Key Quality of Care Measures. Blue Cross Blue Shield of Michigan Traditional, PPO and POS Members. Fourth Quarter 2003

Key Quality of Care Measures Blue Cross Blue Shield of Michigan Traditional, PPO and POS Members Fourth Quarter 2003 Blue Cross Blue Shield of Michigan is a nonprofit corporation and independent licensee of the Blue Cross and Blue Shield Association

Table of Contents Overview Page 2 Summary Findings Page 3 Study Findings Diabetes Management Page 5 Asthma Care Page 10 Cardiac Care Page 12 Antibiotic Utilization Page 15 Depression Management Page 17 Cancer Screening Page 20 Interventions Page 22 BlueHealthConnection Customer Report Page 23 Frequently Asked Questions Page 24 1

Overview Blue Cross Blue Shield of Michigan s (BCBSM) Center for Health Care Quality and Evaluative Studies (Center) measures the quality of care received by our members to identify variations in patterns of care, uncover evidence of best practice performance, and determine where opportunities exist to improve health care value. We conduct these evaluations using nationally recognized clinical guidelines and standards and share the results throughout BCBSM, and with our customers, providers and the community. The Center measures specific topics annually identified as BCBSM Corporate Quality Goals, as well as other topics where well-defined and accepted guidelines are available, clear improvement opportunities exist, and the data can be obtained from administrative (claims and enrollment) sources. BCBSM, through its BlueHealthConnection program, provides information, assistance and resources to help members make decisions and take charge of managing their health care. BlueHealthConnection utilizes data analysis to identify and stratify members in need of health coaching and care interventions. This strategy helps the member improve communication with the physician about their needs and concerns and make health care decisions that are right for them. Based on the severity of the condition, members will fall into three levels of intervention (e.g., Low healthy members with well-managed chronic conditions; Medium members who are relatively healthy with predictive signals or with identified gaps in the management of their chronic condition; and High members with acute, unmanaged chronic conditions requiring complex coordination of healthcare resources). Each level of intervention is designed to address a broad segment of the population presenting with specific care needs where health education and care management interventions can have a positive impact on the quality, clinical outcomes, and cost effectiveness of care. The BlueHealthConnection Member Identification Report is included. The report summarizes all BCBSM members statewide who are eligible to receive services through the BlueHealthConnection program. BlueHealthConnection uses the most recent twelve months of data to identify currently enrolled members with specific health conditions. Our goal is to provide a comprehensive report of prior year(s) utilization of services and what current memberfocused strategies have been developed to improve the health of our members. The quality study reports on which this key measures report is based can be obtained from the Center for Health Care Quality and Evaluative Studies staff or online at http:/www.bcbsm.com/center/. Basic Measure Specifications All measures contained in this report share the following specifications unless otherwise stated in the measure description. Data Sources and Timeframes BCBSM administrative data, including membership, inpatient, outpatient, pharmacy, and professional paid claims from calendar years 2001 and 2002. Additional sources such as master medical, vision and rejected claims are used when required. Population - Non-Medicare Michigan members who were continuously enrolled during the measurement period in a Traditional, PPO or POS product and had claims evidence of the diagnosis being studied. Benefit coverage for the measure being studied must be available. Benefit carve-outs, such as laboratory, vision and pharmacy services, may cause a group to be excluded from a measurement. 2

Summary Findings We examined membership and claims data for 3.03 million members enrolled in a Traditional, PPO or POS product. Measurements of care, cost/use and quality were taken in six areas: Diabetes Management, Asthma Care, Cardiac Care, Antibiotic Use, Depression and Cancer Screenings. The report provides results based on findings from calendar years 2001 and 2002 data, unless otherwise noted. Highlights of these findings with comparisons to the BCBSM statewide average and other benchmarks and targets are summarized below: Diabetes Management The 2002 rates for A1c testing and lipid testing increased for all product lines from the 2001 rates. Lipid testing, with a six-percentage point increase, improved most notably among the POS population. Nephropathy testing rates increased for Traditional and PPO members. The POS testing rate was unchanged from 2001 to 2002 and remains above the BCBSM statewide average. Eye exam rates declined for all products from 2001 to 2002. The combined severity of illness score for PPO members in the diabetic study population was higher than the BCBSM statewide average, particularly for those members enrolled in Blue Preferred Plus with a score 10 percent above the statewide average. The average total health care dollars paid per diabetic member in the Traditional and Blue Preferred Plus products were seven percent and four percent more than the BCBSM statewide average, respectively. The inpatient admission rates per 1,000 were greatest among the PPO members in the study population. The emergency room visit rates per 1,000 were highest for the POS members in the study population. Asthma Care The 2002 rates for appropriate and preferred therapy increased from the 2001 rates for the Traditional, Community Blue, Blue Preferred Plus and POS products. Members in the POS product had the largest increase. The rates for appropriate asthma therapy exceeded the NCQA Quality mean rate in 2002. The combined severity of illness score was 31 percent higher than the BCBSM statewide average for Blue Preferred Plus members in the asthma study population. The average total health care dollars paid per asthmatic member was highest for Blue Preferred Plus members in the study population. The inpatient admission rates per 1,000 and the emergency room visit rate per 1,000 with an asthma diagnosis were lowest among the Traditional members in the study population. The emergency room visit rate per 1,000 for any condition was highest for the PPO members in the study population. Cardiac Care The rates for ACE inhibitor therapy in heart failure increased in 2002 from 2001 for members in the Traditional, combined PPOs and POS products. The rates for Community Blue and Blue Preferred declined four percentage points from 2001. The rates for Blue Preferred Plus and POS members increased by 17 and 15 percentage points, respectively. The rate for beta blocker therapy in the treatment of an acute myocardial infarction increased one percentage point statewide. The rates for POS members (up 11 percentage points) and Blue Preferred Plus members (up eight percentage points) had the greatest increase from 2001 to 2002. The POS rate exceeded the NCQA Quality mean rate in 2002 The rate for cholesterol management among Blue Preferred, Blue Preferred Plus and POS members exceeded the BCBSM statewide average. 3

Summary Findings (continued) Antibiotic Utilization for Acute Respiratory Infection The BCBSM statewide overall use of antibiotics for acute respiratory infections, often deemed as inappropriate by the Centers for Disease Control and Prevention, declined four percentage points from 2001 to 2002. The condition with the largest decline in utilization of antibiotics was upper respiratory tract infection, down eight percentage points from 2001. The condition that appears to offer the greatest opportunity for improvement continues to be acute bronchitis. Depression Management The BCBSM statewide rate for optimal practitioner contacts exceeded the NCQA Quality mean rate for 2002. The rate for the Blue Preferred Plus product was two times the statewide rate. The percentage of BCBSM members statewide with effective medication treatment during the initial three months of care exceeded the NCQA Quality mean rate for 2002. The percentage of BCBSM members statewide with effective medication treatment during the continuation phase of care (a minimum of six months of therapy) exceeded the NCQA Quality mean rate for 2002. The BCBSM statewide rates of follow-up care within seven and 30 days after hospital discharge were well below the NCQA Quality mean rates for 2002. Cancer Screening Services The 2002 rate of breast cancer screening among females statewide was unchanged from 2001 to 2002, although Traditional members did have a one percentage point increase. The 2002 statewide rate has already surpassed the Healthy People 2010 target. The rate of cervical cancer screening among females statewide improved two percentage points from 2001 to 2002. The rate for POS members was equal to the NCQA Quality mean rate for 2002 4

Key Findings The key findings for each measurement category provide group findings at a glance. As a reminder, only those members who were continuously enrolled and eligible to receive the service (meeting diagnosis criteria and benefit availability) are included in the measurement. It is likely that disease prevalence is understated. Claims for members with chronic diseases often reflect other conditions being treated concurrently. In addition, prevalence measures presented in this report are calculated using those members who were continuously enrolled during the study period. Diabetes Management Key Findings for Diabetes Management. Diabetes Prevalence: 3.3% The rate for diabetes management measures: A1 C testing, lipid profiling and kidney disease monitoring improved for all product lines from 2001 to 2002, yet are below the NCQA Quality mean rates for 2002. Eye exam rates declined for all products from 2001 to 2002. Comorbid conditions were identified for 62% of diabetic members statewide. Ischemic heart disease was the most prevalent (47%), followed closely by hypertension (45%). The use of recommended drug therapy was highest for members in the Blue Preferred Plus product. PPO diabetic members had the highest severity of illness score, most notably those enrolled in the Blue Preferred Plus product. Members in the Traditional product incurred seven percent higher total health care dollars per member than the BCBSM statewide average payment. Members in the PPO products incurred lower total health care dollars per member than the BCBSM statewide average payment, with the exception of Blue Preferred Plus their payments were four percent higher. Measurement Results These measures are adapted from HEDIS 2003 Comprehensive Diabetes Care Specifications. Unless noted otherwise, each measure is one-year measure that uses data from the measurement year and year prior to identify diabetics and reports testing rates for the measurement year. 10 8 6 2 Hemoglobin A 1c Testing Hemoglobin A 1c testing measures long-term blood glucose and identifies patients at risk for complications due to elevated blood glucose levels. The American Diabetes Association (ADA) uses A 1c testing as a A1c Testing in 2002 77% 79% 8 78% 83% Trad PPO POS BCBSM Quality standard of care for treatment of patients with diabetes and recommends two or more A 1c tests annually. The measure provides the rates for diabetics with at least one A 1c claim during the measurement year. A1c Testing Rates 2001 2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 91,832 75% 94,050 78% Traditional 45,183 74% 42,340 77% PPO 42,978 75% 48,131 79% Community Blue 24,470 75% 28,375 78% Blue Preferred 9,623 75% 11,434 79% Blue Preferred Plus 8,885 77% 8,322 8 POS 3,671 79% 3,579 8 5

Lipid Profiling Adult patients with diabetes should be tested annually for lipid (fats in the blood) disorders with fasting serum cholesterol, triglyceride, High Density Lipoprotein (HDL) cholesterol, and calculated Low Density Lipoprotein (LDL) cholesterol measurements. The ADA includes lipid testing as a clinical standard for treatment of diabetes. Lipid testing, following HEDIS specifications, is a twoyear measure that uses data from the measurement year and the year prior to identify diabetics and reports testing rates for the entire two-year period. This measure provides the rate for diabetics with at least one claim that reflects lipid testing within the two-year period. 10 8 6 2 Lipid Profiling in 2002 82% 83% 84% 83% 85% Trad PPO POS BCBSM Quality Lipid Profiling Rates 2001 2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 82,179 79% 84,332 83% Traditional 42,577 78% 39,996 82% PPO 36,658 8 41,443 83% Community Blue 19,710 78% 23,484 81% Blue Preferred 8,453 79% 9,953 84% Blue Preferred Plus 8,495 84% 8,006 87% POS 2,944 78% 2,893 84% Nephropathy Monitoring The ADA recommends annual monitoring for nephropathy (kidney disease). Screening for microalbuminuria in individuals with Type 1 diabetes should begin at puberty and/or after 5 years duration of the disease. Because of the difficulty in precise dating of the onset of type 2 diabetes, such screening should begin at the time of diagnosis. This measure provides the testing rate for adult diabetics with at least one claim for nephropathy screening during the measurement year or evidence of kidney disease during the measurement year or the year prior. 10 8 6 2 32% Nephropathy Monitoring in 2002 32% 34% 32% 52% Nephropathy Monitoring Rates 2001 2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 82,179 3 84,332 32% Traditional 42,577 29% 39,996 32% PPO 36,658 3 41,443 32% Community Blue 19,710 3 23,484 32% Blue Preferred 8,453 3 9,953 33% Blue Preferred Plus 8,495 3 8,006 32% POS 2,944 34% 2,893 34% Trad PPO POS BCBSM Quality 6

Eye Screening for Diabetic Retinal Disease The ADA recommends annual monitoring for diabetic retinopathy (eye disease). It is a one-year measure that provides the testing rate for diabetics with at least one claim for an eye exam by an eye care professional during the measurement year. 8 6 2 Eye Screening in 2002 52% 43% 38% 44% Trad PPO POS BCBSM NCQA Quality Eye Screening Rates 2001 2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 9,971 47% 12,637 Traditional 3,939 49% 3,376 43% PPO 5,361 45% 5,573 38% Community 4,325 45% 7,437 38% Blue Blue Preferred 1,037 47% 1,136 41% Blue Preferred N/A N/A N/A N/A Plus POS 671 51% 688 44% Appropriate Management of Comorbid Conditions There is often a coexisting, more commonly referred to as a comorbid, condition among persons with diabetes. The table below shows the distribution of diagnoses, by product line, among the 62 percent of diabetics statewide identified with a comorbid condition. Frequency of Comorbid Conditions Among Diabetic Study Population Heart Failure Hypertension Kidney Disease Ischemic Heart Disease BCBSM Statewide 5% 45% 5% 47% Traditional 5% 45% 5% 47% PPO 4% 43% 5% 48% Community Blue 4% 43% 5% 48% Blue Preferred 5% 45% 5% 49% Blue Preferred Plus 6% 43% 5% 46% POS 4% 44% 4% 48% 7

Rate of Recommended Drug Therapy Use for Cormorbid Conditions Among Diabetic Study Population Current research recommends that diabetic patients also diagnosed with hypertension, heart failure, or kidney disease receive ACE inhibitors to slow the progression or minimize the impact of diabetic complications due to narrowing of blood vessels. This one-year measure identifies adult diabetic members with claims evidence for one of these comorbid conditions: hypertension (HTN), heart failure (HF), or kidney disease (Kidney) and reports the percentage of those members filling a prescription for ACE inhibitors. Heart disease is the leading cause of diabetes-related deaths among adults. Evidence shows that judicious monitoring and management of cholesterol levels can improve outcomes. Heart disease patients who take medication to reduce their cholesterol have better outcomes. This measure also looks at the measurement year and the year prior to identify adult diabetic members with ischemic heart disease (IHD) and reports the percentage of those members filling a prescription for a lipid-lowering drug. Rate of Recommended Drug Therapy Use During 2002 ACE Inhibitor Rx Lipid Lowering Rx HF HTN Kidney IHD BCBSM Statewide 76% 68% 75% 59% Traditional 76% 67% 74% 59% PPO 76% 68% 75% 59% Community Blue 74% 67% 75% 57% Blue Preferred 78% 69% 75% 62% Blue Preferred Plus 79% 7 75% 63% POS 75% 71% 8 61% Disease Impact on Resources Severity of illness scores can be a useful predictor of future healthcare utilization and cost. In this instance, the severity measures include all care a member receives, whether the services are related to diabetes or not. BCBSM determined a severity of illness score, adjusted for age and gender, for all its total population of members with diabetes. Using a BCBSM total diabetic population score of 1 as a reference point, this table compares members severity of illness, grouped by product line, to that reference point. Similarly, the average cost of all care per member was calculated for the entire BCBSM population with diabetes. The table above reflects the relative relationship between the average cost per member with diabetes. Total Disease Impact for Diabetic Members During 2002 Severity of Illness Average Cost Mbrs Mbrs BCBSM Statewide 1 $4,488.00 Traditional.98 $4,820.00 PPO 1.02 $4,266.00 Community Blue.98 $4,144.00 Blue Preferred 1.07 $4,262.00 Blue Preferred Plus 1.10 $4,686.00 POS.90 $4,039.00 8

Resource Utilization The table below depicts the use of inpatient hospitalization and emergency room visits for diabetic members included in the study population expressed as rates per thousand. The cost displayed is the average payment per member for inpatient admissions and the average charge per member for emergency room visits. 550 500 450 400 350 300 250 200 150 100 50 0 Resource Utilization Among Diabetic Study Population (Rates / 1,000) Total PPO 17.2 16.9 17.7 Trad POS 13.7 203.7 211.4 198.8 192.2 17.8 17.1 18.3 18.4 295.3 292 295.2 334.5 Inpt for DM Inpt Any Diag ER Visit for DM ER Visit for Any Diag Resource Utilization Among Diabetic Study Population During 2002 Number of Encounters Rate/1,000 Diabetic Mbrs Avg. Cost / Diabetic Mbr Total Traditional PPO POS Total Traditional PPO POS Total Traditional PPO POS Inpatient Admission for Diabetes 1,617 715 853 49 17.2 16.9 17.7 13.7 $5,944.00 $6,744.00 $5,381.00 $4,076.00 Inpatient Admission, Any Condition 19,158 8,952 9,518 688 203.7 211.4 198.8 192.2 $8,631.00 $9,315.00 $7,967.00 $8,914.00 E. R. Visit for Diabetes 1,671 724 881 66 17.8 17.1 18.3 18.4 $447.00 $454.00 $441.00 $440.00 E. R. Visit, Any Condition 27,770 12,363 14,210 1,197 295.3 292.0 295.2 334.5 $396.00 $398.00 $395.00 $400.00 BlueHealthConnection Diabetes Management Program Focus and Initiatives The BlueHealthConnection focus is to educate the member on the importance of obtaining recommended testing, medication compliance and modifiable risk factors using a variety of outreach interventions. During 2002 registered nurse health coaches made 11,030 telephone calls statewide to BCBSM identified diabetic members. A total of 31,113 Hemoglobin A1c testing and Lipid Profile reminder for Diabetes postcards were mailed to BCBSM identified diabetics statewide during 2002. 9

Asthma Care Key Findings for Asthma Care. Persistent Asthma Prevalence: 3.1% The rates for appropriate and preferred therapy increased from 2001 to 2002 for all product lines, except Blue Preferred. The Blue Preferred rates were unchanged from 2001 to 2002. The rates for appropriate therapy also exceeded the NCQA Quality mean rate in 2002. The percent of PPO members with persistent asthma who filled at least one prescription for preferred therapy (54%) was below the BCBSM statewide rate of 55%. PPO asthma study members with persistent asthma had an average severity of illness score five percent higher than the BCBSM statewide average. Most noteworthy were the Blue Preferred Plus study members with an average severity of illness score 31 percent higher than the statewide average. Traditional and Blue Preferred Plus members incurred five percent and 15 percent higher total health care dollars per member with persistent asthma, respectively, than the BCBSM statewide average payment. Measurement Results Appropriate Therapy According to the National Heart Lung and Blood Institute s National Asthma Education and Prevention Program Guidelines for the Diagnosis and Management of Asthma, the following drug classifications are appropriate forms of therapy for long-term control of persistent asthma: inhaled corticosteroids, cromolyn sodium and nedocromil, leukotriene modifiers, and methylxanthines. This measure is adapted from HEDIS 2003 criteria. It is a one-year measure that uses data from the measurement year and year prior to identify members with persistent asthma and reports on rates of therapy for the measurement year. Along with the basic population criteria, members for this measure must be between the ages of 5 and 56. The measure provides the percentage of persistent asthmatics that filled at least one prescription for appropriate long-term therapy. Preferred Therapy Although all of the drugs listed for appropriate therapy are acceptable forms of long-term therapy, evidence clearly demonstrates that inhaled corticosteroids are the preferred long-term therapy. As a result, the Center also measures the rates of prescriptions for preferred therapy. Measurement criteria are the same as for appropriate therapy. The measure provides the percentage of persistent asthmatics that filled at least one prescription for preferred long-term therapy. No national benchmarks or target goals have been established for preferred therapy, this is a BCBSM value-added measure. Rate of Appropriate Asthma Therapy in 2002 8 74% 72% 73% 73% 68% 6 2 Trad PPO POS BCBSM NCQA Quality Rate of Appropriate Asthma Therapy 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 36,401 71% 38,482 73% Traditional 16,225 72% 15,204 74% PPO 18,673 71% 21,564 72% Community Blue 12,209 7 15,916 73% Blue Preferred 3,083 71% 3,895 71% Blue Preferred Plus 3,381 7 1,753 71% POS 1,503 68% 1,714 73% Rate of Preferred Asthma Therapy 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 36,401 53% 38,482 55% Traditional 16,225 55% 15,204 57% PPO 18,673 52% 21,564 54% Community Blue 12,209 52% 15,916 54% Blue Preferred 3,083 53% 3,895 53% Blue Preferred Plus 3,381 52% 1,753 54% POS 1,503 53% 1,714 57% 10

Disease Impact on Resources Severity of illness scores can be a useful predictor of future healthcare utilization and cost. In this instance, the severity measures include all care a member receives, whether the services are related to asthma or not. BCBSM determined a severity of illness score, adjusted for age and gender, for its total population of members with asthma. Using a BCBSM total asthmatic population severity score of 1 as a reference point, this table compares members severity of illness, grouped by product line, to that reference point. Total Disease Impact for Asthmatic Members During 2002 Severity of Illness Average Cost Mbrs Mbrs BCBSM Statewide 1 $2,493.00 Traditional.94 $2,607.00 PPO 1.05 $2,427.00 Community Blue 1.03 $2,420.00 Blue Preferred.97 $2,264.00 Blue Preferred Plus 1.31 $2,857.00 POS 1.03 $2,304.00 Similarly, the average cost of all care per member was calculated, by product line, for the total BCBSM persistent asthma population. The table reflects the relative relationship between the average cost per member with persistent asthma. Resource Utilization The table below depicts the use of inpatient hospitalization and emergency room visits for asthmatic members included in the study population expressed as rates per thousand. The cost displayed is the average payment per member for inpatient admissions and average charge for emergency room visits. 500 450 400 350 300 250 200 150 100 50 0 Resource Utilization Among Asthmatic Study Population (Rates / 1,000) 11.3 Total PPO 9.3 12.5 14 Trad POS 97.2 91.9 101.1 95.1 52.9 49.3 54.9 60.1 Inpt for Asthma Inpt Any Diag ER Visit for Asthma Resource Utilization Among Asthma Study Population During 2002 412.6 410.3 414.6 408.4 Any ER Visit Number of Encounters Rate/1,000 Asthmatic Mbrs Avg. Cost / Asthmatic Mbr Total Traditional PPO POS Total Traditional PPO POS Total Traditional PPO POS Inpatient Admission for Asthma 435 141 270 24 11.3 9.3 12.5 14.0 $3,586.00 $4,233.00 $3,310.00 $2,886.00 Inpatient Admission, Any Condition 3,740 1,397 2,180 163 97.2 91.9 101.1 95.1 $6,564.00 $7,279.00 $6,136.00 $6,152.00 E. R. Visit for Asthma 2,036 749 1,184 103 52.9 49.3 54.9 60.1 $347.00 $337.00 $360.00 $275.00 E. R. Visit, Any Condition 15,878 6,238 8,940 700 412.6 410.3 414.58 408.4 $319.00 $310.00 $328.00 $277.00 BlueHealthConnection Asthma Management Program Focus and Initiatives The Asthma Program was initiated during June 2003. The outreach strategy for the Asthma Program includes members receiving postcards on asthma. In addition, members receive asthma management booklets. Health education is focused on the following items: importance of asthma self-management plan, peak flow meter use, medication compliance and regular physician visits. 11

Cardiac Care Key Findings for Cardiac Care. The statewide rate for ACE inhibitor use in heart failure (HF) increased from 75% in 2001 to 76% in 2002. The combined PPO rate for ACE inhibitor use in HF increased from 73% in 2001 to 74% in 2002. The rate for members in the Blue Preferred Plus product went from 65% in 2001 to 82% in 2002. The statewide rate for beta blocker therapy use with an acute myocardial infarction increased from 88% in 2001 to 89% in 2002. The combined PPO rate for beta blocker use was consistent with the statewide rate, but the rate for members in the Blue Preferred Plus product rate increased from 89% in 2001 to 97% in 2002 and exceeded the NCQA Quality mean rate (94%) for 2002. The beta blocker rate for POS members increased from 87% in 2001 to 98% in 2002 and also exceeded NCQA Quality mean rate (94%) for 2002. Members in the Blue Preferred Plus and POS products had the highest rates for cholesterol management with a cardiac event during 2002. Blue Preferred Plus members in the ischemic heart disease study population had a severity of illness score five percent higher than the BCBSM statewide average. Total health care dollars per member with ischemic heart disease among the Blue Preferred Plus members were two percent higher than the BCBSM statewide average payment. Measurement Results Angiotensin-Converting Enzyme (ACE) Inhibitor use in Heart Failure ACE inhibitor therapy is used in the treatment of heart failure to relieve symptoms, increase exercise tolerance, reduce hospital admissions and prolong life. The American College of Cardiology/American Heart Association recommends ACE inhibitor therapy, including angiotensin receptor blockers, for patients with heart failure (HF). No national benchmarks or targets have been established for ACE inhibitor use. Measurement rates are calculated for members who are hospitalized with a diagnosis of heart failure. It is a one-year measure that uses data from the measurement year to identify members with heart failure and reports therapy rates. Along with the basic population criteria, members must be between the ages of 21 and 64. The measure provides the percentage of members hospitalized for HF who filled a prescription for ACE inhibitor therapy within seven days of discharge. Use of ACE Inhibitor in Heart Failure During 2002 10 8 6 2 8 74% 65% 76% Trad PPO POS BCBSM ACE Inhibitor Use After Heart Failure 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 674 75% 550 76% Traditional 410 77% 265 8 PPO 248 73% 268 74% Community Blue 121 77% 158 73% Blue Preferred 59 75% 72 71% Blue Preferred Plus 68 65% 38 82% POS 16 5 17 65% 12

Beta Blocker Use After Acute Myocardial Infarction (AMI) Clinical studies have shown that the use of beta blockers after an AMI reduces the likelihood of future cardiac events, including sudden cardiac death. Beta blocker use after AMI is adapted from HEDIS 2003 criteria. This one-year measure looks at the measurement year to identify members with a hospitalization for AMI and reports therapy rates. Along with the basic population criteria, members for this measure have to be between the ages of 35 and 64. The measure provides the percentage of members hospitalized for an AMI who filled a prescription for a beta blocker within seven days of discharge. Cholesterol Management After Acute Cardiovascular Events Evidence shows that for patients who have an acute cardiovascular event, evaluation and treatment of cholesterol levels, specifically their low-density lipoprotein cholesterol (LDL-C), can improve outcomes. Patients who take drugs to reduce their LDL-C have a longer event-free survival than those who do not. Cholesterol management after acute cardiovascular events is adapted from HEDIS 2002 criteria. This one-year measure looks at the previous year to identify members with claims evidence of an acute cardiovascular event (hospitalization for AMI, coronary artery bypass graft CABG, or receiving a percutaneous transluminal coronary angioplasty PTCA) and reports LDL-C measurement rates. Along with the basic population criteria, members for this measure have to be between the ages of 18 and 75. The measure provides the percentage of members with a cardiovascular event who received LDL-C testing on or between 60 to 365 days post event. Beta Blocker Use After AMI During 2002 89% 88% 98% 10 89% 94% 8 6 2 Trad PPO POS BCBSM NCQA Quality 8 6 2 73% 73% Beta Blocker Use After AMI 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 1,277 88% 1,084 89% Traditional 626 89% 422 89% PPO 612 87% 613 88% Community Blue 354 86% 422 86% Blue Preferred 109 89% 126 9 Blue Preferred Plus 149 89% 63 97% POS 39 87% 49 98% ChoIesterol Management After a Cardiac Event During 2002 77% 73% 79% Trad PPO POS BCBSM Quality Cholesterol Management After a Cardiac Event 3Q2001-2Q2002 Mbrs % Lipid Testing BCBSM Statewide 7,009 73% Traditional 3,436 73% PPO 3,342 73% Community Blue 1,830 71% Blue Preferred 756 75% Blue Preferred Plus 756 77% POS 231 77% 13

Disease Impact on Resources Severity of illness scores can be a useful predictor of future healthcare utilization and cost. In this instance, the severity measures include all care a member receives, whether the services are related to ischemic heart disease (IHD) or not. BCBSM determined a severity of illness score, adjusted for age and gender, for its total population of members with IHD. Using a BCBSM total IHD population severity score of 1 as a reference point, this table compares members severity of illness, grouped by product line, to that reference point. Total Disease Impact for Members with Ischemic Heart Disease 3Q2001 2Q2002 Severity of Illness Average Cost Mbrs Mbrs BCBSM Statewide 1 $25,029.00 Traditional 1.00 $26,624.00 PPO 1.00 $23,950.00 Community Blue.98 $23,342.00 Blue Preferred.99 $23,862.00 Blue Preferred Plus 1.05 $25,508.00 POS.95 $20,318.00 The severity of illness score is a useful predictor of future health care cost and utilization. Cardiovascular diseases are common and costly, not only in economic terms, but also in lives lost. Total payments by BCBSM for cardiovascular inpatient/outpatient services and physician charges during 2002 were $6.15 billion. BlueHealthConnection Ischemic Heart Disease (IHD) and Congestive Heart Failure (CHF) Program Focus and Initiatives The primary goals for the IHD and CHF Programs include the following: Improve member lipid profile values. Improve member lipid profile compliance rate for targeted population. Demonstrate member knowledge of disease conditions and modifiable risk factors. Members who participate in the care management programs will perceive that our programs offer valuable services. IHD health education is focused on the following items: importance of Lipid profiles testing, weight and blood pressure management, exercise, and medication compliance. As part of the outreach strategy for the IHD Program, members receive postcards on the importance of beta blockers, lipid testing and medication compliance. In addition, members receive booklets (e.g., taking control of your cholesterol, weight, blood pressure). During 2002, 9,177 BCBSM members identified with IHD statewide were mailed postcards highlighting medication use and compliance as well as the importance of obtaining lipid testing. CHF health education is focused on the following items: importance of weight management with daily checks, fluid management - diuretics, salt restriction, blood presure management, and regular physician visits. As part of the outreach strategy for the CHF Program, members receive postcards on the use of ACE/ARBS, lipid testing and medication compliance. In addition, members receive booklets (e.g., taking control of your cholesterol, weight, blood pressure, learning to live with heart failure). During 2002, 914 BCBSM members identified with CHF statewide were mailed postcards highlighting medication use and compliance as well as the importance of receiving lipid testing. 14

Antibiotic Utilization Key Findings for Antibiotic Utilization. The percent of BCBSM members statewide with a diagnosis for an acute respiratory tract infection during 2002 who received antibiotics was 51%. The BCBSM statewide rate decreased four percentage points from the rate of 55% reported for 2001. Members in the Blue Preferred product, with an overall decrease from 6 to 52%, had the greatest rate of decline. Reduction in the use of antibiotics for acute bronchitis continues to be the condition with the greatest opportunity for improvement. Measurement Results for Use of Antibiotics for Acute Respiratory Infections The Centers for Disease Control and Prevention (CDC) estimates that 80 percent of the antibiotics used for bronchitis and 100 percent of those used for the common cold could be safely eliminated. Other experts have estimated that less than 10 percent of cases of upper respiratory tract infection (URI) and acute bronchitis have bacterial causes requiring antibiotics. Overuse of antibiotics has resulted in the development of bacteria that are resistant to previously effective drugs. The Center measured the use of antibiotics, providing an overall rate for acute respiratory infections, as well as individual rates for the diagnoses of common cold, URI, and acute bronchitis. These one-year measures look at the measurement year to identify members with a target diagnosis in an ambulatory care setting, and reports therapy rates for that one-year period. Along with the basic population criteria, members for these measures must be under the age of 65 and have to be free of co-morbidities that might require antibiotic therapy. The lower the rate of therapy, the better. Acute Respiratory Infection (Overall) - This measure provides the rate of antibiotic use for members with a diagnosis for common cold, URI or acute bronchitis. 10 2002 Antibiotic Usage, by Diagnosis 8 73% 69% 69% 7 6 54% 5 47% 51% Trad PPO 38% 36% 38% 36% 36% 37% POS BCBSM 2 Common Cold URI Acute Bronchitis Overall 15

Antibiotics Measurement Results Overall Acute Respiratory Infection Overall Antibiotic Use Rate 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 173,469 55% 168,190 51% Traditional 61,522 61% 48,598 54% PPO 105,702 57% 110,227 5 Community Blue 73,381 55% 84,063 49% Blue Preferred 16,329 6 19,197 52% Blue Preferred Plus 15,992 65% 6,967 6 POS 6,245 53% 9,365 47% By Diagnosis Common Cold This measure provides the rate of antibiotic use for members with a diagnosis of common cold. Common Cold Antibiotic Use Rate 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 5,433 43% 5,149 38% Traditional 1,704 44% 1,348 PPO 3,584 43% 3,563 38% Community Blue 2,725 42% 2,809 37% Blue Preferred 491 46% 564 Blue Preferred Plus 368 45% 190 38% POS 145 33% 238 36% Upper Respiratory Tract Infection (URI) This measure provides the rate of antibiotic use for members with a diagnosis of URI. Acute Bronchitis This measure provides the rate of antibiotic use for members with a diagnosis of acute bronchitis. URI Antibiotic Use Rate 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 91,972 45% 92,650 37% Traditional 31,091 48% 25,907 PPO 57,433 44% 61,122 36% Community Blue 40,613 42% 47,002 35% Blue Preferred 8,486 47% 10,457 38% Blue Preferred Plus 8,334 54% 3,663 46% POS 3,448 5,621 36% Acute Bronchitis Antibiotic Use Rate 2001 2002 Mbrs % on Rx Mbrs % on Rx BCBSM Statewide 76,064 75% 70,391 7 Traditional 28,727 77% 21,343 73% PPO 44,685 75% 45,542 69% Community Blue 30,043 74% 34,252 68% Blue Preferred 7,352 75% 8,176 71% Blue Preferred Plus 7,290 8 3,114 78% POS 2,652 72% 3,506 69% 16

Depression Management Key Findings for Depression Management. The BCBSM statewide rate of optimal practitioner contacts for medication management statewide (2) exceeded the NCQA Quality mean rate (19%) during 2002. The rate of optimal practitioner contacts for medication management was highest for the Blue Preferred Plus members () during 2002. The percent of BCBSM members statewide with major depressive disorder (MDD) receiving effective pharmacologic treatment during the acute phase of treatment (63%) exceeded the NCQA Quality mean rate (6) during 2002. The percent of BCBSM members statewide with MDD receiving effective pharmacologic treatment during the continuation phase of treatment (5) was above the NCQA Quality mean rate (43%) during 2002. The BCBSM statewide rates of follow-up care within seven (22%) and 30 days of hospital discharge () for MDD were below the NCQA Quality mean rates (53% and 74%, respectively) during 2002. The under-treatment of depression is a nationally recognized problem. Depression is the 4 th leading cause of worldwide disability and is expected to become the second leading cause of disability by 2020. Depression results in a total societal cost of approximately $44 billion, comprised of direct medical costs, lost work, and decreased productivity. Clinical practice guidelines have been developed by a number of different organization including the American Psychiatric Association (APA) and the Michigan Quality Improvement Consortium (MQIC) outlining the use of antidepressants and case management in the acute and continuation phases as well as in the maintenance phase to prevent relapse. Patients treated according to antidepressant guidelines have overall costs lower than those who receive inadequate dosages. Measurement Results The Center measured the use of antidepressant medications in the treatment of major depressive episodes. These measures are adapted from HEDIS 2003 criteria. Each measure is a one-year measure that uses data from the measurement year and year prior to identify members with a newly diagnosed major depressive disorder episode. Unless noted otherwise, members for this measure must be 18 years of age or older and have the following BCBSM benefits: mental health coverage, office visit coverage and pharmacy. Optimal Practitioner Contacts for Medication Management This measure provides the percentage of major depressive disorder episodes with at least three follow-up visits. At least one of the follow-up visits must have been with a prescribing practitioner. 2 Optimal Practitioner Contacts for Medication Management 22% 2 2 19% Trad PPO BCBSM NCQA Quality Optimal Practitioner Contacts During 2002 Episodes % 3+ Visits BCBSM Statewide 13,316 2 Traditional 5,900 22% PPO 7,416 2 Community Blue 5,647 17% Blue Preferred 1,162 21% Blue Preferred Plus 607 POS N/A N/A 17

Effective Acute Phase Treatment The measure provides the percentage of major depressive disorder episodes that had sufficient number of medication dispensed to provide continuous therapy for a minimum of 84 days. 10 8 6 2 Effective Acute Phase Treatment 63% 62% 63% 6 Trad PPO BCBSM NCQA Quality Effective Acute Phase Treatment During 2002 Episodes % Effective Rx BCBSM Statewide 13,316 63% Traditional 5,900 63% PPO 7,416 62% Community Blue 5,647 63% Blue Preferred 1,162 63% Blue Preferred Plus 607 57% POS N/A N/A Effective Continuation Phase Treatment The measure provides the percentage of major depressive disorder episodes that had sufficient number of medication dispensed to provide continuous therapy for a minimum of 180 days. Effective Continuation Phase Treatment 10 8 6 2 53% 47% 5 43% Trad PPO BCBSM NCQA Quality Effective Continuation Phase Treatment During 2002 Episodes % Effective Rx BCBSM Statewide 13,316 5 Traditional 5,900 53% PPO 7,416 47% Community Blue 5,647 46% Blue Preferred 1,162 52% Blue Preferred Plus 607 51% POS N/A N/A 18

Follow-Up After Hospitalization for Depression This measure uses data from the measurement year to identify members aged six years and up hospitalized with a diagnosis of major depressive disorder episode and reports on rate of appropriate follow-up care. Appropriate followup care is defined as a patient receiving an office visit or participating in a day/night treatment program with a mental health provider. Appropriate follow-up care is calculated for the time periods of seven days and 30 days immediately after discharge from an acute care facility. The HEDIS rates reflect follow-up care received for any mental health diagnosis. The BCBSM rates are for those hospital discharges for major depressive disorder only. Follow-Up After Hospitalization for Major Depressive Disorder During 2002 7 Days After Hospitalization 30 Days After Hospitalization Mbrs Hospitalized % Followed % Followed BCBSM Statewide 2,902 22% Traditional 1,187 23% PPO 1,715 21% Community Blue 1,128 21% 38% Blue Preferred 379 21% 42% Blue Preferred Plus 208 23% 39% POS N/A N/A N/A Follow-Up 7 Days After Hospitalization Follow-Up 30 days After Hospitalization 10 8 6 53% 10 8 6 74% 2 23% 21% 22% 2 Trad PPO BCBSM NCQA Quality Trad PPO BCBSM NCQA Quality 19

Recommended Cancer Screening Services Key Findings for Cancer Screening. The BCBSM statewide rate for breast cancer screening (73%) was unchanged from 2001 and has already surpassed the Healthy People 2010 goal. Use of cervical cancer screening increased statewide from 74% in 2001 to 76% in 2002. The cervical cancer screening rate for POS females during 2002 (81%) was equal to the NCQA Quality mean rate. Greater utilization of cervical cancer screening is necessary to reach the Healthy People 2010 goal of 9. Measurement Results Breast Cancer Screening Breast Cancer Screening Rate 2002 Mammography screening is recommended by the American Cancer Society and the Center for Disease Control and Prevention for early identification of breast cancer. The measure is adapted from HEDIS 2003 criteria. It is a two-year measure that uses data from the measurement year and one year prior to identify the members with at least one screening test. 10 8 6 72% 75% 76% 73% 7 75% This measure reports on a split year basis, reporting from 4 th quarter of one-year through the 3 rd quarter of the reporting year. Along with the basic population criteria, members for this measure must be between the ages of 52 and 64. This measure provides the rate of mammography testing for women within the study population. 2 Tr ad PPO POS BCBSM Healthy NCQA People 2010 Quality Breast Cancer Screening Rate 4Q1999-3Q2001 4Q2000-3Q2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 262,402 73% 268,411 73% Traditional 151,645 71% 145,526 72% PPO 103,723 75% 115,762 75% Community Blue 48,888 74% 58,111 74% Blue Preferred 35,348 78% 39,952 78% Blue Preferred Plus 19,487 74% 17,699 73% POS 8,034 76% 7,123 76% 20

Cervical Cancer Screening The Papanicolaou (Pap) screening test is used to decrease mortality and morbidity rates by identifying cervical cancer at an early onset. The Pap test is recommended by the American Cancer Society and the Center for Disease Control and Prevention. 10 8 Cervical Cancer Screening Rate 2002 9 78% 81% 74% 76% 81% The measure is adapted from HEDIS 2003 criteria. It is a three-year measure that uses data from the measurement years (current year and two years prior) to identify the members receiving at least one Pap screening test during the entire three-year period. This measure reports on a split year basis, reporting from 4 th quarter of one-year through the 3 rd quarter of the reporting year. Along with the basic population criteria, members for this measure must be between the ages of 21 and 64. This measure provides the rate of Pap testing for women within the study population. 6 2 Trad PPO POS BCBSM Healthy People 2010 NCQA Quality Cervical Cancer Screening Rate 4Q1998-3Q2001 4Q1999-3Q2002 Mbrs % Tested Mbrs % Tested BCBSM Statewide 647,280 74% 631,330 76% Traditional 337,848 72% 294,731 74% PPO 283,052 76% 312,872 78% Community Blue 169,719 78% 194,955 79% Blue Preferred 67,018 75% 75,871 76% Blue Preferred Plus 46,315 75% 42,046 76% POS 26,380 8 23,727 81% 21

Interventions BCBSM is committed to improving the quality of care provided to our members. We recognize that there are numerous stakeholders who share our concern and our goal of helping our members reach optimal health. The Center capitalizes on the size and scope of BCBSM s data warehouse by turning the data into actionable health care information. Aggregate information is shared directly by the Center, to support BCBSM s corporate and community initiatives, with these stakeholders. Specific activities include: Hospitals The BCBSM Participating Hospital Agreement incorporates a component that factors in an incentive payment for those facilities that meet or exceed identified health care quality and safety measures. Physicians Physicians receive a variety of BCBSM performance reports (profiles) that allow them to compare their quality of care and service utilization to various benchmarks and targets in their self-assessment and improvement efforts. Annually, the Center mails disease-specific performance reports to selected physicians detailing their use of recommended treatment according to published national health care guidelines. References for the specific guidelines are included in the reports and are available via the BCBSM web site. Health Systems BCBSM partners with health systems and provider groups to provide data at an aggregate level to support their internal quality of care activities and monitors/measures for improvement. Members Members can receive disease management information tailored to their specific health care needs. BlueHealthConnection mailed over 150,000 disease specific postcards and in excess of 43,000 copies of the Healthwise handbook to BCBSM members during 2002. High cost and use patients are identified for possible intervention via case and disease management programs. Community Numerous community-based health care coalitions and community health agencies such as Greater Detroit Area Health Care Coalition, Capital Area Health Alliance, Greater Flint Health Coalition, Michigan Health and Safety Coalition, and Michigan Quality Improvement Consortium consistently request BCBSM to be a key participant in local health care quality improvement initiatives. The BCBSM Cardiac Consortium Collaborative, which evaluates the use of angioplasty procedures by Cardiac Centers of Excellence hospitals, recently received the Blue Cross Blue Shield Association s Best of Blue Award for their continuing work in improving patient outcomes through the sharing of information. Researchers in academic settings, such as the University of Michigan, Michigan State University and Wayne State University, have sought BCBSM as a partner in the evaluation and analysis of health care utilization trends and disease management. BCBSM has become a leading provider of information on variations and trends in patterns of health care that is utilized to catalyze change. 22

Below is a copy of the BlueHealthConnection Member Identification Report. It summarizes information on the number of members identified with a target condition. It also outlines planned member outreach activities with the corresponding completion date. BlueHealthConnection clinical interventions are designed based upon peerreviewed evidence-based medical literature, Michigan Quality Improvement Consortium (MQIC) guidelines, and other nationally accepted practice guidelines. 23

Frequently Asked Questions 1. How is the members enrolled calculated? The members enrolled in the first paragraph on the Summary Findings page refers to the sum of the members enrolled in Traditional, PPO and POS products in September 2002, according to BCBSM Underwriting. 2. Why are the member counts in the Key Quality of Care Measures report and the BlueHealthConnection different for the same diseases? The member counts shown in the Key Quality of Care Measures report met the criteria to be included in the study population, such as age, severity of the condition and continuous enrollment during 2002. The counts shown on the sample BlueHealthConnection Member Identification Report are all group members with a specified condition(s) identified during July of 2002 through August 2003. Continuous enrollment is not required for BlueHealthConnection. 3. Are all of members included in the rates? To optimize the accuracy of the rates, only those members who were continuously enrolled during the specified measurement periods and meet the study criteria are included. 4. How often are these rates calculated? These rates are calculated annually using professional, facility, master medical and pharmacy claims data. In most instances, service dates of Jan. 1, 2002 through Dec. 31, 2002 paid through March 30, 2003 are utilized. This paid time extension allows for submission and finalization of claims submitted for services provided at the end of the measurement year. 5. Can the report be made available earlier? The Center conducts studies throughout the year, with the last study reaching completion during the latter part of September. Time must be allowed for claims submission and processing, data analysis, review, and report generation. In order to provide you with the most comprehensive and inclusive report possible, the Center makes the Key Quality of Care Measures report available on an annual basis. 6. What is disease prevalence and how is it determined? Disease prevalence is the percentage of the total membership with a specific condition who were continuously enrolled for the full year. Fluctuation in membership throughout the year could change the number of persons identified with a specific disease. 7. What affects the rates? Performance for any of the measures can be influenced by any of the following: Claims data is utilized. Coordination of benefits issues impacts our ability to determine if the member received the recommended test or treatment, and Benefit carve-outs. Similar to coordination of benefits. Benefit carve-outs often impede our ability to identify a member with a condition and then determine if the recommended treatment was obtained. Most notably impacted are the quality measures that analyze the use of recommended prescription medications. 8. Why are our non-hmo rates compared to HMO rates? Currently, there are no national benchmarks for Traditional or PPO plans. Although the National Committee for Quality Assurance (an independent, non-profit organization dedicated to analyzing and reporting on the quality of care provided by the nation s HMOs) Quality rates (Health Plan Employer Data and Information Set HEDIS ) are provided, they are not directly comparable to BCBSM results because of slight differences in how 24