Lindsay R. ResnickChief Marketing Officer

GORMAN HEALTH GROUP

“You never know who’s swimming naked until the tide goes out.”- Warren Buffett

It’s the Economy, Stupid!

By The Numbers

$50,233Household Income

$12,680Health Insurance

$4.0 Trillion

Health Spending 2015

($38)/$16 Billion

GM/Toyota

$9 Billion/mo

Iraq War

9.1%Unemployment

12.7%Poverty

16.0%Uninsured

31.0%Delayed Care

59.0%OOP Raise

U N S U S T A I N A B L E$450 Billion

Medicare

$614 Billion

Social Security

$340 Billion

Medicaid

$0

$500

$1,000

$1,500

$2,000

$2,500

2000 2005 2010 2015 2020 2025 2030

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Medicare Part D Medicare Spending % of GDP

Between 2000 & 2030 Medicare’s share of GDP will triple.

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($ in billions)

Medicare Expenditures

$450 billion spent on Medicare(could Quadruple by 2020)

44 million beneficiaries- Medicare Supplement 10 M

- Medicare Advantage 10 M

- Prescription Drug 17 M-

650+ MA Plan Sponsors

- PPO

- PFFS

- HMO

- SNP

Income

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Health Reform…Its Time Has Come

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Health ReformRound 2

RetailHealthcare

800Retail Clinics

5,000Urgent Care Centers

55,000Pharmacies

750,000 in 2007

1,500,000 in 2008

16,000,000 in 2018

$68 billionU.S. provider lossesto outbound medical travel in 2010

Global Med

PPI

MedRetreat

Healism

WorldMed

Medical Home

80%Seniors

71Heart Disease

24Diabetes

22Asthma/Lung

5Alzheimer’s

1.5Cancer

1HIV/AIDS

60%Boomers

www.FightChronicDisease.org

$3of$4Chronic Care

Care TeamPayer

Family

Physician

Consumer

Personal Physician

Team Approach

Coordinated Care

Evidence Based

Expanded Access

Recognized Value

Patient Centered Medical Home

• Over 60% U.S. adults are overweight; 45% of this group are obese

• Almost 20% children are overweight (3x more than 1980)

• 60% Americans want smokers to pay more insurance premiums, but

only 40% believe overweight people should pay more.

Prevention and early detection could save $1 trillion over the next 20 years

Obesity is the new smoking!

Pharmaceuticals $289 Billion

Nutraceuticals $ 70 Billion

Cosmeceuticals $ 16 Billion

Biotech

Human Genome

Americans can now order at-home

genetic test kits to learn whether they

have genes predisposed for cancer,

Alzheimer’s, baldness or bipolar disorder.

Personalized

Predictive

Preventive

Participatory

DNA Direct

PAC BIO

VisiGen

deCODEme

Navigenics

Genomas

Improving quality of care – too much variation, 98,000 deaths

Increasing costs – cost sharing, thinner benefits, CDH

Uninsured – uncompensated care (charity + bad debt) = $30 billion

Increasing demand for care – inpatient, outpatient, ER

Workforce shortages – RNs, PCs, caregivers

Technology – it works, people want it….it’s expensive

State-of-the-State

5000 Hospitals

Today, 50% of the nation’s hospitals are operating in the red.

Medical Technology

CAT per 1M population: US = 80, UK&CA = 13

MRI per 1M population: US = 20, UK&CA = 5

Information Everywhere

Social Networks

Mobility

WiFi—WiMax

VoIP

Personal Health Records

Telemonitoring

Teleconsultations

e-Presecribing

THINK ABOUT

The immense impact

consumers now have

on each other.

Technology NOW

OPERATIONS

CUSTOMERS

DISTRIBUTION

EMPLOYEES

250Million

PCs

361,000ATMs

23 Million

UPS/FedEx

$210Billion

Insurance Bureaucracy Waste

6 Million

PHRs

265Million

Cell Phones

125,000,000Blogs

100,000,000YouTube

4,000,000Wikipedia

57%Social Network

14%Trust Advertising

78%Trust Friends

DialogueVS

Monologue

New Message. New Media.

GI Generation (5 million, 84+)

Health & End-of-Life

Silent Generation (45 mil, 64 – 83)

Independence & Deals

Baby Boomers (78 mil, 44 – 63)

Convenience & Value

Gen X (69 mil, 24 – 43)

Cyber-savvy & Unconventional

Gen Y (90 mil, 12 - 23)

High Fashion & Impatient

Changing Consumers

Did you know…Half the world’s population is under 30

Today’s 21 year-olds:

Credit card debt over $2,700

College debt over $20,000

Played over 10,000 hrs of video games

Watched over 20,000 hrs of TV

Spent 10,000 hrs on telephone

Sent over 250,000 emails & IMs

…are the most medicated generation in history.

Health SqueezeChanging benefits and financing

“Where, when and how” of care delivery

Intergenerational family decisions

Cyberchondria

55% patients do not understand their insurance coverage

Benefit Design

Financial Stake

Wellness Incentives

Decision Support

Care Choices

Holistic Consumerism

Educate, engage and enable

consumers to navigate the

health care system—point of

enrollment to point of care.

Health 1.0 = content

Health 2.0 = + community

Health 3.0 = + commerce

Health 4.0 = + connectivity

Activated consumer with any time - any place - any deviceconnectivity accessing a bottomless information reservoir with the confidence and savvy to put it to use.

Competitive Rivalry

100 million covered lives

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United

Kaiser

Health Net

Humana

Wellpoint

Cigna

Aetna

Another 100 million

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Rivalries Heat Up

Approximately 50% of 2008 enrollment went to four companies

Runners Up

Aetna$55 - $24

Cigna$55 - $21

Coventry$60 - $17

Humana$80 - $29

United$55 - $26

Wellpoint$85 - $45

Membership Growth

4%

U/W Profits

19%

Value Basics

Product/Price Risk/Medical AdministrativeDevelopment Management Operations

Customer Marketing DistributionService Mix Capacity

• What are our top three market advantages?

• Are we reaching the right prospects?

• Why do we lose sales to competitors?

• What is our “big idea” – a market clutter buster?

• What do we do better than anyone else?

• Would our customers recommend us to a friend?

Ask Tough Questions

Why my company?

Uncertain economic & political climate

Treacherous competitive landscape

Changing consumer needs & demands

Biotech & medtech is expensive

Differentiation tough to establish

Johnny Raincloud

Pay attention to customers

Act on market trends, quickly

Value blocking & tackling basics

Formalize innovation internally

Embrace technology & new media

CalculatedOpportunity

“We can’t solve problems using the

same kind of thinking we used when

we created them.”— Albert Einstein

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Lindsay R. ResnickChief Marketing Officer

773.372.4961

lresnick@gormanhealthgroup.com

www.GormanHealthGroup.com