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Medco CEO: We Must Seize the Opportunity of Healthcare Reform and Go Beyond Access with Innovations that Address Quality and Cost - Two Essential Elements for Long-Term Sustainability

Friday, April 23, 2010 Press Release J E 4
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DETROIT, April 22 With Congress taking the important step of extending healthcare access to tens of millions of Americans, it is imperative for the public and private sectors to seize this opportunity and also address quality and cost -- two elements pivotal to attaining long-term sustainability for our healthcare system, Medco CEO David B. Snow, Jr. said today in an address at the Detroit Economic Club.

"A stable and sustainable healthcare system requires equilibrium across the elements of access, cost and quality -- similar to stability on a three-legged stool. The recent healthcare reform initiatives, while focusing largely on extending access, also sketch a framework where the equally important components of quality and cost can be addressed to help remove waste and harness opportunities that could reduce healthcare costs by as much as $1 trillion a year," Snow said. "Without a renewed focus on quality and cost, we will speed our journey down a prohibitively inflationary pathway wrought with a deteriorating national health profile."

Snow advocated the importance of wiring the entire healthcare system as an enabler to reduce waste and create efficiencies that will permanently remove costs. This approach fundamentally improves clinical quality for patients and dispenses with the need to ration care or reduce reimbursements to physicians and other healthcare providers.

"Wiring the system ensures that even with the explosion in medical knowledge, the best information is available and actionable for every physician and every patient -- improving safety and ensuring treatment is guided by the latest evidence-based standards and practice protocols, combined with the specific genomic attributes of the individual patient," said Snow, who was raised in a family of physicians and has more than 30 years of experience managing hospitals and healthcare systems.

"A wired system is also a necessary foundation for realizing a cascading series of advances that enables every metric in healthcare to be measured, this is even more important as we extend access across a significant portion of this Country's population: providers may be rewarded based on improved outcomes, researchers reduce their time to market for scientific discovery, including improved early identification of target patient markets, patients are empowered with information, and payors are ensured that they receive the maximum value for each dollar invested in healthcare."

With the United States, across all sectors, currently spending $2.4 trillion a year on healthcare -- a number that will continue to rise over the next several years -- improving the quality of clinical care, maximizing efficiencies in the delivery system and bending the cost curve downward are critical to insure financial sustainability.

Snow's vision to reduce expenditures by $1 trillion a year has several key components -- however none of these strategies would compromise clinical quality for the sake of lowering costs:

"Even in light of the complexities of healthcare, by harnessing the efficiencies of technology and innovation, we can reduce costs in a way that's fair and reasonable -- honoring both the physician's professional judgment and the patient's right to clinical excellence," Snow said.

Snow cited pharmacy, which is already largely wired nationwide, as a proof-point for a new paradigm in healthcare.

He also highlighted several of Medco's partnerships in the Detroit area, which are at the vanguard of reform, citing examples that include: A research partnership with employers, health plans and physicians that now represents one of the country's most successful implementations of ePrescribing technologies; an innovative program to preserve high-quality and affordable prescription benefits for retirees of America's largest domestic automakers; and broad participation in the use of genetic testing to drive a new generation of "precision medicine" to help physicians ensure they are prescribing the most effective medicines at the optimal dose based on their patient's unique genotype.

"We are on the verge of what could be the most profound transformation of healthcare in America -- and there is much work yet to be done," said Snow. "If government advances enlightened policy and regulation that also liberates the private sector to freely compete and innovate, we will become the world leader in achieving universal access, driving higher clinical quality and creating a sustainable cost structure."

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the world's most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarter(TM) for approximately 65 million members.

With more than 20,000 employees dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2009 revenues of nearly $60 billion, Medco ranks 35th on the Fortune 500 list and is named among the world's most innovative, most admired and most trustworthy companies. For more information, go to http://www.medcohealth.com.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

-- Identify and close gaps in clinical care to ensure patients follow their doctors' recommendations and to eliminate the waste related to the treatment of patients with chronic and complex disease. This is critical because these patients currently account for 96 percent of all drug costs and 75 percent of all medical spending in the United States. Savings: $350 billion. -- Significantly Reduce Unnecessary Medical Liability and Defensive Medicine. Medical malpractice reform will help address the current explosion in litigation in healthcare. By providing a framework for adhering to evidence-based protocols, physicians will help establish a shield from unsupported malpractice claims and avert the waste related to unnecessary tests associated with "defensive" medicine. Savings: $200 billion. -- Fix Medicare's Financial Fundamentals. Without major policy reforms, the Medicare system will not survive under its current financing. By implementing evidence-based protocols and medical malpractice reform, the Medicare budget could be reduced by one third. Savings: $130 billion. -- Promote Healthy Lifestyles. Conditions linked to obesity, smoking, and drug and alcohol abuse account for more than 10 percent of overall healthcare spending, but require difficult behavioral and cultural change with strong governmental leadership. Savings: $300 billion.

SOURCE Medco Health Solutions, Inc.
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