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THE VALUE OF BLUE QUALITY HEALTH COVERAGE FOR YOUR EMPLOYEES

ADMINISTRATIVE SERVICES CONTRACT

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Creative SolutionsWorking with Employers for Affordable, Quality Healthcare

Providing quality, affordable health benefits to employees may be one of the biggest challenges Rhode Island employers face today. We understand this, and we’re taking steps to change healthcare in Rhode Island so you can continue to offer the quality coverage that you and your employees expect. To get there, we have created a strategy for innovation that is built on three principles:

1. Delivery System TransformationServe as a leader in the transformation of Rhode Island’s healthcare delivery system.

• Continued support and expansion of patient- centered medical homes

• Assessment of specialists’ performance based on quality and efficiency

• New hospital contracting paradigms that focus on outcomes

• Care coordination incentives for physicians and providers

2. Consumer Activation

Create incentives for your employees to get the most value for every dollar they spend on healthcare.

• Introduce more financial responsibility for your employees through copays/deductibles

• Employ incentives and provide quality data to help your employees make the right care decisions 

3. Product Innovation

Deliver products and services specific to your employee population that help them be as healthy as possible.

• Elimination of financial barriers to ensure complance with health needs and improve the health of your employees

• Optimization of your employee medical expense by leveraging efficiencies and quality outcomes created by a virtual care team

We are very excited about our strategy, and firmly believe this will allow us to offer Rhode Islanders the best possible care at the lowest cost.

Peter Andruszkiewicz

President & CEO

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Table of Contents

Opening the Door to Healthcare See how our national network of doctors and hospitals gives your employees access to the best care available.

Leading the Way in Member Care We remain committed to controlling costs while providing high-quality healthcare. Learn how we’re working with providers to do this.

Helping You Design the Right Plan Learn about medical and pharmacy options that provide additional value to you and your employees.

Blue Cross Medical and Dental—the Power of One By providing medical and dental coverage from the same place, employers benefit from streamlined plan administration, and employees get a whole-body healthcare solution.

A Big-Picture Approach to Pharmacy and Medical Management Learn how fully integrated medical and pharmacy management can lower costs and improve employees’ overall care.

Better Health, Better Employees Through discount programs and wellness services, we can help your employees save money and stay on top of their health.

Making Better Choices Discover the consumer tools and services that will help your employees make informed healthcare decisions.

An Integrated Approach to Health Learn about our member-centric approach to your employees’ health.

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Finding the Right Hospital is easy.Our Hospital Comparison Tool on BCBSRI.com can help your employees choose the hospital that has the best record when it comes to the type of care they need. This interactive tool, which we developed in partnership with WebMD, generates detailed, individualized reports based on data hospitals provide to the government. This will help your employees feel confident in the hospital care they get.

BCBSRI and Hospitals: Putting Quality FirstWe are collaborating with local network hospitals to create and implement a new Hospital Quality Program. This program is designed to help improve the quality, safety, and efficiency of local hospital care and moderate long-term health-care costs. Ninety percent of our network hospitals have agreed to participate this year.

OPENING THE DOOR TO HEALTHCARE

BlueCard® PPO NetworkWhen it comes to choosing a doctor or specialist, your employees want someone who’s right for them. That could mean a doctor with the special skills they need, or simply a primary care physician they like and find easy to talk to. Our BlueCard PPO national network of doctors and specialists gives our members access to thousands of providers across the country, including:• 96 percent of medical providers in Rhode Island• More than 665,000 doctors and specialists

nationwide• And more than 5,300 hospitals across

the country

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LEADING THE WAY IN

MEMBER CARE

Partnerships with HospitalsWe are working with hospitals to focus on improving quality of care and health outcomes. Our productive relationships with local hospitals have allowed us to implement trendsetting financial arrangements, such as contracts that reward quality of care rather than quantity of care. This will help to promote efficiency, quality, and safety; control healthcare costs; create a positive patient experience; and improve health outcomes for our members.

Patient-Centered Medical HomesWe’re leading the way in establishing patient-cen-tered medical homes (PCMH)—where members receive coordinated care that results in better health outcomes and lower claims costs. So far, 30 percent of the state’s primary care physicians are involved in PCMHs supported by BCBSRI, with more joining

To control the rising cost of healthcare benefits, we are changing how healthcare is delivered and paid for. The goal is to both control costs and maintain the high-quality healthcare coverage your employees deserve.

every month. In total, this has impacted over 100,000 of our members. This approach offers:• Efficient care coordination through personalized

care teams• More effective provider communication provided by

electronic health records and e-prescribing technology• An emphasis on primary care, which is proven to be a

preventive, not reactive, approach to careImproving the quality of care makes healthcare more efficient and cost-effective over time, and ultimately helps control the cost of premiums to benefit your business and your employees.

While BCBSRI continues to establish a patient-centered medical home model in Rhode Island for members with access to the local network, the BCBS Association has also begun work establishing similar pilots in almost all of the states within the country.

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BURRILLVILLE

GLOCESTER

FOSTERSCITUATE

COVENTRY

WESTWARWICK

WEST GREENWICH

EXETERNORTH

KINGSTOWN

EAST GREENWICH

RICHMONDHOPKINTON

WESTERLY

CHARLESTON NARRAGANSETTSOUTH

KINGSTOWN

JAMESTOWN

MIDDLETOWN

LITTLECOMPTON

TIVERTON

PORTSMOUTH

BRISTOL

BARRINGTONWARREN

CRANSTON

JOHNSTON

NORTHPROVIDENCE

CENTRAL FALLS

LINCOLN

CUMBERLAND

NORTH SMITHFIELD

WOONSOCKET

PAWTUCKET

EASTPROVIDENCE

PCMH Locations

in Rhode Island

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Patient-Centered Medical Homes within the country

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HELPING YOU DESIGN THE

RIGHT PLANTake advantage of our wide range of options to design the best plan for your needs and budget:

A Consultative ApproachWhen choosing a health plan, you should choose an insurer that gives you more than just health insurance. No matter which of our health plans you select, BCBSRI adds value and improves your bottom line by offering a consultative approach to help you to customize the benefits you offer your employees. We serve as a guide to walk you through the process. We will create a personalized strategy to fit your needs.

Premium Cost

Out-of-Pocket Costs$ $ $ $ $ $

Traditional Health Plans Consumer-Driven Health Plans

HealthMateCoast-to-CoastHigh Deductible

BlueSolutionsHealthMateCoast-to-Coast

Coinsurance

HealthMate Coast-to-Coast BlueCHiP

$ $ $ $ $ $

Consumer-Driven Health Plans (CDHP) They allow your employees to take charge of their healthcare costs. CDHPs provide needed benefits and the option to open a savings account for healthcare expenses. In a study by McKinsey & Company*, CDHP consumers were found to be: • 25% more likely to engage in

healthy behaviors• 30% more likely to get an annual

well visit• 50% more likely to ask about

healthcare costs In turn, you pay lower premiums, while still knowing you’re providing quality benefits to your employees.* McKinsey & Company, “Consumer-direct Health Plan Report – Early Evidence is Promising”

Providing for Your Employees after Retirement We offer a number of retirement health plans, including Medicare Advantage plans, Medicare Supplement plans, and Part D prescription drug plans. These health plans offer Original Medicare benefits, prescription drug coverage, and much more!

VantageBlue

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BLUE CROSS MEDICAL AND DENTAL

THE POWER OF ONE

Your employees will have in-network coverage available wherever they live, work, and travel.

Did You Know? • 164 million work hours are lost every year to dental health issues.1

• Nearly 75 percent of American adults suffer from various forms of gum disease—from simple inflammation to severe cases—and don’t even know it.2

• More than 90 percent of all systemic diseases have oral health symptoms.3

One for AllIt’s always easier to get everything you need—and the quality you expect—at the same place. With Blue Cross & Blue Shield of Rhode Island as your medical and dental administrator, you’ll get: • A whole-body solution that meets all of your employees’

healthcare needs• An account service professional who will provide consultation,

information, and strategic guidance• Easier health plan administration, including a single bill, one plan

administration tool, and comprehensive reporting• The comfort of knowing you’re providing for your employees, while

creating a healthier, more productive workforce

One Network, 130,000 DentistsThe Blue Cross Dental network features more than 130,000 dentists across the country, including nearly 90 percent of dentists in Rhode Island.

One Mouth, One Body, One ConnectionProper dental care is a key part of maintaining your employees’ overall health. Studies have shown a true mouth-body connection. Oral health issues affect more than just your employees’ appearance. Good oral health can help:• Better manage chronic diseases such as diabetes and coronary

heart disease • Lower the risk of delivering low-birth weight babiesOur dental plans provide extensive benefits and cover cleanings, dental examinations, X-rays, and more.

Premium Cost

1 2010 report from Pew Center2 American Dental Hygienist Association 3 Academy of General Dentistry

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A BIG PICTURE APPROACH TO

PHARMACY AND MEDICAL MANAGEMENT

* Congressional Budget Office, 2005 National Academies Press: Pre-venting Medication Errors: Quality Chasm Series, 2007 CDC, 2010. http://www.cdc.gov/nccdphp/overview.htm — World Health Organzation, 2003, J Amer Pharm Assoc 2001; 41:192-9

The Right Medical and Speciality Pharmacy Coverage, All in One Plan• In 2010, Americans spent more than $307 billion on

prescription drugs*• Healthcare costs related to drug mismanagement cost

over $200 billion per year nationally.* • In the United States, there is a 50-60% medical adherence

rate for chronic conditions.

It’s no surprise that this area of healthcare is a target for cost management initiatives. Some employers are hiring pharmacy benefit managers (PBMs) to manage their pharmacy programs, but PBMs only look at cost savings from the perspective of drug costs and drug rebates. We take it a step further by fully integrating our pharmacy and medical management. Through this approach, we’re able to manage both prescription and medical claims costs while also providing more coordinated care. See the sidebar at right for more on how an integrated approach saves money and time.

Save Money with our Value-based Pharmacy ApproachSince being introduced, our Value-based Pharmacy Approach has saved companies 7 to 8 percent on overall pharmacy claims costs. Created to provide the best clinical outcomes, lower cost alternatives, and overall effectiveness, the Premier Formulary emphasizes cost-effective generic and brand name drugs. This isn’t simply to shift costs—it helps your employees understand that alternative medications provide the same medical results while costing less. They learn that more expensive, brand name drugs are not necessarily better.

Three myths about carving out prescription drug coverage Myth: There are better rebates available.

Truth: Every month, more generic alternatives are available. And while generics do not pay out rebates, they cost substantially less than brand name drugs. Also, focusing on rebates will lead to a formulary that emphasizes higher cost brand name drugs.

Myth: Plan administration will be easy.

Truth: With separate medical and pharmacy administrators, you’ll always have lag time in the exchange of data. This hampers the ability to identify employees for care management/ coordination services. It also burdens your human resources staff, who will need to provide enrollment information to two separate companies.

Myth: Only PBMs can provide comprehensive clinical services.

Truth: We have clinical pharmacists who review, recommend, and develop programs that are fully integrated with our medical management programs. We also have relationships with both medical providers and pharmacists, allowing us to provide education and interventions.

-12%-12%

100%88%

76%

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RxPrescribed

RxFilled

RxTaken

RxContinued

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BETTER HEALTH BETTER EMPLOYEES

Good Health Benefit® This suite of health management services focuses on prevention and healthy living while also providing analysis that determines the impact of wellness services on health, costs, and productivity.

GHB provides:• Consultative support and coordination of services• Comprehensive reporting on aggregate health assessment data,

participation, satisfaction, and outcomes• An online personal health assessment (PHA) that rates your

employees’ health risks, summarizes their risk factors, and provides resources for improving their health

• On-site health fairs, which offer a variety of health screenings and tests, as well as lifestyle management seminars, where employees can learn how to lose weight and manage stress

Improving the overall health of your employees can lead to lower operating costs, increased productivity, and reduced overall healthcare costs. That’s why we offer access to wellness programs and a variety of discounts for health- and fitness- related products and services.

The Power of PHAsEvery increase of 1 point in your company’s aggregate PHA score equals a 2% increase in productivity.*

*The Health & Wellness Institute, April 2011

Did you know?

50-70% of all diseases are associated with modifiable health risks that could be prevented with a healthy lifestyle.**Centers for Disease Control and Prevention, June 2010

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MAKING BETTER CHOICES

BCBSRI offers a full suite of consumer tools and services to enable people to make the best choices when they need healthcare. We focus on providing solutions across multiple channels of delivery. This ensures that members have access to information and support from a variety of sources. The following chart shows the range of consumer tools offered.

Tailored Approach to CareAs part of our overall healthcare strategy, we provide integrated health management programs at an appropriate level to members along the healthcare continuum, from those who are healthy to those with chronic conditions and complex healthcare needs.

OptimumHealth

Chronic Illness

Health Risk Factors

Pren

atal

End

of L

ife

Cost of Care

Prevention Treatment

PHA/WellnessPortal

WellnessCoach

Worksite Programs

Incentives DM/MCPrograms

End of LifeInitiative

Healthcare Continuum

Benefits • Benefit and Claims • Hospital/Doctor Finder • Member Statements

Health And Wellness • Personal Health Assessment • Health Knowledge Database and Tools • Blue365 Discounts • MyBlue Community • Fitness Network

Money • Decision Support Tools • Incentive Tracking • Pharmacy Savings Programs

Mem

ber Portal and H.I.T.S. Tracking

Telephone Support

E-mail Face-to-Face Onsite Programs

Mobile Web

Web-based Services

Targeted Mail

Printed Materials

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With BCBSRI, you have the advantage of fully integrated, member-centric care. Through this big picture approach, we are able to leverage both prescription and medical claims to provide a more coordinated experience for your employees. This saves money for both employers and their employees.

Carve Out

Fragmented Whole PersonProviding

Member-centric Care

• Target chronic conditions through therapy adherence

• Offer member education and interventions

• Better manage care for members with chronic and complex conditions

• Guide members to patient- centered medical homes to provide highly coordinated medical and pharmaceutical care

• Ensure alignment of all product and engagement goals

Increased productivity • Healthier workforce • Lower claims

We’re Here for YouI f you have any questions about our products and services, please

contact your Broker or BCBSRI Account Representative .

AN INTEGRATED

APPROACH TO HEALTH

Integrated

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500 Exchange Street • Providence, RI 02903-2699Blue Cross & Blue Shield of Rhode Island is an independent licensee of the Blue Cross and Blue Shield Association.

06/12 IER-11791