Quality Medical Care presentation made to a major Pharm mfgr in 1998 at a national meeting. Purpose is to explain how pharm company could use gov mandates to add value to contracts with MCOs.

3. The Cost = 18% of GNP $2.3 Trillion

4. 16 15 14 13 12 11 10 9 8 7 6 1970 1975 1980 1985 1990 1995 2000 National Health expenditures as a percent of gross national product. Calendar Year Percent Source: Health Care Financing Administration, Office of the Actuary. Data from the Division of National Cost Estimates. NATIONAL HEALTH EXPENDITURES AS A PERCENT OF GROSS NATIONAL PRODUCT BY YEAR

6. Sample of Actual Medical Knowledge (Tested Knowledge) Knowledge Test Score Age (years) 100% 75% 50% 25% 20 40 60 80 100 0% 25% 50% 75% 100% A B C D Theoretical Test Scores “ Changes over time in the knowledge base of practicing internists” Paul G. Ramsey et al, JAMA, August 28, 1991 - Vol 266, No8 pp 1103 A B C D B C 0% 0

7. 100% Efficient Health Care* A Judgment Alone Maximum quality attainable using memory based system Quality of Care - Memory Base System * Most cost efficient, medically necessary, effective and best expected result for the patient. TIME

8. COMMUNITY HEALTH STATUS vs. UTILIZATION and EXPENDITURE RATE B C D A $/C H Conservative Style Elaborative Style Underservice Range of Acceptable Practice Overservice SERVICES and EXPENDITURES PER CAPITA Source: Booz, Allen and Hamilton Inc. HEALTH STATUS of the POPULATION

11. TONS TIME Tons of Paper Printed in Medical Journals Not Shinola Shinola Growth of Medical Publishing Growth of Medical Knowledge

13. 100% Efficient Health Care* B Judgment & Feedback A Judgment Alone Maximum quality attainable using memory based system Augmented memory based system + Other Feedback Quality of Care - Memory Base System Outcomes * Most cost efficient, medically necessary, effective and best expected result for the patient. TIME

14. B C D A Q O PRESSURE TO SATISFY PATIENTS Q = QUANTITY OF MEDICAL SERVICES CONFLICTING PRESSURES ON THE HEALTH SERVICE DELIVERY SYSTEM O = CLINICAL OUTCOME PLATEAU OF COMPARABLE OUTCOMES PRESSURE TO CONTROL COST

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31. POINT FOUR End the practice of awarding business on the basis of price tag. Instead, minimize total medical cost (eliminate unnecessary procedures.) Reduce the number of suppliers for any one service (limited provider network) on the basis of a long-term relationship of loyalty and trust.

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104. CR 9 Recredentialing Standards The MCO incorporates the following data in its recredentialing decision-making process for PCPs: CR 9.1 member complaints; CR 9.2 information from quality improvement activities; CR 9.3 utilization management; CR 9.4 member satisfaction; CR 9.5 medical record reviews conducted as part of MR 2.1; and CR 9.6 the site visits conducted as part of CR 10.1

109. CR 12 Initial Credentialing CR 12.1 The MCO should confirm review & certification by a recognized accrediting body, and is in good standing with state and federal regulatory bodies; and CR 12.2 Confirms that the provider has been approved by an accrediting body confirms that the provider has been reviewed and approved by an accrediting body; or CR 12.3 If the provider has not been approved by an accrediting body, the managed care organization develops and implements standards of participation CR 12.4 At least every three years, the managed care organization confirms that the provider continues to be in good standing with the state and federal regulatory bodies and, if applicable, is reviewed and approved by an accrediting body.

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137. 100% Efficient Health Care* A Judgment Alone Maximum quality attainable using memory based system Quality of Care - Memory Base System * Most cost efficient, medically necessary, effective and best expected result for the patient. TIME

138. 100% Efficient Health Care* B Judgment & Feedback A Judgment Alone Maximum quality attainable using memory based system Augmented memory based system + Other Feedback Quality of Care - Memory Base System Outcomes * Most cost efficient, medically necessary, effective and best expected result for the patient. TIME

139. 100% Efficient Health Care* C Judgment & Computer B Judgment & Feedback A Judgment Alone Maximum quality attainable using memory based system Augmented memory based system Physician Judgment + Computer decision support Computer Assisted Physician Judgment + Other Feedback Quality of Care - Memory Base System Outcomes * Most cost efficient, medically necessary, effective and best expected result for the patient. TIME