Revolutionizing Healthcare in Sweden: A Vision for Sustainable and Holistic Wellness

Value guided healthcare – a platform for the next generation of health care in Sweden Kvalitetsregister – en central roll i framtidens hälso- och sjukvård Öland – May 27, 2010

Per capita HC exp 2006 • €2,650 • Per capita HC cost 2006 • €2,250 • Per capita HC cost 2006 • €1,850 Index (1992=100) Index (1992=100) Index (1992=100) • Per capita HC cost 2006 • € 5,351 Index (1992=100) Unsustainable growth in healthcare spend • HC Cost • GDP • HC Exp • GDP • HC Cost • Wages1 • Wages1 • GDP • Wages1 • Per capita HC cost 2006 • €3,150 • Per capita HC cost 2006 • €3,150 Index (1992=100) Index (1992=100) • HC Cost • HC costs • HC Cost • GDP • GDP • GDP • Wages1 • Wages1 • Wages1 1. Average nominal wage index Note: Index on basis of local currency; Per capita HC cost 2006 at exchange rate of 1 USD=0,797 €, 2005: 110,22 Yen/US$ Source: OECD Health Data 2008; EIU

Suppliers Max drug sales, (rather than best outcomes) at min costs Payers Max premiums at min cost Value • Best possible outcome... • ... at minimal cost Misalignment of incentives across today's health care stakeholders Today: stakeholders with different, competing goals VBHC: all incentives centered on patient value Providers Max procedures with good profit contribution (fee-for-service) Payers Academia Providers Suppliers Government Minimize cost allowing for GDP spend to other areas, balance constituent pressure Government Academia Max high weight publications: Focus on publishing, limited translational research Source: BCG analysis

Many stakeholders, past initiatives and projects... Swedish study scope holistic – integrating efforts by many Large interest in outcomes but lack of shared vision, clear leadership and coordination Scope of study to bring efforts together towards common vision and roadmap • Concrete and realistic 10-year vision with healthcare system perspective • Current landscape, vision and roadmap discussed with all key stakeholders • Roadmap allowing for paced implementation Source: Stakeholder interviews April – June 2009, BCG analysis

Steering and reference group members Name Role Carl Bennet Anders Ekblom Maria Anvret Sigbrit Franke Claes Ånstrand Gunnar Alvan Göran Sandberg Kjell Asplund Marie Beckman Suurküla Joakim Dillner Anna Hedborg Nina Rehnqvist Göran Stiernstedt Ulf Wahlberg Gunnar Nemeth • Ordförande i Getinge, Göteborgs Universitet • Vice-President Development AstraZeneca • Professor FRCPath, forskningspolitisk talesperson Svenskt Näringsliv, ledamot IVA • Rådgivare till Umeå & Stockholm Universitet, tidigare Universitetskansler • Tidigare statssekreterare och landstingsråd • Tidigare GD Läkemedelsverket • Rektor Umeå Universitet • Tidigare GD Socialstyrelsen • Sjukhusdirektör Akademiska sjukhuset tillika biträdande landstingsdirektör • Professor, forskare • Tidigare stadsråd och GD • Professor, ordförande i SBU • Direktör, avd. chef vård och omsorg SKL, tidigare biträdande landstingsdirektör • Vice President, industri research relations Ericsson • Managing Director and Chief Operating Officer Capio Group Steering group Reference Group

Agenda Starting position Shared vision and value captured International outlook Way forward

% Sweden's strength in healthcare increasingly challenged Medically trained students shrinking share of Medical faculty PhDs Sweden losing clinical trial volumes Drop in registered patents • # PhD students at medical faculties1 • Ongoing clinical trials • per year in Sweden (#) CAGR • Patents registered at PRV (#) • 6,000 • ~-25% • +4% • 4,000 -1% • 2,000 • 0 • 90 • 92 • 94 • 96 • 98 • 00 • 02 • 04 • 06 • 00 • 01 • 02 • 03 • 04 • 05 • 06 • 07 • 08 • Average 95-97 • Average 04-08 • PhD Students at medical faculties, total • Industrial chemistry • PhD students at medical faculties with MD • Organic chemistry • Biotechnology 1. At Uppsala University, Karolinska Instritutet; Lund University and Gothenburg University Note: CAGR=Compounded Annual Growth Rate Source: Klinisk forskning – ett lyft för sjukvården, Läkemedelsverket; SCB; Teknikområdesbarometern 2006-2008 PRV; BCG Analysis

Improving healthcare easier said than done Source: The Economist

Payers & Providers Before After Ranked #43 of 73 hospitals Care cycle redone PCI1 - unit established Emergency care expanded to 24/7 coverage Quality index3 raised from 1 to 8, 30-day mortality reduced by 50% Ranked #22 Karlstad central hospital 1 year mortality 20%, ranked #68 of 73 hospitals Care aligned with national treatment guidelines2 New specialist departments for specific coronary conditions started Staffing improved Quality index raised from 1 to 4 Mortality reduced by 50% Ranked #45 Halmstad hospital Transparency drives rapid improvementsExample: Myocardial infarction 1. Percutaneous coronary intervention 2. on angiography and PCI 3. Riks-HIA Source: SVT.se; Aftonbladet 2007-03-08; DN 2009-05-06; Dagens Medicin 2008-08-26; Läkartidningen nr 44 vol. 104, 2007; Värmlands Folkblad 10 Oct 2007

Pre-1980 1980 1990 2000 2010 Efficiency Administrators Value Clinicians Outcome Value = Cost Value based healthcare new paradigm emerging Efficacy and safety Scientists • Measured as outcomes, not inputs • Defined around patient, not supplier • Measured over full cycle-of-care Source: Institute of Strategy and Competitiveness, Harvard Business School; BCG analysis

l >20 registries with >85% patient coverage 22 registries Start year of registry Sweden with strong starting point in quality assessment 69 quality registries started to date1 • Quality registries by start year • (# of registries) • Quality registries by patient coverage, start year • (# of registries) • 1 • Not known • 75-80 • 80-85 • 85-90 • 90-95 • 95-00 • 00-05 • 05-09 • Total • >85% • 75-85% • 65-75% • <65% • Not known • Patient coverage • 2005-2009 1. Only including registries receiving funding from SKL Source: "National Healthcare Quality Registries in Sweden 2007"; Grant applications; BCG analysis • 1975-2005

l ~25% of HC-costs already covered by registries • Tax-funded healthcare costs Sweden, 2007 • (BSEK) ~2% 25% 4% • 0.3 25% • 1 41% • 8 • Inpatient1 • Outpatient2 • Primary care3 • Psychiatry4 • Total Specialist somatic care • Cost not captured by current registries • Cost captured by current registries Share captured cost x% 1. Analysis based on KPP-data 2. Assumptions: Share captured same as for inpatient with adjustment for clinic coverage; for registries covering outpatient care, clinic coverage is same for inpatient and outpatient 3. Quality registries for diabetes, leg ulcer and heart failure cover primary care; assumptions: cost/patient and visit 2000 SEK, 4 visits/year for diabetes patients; cost/patient and visit 2000 SEK, 52 visits/year for leg ulcer patients; cost/patient and visit 4000 SEK, 4 visits/year for heart failure patients 4. Only existing quality register for psychiatry is eating disorder; assumption cost/patient and year 200000 SEK; 1355 patient registered in RIKSÄT 2007 Note: Not including cost of pharmaceuticals, dental care, political activities and restructuring activities Source: KPP-database; SKL; annual reports for quality registries, grant applications to SKL; BCG analysis and estimates

Personal ID number 620510-XXXX Unique platform from broad range of personal registries • Mandatory patient data1 • Socialstyrelsen registries • Medical outcomes data • SKL-funded quality registries • Other quality registries • E.g; child cancer • Drug usage data • Socialstyrelsen registry • Socioeconomic data • Statistics Sweden • Genetics data • Biobanks • Epidemiology • Comparative effectiveness • Health economics • Longitudinal studies • ... Other data Solid patient integrity absolute requirement 1. e.g. medical birth, birth defects, (eg MFR)

A shared 10 year vision for Swedish healthcare • Swedish healthcare system envy of worldAugust 18, 2019 • In the past 10 years Sweden has emerged as the leading nation in value based healthcare and personalized medicine. Today, Swedish physicians and nurses work interactively with outcomes analysis and decision-support tools to deliver world-class healthcare results for their patients. The Swedish healthcare system displays several unique characteristics: • Clinical researchers have access to some of the best data sources in the world. Many important clinical breakthroughs have been made over the last years by teams integrating comprehensive clinical outcomes data with high quality data from national population and cost registries. • Swedish patients and their relatives are empowered to make informed care choices based on the quality of care. Outcomes information services provide transparent performance data for all providers in the country. • Sweden is the fastest nation in the world in making valuable new drugs available to their population. The Swedish MPA (LV); the Dental and Pharmaceutical Benefits Agency (TLV) and clinical research competence centers work closely together to define how to best assess the value of conditionally registered products and efficiently determine appropriate reimbursement levels. • Sweden is the pharmaceutical and medical technology industries' country of choice for conducting post-approval safety, efficacy, and cost-benefit studies. This has been one of the key factors that have enabled a reinvigoration of the Swedish life-science industry. • In addition to the clinical benefits, focusing on value based healthcare has saved the Swedish taxpayer ~50 BSEK in reduced direct medical costs. No wonder Sweden is being flocked by researchers from other countries eager to learn how outcomes and cost measurements can lead to world class research and clinical care.

Payers & Providers Better quality of care without increasing payer costQuality versus cost of healthcare in Swedish county councils 2008 • Cost/capita • (SEK) • 22,000 • Gotland • Norrbotten • Västernorrland • 20,000 • Örebro • Stockholm • Västerbotten • Gävleborg • Dalarna • Jämtland • Kalmar • Värmland • Västmanland • Västragötaland • Skåne • Kronoberg • Sörmland • Jönköping • 18,000 • Uppsala • Halland • Östergötland • 16,000 • County council quality index Systematic quality improvement work has delivered 1-3% annual cost savings per patient group Note: Cost including; primary care, specialized somatic care, specialized psychiatry care, other medical care, political health- and medical care activities, other subsidies (e.g. drugs) Source: Öppna jämförelser, Socialstyrelsen 2008;Sjukvårdsdata i fokus 2008; BCG analysis

w Academia Quality registries significant source of clinical research 10 short-listed registries important source of research ~400 publications / year conservative estimate of future potential • # of publications for short-listed registries • # of publications • Dissertations • Dissertations • Peer reviewed journals • Peer reviewed journals • 18 • 2 • 2 • 2 • 3 • Short-listed registries1 • Including all current quality registries2 • Potential / year (current registries) • Potential / year (adding new registries)3 • 2003 • 2004 • 2005 • 2006 • 2007 Short-listed registries Cataract Gallstone surgery Hip arthroplasty Intensive care Rheumatoid arthritis Pain rehabilitation Rectal cancer Stroke Coronary artery disease Vascular surgery 1. # of publications for 10 short listed quality registries in 2007 2. Average number of publications per short-listed registry 2007 multiplied by number of registries (59) 3. Adding 31 new quality registries to capture a larger share of total HC-cost Note: Total number of publications in clinical medicine: 4,000 / year; Total number of dissertations in medicine: 900 / year Source: Högskoleverket & SCB 2008, KLiniks forskning – ett lyft för sjukvården 2009; registry annual reports, registry grant applications to SKL; BCG analysis

50% of values (separator indicates median for sample) 95% of values Average CRP, Sweden (N = 109,270) Average CRP, Falun3 (N = 5,500) Continuous tracking together with best-practice sharing enables treatment convergence and higher patient value Significantly lower inflammation levels for rheumatoid arthritis patients and lower variance in outcomes Less side-effects (astigmatism) in cataract eye surgery over time and lower variance Average RA CRP value2 (%) Induced astigmatism through eye surgery, average and variance (# of dioptres1) 2000 2001 2002 2003 2004 2005 2006 2007 1. Dioptre = measured as average change of dioptre per clinic based on individual patient data 2. CRP = C-reactive protein level in blood indicating level of inflammation. Lower level of CRP indicate lower level of inflammation short-term as well as lower risk for inflammation long-term 3. National coverage 56% while Falun coverage is 100% for all types of RA-patients. Since 1997 Falun has measured and followed up all its RA-patients on a monthly basis. Data has been used for regional quality work. Source: Cataract Annual Report 2007; RA Annual Report 2008-09

Government Governments funding comparative effectivenessresearch as "public good" to enable VBHC U.S. beginning to fund CER through Stimulus Europe investing in quality research • February 2009: Congress dedicates $1.1 billion to CER to reduce costly, ineffective treatments • Drugs, medical devices, surgery and other ways of treating specific conditions • July 2009: Institute of Medicine lists priority areas for research, incl. drugs, based on: • Affected population size • Existing gap in effectiveness evidence for different treatments of condition • Potential for CER to alter medical practice • January 2010: Congress proposed Center for Comparative Effectiveness Research in health reform bill • Independent agency in Health & Human Services • Coordinates research focused on comparative effectiveness, but excludes cost-effectiveness • Initiative could potentially resurface in coming months • EU: The EU Research Framework Program has defined quality and efficiency research as one three main pillars of HC research within Europe • Invests ~600 M EUR • UK: NHS will publish first ever set of Quality Accounts alongside the Financial Accounts for 2009-10 • Quality improvement financially recognised and rewarded • Sweden: In December 2009, Government doubled funds to the National Clinical Quality Registries, initiated review of new framework • Key component in measuring complex outcome metrics Source: Institute of Medicine of the National Academies, "100 Initial Priority Topics for Comparative Effectiveness Research", July 20, 2009, John K. Iglehart, "Prioritizing Comparative-Effectiveness Research — IOM Recommendations", The New England Journal of Medicine, June 30, 2009, FP7 factsheet, NHS, Swedish government press release

CAGR (%) 2003–07 35.7 31.6 62.7 123.6 29.9 Payers & Providers Payers moving away from fee-for-service paymentBegan with pay-for-performance model, now shifting to more creative approaches Pay-for-performance (P4P) programs growing rapidly... …and select payers moving beyond P4P structure P4P: providers only reimbursed if they meet pre-established targets • Episode-based payment • Payment based on pre-determined cost of treating disease based on SoC1 • No payment for avoidable complications • Hospitals not reimbursed for preventable in-patient complications • Change in primary care payment • Incentivize "medical homes" by offering case-management fees in addition to fee-for-service (cover salaries of nurses, social worker, nutritionist, etc.) • Shared savings programs • If providers bring cost savings relative to peers for same patient group, or spend less than expected based on SoC, they receive part of cost savings • P4P programs (No.) • 160 • Other • 148 • Employer • CMS • 7 • 107 • Medicaid • 6 • 7 • 84 • 6 • Health plan (HMO/PPO) • 39 • 2003 • 2004 • 2005 • 2007 • 2009E 1. Standard of Care Source: "Pay for Performance in Commercial HMOs." New England Journal of Medicine: 11/2/2006, Centers for MedicCare & MedicCaiServices Roadmap for Implementing Value Driven Healthcare in the Traditional Medicare Fee-for-Service Program, "Beyond Pay for Performance – Emerging Models of Provider-Payment Reform", New England Journal of Medicine, September 18, 2008

Rx Pricing based on comparative effectiveness already here Pharma is rapidly seking to collaborate with advanced provider organizations with good outcomes data

Agenda Starting position Shared vision and value gained International outlook Way forward

Steering Committee Payers & Providers Academia • Outcomes analysis and reporting • Structured best-practice sharing • Process improvement expertise • Interface for researchers and financiers • New research topics • In-house analysis expertise Competence Centers other regs Quality Registries Industry • Interface for study design • Sales of registry studies • Information services solution opportunities Patients benefit from increased transparency and better quality of care through all stakeholder activities Governance structure engine for value captureInfrastructure and expertise for evidence-based methodology and processes Governance structure Source: BCG analysis

% ...equaling >10x direct medical cost payback • ~56 BSEK in total savings over 10yrs, while delivering higher quality of care • Total required investment of ~5 BSEK • over same period • Registry funding, building competence, IT, etc. • 10.8x multiple of money coming 10 years Business case example: proposed investments with>10x payback in medical cost only next 10 years Value based model driving annual savings of ~1.5% in medical costs... • BSEK • 300 • 280 • -5% • 260 • 240 • 4.75% • 5 • 220 4.10% • 4 • 254 • 244 • 2 • 235 • 200 • 226 • 1 • 218 • 209 • 201 • 193 • 180 • 185 • 0 • 176 • 0 • 2009 • 2010 • 2011 • 2012 • 2013 • 2014 • 2015 • 2016 • 2017 • 2018 Estimates of societal value at least ~3-5x higher than direct medical cost savings1 1. Based on benchmarks Source: SCB, BCG analysis

Four-step approach to realize vision and capture value 2009 2012 2019 Full value capture Expansion Ramp-up Strengthen foundation Functional initiatives August 18, 2019 Registry initiatives 1. Program Management Office overseeing national initiative Source: BCG analysis

Sammanfattning • 1. Den viktigaste utmaningen för den västerländska sjukvården det närmaste decenniet är hur man skall öka dess produktivitet. Ett nytt paradigm växer fram för att adressera detta – Resultatstyrd vård. Vårdinsatser utvärderas efter bidraget till patientens hälsa relaterad till vårdens kostnad • 2. Med en gemensam vision och en sammanhållen nationell strategi skulle Sverige kunna bygga en världsledande industriell plattform inom resultat-baserad sjukvård under de kommande tio åren. • Effektivare utveckling av sjukvården och bättre kvalitet för våra patienter • Ökat efterfrågan på klinisk och translationell forskning; • Ökat intresse från industrin för satsningar i Sverige • 3. Vi har ca 5 års försprång inom resultatstyrd vård tack vare världsledande kvalitets- och patientregister, men flera andra länder investerar stora belopp för att komma ikapp • 4. För att fullt utnyttja vårt försprång och skapa mesta möjliga värde för landet föreslås en ny styrmodell, en årlig budget om ca 500 MSEK och handlingsprogram över 10 år med tydliga steg och ansvar • 5. En konservativ beräkning visar att föreslagen finansiering skulle ge 10 gångers avkastning, eller 50 miljarder över 10 år, genom långsammare ökning av sjukvårdskostnaderna. Vinsterna för samhället i stort – av bättre livskvalitet för patienterna men även genom till exempel minskade sjukskrivningar, bedöms vara minst tre till fem gånger så stora

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9 Backup Today national quality registries cover 41% of specialized inpatient cost MDC (Major Diagnostic Categories) • Share of specialized inpatient cost covered by quality registry (%) 00 Ungroupable 01 Nervous system 02 Eye 03 Ear, Nose, Mouth And Throat 04 Respiratory System 05 Circulatory System 06 Digestive System 07 Hepatobiliary System And Pancreas 08 Musculoskeletal System And Connective Tissue 09 Skin, Subcutaneous Tissue And Breast 10 Endocrine, Nutritional And Metabolic System 11 Kidney And Urinary Tract 12 Male Reproductive System 13 Female Reproductive System 14 Pregnancy, Childbirth And Puerperium 15 Newborn And Other Neonates 16 Blood and Blood Forming Organs and Immunological Disorders 17 Myeloproliferative DDs (Poorly Differentiated Neoplasms) 18 Infectious and Parasitic DDs 19 Mental Diseases and Disorders 21 Injuries, Poison And Toxic Effect of Drugs 22 Burns 23 Factors Influencing Health Status 24 Multiple Significant Trauma 30 Chest problem 90 Post-MDC • 100 • 80 • 60 • 40 • 20 S cost captured ≈ 41% • 0 • 0 • 31 • 62 • 05 • 08 • 01 • 06 • 04 • 14 • 11 • 07 • 00 • 15 • 17 • 03 • 18 • 23 • 10 • 21 • 30 • 22 • 13 • 09 • 12 • 24 Total specialized inpatient healthcare cost by MDC (BSEK) • 99 • 02 • 16 • 19 Note: Cost data covers specialized inpatient somatic care Source: KPP-database; SKL; annual reports for quality registries, grant applications to SKL; BCG analysis • Cost not captured • Cost currently captured

Providers is where the HC money is spent The Worldwide Healthcare market 2002 Med. dev. Med. equip. Biotech Providers1 Payers1 Pharma2 Share After care/Nursing home Treatment Diagnostics Prevention (bn USD) 1. Only OECD countries; 2. Blood pressure and cholestrol medication in prevention Note: For providers and payors value chain split estimated from US figures Source: OECD; Medicare; Medical & Healthcare Marketplace Guide 2003; BCG analysis and estimates

Need for immediate actions to secure momentum in 2-3 yrs Strengthen foundation Ramp-up phase 2009 2010 2011 2012 Establish PMO1 to drive initiative Negotiate governance setup, key targets and milestones • Drive key functional initiatives • Set up Steering Committee • Secure registry financing • Push for wider CoCe mandate • Identify what additional CoCe(s) to start • Run IT framework project • Initiate legal change (primary care reporting) • Drive key registry initiatives • Set goals for current registries lacking coverage • Support start of additional key registries 1. Program Management Office Source: BCG analysis

Patient • Best possible outcome... • ... at minimal cost Sammanfattning Academia Payers & Providers • 1. Den viktigaste utmaningen för den västerländska sjukvården det närmaste decenniet är hur man skall öka dess produktivitet. Ett nytt paradigm växer fram för att adressera detta – Resultatstyrd vård. Vårdinsatser utvärderas efter bidraget till patientens hälsa relaterad till vårdens kostnad • 2. Med en gemensam vision och en sammanhållen nationell strategi skulle Sverige kunna bygga en världsledande industriell plattform inom resultat-baserad sjukvård under de kommande tio åren. • Effektivare utveckling av sjukvården och bättre kvalitet för våra patienter • Ökat efterfrågan på klinisk och translationell forskning; • Ökat intresse från industrin för satsningar i Sverige • 3. Vi har ca 5 års försprång inom resultatstyrd vård tack vare världsledande kvalitets- och patientregister, men flera andra länder investerar stora belopp för att komma ikapp • 4. För att fullt utnyttja vårt försprång och skapa mesta möjliga värde för landet föreslås en ny styrmodell, en årlig budget om ca 500 MSEK och handlingsprogram över 10 år med tydliga steg och ansvar • 5. En konservativ beräkning visar att föreslagen finansiering skulle ge 10 gångers avkastning, eller 50 miljarder över 10 år, genom långsammare ökning av sjukvårdskostnaderna. Vinsterna för samhället i stort – av bättre livskvalitet för patienterna men även genom till exempel minskade sjukskrivningar, bedöms vara minst tre till fem gånger så stora Industry

Q&A and discussion • Cohort reflections on report and proposal • Marie Beckman Suurküla, Uppsala Akademiska Sjukhus • Göran Sandberg, Umeå Universitet • Tomas Puusepp, Elekta • Open floor • Concluding remarks

Value focus win-win for all stakeholders Payers & Providers Academia • Transparency on outcomes • Improved quality of care • New decision-support tools • Pay for value delivered • Effective patient choice • World class outcomes research • Future clinical research hub • Unlocking potential in translational medicine Patients • Best possible outcome... • ... at minimal cost Industry • Unique platform for outcomes based safety, efficacy and pricing studies • New healthcare information services industries Source: BCG analysis

Key milestones to make 10 year shared vision reality Out Foundation & Ramp-up Expansion Full value capture 2012 2015 2019 2009 Ramp-up phase completed Well into expansion phase Realizing full value capture • ~40% of healthcare cost covered by registries • All governance, capabilities components initiated • IT framework established • All new registries in start-up phase • Primary care reporting to patient registry • ~55% of healthcare cost covered by registries • All governance, capabilities components fully resourced • EMR interface integration near completion • Target registry coverage somatic care • ~60% of healthcare costs covered by registries • Full data use ensured through active Competence Centers • Full EMR interface integration for quality reporting • Target registry coverage all care cycles • World-leading commercial applications

9 Backup Today national quality registries cover 41% of specialized inpatient cost Out MDC (Major Diagnostic Categories) • Share of specialized inpatient cost covered by quality registry (%) 00 Ungroupable 01 Nervous system 02 Eye 03 Ear, Nose, Mouth And Throat 04 Respiratory System 05 Circulatory System 06 Digestive System 07 Hepatobiliary System And Pancreas 08 Musculoskeletal System And Connective Tissue 09 Skin, Subcutaneous Tissue And Breast 10 Endocrine, Nutritional And Metabolic System 11 Kidney And Urinary Tract 12 Male Reproductive System 13 Female Reproductive System 14 Pregnancy, Childbirth And Puerperium 15 Newborn And Other Neonates 16 Blood and Blood Forming Organs and Immunological Disorders 17 Myeloproliferative DDs (Poorly Differentiated Neoplasms) 18 Infectious and Parasitic DDs 19 Mental Diseases and Disorders 21 Injuries, Poison And Toxic Effect of Drugs 22 Burns 23 Factors Influencing Health Status 24 Multiple Significant Trauma 30 Chest problem 90 Post-MDC • 100 • 80 • 60 • 40 • 20 S cost captured ≈ 41% • 0 • 0 • 31 • 62 • 05 • 08 • 01 • 06 • 04 • 14 • 11 • 07 • 00 • 15 • 17 • 03 • 18 • 23 • 10 • 21 • 30 • 22 • 13 • 09 • 12 • 24 Total specialized inpatient healthcare cost by MDC (BSEK) • 99 • 02 • 16 • 19 Note: Cost data covers specialized inpatient somatic care Source: KPP-database; SKL; annual reports for quality registries, grant applications to SKL; BCG analysis • Cost not captured • Cost currently captured

Quality registries Proposed funding mechanism balances base funding and rewards to attractive registries Out Industry Steering committee Private funding for specific registry study, if approved by registry owners Annual direct registry funding2 conditional on participating in open comparisons through one CoCe Competence Center (CoCe) 50% of surplus1 allocated by CoCe to other registries that can show need for additional financing Funding used for registry administration, buying services from CoCe 50% of surplus1 from study to specific registry for registry-related activities Fee-for-services "Development funding" "Base funding" 1. After reimbursing study specific costs at Competence Center and at registry in question 2. provided by Socialstyrelsen Source: BCG analysis

Reduced variance makes registry attractive platform for e.g. product testing • Data with broad industry applications potential Industry Great industrial value from late-stage registriesEvolution of quality registry use Clinical research Quality of care studies and best practice sharing Platform for product development and evaluation Source: BCG analysis

Striking a balance between central scale and local leadership Steering Committee • National oversight and coordination • Strategy and policy definition • Basic quality registry funding • Central audit function • Executive body for assessments, implementation, follow-up • SKL/Landsting • SoS • LV • TLV • Registry rep • Patient rep • UMC1 rep • Academia rep • Industry rep Population registries (EpC, SCB etc) Executive body (initially PMO role) Providers Competence Centers (~6) • Data use interface and services • Data analysis services • Cooperation with other registries • Facilitate best practice sharing • IT infrastructure and support • Coherence in data, metrics Universities Data use interface and services Data analysis services Facilitate best practice sharing Licensing (LV) Reimbursement (TLV) Information technology (IT) Industry • Metrics definition and data capture • Registry management Quality Registries 1.University Medical Center Source: BCG analysis

Revolutionizing Healthcare in Sweden: A Vision for Sustainable and Holistic Wellness