Introducing…. Total annual costs of chronic disease : - $1,600,000,000,000 NOW. - $4,200,000,000,000 in just 7 years (Milken Institute 2007) Doubling.

Introducing…

• Total annual costs of chronic disease: -$1,600,000,000,000 NOW. -$4,200,000,000,000 in just 7 years (Milken

Institute 2007)

• Doubling time is now less than 6 years and accelerating.

• $400,000 per household now…$35 Trillion in Medicare

• Current Medicare Debt will bankrupt U.S. in year 2030

David Walker, former U.S. comptroller general

US Health Care Spending Paradox

Figure 15. Two-Thirds of Medicare Spending is for

People With Five or More Chronic Conditions

5+ chronic conditions

66%

No chronic conditions

1%

4 chronic conditions

13%

1-2 chronic conditions

10%

3 chronic conditions

10%

Commonwealth Fund 2008

3.0

3.2

3.4

3.6

3.9

4.1

4.4

2.9

3.0

3.2

3.4

3.7

3.9

4.1

2.42.5

2.6

2.8

3.0

3.1

3.3

3.4

3.6

2.4

2.6

2.8

2.3

2.7 2.9

$2

$3

$4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Projected under current system

Insurance Connector plus selectedindividual options*

Spending at current proportion(16.2%) of GDP

Commonwealth Fund, December 2008

0

1000

2000

3000

4000

5000

6000

7000

1980 1984 1988 1992 1996 2000 2004

AustraliaCanadaDenmarkFranceGermanyNetherlandsNew ZealandSwedenSwitzerlandUnited KingdomUnited States

0

2

4

6

8

10

12

14

16

1980 1984 1988 1992 1996 2000 2004

AustraliaCanadaDenmarkFranceGermanyNetherlandsNew ZealandSwedenSwitzerlandUnited KingdomUnited States

Total expenditures on healthas percent of GDP

•Average spending on healthper capita ($US PPP)

1 France2 Italy3 San Marino4 Andorra5 Malta6 Singapore7 Spain8 Oman9 Austria10 Japan11 Norway12 Portugal13 Monaco14 Greece15 Iceland16 Luxembourg17 Netherlands18 United Kingdom

19 Ireland20 Switzerland21 Belgium22 Colombia23 Sweden24 Cyprus25 Germany26 Saudi Arabia27 United Arab Emirates28 Israel29 Morocco30 Canada31 Finland32 Australia33 Chile34 Denmark35 Dominica36 Costa Rica37 United States of America38 Slovenia39 Cuba40 Brunei

The World Health Organization

$8130/year for every man, woman and child in the US spent on “Medical Treatment”

Versus$1.21/year spent on awareness and prevention or

“Health Care”

Managed Care 2003 ©MediMedia USA

Chronic Conditions• 88% of all prescriptions written• 72% of all doctors visits• 76% of all inpatient hospital staysManaged Care 2003 ©MediMedia USA

•For every $1 spent on medical and pharmacy costs, employers incur $2.30 in absenteeism, productivity and presenteeism costs.

•If condition is Depression, Stress or Anxiety-related, employers incur $20 in “soft costs” for every $1 spent on medical and pharmacy expenses. (Journal of Environmental and Occupational Medicine, 09)

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

1985 1995 2007

Obesity in America

• Existing medical treatment system:– Designed to “manage” chronic disease…ATF

10+ yrs– Early Detection and Disease Management is

NOT Prevention– Lacks effectiveness - chronic disease. Why? – Fails to address the causes i.e. Largely Peoples’ diet and lifestyle habits

Very Good News …that’s oddly still largely a secret

75-85% HC spending focused on treating:Preventable diet and lifestyle-based

conditions (NIH, CDC, WHO)

Majority of chronic illness is preventable

Chronic illness: - late stage of health-disease

continuum - a continuum that has proven

modifiable

There’s No Argument

New Insights and Approaches are Needed

Empowering Health Response-Ability

LifeStrive Health Promotion System

• Alerts & Informs Individuals ↓ Barriers ↓ Costs

• Compliments Medical Care ↑ Efficiencies ↓ Burden

• Enables Health Response-Ability ↑ Inside-out Health Care

• Inspires Participation Personalized – Uniquely Informative Uniquely Supportive

Trend Tracking Before Diagnosis is the Key!

• We cannot prevent what we cannot predict• Predicting, preventing and mitigating chronic

and critical disease requires much more comprehensive tracking of trends, than has been available to date in the marketplace

Individuals, Corporations & Government- Know Their Health Trend- Know What To Do About It

The Cost-Shift

20

45

3125

31

9

1913 15

29

60

42

34

24

46

37

72

57

45

54

3945 47

60

71

0

25

50

75

Did not fill a

prescription

Did not see

specialist when

needed

Skipped

medical test,

treatment, or

follow-up

Had medical

problem, did

not see doctor

or clinic

Any of the four

access

problems

TotalInsured all year, not underinsuredInsured all year, underinsuredInsured now, time uninsured in past yearUninsured now

Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

All of this bad news has created unprecedented opportunity for products that deliver the solution:

• Can fill the gaps created by “cost shift”• Remove cost and access barriers to critical

health/prevention services• Help employers “soften the landing” when they raise

deductibles or premium contributions• Protect people from unforeseen health care expenses

and medical bankruptcy• *62% of all bankruptcies in U.S.• *78% had health insurance• *$17,749 average amount owed*Harvard University 2007

• HIPAA Exemption• Critical Illness is really chronic illness at a clinical

endpoint• The critical, chronic and degenerative illnesses

AWD insures against account for 75-85% of employer-sponsored health plan costs, not to mention lost productivity, etc…

Why Position a Wellness Program in a Voluntary or Supplemental Benefit?

When you are able to:• Dramatically improve awareness of key risk factors,

follow up with properly individualized education and inspirational support, you can help to prevent and mitigate chronic illness and associated expenses… i.e. LifeStrive

• Have voluntary benefits cover the costs of LS, while providing important employee financial safeguards…

• Result: These benefits make sense to employers and employees on a whole new level…

LS campaign:Email and Personal

LettersLS direct + Employer

direct

Employees notified that their personal web

portal is ready

Insured logs in, prints lab requisition, chooses

local lab

Insured visits lab (5,000+ locations)

Linked to personal results & interpretative

report < 48 hrs

Insured completes Health and Lifestyle

Assessment

Personal Health Promotion Report & web

mini courses for awareness & actions

Communication to remind & inspire to

“take next step”LS direct + Employer

direct

Process Flow

LifeStrive® Comprehensive Wellness Panel

50 individual tests provide thorough biochemical assessment

Lipid panel (cholesterol, HDL, LDL, the risk ratio, triglycerides)Complete Blood Count (CBC) (WBC, RBC, Platelets, Hct, Hgb)Fluids and ElectrolytesThyroid Panel w/TSHLiver Enzyme PanelKidney PanelGlucose (Diabetes)Complete Mineral Profile

• Market Value of lab testing & reporting alone exceeds $700 • Lab testing is only the start of the health promotion process

with LifeStrive

5 large buttons lead consumer to each step in

health promotion.

Users can track, compare and store all relevant health

information

Testing performed through our system is

automatically populated into

member reporting interface

One step reporting to physician, health coach, etc…

Message center serves as single

source of truth for all health-related

messages

Courses currently enrolled in and recommended. We track

ongoing participation and completion for incentives

Group Aggregate Reporting

Group Aggregate Reporting

Predictive Modeling Relationships

Predictive Analysis-High Activity Members

Predictive Analysis-Clinical and Compliance Gaps

Predicted Costs By Member

versus

Actual Costs Experienced that Year

Accuracy of Predictive Model

Workers Comp

Disability, absenteeism

Global Risk Management is here!

42

•Foreword by David M. Walker Fmr. US Comptroller General

•Demonstrates commitment to creating a culture of wellness.

•Wellness recommended by doctors, not employers/brokers.

•Easy implementation

New Book Creates Context for “What’s Next”

Questions?

Support Materials at www.lifestrive.com/awdsupport

Contact: Richard Perryman at (602) 956-3401 or [email protected]