Aetna

1. Mark Bertolini
Chairman, CEO and
President
Aetna’s Strategy for Success
December 15, 2011

2. What We Believe
Health
Access and
Employers Consumerism Providers Information
Affordability
Technology
Source: Premier
is a universal demand more in charge of transforming the helping
issue cost-effective their own network model people live
solutions health care healthier lives
Our strategy is designed to capitalize on the changing
external environment
AETNA INVESTOR CONFERENCE The Changing Environment 13

3. What We Believe
Access and Affordability
The ACA addresses access without providing for affordability
Supreme Court Opportunity to improve
the ACA
Currently implemented
Deficit Reduction
changes likely to remain
Efforts
Employer sponsored
insurance will continue
2012 Elections to thrive
ACA = Affordable Care Act
Photo: Bloomberg News
AETNA INVESTOR CONFERENCE The Changing Environment 14

4. What We Believe
Employers
Employers need more cost-effective solutions
1990’s 2000’s 2012
Consumer
Indemnity Open Innovative
Strong- Directed
Medical Access Network
form HMOs Health
Plans Plans Models
Plans
We are developing new products based on …
Tiered networks
Narrow networks
Accountable Care Solutions
AETNA INVESTOR CONFERENCE The Changing Environment 15

5. What We Believe
Consumers
Consumers will continue to bear higher health care cost increases
$19,393
 Employees have borne +7.5%
half of the dollar increase
$14,500
in medical costs since
+9.4%
2007
 The annual rate of
increase in Employee
+6.3%
costs has been almost
50% higher than CAGRs
Employer cost increases shown
Sources: Milliman Medical Cost index
2007-2011: Average medical cost for a family
of four shown.
AETNA INVESTOR CONFERENCE The Changing Environment 16

6. What We Believe
Providers
Provider systems are increasingly institution-based
Changing Hands
Medical practice ownership
100%
Less than one-third of US
Hospital- medical practices are truly
75% owned
independent
50%
The ACA and shifting economics
25%
Physician- are forcing providers to re-
owned
evaluate their business models
0%
'02 '04 '06 '08 '10
Source: “MGMA Physician Compensation and Production
Survey Report”
Accountable Care Organizations are the future business model
for provider/plan collaboration
Sources: MGMA and Wall Street Journal.
AETNA INVESTOR CONFERENCE The Changing Environment 17

7. What We Believe
Health Information Technology (HIT)
Today’s technologies enable a 360º view of the patient
AETNA INVESTOR CONFERENCE The Changing Environment 18

8. What We Believe
Health Information Technology (HIT)
Consumers
Provider
Meaningful Use
+
Consumer
Connectivity Accountable
Care
+ Solutions
Incentive
Alignment
Intellectual
= Property
Paradigm
Shift Medical
Membership
AETNA INVESTOR CONFERENCE The Changing Environment 19

9. Our Unique Capabilities Can Meet State
and Local Needs
Unique and Configurable Aetna Capabilities
Medicare / Retirees Medicaid State Employees
Accountable Care
ActiveHealth Medicity
Solutions
Patient Centered
iTriage Care Management
Medical Home
Positions Aetna as a solutions provider to address full set
of State and Local needs
AETNA INVESTOR CONFERENCE Advancing the Core 27

10. Our Unique Capabilities Can Meet State
and Local Needs
North Carolina Patient Centered Medical Home
Unique and Configurable Aetna Capabilities
Medicare / Retirees Medicaid State Employees
Accountable Care
ActiveHealth Medicity
Solutions
Patient Centered
iTriage Care Management
Medical Home
Positions Aetna as a solutions provider to address full set
of State and Local needs
AETNA INVESTOR CONFERENCE Advancing the Core 28

11. Our Unique Capabilities Can Meet State
and Local Needs
Carilion Clinic
Unique and Configurable Aetna Capabilities
Medicare / Retirees Medicaid State Employees
Accountable Care
ActiveHealth Medicity
Solutions
Patient Centered
iTriage Care Management
Medical Home
Positions Aetna as a solutions provider to address full set
of State and Local needs
AETNA INVESTOR CONFERENCE Advancing the Core 29

12. Customer Experience:
Enhanced for a Digital Age
Leveraging technology to redefine
quality as convenience
Our new customer models target:
 Installing cases in days, not weeks
 Rate and product availability in minutes,
not days
 Online provider availability and scheduling
 Online adjudication and payment estimation
 Payment online, rather than by check or wire
Aetna’s consumer platform will be a competitive advantage in the
changing environment
AETNA INVESTOR CONFERENCE Commercial Insured 67

13. Charles E. Saunders, MD
Head of Strategic
Diversification
Accountable Care Solutions —
Collaborating To Transform Health Care
December 15, 2011

14. Agenda
 Accountable Care Solutions
 Customer Testimonial
AETNA INVESTOR CONFERENCE 86

15. The Market is Demanding More Value
Health
Access and
Employers Consumerism Providers Information
Affordability
Technology
Source: Premier
Aetna believes Accountable Care Solutions will power the
next transformative network model to help meet the needs
of the changing external environment
AETNA INVESTOR CONFERENCE Accountable Care Solutions 87

16. Rate Pressures are Forcing Providers to
Re-evaluate the Network Model
S&P Healthcare Economic Composite Index
The growth in health care
120%
Commercial Health cost is ultimately
Care Cost Index
unsustainable
Medicare Health Care
115% Cost Index
Cost Shift
Pressure It is estimated that Medicare
110%
and Medicaid account for
55% of hospital revenues*
105%
Source: S&P Healthcare Economic Composite Index Commercial payors are
100%
unable to continue to
subsidize cost shifting
Health Care Reform is forcing providers to re-evaluate their
revenue and profit model
* New York Times, July 4, 2011
AETNA INVESTOR CONFERENCE Accountable Care Solutions 88

17. Changing the provider focus from
Volume to Value
Volume Value
Provider revenues contingent on Re-aligned financial incentives
volume of care services provided create diversified revenue sources
Encourages additional capacity Improved cost structure and
and unnecessary care efficiency increases profitability
Denied claims, un-reimbursed
Quality improvement increases
admissions and other penalties as
performance-based reimbursement
payors manage utilization
Payors and providers as Aligned incentives to provide
adversaries appropriate care in the best setting
Providers recognize the value offered through Accountable
Care Solutions Collaborations
AETNA INVESTOR CONFERENCE Accountable Care Solutions 89

18. We see Accountable Care as a Broad,
Transformational Commercial Model
Aetna Perspective
All patient model – Medicare, Medicaid, Commercial
All payor model – not limited to Aetna members
Committed to quality and total cost management
Symmetrical risk sharing
CMS Model
Medicare only
Defined network
Shared savings
Quality measures and reporting
Aetna’s Accountable Care Solutions offering is a sustainable
long-term model for change
AETNA INVESTOR CONFERENCE Accountable Care Solutions 90

19. Driving Change and Creating Value
Through Accountable Care Solutions
Empower Accountable
Aetna Capabilities… Driving…
Care Solutions…
Improved
Medical Cost
Structure
Membership
Growth
Intellectual Property Service Fee
Source: Premier
Revenue
AETNA INVESTOR CONFERENCE Accountable Care Solutions 91

20. Connecting Providers and Patients with
Powerful, Personal Technology
 Clinical Data Integration
 Secure Data Exchange
 Intelligent provider
 Leading consumer interface
mobile app  Cloud-based
 Symptom-to- application store
Provider pathway  Rapid / viral
 Navigation, access, distribution
appointments,
registration Accountable
Care
Solutions  Population-based clinical
intelligence, decision
 Risk management support, disease registries
and alerts
 Health plan services
 Care Management,
 Network and member
communication and
management Intellectual
Property workflow technology
 Distribution
 Personal Health Record
AETNA INVESTOR CONFERENCE Accountable Care Solutions 92

21. Medicity Transforms Data Into Action
Analytics, Risk-stratified
Populations & Quality
Measures
Clinical Decision
Support
HIS
• Data Aggregation
• Community Health Record Patient Portal
• Identity Management
• Semantic Interoperability
• Security Framework
• Patient Consent Framework
AETNA INVESTOR CONFERENCE Accountable Care Solutions 93

22. Aetna provides a Path to Accountable Care
at Any Stage of Provider Readiness
Accountable Care
Risk
Clinical Integration Management
Workflow Workflow
Management Management
Outcomes Data Outcomes Data
Meaningful Use Analytics
Analytics
HIE HIE HIE
EMR EMR EMR
Clinical Decision Clinical Decision Clinical Decision
Support Support Support
Manage Manage
Coordinate
performance populations
AETNA INVESTOR CONFERENCE Accountable Care Solutions 94

23. ACS is aligning its Market Opportunities to
its Core Business Network Strategy
ACO PCMH
 Large integrated Systems  Mid/large Group
 No Provider-owned Plans  IPA / MSO
 Critical Mass Locally
~330(a) ~230(b)
ACO / PCMH Network Strategy
High Presence
Current Plan
Aetna Sponsor
Presence Coverage
Low Presence Needs
(a) Ideal candidate Independent
Delivery Network Current pipeline is > 150 health systems
(b) Ideal candidate groups
AETNA INVESTOR CONFERENCE Accountable Care Solutions 95

24. In Addition to New Growth ACS Creates
Synergies to the Core
 Network enhancement
 Improved value proposition to plan sponsors
 Improved provider discounts
 Reduced cost of care / MBR
 Provider relationship enhancement
 Differentiation of the Aetna brand
AETNA INVESTOR CONFERENCE Accountable Care Solutions 96

25. Road to Competitive Product Rates and
Membership Growth: Illustrative
Market broker study Health System and Aetna ACS
concluded that small group collaborate to identify
narrow network product would opportunities and implement
need to be priced ~10% lower technology tools and care
than competitors to attract management initiatives to close
members the gap
Unit Price 10-25% Cost
Goal: 10% Better than
Concessions = Parity Reduction from
Competitors
with Competitors Collaboration and IT
Health System unit cost
concessions of ~10% put
collaboration on par with
local competitors
Aetna’s new network model is creating high-quality, low-cost
options in local markets
AETNA INVESTOR CONFERENCE Accountable Care Solutions 97

26. Select Customer Examples
Experience
 52 MA Collaborations
Breadth of Populations Served
 6 Multi-payor PCMHs
 1 Medicaid PCMH
 2 Statewide ACOs
 10+ bundled payment models
 26 multi-line, multi-payor
ACOs being contracted or
launched
 >150 health systems in
pipeline
ACO Scope
AETNA INVESTOR CONFERENCE Accountable Care Solutions 98

27. Case Study
 Headquartered in Roanoke, VA
 More than 1,200 licensed beds and net revenues of $1.25B in FY2009
Background
 600+ physicians in a multi-specialty group practice and 8 not-for-profit hospitals
 Serves approximately 1 million people in Western Virginia
 Employees
Targeted  Commercial
Customer Markets  Medicare Advantage (MA)
 Medicaid
 Improving profitability of Carilion Clinic’s MA health plan using, in part, Aetna’s MA
provider collaboration model
Collaboration  Building a co-branded Carilion Clinic/Aetna suite of products for commercial market
Model(s)
 Transitioned employees off cycle to be Aetna members and manage them in the ACO
 Launching a provider-driven managed Medicaid program with Carilion
Payment Reform
 Risk sharing (up and down) – cost saving based on clinical and financial efficiencies
Highlights
 Care management: Exploring use of ActiveHealth care management platform, PHR,
Other health management programs and staff support
Collaborations
 Health plan services: Aetna insurance license, customized enrollment support, etc.
AETNA INVESTOR CONFERENCE Accountable Care Solutions 99

28. Accountable Care Solutions Can Play a
Transformational Role in Health Care
 Accountable Care Solutions is becoming the marketplace
leader in enabling population health management for
providers
… And it puts Aetna on a path to play a transformational
role in health care
 Aetna is uniquely positioned to drive benefit from this new
model for health care finance and delivery
… And fundamentally change the value proposition for
purchasers and patients
AETNA INVESTOR CONFERENCE Accountable Care Solutions 100