Ken Thorpe’s presentation on the effectiveness of prevention to lower healthcare costs and improve employee productivity

2. Truth #1: A substantial cause of rising health care spending is preventable or poorly managed chronic disease 99% of Medicare expenditures are spent treating patients with one of more chronic diseases Two-thirds of the rise in health care spending is due to the rise in treated chronic diseases. Many cases could be prevented. Most could be better managed. 2/3 1/3 One-third of the rise alone is due to obesity 2 Source: Health Affairs, AHRQ, other calculations

3. Truth #2: The U.S. spends very little on prevention, despite behavioral and environmental factors accounting for 70 percent of U.S. deaths U.S. Investment in Prevention Causes of Avoidable Mortality 30% - Other Contributors (genetics, health care, etc.) 70% - Behavioral and Environmental Factors 1% - 3%- Prevention 97 % - 9% - Medical Care and Biomedical Research 3 Source: Institute of Medicine, Health Affairs, Journal of American Medical Association (JAMA)

4. Truth #3: Americans strongly support prevention in health reform, above many proposals regarding coverage Support Among Americans for Policy Solutions in Health Reform 70% of Americans rank investing in prevention as the number one health reform priority, above proposals regarding coverage or affordability 4 Source: Robert Wood Johnson Foundation and Trust for America’s Health

6. Coronary heart disease

7. Hypertension (high blood pressure)

8. Cancer

9. Stroke

10. Dyslipidemia (for example, high total cholesterol or high levels of triglycerides)

11. Osteoarthritis

12. Liver and gallbladder disease

13. Sleep apnea and respiratory problemsAge-adjusted* prevalence of overweight and obesity among U.S. adults among U.S. adults, age 20 years and over Overweight or obese (BMI greater than or equal to 25.0) Obese (BMI greater than or equal to 30.0) 1988-1994 1999-2000 2003-2004 5 Source: Centers for Disease Control and Prevention (CDC)

14. Truth #5: Some costs can be avoided altogether by averting disease through reducing or eliminating risk factors Projected Lifetime Medicare Health Care Expenditures for a Cohort of Seventy-Year-Olds, 2004 Dollars FACT: Medicare will spend about 34% more on an elderly obese person over their lifetime* than on someone of normal weight, even though they will live about as long. *Lifetime costs refer to costs incurred between Medicare enrollment and death $36,886 = difference in lifetime Medicare spending between obese and normal weight American senior citizens 6 Source: Health Affairs

15. Truth #6: Prevention is often defined inaccurately and incompletely, focusing on a specificcategory rather than the comprehensive definition Prevention Encompasses Three Major Areas with Specific Goals Primary Prevention Secondary Prevention Tertiary Prevention Goal: Manage Disease to Avoid Complications and Disease Progression Goal: Find and Treat Disease in Its Earliest Stages to Stop Its Progression Goal: Reduce or Eliminate Risk Factors and Avert Disease Following treatment recommendations Risk-based screenings Eating healthy Blood tests and other monitoring Health coaching Getting exercise Transitional care Avoiding unhealthy behaviors Taking steps to reduce risks Care coordination models Most people define prevention as this category only, even though it encompasses all three Vaccines 7

16. Truth #7: Many Americans are not receiving the preventive care they need, resulting in preventable cases that can lead to costly complications Example: Diabetes Prevention in United States 5.2 million have their disease CONTROLLED 57 million Americanshave PRE-DIABETES 24 million Americans have DIABETES 13 million of those are TREATED 17 million of those are DIAGNOSED Goal: Reduce or Eliminate Risk Factors and Avert Disease 7 million are UNDIAGNOSED 4 million are diagnosed but NOT TREATED 7.8 million are treated but NOT SUCCESSFULLY CONTROLLED 18.8 million have diabetes that is NOT CONTROLLED Goal: Find and Treat Disease in Its Earliest Stages to Stop Its Progression Goal: Manage Disease to Avoid Complications and Disease Progression Goal: Manage Disease to Avoid Complications and Disease Progression Goal: Avert Onset of Diabetes or Costs due to Untreated or Uncontrolled Disease 8 Source: NIH, CDC

17. Truth #8: To be most effective, prevention must be comprehensive Examples of existing policy proposals Type of prevention Community health teams (CHTs) Economic incentives to individuals and employers to promote wellness Grants for community-based wellness programs Immunizations Primary Community health teams (CHTs) Accountable health organizations (AHOs) Reducing cost-sharing on preventive services in Medicare A & B “Right Choices” program Secondary Community health teams (CHTs) Accountable health organizations (AHOs) Care coordination programs (i.e., medication therapy management (MTM),transitional care) Low or nominal co-pays for prescription drugs to manage chronic conditions Tertiary 9

18. Truth #9: Programs exist that are demonstrating cost savings through prevention Example of Primary Prevention: Healthways Silver Sneakers Program Cost Savings Target Population Summary Seniors enrolled in a Medicare Advantage plan that provides a health club membership. Participants who visited a health club at least twice a week incurred $1,252 less in health expenses per year, on average, than those who visited less than once a week. Participants receive access to a state-of-the-art fitness center, customized fitness classes designed exclusively for older adults and health education seminars and events that promote the benefits of a healthy lifestyle. Total Individual Annual Savings: $1,252 10 Source: CDC For more information visit: http://www.cdc.gov/pcd/issues/2008/jan/07_0148.htm

19. Truth #9: Programs exist that are demonstrating cost savings through prevention Example of Secondary Prevention: Caterpillar, Inc. Healthy Balance Cost Savings Target Population Summary Over a 3-year period, average per person claims costs were $16,121 lower for participants than non-participants. Employees (80,000) and others covered by Caterpillar health plans (120,000 total). The employee wellness program utilizes health risk assessments to detect health risks early and then creates a customized disease prevention or management health plan for each employee. Total Annual Claims Savings: $16,121 Source: The Health Project, C. Everett Koop For more information visit: http://healthproject.stanford.edu/koop/work.html

20. Truth #9: Programs exist that are demonstrating cost savings through prevention Example of Tertiary Prevention: The Diabetes Ten Cities Challenge Cost Savings Target Population Summary Average annual savings of almost $1,100 in total health care costs per patient. Participants receive voluntary health benefit, waiver for diabetes medications and supplies co-pays and a specially-trained pharmacist "coach". Diabetic employees, dependents and retirees of the city government. Total Individual Annual Savings: $1,101 12 Source: American Pharmacists Association Foundation For more information visit: http: http://www.diabetestencitychallenge.com

21. Sources Truth #1: Two-thirds of the rise in health care spending from 1987-2006 is due to the rise in the prevalence of treated chronic disease Source: Thorpe K. “The Rise In Health Care Spending And What To Do About It.” Health Affairs. 2005. Also, Thorpe K, Florence CS, Joski P. “Which Medical Conditions Account For The Rise In Health Care Spending?” Updated by Author using Medical Expenditures Panel Survey. AHRQ. 2007. Accessed at: http://www.meps.ahrq.gov/mepsweb/index.jsp. 99 cents of every dollar spent in Medicare is spent treating patients with chronic disease Source: Partnership for Solutions. Chronic Conditions: Making the Case for Ongoing Care. September 2004. Truth #2: U.S. Investment in Prevention, Causes of Avoidable Mortality Source: Institute of Medicine. 200 3. The Future of the Public’s Health in the 21stCentury. Washington, D.C.: The National Academies Press . Citing: McGinnis JM, Williams-Russo P, Knickman JR. 2 002. “The Case for More Active Policy Attention to Health Promotion.” Health Affairs 21:78 -93 and McGinnis GM, Foege WH. 1993. “Actual Causes of Death in the United States .” JAMA 27 0(18): 2207-2212. Truth #3: Americans strongly support prevention in health reform, above many proposals regarding coverage Source: June 2009 Survey. Robert Wood Johnson Foundation and Trust for America’s Health. Accessed at http://healthyamericans.org/assets/files/health-reform-poll-memo.pdf Truth #4: Obesity rates have increased sharply and contribute to the rising rate of associated chronic diseases Source: National Center for Health Statistics. “Prevalence of Overweight and Obesity Among Adults: United States, 2003-2004. Available at: http://www.cdc.gov/nchs/products/pubs/pubd/hestats/overweight/overwght_adult_03.htm 13

22. Sources Continued Truth #5: Projected Lifetime Medicare Health Care Expenditures for a Cohort of Seventy-Year-Olds, 2004 Dollars Source: Darius N. Lakdawalla, Dana P. Goldman, and Baoping Shang. “The Health And Cost Consequences Of Obesity Among The Future Elderly.” Health Affairs. September 2005. Accessed at: http://content.healthaffairs.org/cgi/reprint/hlthaff.w5.r30v1 Truth #7: 2 in 3 adults are obese or overweight Source: “Statistics related to Overweight and Obesity” Weight Control Intervention Network, NIH Accessed at: http://win.niddk.nih.gov/statistics/ 1 in 12 Americans have diabetes Source: “Number of People with Diabetes Increases to 24 Million” CDC http://www.cdc.gov/media/pressrel/2008/r080624.htm Truth #9: Primary Prevention: Healthways Silver Sneakers Source: “Managed-Medicare Health Club Benefit and Reduced Health Care Costs Among Older Adults” CDC Accessed at: http://www.cdc.gov/pcd/issues/2008/jan/07_0148.htm Secondary Prevention: Caterpillar, Inc. Healthy Balance Source: C. Everett Koop. “The Health Project.” Accessed at: http://healthproject.stanford.edu/koop/work.html Tertiary Prevention: The Diabetes Ten Cities Challenge Source: American Pharmacists Association Foundation, Accessed at: http://www.diabetestencitychallenge.com/ 14