Kenneth J. Phenow, MD, MPH Senior Medical Executive, CIGNA Healthcare of Texas and Oklahoma

1. Effective Management of Health Care CostsThe Patient Centered Medical Home: Re-Organizing Primary Care Delivery and Reimbursement to Improve Quality, Cost and Access  Kenneth J. Phenow, MD, MPH Senior Medical Executive, CIGNA Healthcare of Texas and Oklahoma

2. Systems are perfectly designed and operated to produce the results they get. (Don Berwick) Traditional fee-for-service payment rewards piecemeal work and volume of services rather than prevention of illness and coordination of care (Reactive vs. Proactive / Disease vs. Health) The more procedures a physician performs and the higher the value of the procedure, the more the physician is paid (Rewards specialization and more care, not coordination of care). Primary Care currently operates in a transaction-based, episodic and volume-based reimbursement model that does not recognize the value of comprehensive, coordinated high value care (Fragmented vs. Organized / Episodic vs. Coordinated Care)

3. Imagine if Health Care Delivery was…….. Simple / Coordinated Ongoing and Continuous Primary Care based Quality & Cost Consistency Patient Centric Proactive Preventive Efficient Outcome driven Affordable High Quality & Value

4. Health Reform Will Improve The Way Care Is Delivered For All Americans Changes to the delivery system Incent quality not quantity of medical care No cost sharing for preventive care Better coordinate care for patients with chronic diseases Ensure patients receive clinically recommended treatments and follow-up Reduce duplicative testing and re-hospitalization Integrate with community health resources to provide more holistic patient care Expand coverage and access Medical Homes are a Key Component of Each of the Current Reform Proposals Senate HELP Committee, Senate Finance Committee, House Tri-Committee Primary care has a critical role to play in reform Health reform will facilitate adoption of advanced primary care or medical home models

5. Our Primary Care System Must Be Transformed To Meet Future Demands From Chronic Disease and Reform Current challenges Emergency room visits increased by 36% between 1996 and 2006; 47% of ED visits could have occurred in a physician’s office 20% of patients are readmitted within 30 days of hospitalization, most of which are avoidable 50% of patients that are readmitted do not see a physician after their first hospitalization 75% of health care spending is for patients with chronic diseases Over two years, the typical Medicare patient sees 2 different primary care doctors and 5 different specialists Millions of additional Americans will enter the primary care system with health reform Advanced primary care models, like medical homes, can provide the coordination mechanisms and decision support to improve quality, cost, and satisfaction http://blogs.wsj.com/health/2008/08/06/emergency-room-visits-hit-record-high/ http://www.medicalnewstoday.com/articles/157206.php http://www.boston.com/news/local/massachusetts/articles/2009/04/24/er_visits_costs_in_mass_clim

6. Patient Centered Medical Home Concepts Principles Personal Physician Physician directed practice Whole-Person orientation Coordinated care Quality and safety Enhanced access Payment for value NCQA Standards Access and communication Patient tracking and registry Case management Patient self-management support Electronic prescribing Test tracking Performance reporting Advanced electronic communication

7. Potential Delivery System Improvements via PCMH Seen as a solution to “care fragmentation” as a driver of increasing health care costs Seen as a facilitator of primary care recognition and re-emergence Seen as a driver of improved quality, affordability and high value patient-centric health care Enhanced coordinated health care experience Improved patient safety and reduced duplication of services Care continuity & improved care transitions Improved practice profitability and physician satisfaction Improved quality and effectiveness of care along with patient satisfaction Reduced utilization of supply-sensitive care from value-based payments

8. Comprehensive, Accountable, Collaborative Care Practice Resources CIGNA Solutions Access • Clinical Programs • Disease Management • Case Management • Health Information Line • HRA, On-line coaching Coordinated Care & Disease Registry Information • PCP Health Advocate • Patient centric • Personal care • Holistic • coordinated Evidence based guidelines E-Prescribing Electronic Medical Record • Patient Specific • Re-admission Predictor • Risk Predictor • Gaps in Care • Management Reports • Population Based • Episode Based • Focused Trends Inpatient Care Transition Inpatient/ER Follow-up Improved Quality Increased Satisfaction Lower Costs Lab Test & Referral Results Follow-up Supply Sensitive Care - Generics - Value Referrals

9. Key Focus Areas Access Value Referrals Informatics Enabled Embedded Care Coordination Value Pharmacy Evidence Based Care Acute Chronic Preventive Engaging Patients Informing Empowering Value Pharmacy

10. Medical Clinic of North Texas (MCNT) and CIGNA Pilot Why MCNT as a PCMH Pilot? 120 PCP’s in 42 practices across North Texas region Enabled in all locations with fully interoperable EMR Provide services to about 12,000 CIGNA patients Clinically Integrated with over 20 Clinical Protocols around Chronic Disease In 2008 CIGNA Care Designation (CCD) Data ranked MCNT as #2 in market for Quality and Top 1/3 for Efficiency MCNT’s mission of keeping the healthy healthy is congruent with CIGNA's mission of improving health, well being and security for its participants MCNT is eager to transform their practice guided by foundational elements of the NCQA PCMH standards Tools/ Data to Empower MCNT Care Coordinator funding & support CIGNA Gaps in Care information High Acuity Patients (HAP) data: including ER visits, admissions, high tech radiology, specialist referrals, pharmacy and Predictive Model results to help drive improved care coordination efforts Value based referral data for CIGNA Designated specialists, preferred ancillaries and Center’s of Excellence facilities & procedures Pharmacy data on overall generic and non brand prescription utilization Bi-annual Report Card on key utilization and quality data

11. MCNT and the PCMH CIGNA Pilot Expected Clinical results from MCNT PCMH pilot Enhanced coordination of care Timely access (after hours and weekends) for Acute needs Management of Chronic Disease Use of Preventive services Value based referrals Utilization of preferred ancillary service vendors Generic and preferred brand drug utilization Closure of gaps delineated in Gaps in Care (2-way electronic data transfer) Clinical Collaboration between CIGNA and MCNT Bottom Line: Improved Quality and Cost of Care with Increased Patient & Physician Satisfaction

12. Medical Home Reward Model • Must pass elements compared to market. • Quality: EBM1 Improved or maintained at better than market average • Affordability: TMC2 Trend better than market 3 average YES Employer 2X Advanced Care Management Payments TMCTREND vs. Market TMC Trend Bonus Pool X% Y% Z% Medical Group Affordability Medical Group Quality4 Employer Size of X & Y is dependant on group’s initial evaluation and other contractual changes. Maximum Payment Group capped at 3% of TMC 1EBM – Evidence Based Measures of Quality 2TMC – Total Medical Cost – age, sex and case mixed adjusted 3Market – Mutually agreed upon market comparisons 4Quality – Portion of potential quality bonus depends on degree of improvement in EBM and patient satisfaction (when available)

13. CIGNA Medical Home Experience (est. 2008) Patient Centered Primary Care Collaborative (PCPCC): Founding Plan member Comprehensive, Accountable, Collaborative Care PCMH Pilots To Date Dartmouth-Hitchcock launched 6/08: CIGNA’s first plan sponsored pilot Medical Clinic of North Texas: rolled out 9/1/09 ProHealth of Connecticut: rolling out 1/1/10 Employer driven: Two in Maine, one in TN, VA planned for 2010 Network driven: St. Louis (Mercy) planned 2010 CIGNA Medical Group (Phoenix, AZ) planned 2010 Community Multi-Payer Collaboratives Active: VT, PA, CO, NH Target 1/10 implementation: ME In Discussion: TX, WA 8

14. Thank You for Your Attention! Questions??