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MGC | 04.28.09 MGC | 04.28.09 Peter H. Diamandis, MD Chairman/CEO, X PRIZE Foundation Revolution Through Competition “The best way to predict the future is to create it yourself…”

“The best way to predict the future is to create it yourself…” · Environment. Education & Global Development ... Cost of Care. Satisfaction. FFS. FFS. For services currently

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MGC  |  04.28.09MGC  |  04.28.09

Peter H. Diamandis, MDChairman/CEO, X PRIZE Foundation

Revolution Through Competition

“The best way to predict the future is

to create it yourself…”

“Nothing... nothing

is impossible…”

1927 Orteig

Prize:  New York ‐

Paris“First team to fly non-stop

between NY and Paris…”• O

rteig puts up $25,000

• 9 teams spend $400,000

Lindbergh, 25 year old underdog wins!

Results:

• Top media story of the century

Transformed public’s view of Aviation

6,000  180,000 passengers in 18 months

Ansari

X PRIZE“First team to fly 3 people to 

space, twice within 2 weeks”

Rules:

$10 Million prize purse

Privately funded teams

3 person reusable spaceship

100 km altitude

Two flights within 2 weeks 

Finding Sponsorship…

1996 thru 2004…

Competing Teams

ARCA Space Transport

Pablo DeLeonStarChaser Scaled Composites

DaVinci

Project Canadian Arrow Rocketplane

Armadillo Aerospace

26 teams from 7 nations spending  over 

$100 million, sparking a new generation 

of space entrepreneurs

Darwinian Evolution: Literally every possible approach was tried by teams.

>6 Billion

Media Impressions Worth in Excess of $120 Million

X PRIZE Vision Video

What We Do:

We identify, design and launch X PRIZEs

to address the 

grand challenges

of our times.

Our Mission: 

To bring about radical

breakthroughs for the benefit of 

humanity.

Hallmarks of an X PRIZEHallmarks of an X PRIZE•

Highly leveraged: typically 10 –

40x•

Efficient: only pays the winner•

Sparks new industry development

$2.5M Start-upSt. Louis

$1B+Industry Start

$100MTeams’

Spend$10M PurseAnsari

Family

Trustee & Vision Circle MembersTrustee & Vision Circle Members

Eric Anderson

CEO, Space AdventuresAnousheh

Ansari

CEO, ProdeaMichael Boustridge

President, BT – N. Am Sergey Brin

Co‐Founder, President, GoogleArianna

Huffington

CEO, Huffington

PostDean Kamen

President, DEKA R&D CorpRay Kurzweil

CEO, Kurzweil

AIErik Lindbergh

Vice‐Chair, Lindbergh FndtnElon

Musk

CEO, SpaceXLarry Page

Co‐Founder, President, GoogleAdeo

Ressi

CEO, The FundedEric Schmidt

CEO, GoogleRatan

Tata

Chairman/CEO, Tata

GroupCraig Venter

Pres, J. Craig Venter InstituteWill Wright

Video Game God, Maxis

FPO

Four X PRIZE GroupsFour X PRIZE Groups

Life Sciences Exploration

Energy &Environment

Education &Global Development

Target area that is ‘stuck’; market failure

Clear, objective & simple rules

Hard but attainable

Define a problem, not a solution

Can be won in 3 ‐

8 years

Significant Cash Purse: $10M >

Assure there is a “back end business”

Open to teams worldwide

Telegenic

X PRIZE Design AttributesX PRIZE Design Attributes

Attract maverick

thinkers

Make heroes of the teams

Create global media events

Educate and excite the public

Bring new capital to the problem

Launch an industry

Encourage taking intelligent risk 

Change the paradigm

X PRIZE Design GoalsX PRIZE Design Goals

Active X PRIZESActive X PRIZES

Where Next?

Healthcare Video

Revolution Through Competition

Peter H. Diamandis, MD

[email protected]

Ferris M. Thompson

[email protected]

Peter H. Diamandis, MDChairman/CEO, X PRIZE [email protected]

The WellPoint XPRIZE: Driving Innovation in Health Care

Milken Institute Global Conference 2009 Los Angeles, CA

April 28, 2009

Sam Nussbaum, M.D.

Executive Vice President and Chief Medical Officer

Company Confidential | For Internal Use Only | Do Not Copy 23

35 Million Members Across the United States,

1 in every 9 Americans covered by WellPoint Plans

WellPoint, Inc.

Blue Cross or Blue Cross Blue Shield

UniCare >100K members

Company Confidential | For Internal Use Only | Do Not Copy 24

Source: McGlynn, E.A, et. al. “The Quality of Health Care Delivered to Adults in the United States.”

New England Journal of Medicine 348 (26): 2635-45 (2003); Mangione-Smith R, DeCristofaro

AH, Setodji

CM, Keesey

J, Klein DJ, Adams JL, Schuster MA, McGlynn

EA. The Quality of Ambulatory Care Delivered to Children in the United States The New England Journal of Medicine, Vol. 26, No. 5, Sept 2007, pp. 644-649

Why does nearly half the physician care delivered in America not

comply with established best practices?

Variation in Recommended Care

Patients do not

receive care in accordance

with best practices

Patients receive care in

accordance with best practices

45% 55%64.7%

Hypertension63.9%

Congestive Heart Failure53.9%

Colorectal Cancer53.5%

Asthma45.4%

Diabetes 39.0%

Pneumonia22.8%

Hip Fracture

% of Recommended Care Received

% of Recommended Pediatric Care Received

67.6%

Acute Medical Care53.4%

Chronic Condition Care40.7%

Preventive Care

Company Confidential | For Internal Use Only | Do Not Copy 25

Variation in Inpatient Care

Why, amongst our country’s

leading

academic medical centers, is there a

three-fold variation

in

hospital days

during the last six months of life?

8.0

12.0

16.0

20.0

24.0

28.0NYU Medical Center

27.1

Mount Sinai Hospital

22.8NY Presbyterian Hospitals

21.6Cedars-Sinai Medical Center

21.3

Mass. General Hospital

16.5UCLA Medical Center

16.1Yale-New Haven Hosp.

15.3

Brigham & Women’s Hosp.

13.9UCSF Medical Center

11.5Stanford University Hospital

10.1Source: John E Wennberg, et. al.; Use of hospitals, physician visits, and hospice care during last six months of life among cohorts loyal to highly respected hospitals in the United States British Medical

Journal 2004 328: 607

Company Confidential | For Internal Use Only | Do Not Copy 26

The State of U.S. Population Health

ObesityPhysicalActivity

SmokingStress

66% obese or overweight

28% inactive

23% smokers36% high stress

Key Drivers of Health Status

Aging 22% > 55 years, aging population

Driver

Population health status continues to deteriorate…

Schroeder S. N Engl J Med 2007;357:1221-1228

Proportional Contribution to Premature Death

Genetic predisposition

30%

Social circumstances

15%

Environmental exposure

5%

Health care10%

Behavioral patterns

40%

Prevalence

Company Confidential | For Internal Use Only | Do Not Copy 27

Prevalence of Chronic Illnesses

More than 130 million Americans suffer from chronic conditions; that number

will continue to rise

100

105

110

115

120

125

130

135

140

145

1995 2000 2005 201042

43

44

45

46

47

48

Chronic Conditions % of Population

Popu

latio

n in

Mill

ions

% o

f Pop

ulat

ion

Chronic Condition

Prevalence Annual Cost

Diabetes 16 million Americans

$105 billion in health expenses

11 million lost work days

Heart Disease 60 million Americans

$300 billion in health expenses

1 million deaths

Asthma 14 to 15 million Americans

$5.1 billion in medical expenses

2.1 million missed work days

Depression 17 million Americans

$43 billion

Company Confidential | For Internal Use Only | Do Not Copy 28

•Claims•Rx•Lab•Provider•Member•HRA

Low Risk Members

Optimize Resources in Acute Episodes of Care,

Population Care

Moderate Risk Members

DM and Education, Risk Avoidance

Well Members

Prevention and Education

High Risk, Multiple Diseases

Episodic Care Mgmt, Clinical Guidelines,

High Risk DM

Complex and Intensive Care

Total Care Integration

10%

10%

25%

30%

25% % of Health Care Costs

Identification and Stratification

Predictive Models

Predictive Models

% of WellPoint Members 50%

20%

25%

4%

1%

Evidence-Based Medicine

Evidence-Based Medicine

Variation Models

Unit/Unit $

Clinical Information Drives Evidence-Based Care and Care Management

Source: Company estimates.

Company Confidential | For Internal Use Only | Do Not Copy 29

Pay For Quality

Support from ACP, AAFP and AAPSupport from ACP, AAFP and AAPSupport from ACP, AAFP and AAP

Prospective Payment

Prospective Payment

Payment MethodologyPayment MethodologyPayment Methodology

NCQA’sPPC Recognition:

•Care Coordination•Process Redesign•HIT

Evaluate Levels of

Achievement

ClinicalProcess and Outcomes

Resource Use/Cost of Care

Satisfaction

FFSFFS

For services currently recognized through

Medicare RBRVS system; potential for additional services

Pre-Assessment of Practice ReadinessPrePre--Assessment of Practice ReadinessAssessment of Practice Readiness

New Care and Reimbursement Models:

Patient-Centered Medical Home

Company Confidential | For Internal Use Only | Do Not Copy 30

Integrated Health Records:

Delivering Health Information at the Point-of-Care

Physicians Emergency RoomsHospitals Members Employers

INTEGRATED HEALTH RECORD

Imaging Labs Pharmacy Medical RecordsClaims

Company Confidential | For Internal Use Only | Do Not Copy 31

Healthcare X PRIZE

Initial Design and Prize Guidelines Summary

for Public Comment

Join the discussion at: www.xprize.org/wellpoint

Company Confidential | For Internal Use Only | Do Not Copy 32

Healthcare X Prize Goal

Reactive Proactive

Disease Based

Consumer Centered

Sick Care

Today

Tomorrow

System Focus

System Focus

Optimal Health

“To create an optimal health paradigm that empowers and engages individuals and communities in a way that will

dramatically improve health value.”

Company Confidential | For Internal Use Only | Do Not Copy 33

Exceptional Solutions

Real‐World Testing

Transparent    

Process

WellPoint Commitment

Company Confidential | For Internal Use Only | Do Not Copy 34

Proposed Competition Goal

Health value: Improvements in “community health index”

and “total cost”•

Create mechanisms to engage, coordinate, advise, evaluate, and influence

individuals and relevant care providers in assigned test community to generate health value

Finalists compete in pre-selected community / employer

test community of ~10K individuals; results compared against an control group

Aggregate 3-year results

determine winner; 50% threshold

required to win award.

Company Confidential | For Internal Use Only | Do Not Copy 35

1.

Focus on Health Outcomes and Value at Community Level•

“Community health index”

tracks outcomes across a community; •

“Total cost”

tracks expenditure across all parties2.

Consumer Engagement •

Consumer engagement required 3.

Payment Incentives•

Teams may create incentives for consumers, providers, business partners who demonstrate desirable behaviors/ outcomes

4.

Comprehensive and Proactive Outlook•

Increased focus and investment in proactive, longer-term health improvement programs; improve health across all care settings and multi-year time horizon

5.

Local Partnerships•

Must develop relationships with local health care providers and/

or community organizations

Difference from Other Efforts:

Company Confidential | For Internal Use Only | Do Not Copy 36

Impact Potential

Successful implementation of Healthcare X PRIZE could create within 10 yrs:

1.

A new model and system of health

demonstrating >50% improvement in “health value”

2.

A measurable and globally accepted population health metric, “community health index”

(CHI) benchmark for measuring improvements in population health

3.

An individual health metric, or “individual vitality score”, to help individuals and care team understand and benchmark health status and improvement

4.

A personalized “vitality dashboard”

to understand current health status, “portfolio”

of improvement options, projected return from health improvement efforts

5.

A new “optimal health”

model

that to optimize consumer health and reward providers who create improved health value

Company Confidential | For Internal Use Only | Do Not Copy 37

What Is The Philosophy Behind The Prize Design Guidelines?

Transparent and Objective

Open sharing of results and implementation experiences•

Detailed public updates on team progress •

Independent judges oversee team through selection to finalists

Open contest;global idea recruitment

Teams may enter from anywhere; must compete in test areas•

“Cap”

on operating expenses to ensure equal playing field•

Limited use of existing, controlled facilities to maximize entrants

Demonstrable

impact w/in3 year window

Broad population health spectrum to maximize relevant approaches•

High target: need to generate radical change•

Large enough / long enough to demonstrate sustainable value

Company Confidential | For Internal Use Only | Do Not Copy 38

What Are The Phases Of The Competition?

Entry Concept Pilot Finalist

Requirements •

Registration document–

Concept–

People–

Resources / Assets–

$10k

Intervention model–

Targets–

Interventions–

Engagement–

Modeled impact•

Execution strategy / high-level plan

Concept sketch

Demonstration pilot of key assumptions (50-

100 pts network test)•

Alpha product•

Business plan, modeled financials

Intervention model and pilot exceed targets

Team in place•

Beta product / interface

Proof •

Reasonable Concept•

Mergers between complementary concepts

Model target impact•

Testable key assumptions

Pilots exceeding requirements

Evidence of consumer and provider engagement

Matching / selection into test-beds

Actual progress in test-

beds (live competition, reported monthly, quarterly reports)

Timing •

Fall 2009 •

Summer 2010 •

Spring 2011 •

Early 2015

Company Confidential | For Internal Use Only | Do Not Copy 39

What capabilities might teams deploy?

Financing and payment

Coordinationof care

Measurement, Tracking, Feedback

Personalized Decision Support

Outcomes / Comparative Effectiveness

BehaviorModification

CareExperience

ConvenienceAnd Access

Health Information Technology

Company Confidential | For Internal Use Only | Do Not Copy 40

Which Populations Will Be Included?D

isea

seSe

verit

y

At-risk /

lifestyle•

Behavioral / lifestyle foundational to avoiding preventable illness

Chronically

ill •

Coordination puts “care”

back in healthcare and saves lives

Acutely ill •

Coordination and best practices to prevent error and reduce “fragmentation”.

Early health

risks •

Similar goals to at-risk, but costs likely to be additive in short-term

Wellness •

All costs additive

End of life •

Ethical considerations

Company Confidential | For Internal Use Only | Do Not Copy 41

We Look Forward to Your Input and Participation

Visit our website: www.xprize.org/wellpoint•

Add comments to the proposed approach/ guidelines

Add yourself to the mailing list for updates

Follow the conversation on our blog, twitter, facebook, etc.

Let us know if you are interested in creating a team