Roche to Help Health Care Plans, Providers and Payers Better Evaluate Total Disease Cost; Program Combines Pharmaceutical and Medical Costs in Benchmarks by Disease.

NUTLEY, N.J.--(BUSINESS WIRE)--Nov. 16, 1999--

Hoffmann-La Roche Inc. (Roche) is offering a new program designed to assist managed care organizations in obtaining the elusive answer to one of their most important questions: "What does an episode of a disease really cost?" Beginning with acute otitis media (AOM) and following soon with diabetes, Roche's new Total Resource Utilization (TRU) Program will provide a full set of resources based on a series of disease-specific national and regional cost benchmarks.

Roche is launching the TRU Program in the fourth quarter of 1999 with data resources planned for four diseases, all designed to help health care professionals understand the complete cost of treating the diseases. The AOM resources are currently available. Diabetes resources will be launched later this year, while materials for coronary artery disease (CAD) and osteoporosis will be made available early next year.

The health care industry has traditionally viewed a disease's treatment cost based on the acquisition of drugs, treatments and services, not the complete in-patient, outpatient, ancillary and pharmaceutical costs for a disease episode. With the TRU Program, diseases are properly viewed from a comprehensive perspective, accurately accounting for all medical and pharmacy costs, as well as the long-range use of a variety of resources. "The Total Resource Utilization Program offers health care payers, plans and providers previously unavailable benchmark information on diseases," said Gary Ainsworth, director, National Accounts and Managed Care Markets for Roche.

Up to this point, health plans have had access to their own data, but getting useable industry benchmark data has been difficult. The only available national and regional norms don't combine medical and pharmacy information, leaving no recognized single point of reference. "Roche's TRU Program offers a medical director at a health plan another valuable metric for gauging how well his or her plan is delivering overall quality care at the most affordable cost," Ainsworth said.

The program, which has been previewed by several managed advisors and other industry groups, has been welcomed. "The initial feedback has been very positive" said Ainsworth.

Roche will make program elements available at no cost and no obligation to managed care organizations, hospitals, large group practices and employers. But with pressure to provide quality health care that's affordable, it is the managed care industry that may benefit most. "The TRU Program offers innovative tools for assessing and improving health care delivery," said Myron Holubiak, president of Roche's marketing and sales unit. "The program also underscores Roche's commitment to being a valued partner to the managed care industry."

Ainsworth also noted that the TRU data interpretations have important meaning to different industry groups. Managed care companies are able to measure their costs versus regional and national benchmarks, as well as gain a more comprehensive view of disease management. Physician groups and hospitals are able to better frame their accomplishments in the areas of wellness programs, quality of life initiatives and disease management. Employers can also illustrate the benefits of various health-related wellness programs against regional and national norms.

Total Resource Utilization Tool Box

The TRU Program comprises a number of primary resources directed to the managed care industry -- publications, web sites and a service component that customizes information for individual health plans. Roche plans to make available a series of Conspectuses (TRUC (TM)) with complete data and benchmark information in each disease category, a web site -- and a series of publications called TRU Insights(TM). TRU Insights(TM) enables plans to perform data analysis, compare their specific information to regional and national norms and deliver their results in a publication to their constituents.

Roche will also provide customers with a TRU Disease Mapping tool that gives health care professionals the ability to examine disease costs in a wide variety of ways.

Episode Treatment Grouper (ETG(tm)

The entire TRU Program uses Episode Treatment Group (ETG) methodology to analyze inpatient, outpatient and ancillary services and pharmaceutical costs. ETGs, developed by Symmetry Health Data Systems, Inc., are a patented episode "grouping" software developed for health plans and at-risk provider groups. Using ETGs, patient specific costs are matched to the patient specific diagnosis and dynamically linked to an episode of care. "Up to now, organizations have frequently been frustrated trying to evaluate the impact of a pharmaceutical product or class utilized in a specific disease, because pharmaceutical claims have not been linked to the actual medical diagnosis. By using ETGs, all costs, including pharmaceuticals, can be measured, tied to the diagnosis and compared to other treatment options," explained Ainsworth.

ETGs are an illness classification system and are currently used by more than 280 health plans, including Blue Cross/Blue Shield organizations, to measure and compare financial performance, health care demand and numerous disease management and outcomes management strategies.

The TRU Program uses data that was compiled from health plans nationwide by PharMetrics, Inc., who has developed a powerful national managed care clinical database. The database includes longitudinal, integrated medical and claims history on more than 10 million managed care lives linked to 100 million disease-specific episodes. The depth and scope of the database allows for comparisons across a range of patient demographics, including age, gender and co-morbidity.

Roche will make and supply annual updated data to those who subscribe to the program. Guidelines to assist in using the data are also currently being developed and will be issued in the next phase of the TRU program rollout.

Developed by Industry Experts

To develop the TRU program, Roche formed, funded and led a multi-company team of experts. In addition to PharMetrics, other key companies involved in the process include Managed Care Measures, LLC; and Centric Medical Communications, Inc.

About Roche

Hoffmann-La Roche Inc., (Roche), based in Nutley, N.J., is the U.S. prescription drug unit of the Roche Group, a leading research-based health care enterprise that ranks among the world's leaders in pharmaceuticals, diagnostics, vitamins, and fragrances and flavors. Roche discovers, develops, manufactures and markets numerous important prescription drugs that enhance people's health, well being and quality of life. Among the company's areas of therapeutic interest are: virology, including HIV/AIDS and hepatitis C; infectious diseases, including influenza; cardiology; neurology; oncology; transplantation; dermatology; and metabolic diseases.

For more information on the Roche pharmaceuticals business in the United States, visit the company's web site at: http://www.rocheusa.com. The TRU program web site is http://www.TRUbenchmarks.com