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Medco CEO: Health IT Provides the Foundation for 'Real' Health Care Reform

Improving Care, Creating a $680 Billion Annual Savings Opportunity

WASHINGTON, March 18 /PRNewswire-FirstCall/ -- Real health care reform would be difficult, if not impossible, without the transparency that a wired system can deliver, Medco Health Solutions, Inc. (NYSE: MHS) Chairman and CEO David B. Snow Jr. said today in a keynote address at the American Enterprise Institute.

"A wired system will create accountability, where every provider and service across the spectrum of health care can be measured based on their contribution in lowering costs and improving clinical quality," Snow said. "Wiring America's health care system is the key foundational step that will enable as much as $680 billion in annual savings."

Health IT investments will provide comprehensive information that practitioners in the public and private sectors need in solving the challenge of more effectively treating patients with chronic and complex illness, with the potential to reduce health care spending by as much as $350 billion. Meanwhile, transparency with accountability could yield an additional $330 billion in savings by creating the opportunity to engage in a rational conversation in three additional areas: reducing the need to practice defensive medicine, resolving a stalemate related to tort reform and addressing the difficult issues around providing appropriate care in the last years of life.

"This is a critical platform to drive meaningful health care reform that stimulates continuous innovation and delivers sustainable savings," Snow said. "Wiring health care empowers the fundamental capability to measure, examine, evaluate and improve each element and every process in real-time. This, in turn, provides a level of insight and accountability that will improve the quality of service, and ensure payors and patients alike are confident they are receiving the greatest value for each health care dollar invested."

A proven model

The power of a "connected" health care infrastructure has already been demonstrated on a nationwide scale. Pharmacy, which was first wired in 1988 by virtue of a national electronic claims adjudication system, provides a case history documenting the importance of establishing standards to guide rational investment.

With a series of continuing investments, private-sector innovation, coupled with a guiding hand from policymakers, has transformed pharmacy into the most wired sector of health care today -- providing immediate claims adjudication, real-time safety checks, and efficiencies that improve quality and deliver information to physicians and patients so each can make more-informed decisions.

Last year, Congress took an important step forward by approving incentives to spur physician adoption of electronic prescribing (ePrescribing) in Medicare. This change is likely to accelerate physician adoption throughout the entire system. And just a few weeks ago, the Obama Administration joined Congress in moving the concept of wiring health care to unprecedented heights by injecting funding of $19 billion, much of it to provide incentives for the expanded adoption of Health IT.

Snow noted that Medco has invested close to $1 billion in developing the world's most advanced pharmacy, training 1,100 pharmacists as specialists who are located in Medco Therapeutic Resource Centers(R) and focus on addressing the needs of patients with chronic and complex conditions -- patients who account for 96 percent of all prescription drug spending and 75 percent of overall health costs. The company is using evidence-based protocols to close the clinical gaps that diverge from proven medical treatment guidelines, and is committed to publishing the results of its breakthrough pharmacy initiatives.

Challenging the status quo

"We all can agree on the critical need to reform health care in America, and now is the time. We must overcome the barriers of technology, cost and inertia -- which preserve the status quo of inefficiency -- in order to relieve the health care cost-burden on individuals, employers and government," Snow said.

Snow's remarks today build on his vision for health reform first released last fall in an address at the National Press Club. Combined with the $680 billion savings related to health care IT, a comprehensive effort to promote healthy lifestyles through prevention wellness has the potential to reduce health care expenditures by an additional $320 billion -- trimming America's overall health care spending by about $1 trillion -- nearly 50 percent.

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is a leading health care company, serving the needs of more than 60 million people. Medco, the world's most advanced pharmacy(R), provides clinically driven pharmacy services designed to improve the quality of care and lower total health care costs for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. Through its unique Medco Therapeutic Resource Centers(R) and the Accredo Health Group, Medco's Specialty Pharmacy, the company is creating innovative models for the care of patients with chronic and complex conditions. Medco is a leader in the emerging field of personalized medicine and in applying evidence-based protocols to elevate the practice of pharmacy -- a key element in reforming America's health care system. Medco is ranked number 51 on the Fortune 500 list, with 2008 revenues of more than $51 billion. For more information about Medco, go to

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.

SOURCE Medco Health Solutions, Inc.
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