Revised Baseline - Largest Proprietary Network • Focused on access/choice, quality and cost-effectiveness • 4,775 hospitals • 537,000 physicians and care professionals • 60,000 pharmacies • Meet access standards for 97% of the commercial population • Targeting 19,000 physicians and 240 hospital additions for 2007 • Market-leading procedure cost discounts and other terms • One system with common data set and database • Highly sophisticated claim editing • Clinically integrated approach Growing for One Purpose: To Better Serve People
Expanding Coverage in a Quality and Informed Way • Over last 3 years, added ~82,000 physicians and other health care professionals and ~750 hospitals, representing almost 20% growth rate. • Information and consumer activation tools provided real-time via myuhc.com® • It’s not just about size, by year end, nearly 80% of our members will have access to our quality and efficiency Premium Designation Programs
Expanding Coverage in All Addressable Geographies We’re Not Done
Stability and Expansion of Commercial Network • Steady progress in driving expansion of hospital network over past nine quarters • In any given quarter: • Recruit 80 - 100 new hospitals • Renew 350 - 450 existing agreements • Hospital initiated terminations, measured by spend, average ~ 40 bps (0.4%) per year • Renewals • Additions • Terminations - Ex. HCA • Terminations 99.6% of hospital spend is renewed annually without notice or disruption!
Principles of Network Development • Broad-based, universal access • Proprietary & Integrated – not leased • Rationalized by market forces demanding high quality and efficient care • Indifferent to funding status, systems platform, license or product • Fixed rates; highly predictable; best in class economics • Long-term (3-5 year durations) & Sustainable • Quality and transparency valued • Highly Administrable • Responsive to the future Retailization of healthcare • Clinically Integrated Accountable to Lead the Market…Together
We Deploy Effective Network Strategies - Examples • Acquisitions – Significant improvement in access and economics in NE, MA, Pacific and select other markets. • Market Alliances – Access to best in class networks in high barrier to entry markets (Medica and HPHP). • Product Alliances – Promote modern, market-defining products while providing market-leading access and economics (JHS and WPAH). • Organic Development – Rural and suburban efforts primarily. • Lab Repositioning – Significant savings on commodity services while advancing quality through data sharing, improved access and esoteric lab. • Designation, Transparency and Practice Rewards Programs • Health coaching tools • HP3 – Driving six sigma and lean production into the supply chain • Contract for administrability The Best is Yet to Come
Network Performance Group • Hospital Process Performance Program (HP3): • Objective: Leveraging Six Sigma Methodology to Improve 1st Pass Claim Payment Accuracy, Optimize Current Contract Performance, and Improve Hospital Relationships • Proven Successes: • BJC: Payment Discrepancy Rate improved from 32 to 1% as reported by BJH • Missouri Baptist Medical Center: 29% to 6% (additional reduction in Control phase) • Projects Underway (See Diagram 1 – Active Projects) • BayCare Health System • Cleveland Clinic • Wake Forest • National Roll-Out of NEW HP3 Service Offering • Recruitment of HP3 Black Belts and Data Miners • Collecting Transaction and Service Data by Facility to Identify Next Candidates • Deployment to 50 Hospitals by EOY, with 6+ Hospitals engaged each month in ‘07 Diagram 1 – Active Projects “We are very pleased to be working with UnitedHealthcare on this initiative and are encouraged by the early results we are seeing. For our patients, improving administrative processes will help reduce costs and improve their total healthcare experience, which is our primary focus.” - Steve Lipstein, CEO BJC Healthcare Driving Six Sigma and Lean into the Supply Chain
Transparency & Practice Rewards • Premium Designation • 21 most costly conditions and specialties; over 60% of medical spend • Premium Cardiac Facilities – 297 in 85 markets • Premium Physicians – Currently 144,000 eligible in 94 markets – 81,300 designated. MA and NE rollout Q2 ’07. Other selected markets in Q3 ’07. • Hospital Comparison • Information on relative hospital quality and cost data for 54 elective and non-emergent conditions • Version 1.0 was deployed on February 22, 2007 in 140 markets after evaluating ~3,600 hospitals • Practice Rewards • For designated physicians meeting additional specified quality, efficiency and administrative criteria. • 58 markets by 6/30/07: expanding to all Premium Designation markets by second quarter 2008.
In Closing….. • Reminder on available tools….. • Enrollment training website • Weekly eBulletin/Network updates • myuhc.com®