Disorders 33 658,769 Cerebrovascular Diseases 10 543,999 Myocardial Infarction 8 468,422 Septicemia 9 428,144 Diabetes Mellitus 33 411,303 Procedure Complications 26 402,821 Atrial Fibrillation 12 336,663 All Others 9,387,378 Total 155 19,630,637

High Cost Claimants by Top 20 Diagnosis GroupsJan 10 - Dec 10


Emergency Room Utilization

15

# of Members

% on Weekends

% Dependents

# of Members

% on Weekends

% Dependents

1 1,104 34% 33% 1,037 30% 30%2 263 30% 30% 228 33% 31%3 88 32% 34% 65 34% 17%4 21 36% 29% 20 45% 25%5+ 18 29% 0% 24 34% 25%

Visits per Member

Jan 09 - Dec 09 Jan 10 - Dec 10ER Visits by Number of Visits

43% 42%

26% 29%

31% 29%

0%

25%

50%

75%

100%

2009 2010

ER Visits by Relationship

Employees Spouses Dependents


Emergency Room Utilization

16

Primary Diagnosis Group Visits Paid AmountIntracranial Hemorrhage 4 330,211 Chest Pain 94 227,105 Misc Wounds and Injuries 202 184,498 Pain, not elsewhere classified 83 184,120 Abdominal Pain 80 143,117 ENT and Upper Resp Disorders 130 114,568 Appendicitis 15 113,058 Urinary Stones 26 96,088 Limb Fractures 61 92,735 Headache 55 85,448 Misc Skin Diseases 82 81,729 Musculoskeletal Disorders 95 80,728 Misc Symptoms 24 71,811 Nausea and Vomiting 40 67,477 Gall Bladder Diseases 14 66,800 Pregnancy Complications 40 63,070 Dysrhythmias 31 61,414 Dizziness 26 45,515 Misc Urinary Diseases 53 45,009 Syncope 26 44,153 All Others 741 1,085,566 Total 1922 3,284,221

Emergency Room Visit by Top 20 Diagnosis GroupsJan 10 - Dec 10

151

1771

2010 Potential Non Emergent ER Visits

Potential Non Emergent VisitsOther ER Visits


Pharmacy Financial Analysis Overview

17

Generic usage increased from 2009 and 2010 from 53.6% to 57.9% For each 1% increase in generic usage the pharmacy plan costs should

decrease 1% Estimated savings of $300,000 from 2009 to 2010

Nexium per script usage decreased from 2009 to 2010 from 1,318 to 1,197 & Simvastatin per script usage increased from 2009 to 2010 from 1,137 to 1,258 Step Therapy implemented in July 2010

Four specialty drugs made up 6.8% of the total University pharmacy spend in the calendar year 2010 Therapeutic class (condition): Anti-Inflammatory and Multiple Sclerosis % paid per member per month increased 33.5% for MS and 66.0% for Anti-

Inflammatory drugs between 2009 and 2010 Potential savings of $166,351, if 50% of cholesterol scripts moved to

Simvastatin Potential savings of $129,587, if 50% of PPI scripts moved to

Omeprazole


Prescription Drugs - Top 20 Therapeutic Classes

18

Paid Paid PMPM Scripts

Cost per

ScriptPaid Paid

PMPM ScriptsCost per

ScriptAntihyperlipidemics $560,152 $4.58 5,639 $99 $644,562 $5.43 5,948 $108 18.5%Antidepressants $550,720 $4.51 7,062 $78 $552,265 $4.65 7,247 $76 3.3%Peptic Ulcer - Antisecretory Agents $527,049 $4.31 3,456 $153 $453,332 $3.82 3,628 $125 -11.4%Multiple Sclerosis Agents $284,500 $2.33 122 $2,332 $368,625 $3.11 137 $2,691 33.5%DMARD - Anti-inflammatory Tumor Necrosis Factor Inhibiting Agents $164,166 $1.34 95 $1,728 $264,635 $2.23 146 $1,813 66.0%Asthma Therapy Combinations $187,127 $1.53 926 $202 $200,969 $1.69 942 $213 10.6%Anticonvulsant $166,430 $1.36 1,863 $89 $150,908 $1.27 2,197 $69 -6.6%Asthma Therapy - Leukotriene Modulators $147,268 $1.20 1,209 $122 $150,800 $1.27 1,064 $142 5.5%Analgesic Narcotic Agonists and Combinations $146,910 $1.20 1,172 $125 $144,058 $1.21 1,280 $113 1.0%Sedative-Hypnotic - Non-Barbiturates $129,479 $1.06 1,713 $76 $132,179 $1.11 1,920 $69 5.1%Contraceptive Oral Combinations $119,327 $0.98 3,719 $32 $114,862 $0.97 3,657 $31 -0.9%Attention Deficit-Hyperact Disorder (ADHD) Therapy $122,247 $1.00 897 $136 $114,845 $0.97 889 $129 -3.2%Inflammatory Bowel Agents $66,883 $0.55 146 $458 $114,694 $0.97 181 $634 76.6%Insulin - Human & Analogs, Short or Rapid Acting $95,183 $0.78 361 $264 $112,568 $0.95 381 $295 21.8%Insulin Response Enhancers $102,913 $0.84 1,799 $57 $111,096 $0.94 1,783 $62 11.2%Migraine Therapy - Serotonin Agonists $124,037 $1.01 666 $186 $110,903 $0.93 719 $154 -7.9%Herpes Agents $146,380 $1.20 805 $182 $108,252 $0.91 888 $122 -23.8%Antipsychotic - Atypical Agents, General $92,954 $0.76 208 $447 $103,668 $0.87 201 $516 14.9%Antipsychotic - Atypical Dopamine-Serotonin Antagonists $85,733 $0.70 365 $235 $102,084 $0.86 437 $234 22.6%Diagnostic - Blood Tests $102,122 $0.84 698 $146 $100,192 $0.84 672 $149 1.1%All Others $3,089,477 $25.27 55,345 $42 $3,225,335 $27.18 56,576 $57 7.5%Total $7,011,056 $57.36 88,266 $79 $7,380,833 $62.19 90,893 $81 8.4%

Therapeutic ClassJan 09 - Dec 09 Jan 10 - Dec 10 % Change

in Paid PMPM


Prescription Drugs - Top 20 Drugs by Paid Amount

19


Cost per

ScriptPaid Paid


ScriptLIPITOR Brand Antihyperlipidemics $296,311 $2.42 2,370 $125 $336,646 $2.84 2,389 $141NEXIUM Brand Peptic Ulcer - Antisecretory Agents $275,497 $2.25 1,318 $209 $264,257 $2.23 1,197 $221HUMIRA Brand DMARD - Anti-inflammatory Tumor Necrosis Factor $84,341 $0.69 43 $1,961 $163,463 $1.38 85 $1,923SINGULAIR Brand Asthma Therapy - Leukotriene Modulators $147,268 $1.20 1,209 $122 $150,800 $1.27 1,064 $142ADVAIR DISKUS Brand Asthma Therapy Combinations $146,138 $1.20 679 $215 $142,254 $1.20 641 $222

LEXAPRO Brand Antidepressants $110,837 $0.91 1,147 $97 $126,219 $1.06 1,153 $109

REBIF Brand Multiple Sclerosis Agents $98,636 $0.81 42 $2,348 $121,847 $1.03 47 $2,592COPAXONE Brand Multiple Sclerosis Agents $68,847 $0.56 28 $2,459 $114,006 $0.96 38 $3,000CYMBALTA Brand Antidepressants $92,584 $0.76 542 $171 $113,667 $0.96 639 $178CRESTOR Brand Antihyperlipidemics $83,844 $0.69 712 $118 $109,656 $0.92 812 $135ABILIFY Brand Antipsychotic - Atypical Agents, General $92,954 $0.76 208 $447 $103,668 $0.87 201 $516ENBREL Brand DMARD - Anti-inflammatory Tumor Necrosis Factor $79,825 $0.65 52 $1,535 $101,173 $0.85 61 $1,659EFFEXOR XR Brand Antidepressants $133,364 $1.09 780 $171 $93,564 $0.79 503 $186ONE TOUCH ULTRA TEST Brand Diagnostic - Blood Tests $80,146 $0.66 456 $176 $83,965 $0.71 502 $167ACTOS Brand Insulin Response Enhancers $70,027 $0.57 305 $230 $82,255 $0.69 322 $255HUMALOG Brand Insulin - Human & Analogs, Short or Rapid Acting $58,315 $0.48 231 $252 $76,931 $0.65 272 $283OXYCONTIN Brand Analgesic Narcotic Agonists and Combinations $54,479 $0.45 127 $429 $68,793 $0.58 163 $422BUPROPION XL Generic Antidepressants $59,176 $0.48 632 $94 $68,256 $0.58 907 $75AMBIEN CR Brand Sedative-Hypnotic - Non-Barbiturates $55,422 $0.45 378 $147 $67,842 $0.57 412 $165CELEBREX Brand NSAIDs, Cyclooxygenase-2 (COX-2) Selective

Inhibitors and Combinations$65,924 $0.54 414 $159 $67,481 $0.57 413 $163

All Others $4,857,124 $39.74 76,593 $63 $4,924,093 $41.49 79,072 $62Total $7,011,056 $57.36 88,266 $79 $7,380,833 $62.19 90,893 $81

Drug Name Brand/ Generic Therapeutic Class

Jan 09 - Dec 09 Jan 10 - Dec 10


Prescription Drugs - Top 20 Drugs by Script Count

20


Cost per

ScriptPaid Paid


ScriptLIPITOR Brand Antihyperlipidemics $296,311 $2.42 2,370 $125 $336,646 $2.84 2,389 $141HYDROCODONE-ACETAMINOPHEN

Generic Analgesic Narcotic Agonist Combinations $7,663 $0.06 2,139 $4 $8,956 $0.08 2,196 $4

LISINOPRIL Generic ACE Inhibitors and ACE Inhibitor Combinations $16,065 $0.13 1,788 $9 $13,759 $0.12 1,970 $7SYNTHROID Brand Thyroid Hormones and Combinations $3,470 $0.03 1,322 $3 $4,099 $0.03 1,361 $3

LEVOTHYROXINE SODIUM Generic Thyroid Hormones and Combinations $2,156 $0.02 1,201 $2 $1,835 $0.02 1,266 $1

SIMVASTATIN Generic Antihyperlipidemics $45,294 $0.37 1,137 $40 $44,907 $0.38 1,258 $36HYDROCHLOROTHIAZIDE Generic Diuretic - Thiazides and Related, and Combinations $720 $0.01 1,130 $1 $891 $0.01 1,230 $1NEXIUM Brand Peptic Ulcer - Antisecretory Agents $275,497 $2.25 1,318 $209 $264,257 $2.23 1,197 $221LEXAPRO Brand Antidepressants $110,837 $0.91 1,147 $97 $126,219 $1.06 1,153 $109AZITHROMYCIN Generic Macrolides and Combinations $31,574 $0.26 1,144 $28 $24,872 $0.21 1,129 $22ZOLPIDEM TARTRATE Generic Sedative-Hypnotic - Non-Barbiturates $36,209 $0.30 893 $41 $32,899 $0.28 1,105 $30SINGULAIR Brand Asthma Therapy - Leukotriene Modulators $147,268 $1.20 1,209 $122 $150,800 $1.27 1,064 $142METFORMIN HCL Generic Insulin Response Enhancers $15,109 $0.12 1,059 $14 $13,321 $0.11 1,019 $13OMEPRAZOLE Generic Peptic Ulcer - Antisecretory Agents $43,186 $0.35 675 $64 $45,464 $0.38 923 $49BUPROPION XL Generic Antidepressants $59,176 $0.48 632 $94 $68,256 $0.58 907 $75AMOXICILLIN Generic Penicillins $1,511 $0.01 708 $2 $1,944 $0.02 888 $2CRESTOR Brand Antihyperlipidemics $83,844 $0.69 712 $118 $109,656 $0.92 812 $135AMLODIPINE BESYLATE Generic Calcium Channel Blockers $16,710 $0.14 735 $23 $15,107 $0.13 787 $19METOPROLOL SUCCINATE Generic Beta Blockers Cardiac Selective, All $18,263 $0.15 638 $29 $22,736 $0.19 750 $30ALPRAZOLAM Generic Antianxiety Agents $880 $0.01 665 $1 $1,064 $0.01 737 $1All Others $5,799,313 $47.44 65,644 $88 $6,093,146 $51.34 66,752 $91Total $7,011,056 $57.36 88,266 $79 $7,380,833 $62.19 90,893 $81

Drug Name Brand/ Generic Therapeutic Class

Jan 09 - Dec 09 Jan 10 - Dec 10


$166,351

Anti-Hyperlipidemics Generic Analysis

21

Potential SavingsIf 50% of scripts

for:Lipitor,

Crestor, and Lescol XL

moved to

Simvastatin last year

costs would have been reduced by approximately:

Anti-hyperlipidemics % ChangePlan Paid PMPM $4.58 $5.43 18.5%

Statins Script Count

RxPMPM

Script Count

Rx PMPM

% Change

Lipitor 2,370 $2.42 2389 $2.84 17.0%Crestor 712 $0.69 812 $0.92 34.7%Lescol XL 7 $0.01 4 $0.01 -42.0%Simvastatin 1,137 $0.37 1258 $0.38 2.1%Lovastatin 77 $0.01 76 $0.01 21.2%Pravastatin Sodium 341 $0.09 421 $0.10 10.5%

Jan 09 - Dec 09 Jan 10 - Dec 10

Jan 09 - Dec 09 Jan 10 - Dec 10


Peptic Ulcer Generic Analysis

22

Potential SavingsIf 50% of scripts

for:Prevacid, Nexium, Aciphex, Protonix,Kapidex, Prilosec, Axid, and Zantac

moved to

Omeprazole last year

costs would have been reduced by approximately:

Peptic Ulcer % ChangePlan Paid PMPM $4.31 $3.82 -11.4%

Proton-Pump Inhibitor Script Count

Rx PMPM

Script Count

Rx PMPM

% Change

Prevacid 510 $0.96 62 $0.13 -86.8%Nexium 1318 $2.25 1197 $2.23 -1.2%Aciphex 122 $0.22 76 $0.14 -35.1%Protonix 7 $0.01 2 $0.00 -100.0%Kapidex 17 $0.02 25 $0.03 71.8%Prilosec 0 $0.00 1 $0.00 0.0%Axid 0 $0.00 0 $0.00 0.0%Zantac 0 $0.00 0 $0.00 0.0%Pantoprazole Sodium 458 $0.41 518 $0.44 9.0%Lansoprazole 43 $0.04 421 $0.34 740.2%Omeprazole 675 $0.35 923 $0.38 8.4%Ranitidine HCL 244 $0.03 264 $0.03 -24.6%Cimetidine 8 $0.00 30 $0.00 9.6%Famotidine 39 $0.01 33 $0.01 4.7%

Jan 09 - Dec 09 Jan 10 - Dec 10

Jan 09 - Dec 09 Jan 10 - Dec 10

$129,587


$9.28

$52.91

2010 Rx PMPM Paid

High Cost Scripts PMPM All Other PMPM

$7.70

$49.66

2009 Rx PMPM Paid

High Cost Scripts PMPM All Other PMPM

$7.70$9.28

$0

$2

$4

$6

$8

$10

2009 2010

PMPM Paid for High Cost Scripts

420498

0

100

200

300

400

500

600

2009 2010

Number of High Cost Scripts

Prescription Drugs - High Cost Scripts (>$1,000)

23


$162$177 $183

$32 $32 $29

$0

$50

$100

$150

$200

Jan 09 - Dec 09 Jan 10 - Dec 10 Norm

Cost per Script

Average Allowed per Brand Script Average Allowed per Generic Script

Brand versus Generic Analysis


46.4%

81.9%

42.1%

80.3%

36.0%

80.4%

53.6%

18.1%

57.9%

19.7%

64.0%

19.6%

0%

20%

40%

60%

80%

100%

Scripts Plan Paid Scripts Plan Paid Scripts Plan Paid

Jan 09 - Dec 09 Jan 10 - Dec 10 Norm

Percentage of Scripts and Plan Paid

Brand Generic

Clinical Risk and Conditions

Members included in this section were active plan participants as of the last month of the reporting cycle.

Each individual member is assigned a risk score indicating disease burden and a care gap score quantifying appropriate medical care. Depending upon the prevalence of disease and the extent of gaps in medical care, the population is stratified into low, moderate, and high risk for disease burden, and compliant or non-compliant for disease management.


Employee Population

Low Risk

High Risk

Moderate Risk

High Risk

Non-Compliant

26

Compliant

Moderate Risk

High Cost

PRIO

RITY

Goal InterventionManage high

costsHelp members

navigate systemCase Management

Close gaps in careSteerage

Disease Management and Health Promotion

Manage risk factors

Reinforce and monitor

compliance rates

Health Promotion

Manage risk factors Health Promotion

9615 members$5,695 PMPY


5,031 members$1,164 PMPY







Population Stratification


Low Risk, 52.3%

Low Risk, 9.6%

Moderate Risk, 30.6%

Moderate Risk, 23.2%

High Risk, 15.6%

High Risk, 33.6%

High Cost, 1.5%

High Cost, 33.6%

0.0%

25.0%

50.0%

75.0%

100.0%

Membership Cost

Percent of Members compared to Percent of Cost

Population Risk


Risk Category Number of Members 2009 PMPY 2010 PMPY Paid PMPY

NormAverage

RIAverage

CGIMember

DistributionMember

Distribution Norm

Low Risk, Compliant 5,000 $796 $1,162 $676 1.52 0.93 52% 48%Low Risk, Non-Compliant 31 $966 $1,561 $1,171 2.74 7.26 0% 0%Moderate Risk, Compliant 2,779 $3,832 $4,226 $2,312 9.26 1.59 29% 31%Moderate Risk, Non-Compliant 167 $5,366 $4,283 $2,725 9.92 7.56 2% 2%High Risk, Compliant 1,251 $15,169 $11,813 $7,228 21.59 2.29 13% 14%High Risk, Non-Compliant 246 $17,449 $13,088 $8,263 26.45 7.78 3% 4%High Cost 141 $39,722 $130,794 $116,333 32.23 4.43 1% 1%Total 9,615 $4,621 $5,695 $3,372 7.61 1.66 100% 100%


9.6% 9.7%

23.2% 22.8%

33.6%

39.7%

33.6%

27.8%

0%5%

10%15%20%25%30%35%40%45%

Actual Norm Actual Norm Actual Norm Actual Norm

Low Risk Moderate Risk High Risk High Cost

% of Total Paid by Risk Category

Population Risk (continued)


52.3%48.4%

30.6% 32.9%

15.6% 18.0%

1.5% 0.8%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Actual Norm Actual Norm Actual Norm Actual Norm

Low Risk Moderate Risk High Risk High Cost

Members by Risk Category


Cost of Non-Compliance

29

Condition Members Cost Members Cost Members Cost Members CostAsthma 104 $3,919 17 $3,791 85 $12,319 25 $14,229 Back Pain 835 $4,932 39 $5,367 570 $13,177 95 $14,349 Neck Pain 459 $5,131 23 $5,065 334 $13,425 53 $14,296 COPD 4 $3,608 3 $7,115 7 $13,271 8 $20,405 CAD 10 $3,042 6 $5,144 27 $10,938 22 $10,314 Depression 299 $4,563 13 $2,138 230 $12,061 35 $15,397 Diabetes 23 $4,939 83 $3,485 76 $14,846 143 $11,417 Hyperlipidemia 255 $3,978 12 $1,514 246 $12,090 57 $11,055 Hypertension 253 $3,573 26 $2,985 265 $10,681 70 $14,592 Osteoarthritis 99 $6,520 4 $4,040 150 $15,114 33 $16,931 Total 2,779 $4,226 167 $4,283 1,251 $11,813 246 $13,088

Compliant Non-Compliant Compliant Non-CompliantModerate Risk High Risk

This exhibit excludes high cost claimants. PMPY costs include comorbidities. *Norm from the Lockton InfoLock Book of Business.

Moderate Risk - Non-Compliant members on average cost $627* more per year than Compliant members.High Risk - Non-Compliant members on average cost $1,035* more per year than Compliant members.


18%

82%

Paid Amount by Number of Chronic Conditions

No Chronic Conditions 1 or more condition

Chronic Conditions per Member

30

58%

19%13% 10%

65%

17%9% 8%

0%10%20%30%40%50%60%70%





Chronic Conditions per Member

Actual

Norm

$1,855

$6,776 $8,691

$22,413

$1,216$4,129

$6,274

$13,667

$-

$5,000

$10,000

$15,000

$20,000

$25,000





PMPY by Number of Chronic Conditions

Actual

Norm


Top 5 Chronic Conditions

31

58

92

58

224

442

267

312

279

482

874

303

265

335

387

665

45

34

49

59

109

0 500 1000 1500 2000 2500

Hyperlipidemia

Depression

Hypertension

Neck Pain

Back Pain

Top 5 Chronic Conditions by Number of Members

Low Risk

Moderate Risk

High Risk

High Cost


Cost Adjustment

32

1In the ACCRA Cost of Living Index, health care costs in Alaska’s cities ranged from 30.4% to 44.6% spendier than the average U.S. city in 2010

The Norm has not been adjusted for the higher costs in Alaska Analysis Summary will compare UA costs to adjusted norm

of norm plus 37.5%

1http://labor.alaska.gov/research/col/col.pdf


Asthma Summary & Observations

33

Asthma Prevalence is comparable to the norm but has higher costs of $7,636 per

member per year (pmpy) compared to the adjusted norm of $6,407 pmpy 81% of the members with asthma are compliant in medication and doctor

visits Patients with more than one asthma-related emergency room visit is

higher than norm 18.3% of members with Asthma are without inhaled corticosteroids or

leukotriene inhibitors compared to the norm of 27.2% without inhalers Recommendation:

Alere send communications and out-reach to members with emergency room visits for Asthma Provide information on new free generic program if actively engaged in Alere DM

Asthma program


$6,621$7,636

$4,660

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000

2009 PMPY 2010 PMPY Norm

Asthma Members - Annual Cost2.7% 2.8%

2620

50

100

150

200

250

300

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Prevalence Norm

Asthma Prevalence

22

25

34

50

91

0 20 40 60 80 100

Hypertension

Hyperlipidemia

Depression

Neck Pain

Back Pain

Top 5 Comorbidities by Number of Members

Asthma

34

Members with Asthma

48% 20% 32%Members by Relationship Employees Spouses Dependents

7% 46% 42% 5%Member by Risk Category Low Risk Moderate Risk High Risk HCC

81% 19%Members by Compliance Compliant Non-Compliant

42% 19% 22% 17%Number of Comorbidities Asthma Only 1 comorbidity2 comorbidities 3+ comorbidities

Excludes High Cost Claimants



Asthma Quality and Risk Measures

35

Quality Care Measures

Risk Measures

Norm from the Lockton InfoLock Book of Business.

Criteria # Description Actual % Norm % VarianceAsthma 262 Patients with more than one asthma-related ER visit in the analysis period 4.2% 3.0% 1.2%Asthma 262 Patients with more than one asthma-related hospitalization in the analysis period 0.4% 0.4% 0.0%Asthma 262 Patients with asthma-related ER visit in the analysis period 10.7% 11.8% -1.1%Asthma 262 Patients with asthma-related hospitalization in the analysis period 2.3% 3.2% -0.9%

Criteria # Description Actual % Norm % VarianceAsthma-related ER visit 40 Patients without office visit in the analysis period 0.0% 2.8% -2.8%Asthma-related admission 6 Patients without office visit in the analysis period 0.0% 1.3% -1.3%

Asthma 262 Patients without inhaled corticosteroids or leukotriene inhibitors in the analysis period 18.3% 27.2% -8.9%


COPD Summary & Observations

36

COPD Prevalence is below the norm with higher UA costs of $12,692 pmpy

compared to the adjusted norm of $11,390 pmpy 47% of the members with COPD are non-compliant due to doctor visits 40% have 3 or more co-morbidities Low percentage of hospitalizations to due to COPD compared to the norm The number of members with COPD with an ER visit is comparable to the

norm Typically COPD is related to smoking

Communicate smoking cessation programs


$7,806

$12,692

$8,284

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000


COPD Members - Annual Cost

0.3%

0.8%

300

5

10

15

20

25

30

35

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

Prevalence Norm

COPD Prevalence

6

8

8

8

10

0 2 4 6 8 10 12

Diabetes

Neck Pain

Hypertension

Asthma

Back Pain


COPD

37

Members with COPD

40% 60%0%Members by Relationship Employees Spouses Dependents



10% 27% 23% 40%Number of Comorbidities COPD Only 1 comorbidity2 comorbidities 3+ comorbidities




COPD Quality and Risk Measures

38This exhibit excludes high cost claimants. PMPY costs include comorbidities. Norm from the Lockton InfoLock Book of Business.

Risk Measures


Criteria # Description Actual % Norm % VarianceCOPD 30 Patients with COPD-related ER visit in the analysis period 13.3% 13.4% -0.1%COPD 30 Patients with more than one hospitalization in the analysis period 10.0% 23.4% -13.4%COPD 30 Patients with more than one COPD-related ER visit in the analysis period 0.0% 3.9% -3.9%COPD 30 Patients with COPD-related hospitalization in the analysis period 6.7% 10.9% -4.2%

Criteria # Description Actual % Norm % VarianceCOPD-related ER visit 8 Patients without office visit in the analysis period 0.0% 0.0% 0.0%COPD-related admission 2 Patients without office visit in the analysis period 0.0% 0.0% 0.0%COPD 30 COPD without Office visit in last 12 months 3.3% 5.9% -2.5%


CAD Summary & Observations

39

CAD (Coronary Artery Disease) Prevalence is below the norm with lower UA costs of $8,787 pmpy

compared to the adjusted norm of $11,647 pmpy Greater percentage of spouses than employees with CAD High Risk members make up 50% of the group Higher than the norm CAD-related hospitals, cardiac catheterizations and

cardiac stentings This relates to higher intensity of CAD related services

There is significant non-compliance with only 54% of members being complaint 8.6% of the CAD population did not have hypertensive drugs and the norm is

5.6% July 1, 2011 implementation of new disease management program for actively

engaged members and free generic drugs


$8,907 $8,787 $8,471

$0

$2,000

$4,000

$6,000

$8,000

$10,000


CAD Members - Annual Cost

1.0%

2.1%

980

20

40

60

80

100

120

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Prevalence Norm

CAD Prevalence

16

26

27

31

35

0 10 20 30 40

Neck Pain

Diabetes

Hyperlipidemia

Back Pain

Hypertension


CAD

40

Members with CAD




16% 32% 17% 35%Number of Comorbidities CAD Only 1 comorbidity2 comorbidities 3+ comorbidities



CAD Quality and Risk Measures


Risk Measures


Criteria # Description Actual % Norm % VarianceCAD 98 Patients with cardiac catheterization in the analysis period 42.9% 37.7% 5.1%CAD 98 Patients with CABG in the analysis period 6.1% 5.0% 1.1%CAD 98 Patients with cerebrovascular disease (CVD) 9.2% 12.9% -3.7%CAD 98 Patients with MI-related hospitalization in the analysis period 4.1% 5.0% -0.9%CAD 98 Patients with peripheral vascular disease (PVD) 4.1% 6.7% -2.6%CAD 98 Patients with CAD-related ER visit in the analysis period 12.2% 14.2% -2.0%CAD 98 Patients with depression 3.1% 5.0% -1.9%CAD 98 Patients with CAD-related hospitalization in the analysis period 23.5% 19.3% 4.2%CAD 98 Patients with obesity 1.0% 1.1% 0.0%CAD 98 Patients with more than one hospitalization in the analysis period 17.3% 19.5% -2.2%CAD 98 Patients with cardiac stenting in the analysis period 24.5% 14.5% 10.0%CAD 98 Patients with hyperlipidemia 27.6% 50.6% -23.0%

Criteria # Description Actual % Norm % VarianceCAD and Hypertension 35 Patients without antihypertensive drugs in the analysis period 8.6% 5.6% 2.9%CAD-related ER visit 13 Patients without office visit in the analysis period 0.0% 0.6% -0.6%CAD-related admission 24 Patients without office visit in the analysis period 0.0% 0.4% -0.4%CAD 98 Patients without office visit in the last 12 months 2.0% 3.8% -1.8%

CABG – Coronary Artery Bypass Graft


Depression Summary & Observations

42

Depression Prevalence is significantly above the norm and UA costs are lower at

$7,258 pmpy compared to the adjusted norm of $7,661 pmpy Employees make up 60% of the depressed population Back and Neck pain are the top 2 co-morbidities There is a high compliance rate of 92%

Anti-depressants are number two out the top 20 therapeutic drug classes by paid amount and number one by script count


$6,629$7,258

$5,572

$0

$2,000

$4,000

$6,000

$8,000


Depression Members - Annual Costs7.3%

3.6%

7030100200300400500600700800

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%

Prevalence Norm

Depression Prevalence

60

68

69

163

270

0 50 100 150 200 250 300

Hypertension

Headache

Hyperlipidemia

Neck Pain

Back Pain


Depression

43

Members with Depression




37% 27% 18% 18%Number of Comorbidities Depression Only 1 comorbidity2 comorbidities 3+ comorbidities




Depression Quality and Risk Measures

44

Risk Measures



Criteria # Description Actual % Norm % VarianceDepression 703 Patients with more than one hospitalization in the analysis period 3.3% 7.6% -4.4%Depression 703 Patients with depression-related ER visit in the analysis period 3.1% 4.7% -1.6%

Criteria # Description Actual % Norm % VarianceDepression 703 Patients without office visit in the last 12 months 4.6% 4.4% 0.2%Depression-related admission 22 Patients without mental health office visit within 14 days of discharge 81.8% 77.0% 4.8%


Diabetes Summary & Observations

45

Diabetes Prevalence is slightly below the norm with UA costs of $9,459 pmpy higher

than the adjusted norm of $8,984 pmpy 71% of the population is non-compliant

There is significant non-compliance in this population with 56% falling in the high risk category

Patients with diabetes-related ER visit is above the norm at 4.6% compared to 4.1%

Patients without a retinal exam is higher than the norm as InfoLock does not collect third party vision information Currently VSP and Alere and working on a data exchange to better identify

these individuals Obesity is an issue within this group and percent of the diabetes

population that is obese is greater than the norm


$8,045

$9,459

$6,534

$0

$2,000

$4,000

$6,000

$8,000

$10,000


Diabetes Members - Annual Costs

4.1%4.7%

3900

100

200

300

400

500

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Prevalence Norm

Diabetes Prevalence

42

65

82

96

137

0 50 100 150

Depression

Neck Pain

Hyperlipidemia

Hypertension

Back Pain


Diabetes

46

Members with Diabetes




29% 25% 21% 25%Number of Comorbidities Diabetes Only 1 comorbidity2 comorbidities 3+ comorbidities




Diabetes Quality and Risk Measures



Risk MeasuresCriteria # Description Actual % Norm % VarianceDiabetes-related admission 6 Patients without diabetes-related office visit in the analysis period 0.0% 8.5% -8.5%Diabetes 390 Patients with dialysis in the analysis period 1.0% 2.6% -1.5%Diabetes 390 Patients with diabetes-related hospitalization in the analysis period 1.5% 2.3% -0.8%Diabetes 390 Patients with ulcer or open wound 11.0% 8.7% 2.3%Diabetes 390 Patients with CAD 6.7% 13.4% -6.7%Diabetes 390 Patients with obesity 3.8% 2.0% 1.9%Diabetes 390 Patients with hyperlipidemia 21.0% 36.3% -15.2%Diabetes 390 Patients with hypertension or taking antihypertensive drugs 66.4% 76.0% -9.5%Diabetes 390 Patients with peripheral vascular disease (PVD) 1.0% 2.6% -1.5%Diabetes 390 Patients with retinopathy 2.3% 3.6% -1.3%Diabetes-related ER visit 19 Patients without office visit in the analysis period 0.0% 1.1% -1.1%Diabetes 390 Patients with diabetes-related ER visit in the analysis period 4.6% 4.1% 0.5%Diabetes 390 Patients with renal failure 4.1% 4.7% -0.6%Diabetes 390 Patients with more than one hospitalization in the analysis period 5.6% 8.9% -3.2%

Criteria # Description Actual % Norm % VarianceDiabetes 390 Patients without micro or macroalbumin screening test in the last 12 months 42.3% 41.8% 0.5%Diabetes 390 Patients without semiannual HbA1c test 85.4% 88.8% -3.4%Diabetes 346 Diabetes without Office Visit in Analysis Period 0.3% 0.8% -0.5%Diabetes 346 Diabetes without Lab Test in Analysis Period 1.2% 2.3% -1.2%Diabetes 390 Patients without HbA1c test in the last 12 months 22.6% 27.5% -4.9%Diabetes 390 Patients without claims for home glucose testing supplies in the last 12 months 47.4% 49.9% -2.4%Diabetes 390 Patients without retinal eye exam in the last 12 months 90.0% 72.8% 17.2%Diabetes 346 Diabetes without Lab Test in Last 12 Months 9.0% 10.7% -1.7%


Hyperlipidemia Summary & Observations

48

Hyperlipidemia (High Cholesterol) Lower prevalence to the norm with higher UA costs of $7,493 pmpy

compared to the adjusted norm of $6,792 66% of the population are employees 45% of the population is high risk but has significant compliance of 88%

Hyperlipidemics are the number one therapeutic drug class by paid amount and number two by script count


$6,799$7,493

$4,940

$0

$2,000

$4,000

$6,000

$8,000


Hyperlipidemia Members - Annual Cost

7.0%

9.6%

6730100200300400500600700800

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Prevalence Norm

Hyperlipidemia Prevalence

74

82

157

182

269

0 50 100 150 200 250 300

Osteoarthritis

Diabetes

Neck Pain

Hypertension

Back Pain


Hyperlipidemia

49

Members with Hyperlipidemia




27% 27% 21% 25%Number of Comorbidities Hyperlipidemia Only 1 comorbidity2 comorbidities 3+ comorbidities




Hypertension Summary & Observations

50

Hypertension Prevalence is significantly lower the norm and UA costs of $7,335 pmpy

are higher than the adjusted norm of $7,034 pmpy 46% of the population is high risk but with a high compliance rate of 84%


$6,541$7,335

$5,116

$0

$2,000

$4,000

$6,000

$8,000


Hypertension Members - Annual Cost

7.5%

11.0%

7210100200300400500600700800

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Prevalence Norm

Hypertension Prevalence

91

96

140

182

256

0 50 100 150 200 250 300

Osteoarthritis

Diabetes

Neck Pain

Hyperlipidemia

Back Pain


Hypertension

51

Members with Hypertension






32% 28% 17% 23%Number of Comorbidities Hypertension Only 1 comorbidity2 comorbidities 3+ comorbidities


Hypertension Quality and Risk Measures

52

Risk Measures



Criteria # Description Actual % Norm % VarianceHypertension 721 Hypertension Related ER Visit in Analysis Period 35.8% 37.5% -1.8%Hypertension 721 Hypertension Related Hospitalization 0.1% 0.7% -0.5%Hypertension 721 Patients with more than one hospitalization in the analysis period 3.9% 7.0% -3.1%

Criteria # Description Actual % Norm % VarianceHypertension-related ER visit 14 Patients without office visit in the analysis period 0.0% 1.8% -1.8%Hypertension-related admission 1 Patients without office visit in the analysis period 0.0% 0.9% -0.9%Hypertension 721 Patients without office visit in the last 12 months 3.7% 4.9% -1.1%Hypertension 721 Patients without office visit in the analysis period 0.0% 0.6% -0.6%


Cancer & Screenings Summary & Observations

53

Malignant Neoplasms & Cancer Screenings Cancer screenings (e.g. mammogram) are better than the norm 45% of the cancers are early-identifiable cancers such as breast and colon Recommendation:

Communication to all members that there is no cost for preventive care and screenings


50%55%

38%44%

53%

35%

0%

10%

20%

30%

40%

50%

60%

Women >49 y/o with mammogram in last 12

months

Women>20 y/o with pap smear in the last

two years

Patients >49 y/o with any colorectal cancer

screening in the analysis period

Cancer Screenings

Actual Norm

Malignant Neoplasms/ Cancer Screenings

54

55%24%

9%

5%

5%

2%

45%

Early-Identifiable Cancers as a % of Total Paid

Non-Early Identifiable Breast CancerColorectal Cancer Female Genital Organ CancerProstate Cancer Skin Cancer

25%

24%

9%7%

6%

29%

Top 5 Malignant Neoplasms Diagnoses by Paid AmountJan 10 - Dec 10

Breast Cancer

Leukemia

Colorectal Cancer

Upper GI Cancer

Lymphoma and Lymphosarcoma

All Others



Back & Neck Pain Summary & Observations

55

Back & Neck Pain Significantly higher prevalence to the norm with UA costs of $7,092 pmpy

comparable to the adjusted norm cost of $7,156 pmpy 58% of the members with back pain were employees Approximately 50% of back pain members had associated neck pain Significantly higher utilization of chiropractic and physical therapy care

compare to the norm Chiropractic units/1,000 for UA at 1,261.5 compared to the norm of 439.4 Physical Therapy units/1,000 for UA at 3,720.3 compared to the norm of 786.2

MRI Scan is slightly above the norm for utilization and CT Scan is significantly below the norm


$6,140$7,092

$5,205

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000


Back Pain Members - Annual Cost

208

256

269

270

1108

0 200 400 600 800 1000 1200

Osteoarthritis

Hypertension

Hyperlipidemia

Depression

Neck Pain


21.7%

12.0%

20900

500

1000

1500

2000

2500

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Prevalence Norm

Back Pain Prevalence

MusculoskeletalBack Pain

56

Members with Back Pain




24% 39% 21% 16%Number of Comorbidities Back Pain Only 1 comorbidity2 comorbidities 3+ comorbidities




MusculoskeletalBack Pain Quality and Risk Measures

57Norm from the Lockton InfoLock Book of Business.

Risk Measures


Criteria # Description Actual % Norm % VarianceBack Pain 2,090 Back Pain Related Hospitalization in Analysis Period 0.8% 1.3% -0.5%Back Pain 2,090 Back Pain Related ER Visit in Analysis Period 32.2% 39.3% -7.1%Back Pain 2,090 Back Pain with >1 Hospitalizations in Analysis Period 2.3% 5.2% -2.9%

Criteria # Description Actual % Norm % VarianceBack Pain-related ER visit 93 Patients without office visit in the analysis period 1.1% 4.3% -3.2%


MusculoskeletalBack Pain, Neck Pain, and Intervertebral Disc Disorders Utilization


Primary Procedure Group Visits Paid Avg Paid Per Visit

Physical Therapy 7,797 $1,266,947 $162Orthopedic Surgery, exclude endoscopic 13 $579,723 $44,594Neurosurgery 22 $393,289 $17,877Chiropractic 5,050 $337,860 $67MRI Scan 172 $314,691 $1,830Other Anesthesia 82 $197,861 $2,413Rehab 928 $137,227 $148Office Visit - Established Patient 1,007 $130,556 $130Durable Medical Equipment 70 $112,603 $1,609Neurology 48 $99,218 $2,067X-ray 288 $94,404 $328Musculoskeletal Procedures 30 $40,010 $1,334All Others 731 $175,997 $241Total 16,238 $3,880,385 $239

Units/ 1000 Paid/ Unit Units/ 1000 Paid/ UnitChiropractic 1,261.5 $43 439.4 $16Physical Therapy 3,720.3 $32 786.2 $14CT Scan 2.1 $1,071 6.7 $344MRI Scan 20.8 $1,585 17.3 $502

Category Jan 10 - Dec 10 Norm


$6,611$7,493

$5,423

$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000


Neck Pain Members - Annual Cost

12.0%

5.3%

11520

200

400

600

800

1000

1200

1400

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Prevalence Norm

Neck Pain Prevalence

120

140

157

163

1108

0 200 400 600 800 1000 1200

Osteoarthritis

Hypertension

Hyperlipidemia

Depression

Back Pain


MusculoskeletalNeck Pain

59

Members with Neck Pain




2% 46% 30% 22%Number of Comorbidities Neck Pain Only 1 comorbidity2 comorbidities 3+ comorbidities




$10,603$11,513

$8,357

$0$2,000$4,000$6,000$8,000

$10,000$12,000$14,000


Osteoarthritis Members - Annual Cost

3.8%3.3%

369050100150200250300350400

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Prevalence Norm

Osteoarthritis Prevalence

51

74

91

120

208

0 50 100 150 200 250

Depression

Hyperlipidemia

Hypertension

Neck Pain

Back Pain


MusculoskeletalOsteoarthritis

60

Members with Osteoarthritis




16% 27% 25% 32%Number of Comorbidities Osteoarthritis Only 1 comorbidity2 comorbidities 3+ comorbidities




MusculoskeletalOsteoarthritis Quality and Risk Measures

61

Risk Measures



Criteria # Description Actual % Norm % VarianceOsteoarthritis 369 Patients with continuous use of opiates across the last 12 months 9.2% 11.4% -2.2%Osteoarthritis 369 Osteoarthritis Related ER Visit in Analysis Period 41.5% 44.3% -2.8%Osteoarthritis 369 Osteoarthritis with >1 Hospitalizations in Analysis Period 6.8% 12.1% -5.3%Osteoarthritis 369 Osteoarthritis Related Hospitalization in Analysis Period 16.0% 12.3% 3.7%

Criteria # Description Actual % Norm % VarianceOsteoarthritis-related ER visit 1 Patients without office visit in the analysis period 0.0% 2.3% -2.3%Osteoarthritis-related admission 63 Patients without office visit in the analysis period 0.0% 0.1% -0.1%


Pregnancy & Neonates Summary & Observations

62

Pregnancy Pregnancy and neonatal cost as a % of total paid claims is lower than the

norm Pregnant women delivering with fewer than 6 prenatal visits is

significantly worse than the norm 90.5% of the pregnant women in the UA population had less than 6 prenatal

visits 16.8% of the women within the child-bearing age had babies

Neonates Inpatient cost per neonate from 2009 to 2010 increased 95% from $2,590

to $5,053


4.7%

3.7%

0.0% 50.0% 100.0%

Norm

Actual

Pregnancy as a % of Total Paid

All Others Pregnancy

Pregnancy


1686

143

120

20

Pregnancy-Related Claimants of Total Childbearing Aged Females

Child Bearing Age - No Pregnancy Claims

Pregnancy Claimants - Employee

Pregnancy Claimants - Spouse

Pregnancy Claimants - Dependent

Risk Measures

Quality Care MeasuresDescription # Actual % Norm % VarianceWomen with hospitalization for pregnancy-related diagnosis other than delivery 263 4.9% 6.4% -1.5%Women with pregnancy-related ER visit in the analysis period 263 16.0% 16.6% -0.6%

Description # Actual % Norm % VariancePregnant women delivered with fewer than six prenatal visits 263 90.5% 25.5% 65.0%

$53,676 $82,610

$1,267,302

$1,222,682

$-$200,000 $400,000 $600,000 $800,000

$1,000,000 $1,200,000 $1,400,000

2009 2010 2009 2010

ER Cost Inpatient Cost

Pregnancy-Related Cost

37 40

117 117

0

20

40

60

80

100

120

140

2009 2010 2009 2010

ER Claimants Inpatient Claimants

Pregnancy-Related Claimants


6 5

110119

0

20

40

60

80

100

120

140

2009 2010 2009 2010

ER Claimants Inpatient Claimants

Neonates-Related Claimants

4.1%

1.8%

0.0% 50.0% 100.0%

Norm

Actual

Neonates as a % of Total Paid

All Others Neonates

Neonates

64

$2,983 $2,081

$284,907

$601,323

$-$100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000

2009 2010 2009 2010

ER Cost Inpatient Cost

Neonates-Related Cost


Recommendations

65

Medical ER - Specific communication on using alternative care setting for non-

emergent care ER - Care manage those members thru Premera with three or greater ER

visits to determine cause and appropriate resources and tools for the employee Is primary care physician located close and are they seeing their primary care

doctor Neonates – provide communication on importance of prenatal vitamins

and visits Chiropractic – Reduce the number of visits from 26 a year to 12 visits a

year Pharmacy

Covering generic only PPIs – was not supported by JHCC for FY 2012


Recommendations

66

Wellness Provide Alere with list of individuals in the compliant and non-compliant

high and moderate risk to see how many have been contacted by Alere and if any are actively engaged in the Alere programs

Gather metabolic syndrome cluster data through IHPs and Mass Screening events to identify those that are progressing to moderate and high risk – Keep the health employees healthy Establish incentives for employees to provide biometric information

Communicate to employees no cost preventive care and screenings Continue to provide and promote nutrition management and improved

physical activity/ergonomics at work thru WIN and targeted communications Obesity is a significant risk at the University

Continue programs that address obesity and nutrition Currently have WIN weight management and IHPs

Appendix


Chronic Condition Reference

68

Asthma Asthma is quite common. It can be triggered by environmental triggers such as allergies to pets or pollens, infections, cold temperatures, stress, and sometimes exercise. It is a common reason for emergency room visits and sometimes hospital admissions. It is best managed by avoidance of triggers when possible and regular use of medication. The number one reason for poor asthma control is lack of adherence to a medication regimen that includes an inhaled steroid in addition to a bronchodilator. Educating patients about the triggers and the importance of medication compliance are key to controlling this condition.

Back Pain and Neck PainBack injury prevention programs and core strengthening programs are effective in preventing injury and getting individuals back to work. In the workplace, attention to ergonomics of workstations is important in reducing back and neck pain. Monitoring the trend in high cost radiology for back pain, and surgery for herniated discs is important to establish the need for low back pain condition management programs and pre-certification programs in high cost radiology. Evaluation along with proper treatment of back pain and neck pain should limit the early use of high cost radiology including MRI and CT scans and early back surgery for herniated discs and other back ailments. Preventive practices in postural alignment, availability of therapeutic alternative treatments such as PT, acupuncture, pain treatment, and steroid injections help promote lower cost, higher efficacy solutions. COPDThe most common cause of COPD is smoking. Unfortunately about 23% of American adults still smoke. COPD commonly includes chronic emphysema and bronchitis. The condition is associated with significant lost work time and high health costs. It is progressive and remains the fourth leading cause of death in the U.S. There is no cure. Treatment is aimed at managing exacerbations of the disease. The most important step in treatment is to encourage those who are still smoking to stop. This can be aided by implementing a smoking cessation program that combines behavioral modification with medication.

CADThis the most common type of chronic heart disease. It is caused by the build up of plaque in the arteries supplying oxygen and nutrients to the heart muscle. Plaque consists of a number of substances, including cholesterol, other fats, and calcium. CAD can result in chest pain (angina), heart attacks, abnormal heart rhythms, and congestive heart failure. It can be minimized or ameliorated by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. Medications also play a significant role, so compliance with a medication regimen is important.

Depression Depression is common, whether it is mild, moderate, or severe. It is often associated with other chronic conditions such as heart disease, diabetes, and chronic pain. It is most commonly managed with medication. These drugs are expensive so employees should be aware of several good generic antidepressants that are now available. Several studies indicate that regular sleep and exercise, combined with a strong social network can reduce the incidence and severity of depression and also reduce the need for medication.


Chronic Condition Reference (continued)

69

DiabetesType 2 diabetes continues to increase in the U.S. The prevalence is a direct result of poor lifestyle choices including inactivity and poor dietary choices that result in obesity and diabetes. This a particularly serious chronic disease because it affects so many different body systems including the heart, the eyes, the kidneys, and the blood vessels. Poorly controlled diabetes results in accelerated decline in these body systems, a decline in quality of life, and high health costs. Like many of the other chronic conditions, it is best managed by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. For those with established type 2 diabetes, it is very important that regular monitoring of the condition is done in order to avoid some of the serious complications.

HyperlipidemiaAn abnormally elevated lipid profile is a risk factor for heart disease. The lipid profile includes measurement of cholesterol, triglycerides, and LDL and HLD cholesterol. There is a genetic component to lipid levels that can make it more challenging for some individuals to control their lipid levels. But for most people lipid levels can be managed by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. But many people now are prescribed medication to help control lipids. These medications are called “statins” and a variety of medication options are now available.

Hypertension High blood pressure is very common. Sometimes there is an increased risk for an individual due to genetic makeup. For most people blood pressure gradually rises with age. Hypertension is a significant risk factor for heart attack, stroke, impaired vision, kidney damage, and congestive heart failure. Hypertension can be ameliorated by implementing healthy lifestyle habits that include regular exercise, a healthy diet, and successful work-life balance. Also for many a diet low in sodium is helpful. There are many medications that can help control blood pressure. As with any treatment for chronic disease, compliance is essential for effective management.

OsteoarthritisAbout 21 million Americans have osteoarthritis. The incidence increases with age. It is associated with a breakdown of cartilage in joints and can occur in almost any joint in the body. It most commonly occurs in the weight bearing joints of the hips, knees, and spine. Factors associated with its onset include obesity, injury, joint overuse, and heredity. Osteoarthritis generates a lot of medical expense due to the cost of pain medications, diagnostic imaging, and surgical procedures (especially of the hip and lower back). Exercise and physical therapy are important restorative and preventive measures. Weight management and good nutrition are often helpful as well.


Glossary

70

Adjusted Risk Index (ARI)Measurement of an individual's disease burden and compliance with D2Hawkeye's Quality and Risk Measures. The Quality and Risk Measures are designed to identify potential gaps in care and care management opportunities.

Allowed AmountTotal paid amount, this includes both the employee and employer paid amount.

Co-morbiditiesA medical condition that exists simultaneously with and usually independently of another medical condition.

Compliant MembersMembers with a Care Gap Index of 5 or less.

Current MembersIndividuals who are eligible with the plan as of the end of the reporting period.

Employee PaidEmployee paid consists of co-pays, coinsurances, and deductibles paid by an enrollee, the spouses, and their dependents.

Employer PaidEmployer paid includes total paid by the plan for enrollee, the spouses, and their dependents.

Emergency Room VisitDistinct service dates for members with claims that have HCFA (Health Care Financing Administration) Place of Service code of 23.

Emergency Room Visits, Potential Non Emergent – Potential non emergent ER visits are visits which based on the diagnoses potentially should have been treated in a physician’s office. These include visits for general symptoms, sinusitis, influenza, general medical examinations, etc.

Full CycleTime period that corresponds to date range of data included in the data warehouse (typically 36 months).

High Cost Claimants (HCC)Claimants with plan payment of $50,000 or more during either the current or previous 12 months.


Glossary (continued)

71

High Risk ClaimantsClaimants with plan payment of less than $50,000 during the most recent 12 months and a Risk Index greater than or equal to 15.

High Cost ScriptScript with a plan paid amount of $1,000 or more.

Homegrown CodesNon-standard codes found in the dataset being reported.

Incurred BasisClaim expenses reported based on the service date.

InpatientAll claims paid for hospital inpatient services base on HCFA Place of Service code 21, 51, and 61.

Low Risk ClaimantsClaimants with plan payment of less than $50,000 during the most recent 12 months and a Risk Index of 4 or less.

MDC Major Diagnostic Category

Member MonthsTotal number of members eligible for the time period.

Moderate Risk ClaimantsClaimants with plan payment of less than $50,000 during the most recent 12 months and a Risk Index between 5-14.

Non-Compliant MembersMembers with a Care Gap Index of 6 or more.

NormNorms from the Lockton InfoLock Book of Business are derived from claims paid for the 12 months ending 12/31/2010 from Lockton’s Normative Database comprised of 2 million member lives from self-insured, commercial plans.


Glossary (continued)

72

Office VisitDistinct service dates for members with claims that have HCFA Place of Service code of 11.

OutpatientServices which take place outside of an inpatient place of service are defined as outpatient.

Paid BasisClaim expenses reported based on the date the claim was paid.

PEPM Per Employee per Month.

PMPM Per Member per Month.

Plan PaymentPlan payment includes total paid by the plan for enrollee, the spouses, and their dependents. Also referred to as Employer Paid.

Quality and Risk MeasuresThe Quality and Risk measures are designed to identify potential gaps in care and care management opportunities.

Risk Index (RI)Measurement of an individual's disease burden. The higher the RI the more likely that member is to experience a negative health event in the next 24 months.

Therapeutic ClassGrouping of drugs into categories defined by First Data Banks.

Total MembersNumber of unique members in the time period.

Units per 1,000The average number of units (days, members, emergency room visits, etc.) per 1,000 members per year.


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