Medibank Private Ltd. · ASX:MPL
Medibank Private — Investor Day (November 2016)
43 slides from Medibank Private's investor day presentation, Nov 30, 2016
Slide 1: Medibank 2016 Investor Day Presentation
Medibank Private Limited ABN 47 080 890 259 GPO Box 9999 in your capital city Telephone 132 331 medibank.com.au ASX Market Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street SYDNEY NSW 2000 30 November 2016 Medibank 2016 Investor Day Presentation Medibank (ASX:MPL) is co
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Slide 3: Important Notice
Important Notice The information contained in this presentation is for information purposes only. The information contained in this presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particula
Slide 4: Agenda
Agenda 1 Strategy Overview Craig Drummond Q&A 2 Customer Reorientation David Koczkar Q&A & Panel Break 3 Healthcare Value Dr Andrew Wilson Q&A & Panel Wrap-up Lunch medibank For Better Health
Slide 5: Strategy Overview
‘Strategy Overview Craig Drummond Chief Executive Officer medibank For Better Health
Slide 6: Refreshed Executive Leadership Team
Refreshed Executive Leadership Team j a | Craig Drummond Kylie Bishop John Goodall David Koczkar Chief Executive Officer Group Executive - Group Executive - Group Executive - People and Culture Technology and Operations Chief Customer Officer Mei Ramsay Mark Rogers Andrew Wilson Group Executive - Gr
Slide 7: Industry Challenge
Industry Challenge Fundamental issue is healthcare costs continue to grow at a faster rate than wage growth Aggregate gap between claims and wages growth 14 ¢ Affordability is a shared 10 4 +2.0% p.a. industry challenge a4 ¢ Reform has a role to play : | ° Increasing pressures on the z Australian he
Slide 8: Medibank Today
Medibank Today Established health insurer that has underinvested for future growth Dual-brand strategy - Medibank and ahm Health cost financial position leader Shifting investment from infrastructure to customer outcomes Market share in decline Embedding major IT transformation medibank 7 For Better
Slide 9: Strategic Priorities for FY17
Strategic Priorities for FY17 Strengthening the core by reorienting to our customers, actions underway are expected to deliver approximately $40m in annual benefits by 2020 Strengthen + Settle new IT embedding and upgrades ($15m) ] the core IT system Adding 60 contact centre staff...incl. 24/7 web c
Slide 10: Strategic Priorities Beyond FY17
Strategic Priorities Beyond FY17 Unlock Medibank’s potential to drive growth and competitive positioning Strong purpose - For Better Health Expand Deliver superior Optimise our Leverage integrated care customer service product suite our scale * Easy to deal with and * Return value to our * Utilise o
Slide 11: Milestone Objectives
Milestone Objectives Within 3 years Customer ¢ PHIO complaints less than market share [within 12 months) ¢ NPS best in class against major peers e Market share stabilised Financial ¢ Maintain net margin above major peers ¢ Maintain ROE above cost of capital major peers ¢ More than double Complementa
Slide 12: FY17 Health Insurance Outlook
FY17 Health Insurance Outlook Revenue slightly below expectations but operating profit broadly in line Four months to 31 October 2016 * Revenue slightly below company expectations ¢ Premium revenue growth of 1.3% Health Insurance operating profit for FY17 expected to be broadly in line with FY16, ex
Slide 13: Summary
Summary Strong purpose - For Better Health which has engaged our stakeholders Right team building a culture of accountability Primary executive . focus for 2016/17 Action underway to is to strengthen the unlock Medibank’'s core PHI business - potential to drive this will take time growth Substantial
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Slide 16: Customer Team
Customer Team David Koczkar Group Executive - Chief Customer Officer Milosh Milisavljevic Jonathan Spiers Luke Fishley Mark Brownfield GM Strategy & Insights DGM PHI Portfolio GM Diversified DGM Customer Channels ; : Franca Venetico Fiona Le Brocq Chris Carroll Director Customer GM Medibank Marketin
Slide 17: Current State
Current State Medibank brand decline has not been offset by ahm growth Market share [resident policyholders): Top 5 vs. rest of industry medibank [atm Rest of Industry! OHCF nib) hbf- | Rest of industry represents the aggregate of all private health insurers in Australia excluding the Top 5 Source:
Slide 18: Underlying Portfolio Priorities
Underlying Portfolio Priorities Medibank consumer portfolio is key to our turnaround medibank Further segment-orientated product For Balter Health Product remediation, brand reposition, changes and introductions, experience Consumer initial customer benefit investments improvement, bed down core sys
Slide 19: Delivering on Customer Needs
Delivering on Customer Needs Two brands targeting different customer needs Purpose Vision Promise Brand Proposition For Better Health Our customers’ partner in health and wellness We have a relentless focus on ensuring our customers have the confidence we will be there in times of need. We will do t
Slide 20: Short Term Focus
Short Term Focus Moving quickly to bed down DelPHI and fix customer pain points : . \ 5 Scaled up customer Customer Was impacted with tax \ Methodically GRO aD statement, a process is ? reducing system Ny : : : : : address issues and in place to fix pain points issues complaints experience Total cos
Slide 21: Putting our Customers First
Putting our Customers First Focused on improving product, experience and engagement * Cover that suits needs * Relevant, clear, * Relevant and consistent information personalised content * Out-of-pockets for . : . and advice hospital / extras * Ease of claiming . . . ° Recognition and rewards * Pric
Slide 22: New Products, Better Value
New Products, Better Value Leading new products launched for Medibank and ahm 100% backona dental check-up 1 medibank For Better Health
Slide 23: Changing the Customer Experience
Changing the Customer Experience Six customer journeys that underpin customer experience Getting started New to fund Using extras Going to hospital Review cover Making contact ‘O0O0000 Purchasing health insurance On-boarding with Medibank (first 45 days) Visiting an ancillary provider and making a c
Slide 24: Engagement, Recognition and Reward
Engagement, Recognition and Reward Engaging with our customers in health and wellness VA . aN Live Better with Medibank e Inspiring you to create a healthier, happier lifestyle medibank ° livebette iy i Ee althiafd Why you're better off with Welcome to Live Better Medibank 2 medibank For Better Heal
Slide 25: Getting it Right for our Customers
Getting it Right for our Customers Our customers will tell us when we've got it right Product Experience Engagement * Integrated propositions that ° Effortless interactions and ° Broad health and wellness lead the market in value and easy digital self-service offers that support better combine healt
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Slide 27: Health Value Leadership
| Health Value | Leadership Dr Andrew Wilson Group Executive - Healthcare and Strategy medibank For Better Health
Slide 28: Healthcare and Strategy Team
Healthcare and Strategy Team Dr Andrew Wilson Group Executive - Healthcare & Strategy oe hee ; David Simpson Dr Linda Swan ow Mahi ee me PING ST 6M Health Benefits Chief Medical Officer Tote) SHEL Management Innovation Peter Derbyshire Rebecca Bell Justine Cain GM Health Strategy & Divisional GM Pop
Slide 29: Healthcare Costs
Healthcare Costs Affordable, quality healthcare an ongoing challenge Ageing and chronic disease Medical gaps and transparency Medical technology AA Ca. w Public vs. private perceptions Unwarranted variation and low value care medibank 28 For Better Health
Slide 30: PHI Review and Other Regulatory Reform
PHI Review and Other Regulatory Reform Regulatory reform needed, but pace and extent of change less certain PHI Review Product simplification and standardisation Private patients in 2nd tier public regulation hospitals Transparency of healthcare costs and quality Lifetime health cover Risk equalisat
Slide 31: Strategic Focus
Strategic Focus Delivering value in healthcare Improve health ic) Enhance patient ® Reduce costs experience outcomes Reducing the Improving the patient , per capita experience of care improving the cost of healthcare (including quality and satisfaction) of populations medibank 30 For Better Health
Slide 32: Hospital Contracting
Hospital Contracting 94% of hospital outlays in dollar terms contracted for FY17 Proportion of hospital outlay contracted FY17 FY18 FY19 93.9% 71.4% Contracted 35.1% Contracted Contracted =Contracted = Remainder = Contracted = Remainder =Contracted = Remainder * Indexation rates negotiated ¢ Audit r
Slide 33: Patient Outcomes and Experience
Patient Outcomes and Experience Evidence that hospital acquired complication and readmission clauses are contributing to better quality and health outcomes Hospital group 1: Hospital Acquired Complication rate per 1000 separations Average HACs / 1000 admissions: 22.0 i Average HACs / 1000 admissions
Slide 34: Patient Outcomes and Experience
Patient Outcomes and Experience Transparency initiatives — a key foundation, encompassing partnerships with peak bodies and providers Hospital quarterly reporting Surgical variance reports Total ALOS % Rehab %ICU you Tet Procedure gp Ae | Tol fe Trend varanay Re Trend soy “ICU Trend medibank Atos we
Slide 35: Payment Integrity
Payment Integrity Initiatives expanded across portfolio continue to contribute to reducing error and waste, and so helping affordability and value Error rates in coding of a selection of the most complex soo hospital admissions by hospital (90 onsite hospital audits) 50.0% 40.0% 30.0% | Average Erro
Slide 36: Supporting Customers' Health
Supporting Customers’ Health Medibank as a health partner in our members’ health journeys Improving health outcomes in three key ways 1. Preventative activities 2. Substitutive activities 3. Support activities Preventative activities are __ Patient predominantly secondary identification and tertiary
Slide 37: Complexity and cost of member needs
• Integrated care program targeting people who experience chronic & complex conditions. • Complexity and cost of member needs Integrated • Care Behaviour change focused Program integrated into the model supported by telephonic & online hospital discharge process that addresses the care needs of • ed
Slide 38: Delivering Value in Healthcare
Delivering Value in Healthcare Best in class healthcare value, experience and outcomes Value Experience Health outcomes * Better health outcomes ¢ Integrated PHI and provider * Expansion of through value based experience CareComplete purchasing * Proactive health system ¢ Expansion of out-of- ° Tran
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Slide 42: Summary
Summary Strong purpose — For Better Health which has engaged our stakeholders Right team building a culture of accountability Primary executive . focus for 2016/17 Action underway to is to strengthen the unlock Medibank’'s core PHI business - potential to drive this will take time growth Substantial
Slide 43: Thank you
Thank you medibank Fe Health ‘or Better Heal