1. Proprietary & Confidential, Property of Walgreen Co.
July 8, 2013
Predictive Risk in a U.S. Pharmacy

2. Proprietary & Confidential, Property of Walgreen Co. ©20132
Introductions
Author of several books and peer-reviewed studies in healthcare management and
predictive modeling.
Published 2008 (*new ed. October 2013) May 2011
Ian Duncan FSA FIA FCIA MAAA. Vice President, Clinical Outcomes, Analytics Reporting;
Head of Clinical Research, Walgreen Co. Chicago. Adjunct Professor at UC Santa Barbara
and Adjunct Research Professor, Georgetown Dept. of Health Administration.
Board member, Massachusetts Health Insurance Connector Authority (Exchange).

3. Proprietary & Confidential, Property of Walgreen Co. ©20133
Begin with a New Strategic Vision . . . .
Begin with a New Strategic Vision . . . .
Purpose Help people get, stay and live well.
Brand
Mantra
Well at Walgreens: happy and healthy made easy.
Vision
To be the first choice in health and daily living for everyone in America… and
beyond.
Mission
In communities across America, be the trusted advisor and convenient
multichannel provider of innovative pharmacy, health and wellness solutions,
consumer goods and services. A destination where health and happiness come
together to help people get well, stay well and live well.

4. Proprietary & Confidential, Property of Walgreen Co. ©20134
. . and transition beyond the corner drugstore
to be One Destination for Wellness
Immunizations
s
Workplace Health
Centers & Pharmacies
s
Health
Testing
s
Community
Pharmacy
s
Take Care
ClinicsSM
s
Adherence
Programs;
Wellness Initiatives
Specialty Pharmacy &
Infusion Services
Health Systems
Solutions: Outpatient
Pharmcies and
WellTransitions
Home
Infusion
Mail & Mobile
Pharmacy
s

5. Proprietary & Confidential, Property of Walgreen Co. ©20135
Walgreens Core Strategies
Deliver the Well
Experience
Transform the
customer experience
across all touch points,
channels and formats
Transform the Role of
Community Pharmacy
Offer unparalleled
access to innovative,
high quality, affordable
health and wellness
services within our
communities
Create an efficient
global platform
Become the first global
pharmacy-led health
and wellbeing
enterprise

6. Proprietary & Confidential, Property of Walgreen Co. ©20136
Global Leadership –
Walgreens and Alliance Boots
 Largest global pharmacy solutions provider
 Largest global purchaser of prescription drugs
 Over 1 billion prescriptions filled annually
 $53 billion in branded pharmaceutical
purchases
 370 pharmaceutical wholesale distribution
centers worldwide
 12,000 points of care located in more than 25
countries
 More than 8000 of the best corners in
America
 More than 300,000 healthcare professionals
 8 million in-store customer visits daily
 More than 1.5 million online customer visits
daily

7. •Boots international countries: UK, ROI, Thailand, Netherlands, Middle East, Sweden, Norway
•Alphega: UK, France, Italy, Spain, Czech republic, Germany, Netherlands, Russia
•Wholesale countries: France, UK, Turkey, Spain, Germany, Russia, The Netherlands, Czech Republic, Norway, Egypt, Lithuania,
•Romania, Algeria, Croatia, Bosnia, Serbia, Slovenia, China, Italy, Portugal, Switzerland
•Alliance Boots
Retail
Take Care Clinics
Take Care Worksites
Health Systems
Pharmacy
Mail
Home Infusion/RT
Specialty
Unequalled Global Presence
Walgreens
©2013 Walgreen Co. All rights reserved. 7

8. Proprietary & Confidential, Property of Walgreen Co.
Predictive Modeling Applications in the
Pharmacy Space

9. Proprietary & Confidential, Property of Walgreen Co. ©20139
Begin with a New Strategic Vision . . . .
Three Predictive Modeling Examples
1. Targeting non-adherent customers
2. Stratifying End-of-Life Patients in our Accountable Care Organizations
3.
Identifying Medicare and Health Insurance Exchange patients for wellness
visits and Risk Assessments

10. Race Composition
Ave. Household Income
Unemployment Rate
% White Collar Workers
% Houses Vacant
% Houses Owned
Patient
Level
Age
Gender
Enabling Factors
Patient Level
Inferred Disease
Severity
Comorbidities
Monthly Rx Costs
Medication
Adherence
Community
(Block Group Level)
Predisposing Factor
Patient Reported
Knowledge of Disease
Knowledge of Drug
Health Beliefs
Block Group Level
Marital Status
Ethnicity
Education
Occupation
Patient Level
Co-pay
Plan Type
Drug Regimen
Block Group Level
Average Income
Unemployment Rate
Need Factors
Patient Reported
Illness Perception
Beliefs in Meds
Lack of symptoms
Patient Level
Medication
Complexity
# medications
# prescribers
Patient Past Behavior
Drug Profile
Side Effects
Dosage
Frequency
Patient Level
Prior Proportion of Days Covered
Late Refills
Generic Drug Utilizations
% Transient Population
% Seasonal Population
% Bachelor Degree & Above
Ave. Vehicles/Household
Accessibility of Pharmacy
Population Growth Indicator
A Conceptual Model of Medication Adherence

11. Proprietary & Confidential, Property of Walgreen Co. ©2013
Actual PDC and Non-Adherence Rate in 6 & 12
Month Periods from the Index Fill – New to Therapy
63.93%
72.55%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
6 Month % Non-
Adherence
12 Month % Non-
Adherence
0.58
0.48
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
6 Month PDC 12 Month PDC
11
Actual PDC Non-Adherence Rate

12. Proprietary & Confidential, Property of Walgreen Co. ©2013
100.0% 99.7% 98.5% 95.3% 89.3% 79.6% 65.9% 43.7% 16.1% 1.4%
64.0% 64.1% 64.6% 65.6%
67.6%
70.6%
74.5%
80.5%
86.0%
92.3%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
>=0% >=10% >=20% >=30% >=40% >=50% >=60% >=70% >=80% >=90%
%ofTotalPatients
Predicted Risk
% of Total Patients Positive Predictive Value (PPV)
12
Positive Predictive Value and % of Total
Patients by Cumulative Predicted Risk

13. Proprietary & Confidential, Property of Walgreen Co. ©2013
13
Overview – ACO Clinical Programs
(1) Prevent over-medicalized End-Of-Life
(EOL) care.
(2) Prevent unplanned Transitions in care.
(3) Prevent Ambulatory-Care-Sensitive
(ACS) hospitalizations.*
(4) Improve decision-making for Preference-
Sensitive Treatments
* especially for patients with a combination of acute + chronic
+ mental health issues.
Key Point: High Opportunity ≠ High Cost or High Risk Score.
High cost and/or
highly intervenable
patients

14. Proprietary & Confidential, Property of Walgreen Co. ©2013
Preventing over-medicalized End-Of-Life
care
↑
Population
health
↓
Administrative
burden
↓
Per capita cost
↑
Patient
experience
Reduction in
inappropriate
life-sustaining
treatments
within 6
months of
death,
including a
reduction in
ER visits.2
Dedicated
case managers
to support
physicians in
caring for
complex
patients that
are at very high
risk of over-
medicalized
end-of-life care
as defined by
Barnato et al.2
Home-
hospice care
associated
with
significantly
lower average
costs ($12,434
versus $4,761
per year in
2007 dollars).5
Patients
receiving in-
home
palliative care
report
significantly
higher
satisfaction
and quality of
life.6
Clinical Program:
• Education for physicians and
their staff on how to instigate
end-of-life conversations.3
• Program to encourage patients
to complete advance directives,
consisting of materials, a
helpline, and a registry.4
• Patient access to hospice and
palliative care.
• Symptom-focused case
management for very high-risk
patients.3
1 Zhang B, Wright AA, Huskamp HA, et al. Health care costs in the last week of life: associations with end-of-life conversations. Archives of Internal Medicine. 2009;169(5):480
2 Barnato AE, Farrell MH, Chang CC, Lave JR, Roberts MS, Angus DC. Development and validation of hospital "end-of-life" treatment intensity measures. Medical Care.
2009;47(10):1098-1105
3 Wright AA, Zhang B, Ray A, Mack JW, Trice E, Balboni T, et al. Associations between end-of-life discussions, patient mental health, medical care near death, and caregiver
bereavement adjustment. JAMA 2008; 300(14):1665-73
4 Nicholas L, Langa KM, Iwashyna TJ, Weir DR. Regional variation in the association between advance directives and end-of-life Medicare expenditures. JAMA 2011;
306(13):1447-53
5Shnoor Y, Szlaifer M, Aoberman AS, Bentur N. The cost of home hospice care for terminal patients in Israel. Am J Hosp Palliat Care. 2007 Aug-Sep;24(4):284-90
6 Brumley R, Enguidanos S, Jamison P, Seitz R, Morgenstern N, Saito S, McIlwane J, Hillary K, Gonzalez J. Increased satisfaction with care and lower costs: results of a
randomized trial of in-home palliative care. J Am Geriatr Soc. 2007 Jul;55(7):993-1000.

15. 15
End of Life Predictive Model – Performance
of Model on Medicare 5% Database
Out of a 10,000 attributed life group, we would expect 430
overmedicalized deaths (4.3%). Based on our model, approximately
46% of these members will have risk scores >.95.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
0-10%
10-15%
16-20%
21-25%
26-30%
31-35%
36-40%
41-45%
46-50%
51-55%
56-60%
61-65%
66-70%
71-75%
76-80%
81-85%
86-90%
91-95%
96-100%
% of Total OM Deaths
% of Total OM
Deaths

16. Proprietary & Confidential, Property of Walgreen Co. ©2013
What is a Medicare/Exchange Wellness Visit?
Components Welcome to Medicare
Preventive Visit
Medicare Yearly
Wellness Visit
• Medical/Social History
√ √
• Depression Screening
√ √
• Mood Disorders Screening
√ √
• Functional Ability Screening
√ √
• Falls Risk Screening
√ √
• Home Safety Screening
√ √
• Physical Exam (height, weight, blood pressure, BMI,
visual acuity, other factors as appropriate)
√ √
• End-of-Life Planning
√
• Education, Counseling and Referral
√ √
• Written plan for appropriate screenings and other
covered Part B preventive services
√ √
16
Walgreens unparalleled access to clinical (drug) data allows us to identify,
stratify and outreach to patients for this (free) service.

17. Proprietary & Confidential, Property of Walgreen Co. ©2013
Improving 22 Stars/HEDIS Measures:
 Functional Status
 Advanced Directive
 BMI Measurement
 Adult Access to
Preventive/Ambulatory
Health Services
 Flu Vaccine
 Pneumo Vaccine
TAKE CARE CLINIC MEDICARE WELLNESS VISIT ADDITIONAL BIOMETRICS
 Breast Cancer Screening
 Colorectal Cancer Screening
 CV Care – Cholesterol Screening
 Diabetes Care – Cholesterol Screening
 Glaucoma Testing
 Improving or Maintaining Physical Health
 Improving or Maintaining Mental Health
 Osteoporosis Testing
 Diabetes Care – Cholesterol Controlled
 Diabetes Care – Blood Sugar
Controlled (HbA1C)*
 Colorectal Cancer Screening – Fecal
Occult Blood Test*
Impact up to 6 Stars measures via
services provided during the visit
Impact up to 8 Stars measures via
education provided during the visit
Impact up to 5 Part B services via
education provided during the visit
 Diabetes Screening – Fasting Blood
Glucose
 Pap Tests and Pelvic Examination
 Prostate Cancer Screening
 HIV Screening of At-Risk Patients
 U/S Screening for Abdominal Aortic
Aneurysm
Impact up to 3 Stars measures
via additional biometric services
17

18. Proprietary & Confidential, Property of Walgreen Co. ©2013
Personalized Wellness Plan
 Easy-to-understand
wellness plan
 Delivered face-to-face with
a clear explanation of the
findings and clear
explanation of follow-up
recommendations
 Educates patients about
potential gaps in care
 8 Star measures
 5 Part B services
 Individualized approach that
facilitates member
adherence with
recommended follow-up
services
18

19. Proprietary & Confidential, Property of Walgreen Co. ©2013
Improving HCC Coding & Quality Measures
Drive improvements in HCC coding and 6-14 Medicare Stars and HEDIS measures:
INCREASED
ACCESS/PARTICIPATION
 Expand member access to convenient locations, open 7 days a week
 Increase member awareness in high-traffic Walgreens retail locations and through
marketing/communications support
 Deliver care guided by evidence-based frameworks and assessment tools
 Improve member adherence with an exceptional patient experience and an easy-to-
understand Personalized Wellness Plan
 Coordinate care with members’ Primary Care Physician through electronic
transmission of informative visit summary
 Connect patients with identified gaps in care to needed services
 Receive timely, comprehensive data to improve HCC coding and Stars/HEDIS
measures
 Identify at-risk patients for case management and disease management programs
CLINICAL EXCELLENCE
CARE
COORDINATION
TIMELY
DATA SHARING
19