1. Introducing…
Whole Health
Original concept
1

2. Whole Health PPO – concept description
Whole Health PPO is plan
that allows members to tailor
their health coverage to their
personal health style or
situation, combining
coverage for traditional and
alternative health practices.
A high deductible plan
combined with a free health
style basket provides first
dollar benefit for consumers.
The concept was intended to
be tested in a small
geographical area, where the
network could be quickly
assembled and managed, and
utilization measured.
2

3. Overall concept – core intentions
One health style basket is included in the basic plan, with the cost covered
through an increased deductible. Additional baskets can be added for $30 per
month.
+
The premium covers:
High-deductible PPO + 1 health basket
+
Additional baskets can
be added at $30 PMPM
The plan’s intention is that the higher deductible for the PPO plan will cover
the cost of the one “free” basket. The basket price was intentionally set at
~$30, a figure the focus groups found attractive and “worth it.”
3

4. Care baskets – core intentions
The core of the Whole Health offer are four baskets tailored to health styles
and situations. Over time, more baskets will be developed.
The baskets were conceived with a compelling core benefit that was ‘free.’
This benefit was surrounded with thematically similar services provided as a
covered benefit or as a discount. The mix of these services were intended to
help utilization.
4

5. My Health portal – core intentions
The My Health portal is a personalized
website with personal coverage and
health information. It links to memberselected Whole Health wellness programs
and to an on-line health store, where
members can purchase prescriptions,
supplements, vitamins and herbs.
The core intention behind the portal is to
allow members to manage and interact
with their coverage (to stay actively
engaged in their health) and to frequent
the online store where they can purchase
prescriptions, herbs, vitamins, etc.
The original idea was for the site to be
the portal for all BCC members, not just
for Whole Health, leveraging the
development investment.
5

6. Concept
specifics…
6

7. Plan details
The concept was meant to target consumers with a high level of engagement with
their own health. The “menu” items (or care baskets) were tested with consumers
and subsequently refined.
The concept can be a model for many BCC offerings, and the original idea
centered on the Power HealthFund as a good candidate for piloting the concept. In
later stages, replicating the architecture and leveraging resources to ISG and
possibly beyond was the goal.
The plan had four levels of coverage, with simple and logical differences in
deductible, copay, co-insurance, out-of-pocket maximum and pharmacy benefit.
The intention was for straightforward communication and easy-to-understand
benefits.
The people who were the target for this plan were already involved in the
activities covered by the plan, and would likely “do the math” in order to justify
the plan. Therefore, clear and tangible benefits were important. Discounts were
not seen in testing as a sufficient benefit on their own.
Initial pricing for the pilot was meant to be competitive with other high deductible
plans. The medical and utilization experience data would help adjust baskets and
pricing for the actual launch.
7

8. Basket details
The baskets were conceived to have a clear and compelling core benefit
completely covered, surrounded by related services provided with limits
or at a discount. The additional services raise the perceived value of the
basket, while avoiding adverse selection. As people are already spending
money on many of these activities (one estimate showed this spending to
be ~$34 Billion), the increased baskets would enhance WP revenues.
The core benefits of each basket are currently popular health-related
activities. The additional basket elements are to complement the core,
making the overall appeal of the basket stronger.
New baskets will be developed as new activities become popular, and as
experience data became available.
The baskets or bundling of benefits are key to managing the risk of the
plan. However, the value of the experience data will be beneficial to all
WP plans, and might allow for lower margins on some benefits.
8

9. My Health portal – intentions of basic portal functions
My Health
Records
Coverage,
health history,
reminders for
appointments
and contacts
Simplifies the
ongoing
management
of healthcare
activities,
offloading calls
to BCC.
1
2
3
4
My Expenses
Tracking of expenses, payments and deductibles make ongoing
account management simpler, offloading calls to BCC.
Health Store
On-line source
for health and
wellness
products. This
helps drive
traffic to the
site, while
helping to
increase
utilization of
PrecisionRx.
News
Personalized
medical news
scours the web
for relevant
stories, and help
bring members
back to the
website.
9

10. My Health portal – details
There is a high correlation between the target market for Whole
Health and online research regarding health issues. For this reason,
the website – if it contains rich and useful information – will be one
of the key channels through which members interact with BCC and
their health information. The key information for the site was found
to be plan management (timely enrollment, provider listings, claims
tracking, levels of deductible, FSA status, health history and
resume), tailored health news and information (as news to healthy
individuals, and as disease management information to members
with chronic or acute conditions).
With a “critical mass” of content, the retail part of the site can
capitalize through convenient one-click ordering of prescriptions,
vitamins, herbs and other health-related products and services etc.
10

11. Original
rollout plan
11

12. Phase 1 Goal
To enhance existing offerings with insights from the
consumer experience project, while gaining insights on
consumer ‘appetite’ for the broader health related
concept. The ambition at this stage is to design
expanded and improved coverage offerings while
leveraging existing resources.
By selecting existing offerings (e.g.Power Health Fund, Precision
Rx), we can achieve quick wins and grow the concept quickly.
12

13. Phase 1: integrate existing pieces
WellPoint Benefits
My Health
Experience Portal
• Offer tailorable,
personalized interactions
• Shift and channel
spending to Precision Rx
• Capture a portion of CAM
spend
• Facilitate avoidance of
hazardous drug
interactions
Whole Health PPO
Wellness Promotion Programs
• Attract new members
• Integrate existing services
• Capture a portion of out of
pocket health expenditures
• Build extended network
(ASHN+)
• Augment and accelerate
appeal of existing products
(Power HealthFund)
13

14. Phase 1: integrate existing pieces
Member Benefits
My Health
Experience Portal
Whole Health PPO
• Personalized and simplified • Reduce out of pocket
expenses for non-traditional
interactions
• Reliable information on
health related activities
health concerns and
coverage
• Convenience of shopping
through one channel for
drugs and CAM
• Guidance on herbs and
supplement choices
• Drug interaction notification
14

15. Phase 2 Goal
To gain regulatory approval and extend the concept to
other groups within BCC while augmenting the
consumer offer through increasing coverage and
available services. The ambition at this stage is to gain
significantly greater share of member’s health spending.
15

16. Phase 2: create platform
WellPoint Benefits
My Health
Experience Portal
• Increase interactions with
members
• Proactively push
information to members
• Reduce call center loads
• Expand CAM and DME
offerings
• Collection of herb and
supplement data
Whole Health PPO
• Implement new care baskets
to attract additional potential
members
• Extend network
• Capture actuarial data on nontraditional health activities
• Extend product to ISG
16

17. Phase 2: create platform
Member Benefits
My Health
Experience Portal
• Reliable breaking news
and information pertinent
to individual health
concerns and interests
• Link to FSA/HRA
accounts (ISG) and FSA
tracker and alerts
• Expanded information on
PPO providers (through
HealthScope)
Whole Health PPO
• Expanded non-traditional
coverage and discounts with
new and refined care
baskets
• Benefits enjoyed by ISG as
well as Large Group
members
17

18. Phase 3 Goal
To open the platform to other groups and regions, while
continuing to extend the consumer offer and make the
provider offer compelling. The ambition at this stage is
to leverage the platform and architecture throughout
WellPoint to achieve improved margins and enhanced
member satisfaction.
18

19. Phase 3: extend platform
WellPoint Benefits
My Health
Experience Portal
• Extend website across
WP, other regions and
products
• Support and foster
WellPoint’s relationship
with providers
• Expedited transactions
with My Health
debit/credit and stored
value cards
Whole Health PPO
• Potentially lowering medical
expenses
• Utilize actuarial data to refine
care basket proposition and
offer new ones
• Potential licensing or network
renting opportunity
19

20. Phase 3: extend platform
Member Benefits
My Health
Experience Portal
• Seamless integration of
health information and
health spending
Whole Health PPO
• Additional baskets provide a
broader array of choices for
coverage of non-traditional
health activities
20

21. Appendix
21

22. Phase 2 research
overview
22

23. Phase 2 research
Goal:
To gather insured (individual & group), uninsured customers’ and breast cancer
survivors’ reactions to the Whole Health product concept (n=20).
Objectives:
• Assess consumers’ reactions to the basic concept. Questions explored how
consumers’ attitudes and behaviors influence their interest in the concept;
• Determine how compelling the Balanced Meal concept, web portal, and breast
cancer components are terms of value to consumers versus their current healthcare
coverage;
• Explore consumers’ receptivity to each of the four traditional healthcare coverage
options and six care basket choices;
• Explore consumer price sensitivity as well as uncover potential ways to make the
concept more financially attractive;
• Gather information on consumers’ perceptions of their overall health, associated
health goals, and interest in and use of complementary and alternative healthcare
options.
23

24. Phase 2 research screening
This behavioral health style model was used to screen participants for Phase 2 concept
testing. It was intended as a starting point to map people’s approaches to dealing with
their health in maintain and monitor modes.
Multi-focus
Challenged
maintainer
Active
maintainer
Generally feels
healthy and works
to maintain this
state
Primarily internal
motivators
Striver
Goal oriented – e.g.
wants to lose
weight, or run a
marathon
Has a difficult time
keeping health
indicators like
weight, cholesterol
or blood pressure at
acceptable levels
Primarily external
motivators
Water-treader
Experiences
chronic health
conditions such as
asthma, or IBS
Single focus
24

25. Phase 2 research screening, continued
All participants:
• Had at least minimal interest in Complementary/Alternative medicine
• Where medium to high health information seekers
• Were comfortable being interview in English
25

26. Research methods: Phase 2
In-depth interviews
Goal: To understand consumer reactionsto the base components of the Whole Health
concept.
Gender
Insured (12)
Actual 12
Age
Income
Race
WP
coverage
Geo
Male (6)
25-36 (4) 4
Mixed
Yes (8) 8
So. Cal (6) 6
Female (6)
37-49 (4) 4
35K-55K (4)
4
Caucasian 9
No (4) 4
No. Cal (6) 6
NA
So. Cal (2) 2
50-60 (4) 4
Uninsured (4) Male (2) 2
Actual 4 Female(2) 2
56K-75K (4)
4
Other 3
76K+ (4) 4
Mixed
25-36 (3)
37-49 (1)
Mixed
35K-55K (1)
2
No. Cal (2) 2
Caucasian 3
Other 1
56K-75 (2) 1
76K+ (1) 1
Breast cancer
survivors (4)
Actual 4
NA
25-36 (1) 3
35K-55K (1) 3
Cauc. (2) 2
Yes (2) 2
So. Cal (2) 2
37-49 (2) 1
56K-75 (2) 1
Other (2) 2
No (2) 2
No. Cal (2) 2
50-60 (1) 0
76K+ (1) 0
26

27. Research methods: Phase 2
In-depth interviews
Goal: To understand insured consumer reactions, by behavior categories, to the base
components of the Whole Health concept
Age
Income
25-36 (1) 0
35K-55K (1) 0
37-49 (1) 2
56K-75K (1) 2
50-60 (1) 1
76K+ (1) 1
M (1) 2
25-36 (1) 2
35K-55K (2) 1
F (2) 1
37-49 (1) 0
56K-75K (1) 1
50-60 (1) 1
76K+ (1) 0
M (1) 2
25-36 (1) 0
35K-55K (1) 0
Cauc. (2) 3
F (2) 1
37-49 (2) 2
56K-75K (1) 1
Other (1) 0
50-60 (1) 1
76K+ (1) 2
M (1) 2
25-36 (1) 2
35K-55K (1) 1
Cauc. (2) 1
F (2) 1
37-49 (1) 1
56K-75K (1) 1
Other (1) 2
50-60 (1) 0
76K+ (1) 1
Gender
Male (1) 0
Active
Maintainer (3) Female (2) 3
Actual 3
Challenged
Maintainer (3) 3
Striver (3) 3
Water
Treader (3) 3
Race
WP
coverage
Cauc. (2) 2 Yes:(1)grp1
Other (1) 1 (1) ind. 1
No (1) 1
Cauc. (2) 3 Yes: (1)grp 1
Other (1) 0 (1) ind. 1
No (1) 1
Geo
So. Cal (1) 1
No. Cal (2) 2
So. Cal (2) 2
No. Cal (1) 1
Yes: (1)grp 2 So. Cal (2) 2
(1) ind. 0 No. Cal (1) 1
No (1) 1
Yes: (1)grp 0 So. Cal (1) 1
(1) ind. 2
No. Cal (2) 2
No (1) 1
27

28. Phase 2
Research findings: medical coverage options
Preferred coverage option
across all participants
(including uninsured):
Preferred coverage option by
type of current coverage:
Premium:
Preferred:
Standard:
Basic:
Those with Group coverage:
Premium:
100%
Preferred:
0%
Standard:
0%
Basic:
0%
85%
10%
0%
5%
Preferred coverage option
across participants with
health insurance only:
Premium:
Preferred:
Standard:
Basic:
76%
12%
0%
5%
Those with Individual coverage:
Premium:
66%
Preferred:
22%
Standard:
0%
Basic:
11%
28

29. Phase 2
Research findings: medical coverage by behavioral category
Premium
Active Maintainers: 100%
Challenged Maintainers:
Water Treaders:
Strivers:
Uninsured
Breast Cancer Survivors
Other
Preferred
Active Maintainers: 0%
Challenged Maintainers:
Water Treaders:
Strivers:
Uninsured
Breast Cancer Survivors
Other
33%
66%
100%
100%
100%
100%
Standard
Active Maintainers: 0%
Challenged Maintainers:
Water Treaders:
Strivers:
Uninsured
Breast Cancer Survivors
Other
0%
0%
0%
0%
0%
0%
33%
33%
0%
0%
0%
0%
Basic
Active Maintainers: 0%
Challenged Maintainers:
Water Treaders:
Strivers:
Uninsured
Breast Cancer Survivors
Other
33%
0%
0%
0%
0%
0%
29

30. Phase 2
Research findings: care basket preferences
Most to least liked (by rank)
1. Rejuvenation
2. Alternative (therapy)
3. Enhanced health
4. Integrative care
5. Elder caregiver support
6. Family support
30

31. Phase 2
Research findings: web portal components
Participant ranking of web portal components they would use most
regularly**:
1. Automated Reminders (especially if they could be uploaded to a PDA)
2. Provider Ratings
3. Health Resume (doctor forms)
4. Automated Health History
5. Health Expense Tracking (for both pre and post-tax health expenses)
Overall, the web portal received 108 points out of a possible 140 total.
** Regularly was self-defined by each participant.
31

32. Phase 2
Research findings: breast cancer support
Breast cancer research participants:
• Liked the overall concept as it demonstrated an intuitive understanding of what
breast cancer patients endure.
• Found the five steps and sub-points accurately captured the issues and questions
that they had as breast cancer patients.
• Stated it is an informational resource they would have used, if it had been
available at the time of their diagnosis.
• Suggested that the language be as positive and empowering as possible
(e.g., change “coping with the bad news” to “coping with the news.”).
• Suggested that a sub-point be added to Step 2 called “Understanding your
treatment plan, or something that reflects planning one’s course of treatment with
the doctor.
• Stated the need to have this resources available via telephone as well as on-line.
32

33. High-level financials
33

34. Preliminary financial analysis
•
•
•
•
•
•
•
•
Key assumptions:
Income tax = 40%
Premium increase = 5% per year
Broker commission = 5.60% (based on total BCC)
Discount rate = 12.50%
One time costs:
– Development costs = estimated at $4M (rounded up from the first year of
PHF at $3.9M)
– Launch and marketing costs = estimated at $2M
– Infrastructure costs = estimated at $1.5M
Investment income = average 3% (from PHF)
Premiums = average of $250 PMPM (average of LG rates supplied)
Underwriting margin = average 12% (from PHF)
Using these assumptions, the concept would
need 16,667 members to break-even
34

35. Preliminary financial analysis
Members
Growth rate
Member months
(assumes 1/1 enrollment)
Base revenue PMPM
Premium Increase
MCR
Premium Revenue
Claims Expense
U/W Margin
Broker commissions
U/W Margin after
Broker
One time costs
Development
Launch
Total
Infrastructure costs
Total costs
Pretax Income
Income tax
Net Income
NPV
Year 1
----
Year 2
2,000
-24,000
Year 3
4,000
100%
48,000
Year 4
7,000
75%
84,000
$250
-88%
------
$4,000,000
$2,000,000
$6,000,000
$1,500,000
$7,500,000
($7,500,000)
($3,000,000)
($4,500,000)
$54,477
Year 5
10,500
50%
126,000
Year 6
13,125
25%
157,500
$250
-88%
$6,000,000
$5,280,000
$720,000
$336,000
$384,000
$262.50
5%
88%
$12,600,000
$11,088,000
$1,512,000
$705,600
$806,400
$275.63
5%
88%
$23,152,500
$20,374,200
$2,778,300
$1,296,540
$1,481,760
$289.41
5%
88%
$36,465,188
$32,089,365
$4,375,823
$2,042,051
$2,333,772
$303.88
5%
88%
$47,860,559
$42,117,292
$5,743,267
$2,680,191
$3,063,076
-----$564,000
$225,600
$338,400
-----$1,184,400
$473,760
$710,640
-----$2,176,335
$870,534
$1,305,801
-----$3,427,728
$1,371,091
$2,056,637
-----$4,498,893
$1,799,557
$2,699,336
35

36. Concept details
36

37. Traditional coverage levels
Small group
$5000 deductible
30% co-insurance up to out of pocket maximums of
$7500 per person
4 provider visits per year for a $40 copay
Full hospital coverage
MyHealth™ web portal
$500 deductible
40% co-insurance up to out of pocket maximums of
$7500 per person
4 provider visits per year for a $40 copay
Full hospital coverage
MyHealth™ web portal
$2500 deductible
30% co-insurance up to out of pocket maximums of
$6000 per person
12 provider visits per year for a $30 copay
Pharmacy coverage (after a $250 deductible)
Full hospital coverage
MyHealth™ web portal
$500 deductible
30% co-insurance up to out of pocket maximums of
$6000 per person
12 provider visits per year for a $30 copay
Pharmacy coverage (after a $250 deductible)
Full hospital coverage
MyHealth™ web portal
$1500 deductible
30% co-insurance up to out of pocket maximums of
$5000 per person
Provider visits at $25/visit
Full pharmacy coverage
Full hospital coverage
MyHealth™ web portal
Basic
Individual
$250 deductible
20% co-insurance up to out of pocket maximums of
$5000 per person Provider visits at $20/visit
Full pharmacy coverage
Full hospital coverage
MyHealth™ web portal
$500 deductible
30% co-insurance up to out of pocket maximums of
$4000 per person
Provider visits at $10/visit
Full pharmacy coverage
Full hospital coverage
MyHealth™ web portal
$250 deductible
10% co-insurance up to out of pocket maximums of
$4000 per person
Provider visits at $10/visit
Full pharmacy coverage
Full hospital coverage
MyHealth™ web portal
Standard
Preferred
Premium
37

38. Potential pricing of Whole Health PPO for Individual
Number of baskets selected
1
3
4
basic
Traditional
medical
coverage
2
$115
$145
$175
$205
standard
$150
$180
$210
$240
preferred
$205
$235
$265
$295
premium
$290
$320
$350
$380
38

39. Potential pricing of Whole Health PPO for Small Group
Number of baskets selected
1
3
4
basic
Traditional
medical
coverage
2
$205
$235
$265
$295
standard
$245
$275
$305
$335
preferred
$285
$315
$345
$375
premium
$330
$360
$390
$420
39

40. Potential pricing of Whole Health PPO for Large Group
Southern CA: LA
Northern CA: SF
Ranges from:
Ranges from:
$268.14 - $238.77
$344.21 - $306.15
Includes one basket
Includes one basket
40

41. Thank you!
Access the Doblin client website at:
http://clientweb.doblin.com
username: WellPoint
password: innovate
Doblin Inc.
One IBM Plaza
330 North Wabash Avenue
Suite 1300
Chicago IL 60611
312 443 0800 phone
312 443 0567 fax
www.doblin.com
41