MedCost Index - February 2008

MedCost Delivers Outstanding
Results in 2007

As your partner in managing healthcare costs, MedCost understands that the success of our programs directly impacts your bottom line. We take pride in the value we bring to our customers and would like to highlight some of the outstanding results MedCost delivered to its customers in 2007.

2007 Highlights

Improved 42 hospital contracts, representing an additional $11 million savings for our customers.
Held the line effectively on physician reimbursement in a challenging negotiating environment. Using 2006 RBRVS as a comparative baseline, physician reimbursement in aggregate increased only .42%.
Obtained reaccredidation by URAC for both health management and network credentialing, validating the continued level of high quality in operations. (See article in sidebar)
Re-priced 99% of all claims received within 1.2 days.
Established additional relationships and implemented technology that allowed growth of electronic transactions to 84% of all claims received and 80% of all outbound claims.
Negotiated a fixed price dialysis contract that delivers significant cost relief to our customers. (See article in sidebar)
Delivered outstanding results in all MedCost programs:

PPO Network - 63 to 1 return on investment
Inpatient Utilization Review - 187 days of care per 1,000 lives with 96% patient satisfaction
Outpatient Utilization Review - 5.6 to 1 return on investment
Case Management - 7 to 1 return on investment with 99% patient satisfaction
SmartStarts Prenatal Program - 13 to 1 return on investment with 98% patient satisfaction
Personal Care Management (nurse coaching program) - positive health changes for 82% of participants

Received a 100% customer satisfaction rating, as reported through our Annual Customer Opinion Survey, for all MedCost products and on overall customer satisfaction and communication categories and a 90% rating on usefulness of MedCost reports.

Focus on 2008

While we are proud to report these outstanding results, we are even more excited about the goals and priorities we have in place for 2008 to further strengthen the value of our products and services. In 2008, you can expect MedCost to continue to:

Deliver competitive pricing through aggressive provider contracting strategies;
Work with customers, brokers and consultants to bring accurate network comparison data to employers so they can make informed decisions;
Refine our health management programs based on customer feedback so that MedCost continues to operate as best in class; and
Place emphasis on effective analysis of data and presentation of meaningful information to payers, employers and providers.

MedCost values your partnership and is proud to be serving almost 5,000 employers representing over 750,000 covered lives in the Carolinas. We’re listening to what you say and understand your challenges, and our goal is to respond with creativity and flexibility to assist you in identifying solutions—all while delivering the highest level of service and quality.

We look forward to meeting with many of you throughout the year to hear your perspectives and challenges. We appreciate your business and the confidence you place in us as a health plan partner.

We hope 2008 is a very successful and happy year for all of us.

There are many options in the marketplace today for various case and/or disease management programs. Often, it’s difficult to differentiate the level of service one company provides over another. This differentiation becomes even more difficult for oncology case management where treatment options vary widely and costs can quickly get out of control.

At MedCost, where 55% of overall catastrophic case management referrals are oncology cases, we take a holistic approach to oncology case management. What this means to our clients is that our case managers become a facilitator as well as an educator and, most importantly, a patient advocate in everything from treatment options to insurance coverage.

This holistic approach to oncology case management is what differentiates MedCost from many other disease management vendors, whose focus is primarily patient education. The health education and guidance we provide our oncology patients is critical to their care; however, our case managers also step in to help patients and their families navigate the complicated arena of treatment options and insurance. Our goal with this approach is to help them make better informed decisions about their care from both a health and financial standpoint.

In addition to performing what MedCost views as “basic” services—patient and family education and support, working with claim administrators and physicians, steering patients to in-network providers, negotiating pricing for treatments and drugs, evaluating standards of care, researching drug protocols and clinical trials and ensuring compliance with prescribed treatments—MedCost truly differentiates itself with the many “extras” that are a core part of our program.

It’s the “extras” that differentiate MedCost from other disease management vendors.

MedCost specialty case managers are registered nurses who, for cases such as oncology, offer our clients—at no additional cost—a level of expertise rarely found in health management operations. The nurses have earned the CCM (certified case manager) credential and average 18 years of nursing experience, with an average of seven years of health management experience with MedCost. In addition, one of our case management nurses is a former assistant director of hospice and a certified ONS (Oncology Nurse Specialist).

MedCost wants our clients to fully understand the value our case managers provide, not only for oncology cases but for all catastrophic cases we manage. It is important to ask the right questions when evaluating various case and/or disease management programs and to know exactly what you will receive in return for your investment.

If you have any questions about the MedCost case management program, please contact your MedCost account manager.

Joe comes to MedCost with over ten years of experience in healthcare administration, including four plus years at a major health system and six years in sales and marketing with BCBSNC. Joe’s strong strategic and analytical background, coupled with his knowledge of the healthcare market, will be a huge asset to MedCost in evolving our existing products/services, as well as identifying and implementing new products/services to meet market needs.

“I am extremely excited to join the MedCost/MBS management team,” says Joe. “The customer-centric focus of MedCost lines up perfectly with my experience and my business philosophy, and I look forward to enhancing the ways in which my area can serve as a strategic resource for our clients.”

From a planning perspective, it is Joe’s responsibility to put into place today the processes and infrastructure that will ensure the success of the company for many years to come. States Joe, “It will be very important for my team to understand the vision of our leadership team and to lay the groundwork for the execution of that vision.”

Joe holds a Master of Healthcare Administration from the University of North Carolina at Chapel Hill and an undergraduate degree from the College of Charleston. He is married to Eleanor and has two little girls, Helen who is almost four and Emory who just turned two. In his spare time, he can usually be found doing a variety of activities with his children. He also enjoys reading, watching or playing sports and is a self-proclaimed political junkie (this is his year!).

Myra brings over 20 years of experience in marketing to MedCost, including 13 years with a Fortune 500 company. Her strong background in marketing communications and branding will be a huge benefit to MedCost in effectively positioning the company and its products in the marketplace.

“I am thrilled to be a part of the MedCost team,” says Myra. “We posted outstanding results for our customers in 2007, and it’s exciting to see many innovative initiatives already taking shape for 2008. MedCost has so much to offer, and through integrated communication efforts, that’s the responsibility of my area—to ensure we effectively package and communicate the value and breadth of our products and services.”

Myra holds a Bachelor of Science with a concentration in marketing from High Point University. In her free time, she enjoys riding motorcycles with her boyfriend (as a passenger, at least for now!) to “off the beaten path” little towns. She also enjoys cooking for family and friends, reading, shopping and playing golf when time permits.

Effective January 2, 2008, Alicia Stewart assumed the position of Account Manager for MedCost. Alicia has been with MedCost for over 12 years, primarily within the area of Network Management where she was responsible for hospital contract negotiations. She brings a wealth of knowledge to this position and will be an excellent resource for her clients in evaluating and managing their healthcare programs.

“I look forward to building strong relationships with my clients,” says Alicia. “I’m a firm believer that a positive outlook can yield incredible results, and that’s how I approach everything both professionally and personally. I hope to always offer my clients a solution that comes from the perspective of the glass being half full versus half empty.”

Alicia holds a Bachelor of Science degree from the University of North Carolina at Greensboro. She is married to Doug and has a six-year-old boy named Adam Francis. In her spare time, Alicia enjoys spending time with family and friends, running with her “running friends,” learning anything about history and watching basketball (college) and football (college and pro). She loves family time fishing and crabbing on the Chesapeake Bay in Maryland—and “simply the best” is being involved in Adam’s extracurricular activities.