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Healthways, the Queen’s Health Systems, and HMSA Will Transform How Care is Delivered at Queen’s
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Collaborative Commitment to Improve Well-Being and Reduce Health-Related Costs in Hawaii

HONOLULU & NASHVILLE, Tenn.--(BUSINESS WIRE)--Oct. 2, 2012-- Healthways (NASDAQ: HWAY),The Queen's Health Systems (Queen's), and Hawaii Medical Service Association (HMSA) today announced an agreement to improve care and reduce costs by transforming how care is delivered by Queen's. The work will begin as a series of projects with an ultimate goal of deploying efficient and effective models for keeping people healthy and better managing chronic illness.

Healthways is working with HMSA, Queen's and the hospital's medical staff to determine how they optimally collaborate and advance the Queen's mission of improving the health of the people of Hawaii. The organizations will engage their respective resources to fulfill several key objectives:

1. Develop guiding principles for how Queen's will organize and operate with employed and independent physicians.

2. Identify and deploy state-of-the-art governance and management models that best meet the needs of all physicians and Queen's for improving overall performance.

3. Engage physicians critical to the success of Queen's effort to build a high-performing clinical enterprise that is capable of managing risk based arrangements with HMSA and other payors.

HMSA continues to deploy innovative physician payment methodologies that reward quality and, increasingly, efficiency within a patient-centered medical home. When executed fully, the anticipated results of this agreement would include the deployment of services and tools to deepen Queen's capabilities with the objective of being recognized for having the best physicians collaborating on systems of care that deliver the best quality and outcomes in Hawaii.

"The pace of change in healthcare is accelerating rapidly," said Queen's CEO, Art Ushijima, "and the time to act is now. Our agreement with Healthways is an important first step in continuing Queen's leadership in delivering care and improving the well-being of Hawaii. We must organize to act earlier to keep people healthy and keep them out of the hospital, while ensuring that when care is delivered, in and out of the hospital, it meets the highest quality standards and most effective cost metrics. As part of our ongoing improvement efforts, we recently determined that HMSA would be the best partner to deliver third-party administrative services to our own employees, and now with our new agreement with Healthways, we will also work toward capabilities that integrate effectively with reimbursement models developed by HMSA."

Healthways CEO, Ben R. Leedle, Jr., noted, "The leadership of Queen's clearly understands the challenges within the evolving delivery and reimbursement systems of healthcare today. Our long-term relationship with HMSA has helped to foster the beginning of what we believe will be a meaningful collaboration with Queen's. We are excited to join with Queen's and HMSA in this bold step to ultimately improve well-being and lower health-related costs for Hawaii."

HMSA President, Michael A. Gold, said, "Once again, Queen's is a pioneer in transforming health care in Hawaii. Two years ago they worked with us on Hawaii's first pay-for-quality contract. Now they are bringing in the resources of Healthways, a national leader in health and well-being. Queen's is moving forward as a leader in enhancing well-being and reducing health-related costs. We will be a key partner in that journey and in creating a more sustainable health care system for our state."

Leedle remarked, "Over the past several years, Healthways has led the way in establishing proof that solutions linking advanced science with effective delivery tools do improve well-being and performance and reduce health-related costs. Now we believe that our experience and proven capabilities in well-being improvement - coupled with our consultative and change management capabilities - will serve Queen's very effectively as they begin to transform their array of physicians, clinicians, health care facilities and services into a model for the health care delivery system of the future."

About The Queen's Health Systems

The Queen's Health Systems (QHS) is a not-for-profit corporation established in 1985 to provide expanded health care capabilities to the people of Hawaii and the Pacific Basin. It is Hawaii's oldest and preeminent family of health care-related companies, and employs approximately 4,500 employees. QHS consists of The Queen's Medical Center, The Queen's Health Care Centers, The Queen Emma Land Company, Queen's Development Corporation, Queen's Insurance Exchange, Inc., and Molokai General Hospital, and has ownership interests in CareResource Hawaii, Hamamatsu/Queen's PET Imaging Center, and Diagnostic Laboratory Services, Inc.

About The Hawaii Medical Service Association (HMSA)

HMSA is a nonprofit, mutual benefit association founded in Hawaii in 1938. It is governed by a community board of directors that includes representatives from health care, business, labor, government, education, clergy, and the community at large. HMSA is an independent licensee of the Blue Cross and Blue Shield Association. Nationally, HMSA and 38 other Blue Cross and Blue Shield plans provide worldwide coverage to more than 100 million members. For more information, please visit hmsa.com.

About Healthways

Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities, and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant's health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 40 million people on four continents. Learn more at www.healthways.com.

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Source: Healthways

Healthways
Chip Wochomurka, 615-614-4493
chip.wochomurka@healthways.com
or
The Queen's Health Systems
Cedric Yamanaka, 808-691-4975
or
Hawaii Medical Service Association
Elisa Yadao, 808-948-6025
elisa_yadao@hmsa.com