INDUSTRY PROFILE QUARTERLY UPDATE 2/26/2007

Managed Healthcare
SIC CODES: 6321, 6324
NAICS CODES: 524114

Industry Overview
The US managed healthcare industry includes about 3,000 companies with combined annual revenue of about $350
billion. Large participants include Aetna, UnitedHealth, and Humana, and nonprofits such as Kaiser Permanente and
state Blue Cross Blue Shield organizations. The industry has become concentrated, with the 50 largest companies
holding more than 60 percent of the market.

COMPETITIVE LANDSCAPE
Demand is driven by the rising costs of providing medical care. The profitability of individual companies depends on
efficient operations and the ability to negotiate favorable contracts with healthcare providers. Large companies and
organizations have advantages in negotiating contracts with healthcare providers. Small companies can compete
successfully only by providing special coverage plans, or in small markets. The industry is highly automated, with
annual revenue per employee close to $1 million.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry provides various types of health insurance plans that have built-in cost containment measures, unlike
traditional indemnity plans that pay whatever costs are incurred. Among the major products are health maintenance
organizations (HMO), preferred provider organizations (PPO), point of service (POS) plans, and indemnity
benefit plans. Companies usually offer a number of such plans and each may operate dozens of them.

HMO plans, sometimes called "closed system" plans, have the most active cost-containment features. Consumers
choose a primary care doctor from the HMO's network of providers, who acts as a gatekeeper for any other medical
services the consumer may need. PPO plans, also called "open access" plans, allow consumers to use any services
within a network of providers, without a gatekeeper. Services outside the provider network are available, but cost more.
POS plans are hybrids of HMOs and PPOs. They typically feature a primary care doctor who makes referrals for
services within the provider network, but also allow consumers to avoid the gatekeeper and directly use services within
the network, though at higher cost. POS plans also allow consumers to go outside the network at a still higher cost. The
higher costs in PPO and POS plans take the form of higher deductibles, higher co-payments, or lower reimbursement
rates.

The industry grew rapidly in the 1990s on the premise that the traditional way of delivering healthcare was financially
wasteful, since healthcare providers (doctors, hospitals, etc.) had no incentive to keep treatment costs to a minimum.
Managed care companies attempt to control costs in four ways: by providing financial incentives to providers and
users to minimize the amount of care used, contracting for services at discounted rates, reviewing expenses to
determine the legitimacy of costs, and establishing low-cost treatment protocols providers are expected to follow.

Managed healthcare companies are administrative intermediaries between healthcare providers and users. They sign
annual contracts for services with doctors, hospitals, testing labs, and other providers, usually at a fixed cost, and resell
them to plan members for a fixed monthly premium. The risk that actual expenses will be higher than the contracted
reimbursement rate is borne mainly by providers, although most plans provide a stop-loss provision that shares
excess expenses with providers after a certain expense limit is reached. The risk that premiums are insufficient to cover
administrative costs is typically borne by the company.

In addition to using financial incentives to limit unnecessary medical care, managed healthcare companies use
"utilization management" to review and standardize care. Committees of doctors and administrators review the actual
services used in the network to determine if they're being used appropriately, and to recommend standards of care that
doctors and hospitals are expected to follow. Committees also determine drug formularies that specify which drugs
should be used to treat specific conditions. The statistical information collected for utilization management is also used
for risk management and underwriting, the process of determining what payments to offer providers and what
premiums to charge consumers.
Computerized information and communications systems are vital to managed healthcare companies to process
claims and manage records, and for statistical collection and analysis.

SALES & MARKETING

Managed healthcare plans are sold mainly to employers or other groups that want to provide healthcare insurance
to employees or members. Plans intended for large employers are sold directly by sales representatives or through
insurance brokers. Such sales involve two steps: the employer must sign on, and then employees must be convinced
to join. Plans designed for small groups and individuals are often sold through independent agents, telemarketing, or
direct mail, and may involve TV and print advertising. Average annual premiums for US employer-sponsored plans in
2005 were $4,023 for an individual plan and $10,880 for a family plan, according to the annual survey of Employer
Health Benefits by the California HealthCare foundation.

To attract customers, managed healthcare companies build networks of providers (doctors, hospitals, diagnostic labs).
Contracts with providers are usually non-exclusive and typically renew annually at renegotiated rates; contract terms
differ for the various plans a company offers. A typical independent doctor has contracts with several managed care
plans.
Contracts with doctors, hospitals, and other providers usually take the form either of "capitation," a fixed payment per
month based on the number of members in the plan (whether they use the service or not), or a "fixed-fee schedule"
that specifies the amount the plan pays for actual services rendered. Capitation is the major incentive used by HMOs to
limit referrals by primary care doctors, who keep a greater amount of the capitation for primary care patients if they
minimize treatments and referrals. Capitation limits risk for the managed healthcare company. Fixed-fee schedules are
the major form of contract for PPOs.
FINANCE & REGULATION

With premiums received up front and expenses paid later, managed healthcare companies have large cash or
investment balances. Some have significant investments in computer equipment. Because they are insurance
companies, they must maintain reserves (sometimes called "future policy benefits") and are restricted in the types of
investments they can make. Most hold considerable amounts of casualty insurance to protect against catastrophic costs,
liability, malpractice, and insolvency.

Managed healthcare companies and their plans are regulated by state insurance commissions and sometimes by state
health commissions. Those with Medicare and Medicaid contracts must conform to CMS and Department of Health and
Human Services (HHS) regulations. Major federal legislation relevant to managed care includes the Federal HMO Act
of 1973, which set standards for federal qualifications; the Health Insurance Portability and Accountability Act of
1996 (HIPAA), which addressed issues of records, information disclosure, and preexisting conditions; and the Balanced
Budget Act of 1997 and Balanced Budget Refinement Act of 1999, which modified Medicare.

REGIONAL & INTERNATIONAL ISSUES

Because managed healthcare companies are regulated at the state level, pricing and operating procedures may vary
from state to state. Some states mandate specific benefits coverage.
HUMAN RESOURCES

Most jobs in managed healthcare companies are clerical, but involve computer skills or technical knowledge of insurance
products and government regulations, and are therefore fairly well-paid. Average hourly pay is about 28 percent higher
than the average national wage. The industry’s safety record is good, with only one-fourth the number of injuries as the
national average.

Industry Employment Growth

Bureau of Labor Statistics
Average Hourly Earnings & Annual Wage Increase
Bureau of Labor Statistics

Recent Developments

MONTHLY NEWS
In Effort to Boost Commercial Biz, Humana Offering Employers a Health-Cost Guarantee
Best's Insurance News, 25 April, 2007, 558 words
LOUISVILLE, Ky. (BestWire) - Humana Inc. has launched a program for large U.S. employers that guarantees their
annual medical claims costs will stay below a certain percentage or the health insurer will refund up to 40% of the fees
it ...

More Health Insurers Team Up With Vision Firms to Offer Popular Benefits to Members
Managed Care Week, 23 April, 2007, 1071 words
An increasing number of health plans that do not operate their own ancillary product subsidiaries are partnering with
managed vision companies to offer benefits, as vision insurance remains a popular employee benefit. But MCOs face
many ...

HDHP Enrollment Triples in Large-Group Market, AHIP Finds

Inside Consumer Directed Care, 13 April, 2007, 664 words
More than 2 million lives are covered by an HSA-compatible high-deductible health plan (HDHP) offered in the large-
group market - triple the enrollment a year ago, according to data released this month by the trade group America's
Health ...

QUARTERLY INDUSTRY UPDATE

2007 Healthcare Outlook Challenging - In 2007 the managed healthcare industry faces significant challenges,
according to experts. Chief among these challenges are controlling medical costs and developing lower-premium benefit
designs and options, as more plans move from co-pays to deductibles and coinsurance. Other challenges include
maintaining margins in an increasingly competitive marketplace, improving consumer-directed healthcare, and
developing more sophisticated wellness programs.
Industry Consolidation Continues - Consolidation in the managed healthcare industry continues as more providers
feel pressures of the changing managed care marketplace with larger regional and national rivals. As more employers
migrate to PPOs and consumer-driven plans, HMOs must choose between heavily investing in new products or leaving
the business. At the beginning of 2007, M-care sold its business to Blue Cross and Blue Shield of Michigan and Trinity
Health sold its business to Priority Health.
Health Industry Capital, Surplus Rises - Capital and surplus for the health industry increased almost 15 percent in
2005, down from the 17 percent increase in 2004. More than 85 percent of the top 100 insurers had gains, with an
average increase of over 20 percent. The drivers of this increase were strong underwriting gains and improved
investment returns due to rising interest rates.

Business Challenges
CRITICAL ISSUES
Rapidly Rising Healthcare Costs - Healthcare spending by private health insurers increased 70 percent between
1998 and 2004. National healthcare costs rose almost 60 percent, and are expected to grow 7 percent annually through
2010. In 2004, private health insurance accounted for 36 percent of national healthcare costs.

Costs for medical care services rose 4.1 percent in November 2006 compared to year-ago costs.

Tighter Government Regulation - Government mandates concerning management and medical practice have
increasingly restricted actions managed care organizations (MCOs) can take to improve profitability. Although
government policy opposes a publicly operated national healthcare system, the formation of ever-larger MCOs,
combined with tighter regulatory controls on them, is essentially creating such a system.

Several states have enacted legislation to provide health insurance to uninsured citizens; Connecticut is
following the lead of Massachusetts, Vermont, and Tennessee, which all enacted such laws in 2006.

OTHER BUSINESS CHALLENGES

Premiums Lag when Costs Rise - Because health insurance premium rates are usually based on actual historical
rather than prospective future costs, premiums can be insufficient when costs rise rapidly.

Possible Liability for Medical Errors - The incidence of medical errors resulting in patient injury or death is higher
than previously thought. The Institute of Medicine estimates that the annual national cost for medical errors is between
$8 and $17 billion. Various legislative proposals would join managed care companies with healthcare providers in liability
for bad care.
Greater Bargaining Power for Hospitals - With some financially weak hospitals eliminated and consolidation among
many of the rest, large hospital chains have gained greater bargaining power with managed care companies. With 700
hospital mergers in the past five years, some hospital operators now control a large share of beds in many local markets
and are using that leverage to force higher payments in their contracts with managed care companies.

More Employers Self-Insuring Employees - To avoid rising health plan costs, a growing number of small and
midsized companies are taking on more risk by self-insuring, so they can continue offering health insurance benefits to
employees. Instead of paying high premiums, companies are creating funding pools from which employees can deduct
money to pay medical costs. Each employee is allotted a determined amount annually and must pay for medical costs
exceeding the allotment. Companies are also buying stop-loss policies to cover their liability for catastrophes, limiting
payouts to $20,000, for example.

Trends & Opportunities

BUSINESS TRENDS

Consolidation - Economies of scale in administration have pushed strong consolidation. Although managed care plans
(MCPs) have proliferated at the local level, more are being sponsored by large for-profit companies that maintain
separate entities in each state. Consolidation is also being pushed because large provider networks, difficult for smaller
companies to assemble, are more attractive to customers. In some parts of the country, a few large companies now
dominate the health insurance market, holding a combined HMO/PPO (preferred provider organization) market share of
30, 40, or sometimes even 50 percent. In Philadelphia, one insurer holds 55 percent of combined HMO/PPO market
share.

Tiered Hospital Plans - To control costs, some healthcare plans now charge patients more for care delivered at
higher-cost hospitals. By shifting more of the cost decision to patients through higher co-payments for selected services,
rather than by arbitrarily restricting services, healthcare plans are reintroducing market economics into decisions about
medical care. This type of cost control is likely to become more popular with healthcare plans for other types of services,
such as prescription drugs. Likewise, patients who use less expensive services have a lower co-payment or lower
coinsurance.

Bigger PPOs Get Bigger Discounts - According to InterStudy Publications, large PPOs negotiate discounts that
average more than 35 percent for medical services, while smaller PPOs get discounts that average just 30 percent.

Rewarding Physicians - Nationally, health plans are shifting how they reward physicians. Most new incentive programs
reward doctors for meeting certain quality-of-care standards, such as providing diabetics with regular eye exams. Some
health plans now pay extra bonuses to the best-performing doctors, who provide above-average care at lower costs.
Pharmacy Benefit Managers (PBMs) Cut Drug Costs - PBM programs, offered under managed healthcare plans,
are reducing prescription drug costs for consumers. PBMs offer discounts by substituting generic drugs when possible,
negotiating prices with drug manufacturers, and offering discounts at pharmacies.

Preferred Drug Lists Gaining Popularity - To cut costs, many managed care companies are creating preferred drug
lists to limit physicians from prescribing expensive drugs when an equally effective cheaper equivalent is available. The
preferred list program has been so successful for private managed care companies that the federal government is
considering using a similar plan for Medicaid. Many states have begun using a preferred drug list plan for government
employees.
INDUSTRY OPPORTUNITIES

Additional Product Opportunities - Many managed care companies offer products to supplement their basic
managed care plans (MCPs), such as supplemental health, disability, traditional indemnity, and life insurance as well as
various investment products. Companies also sell their management expertise by contracting to manage third-party self-
insurance plans for a fee.

Opportunities for Uninsured - More than 40 million Americans lack health insurance, and the number is increasing.
Various government proposals would create coverage by expanding Medicare and Medicaid programs, and by creating
new opportunities for managed care organizations (MCOs) to run associated HMO plans. Other possibilities include low-
premium, high-deductible plans.
Computerized Medical Records - Some HMOs are adopting electronic systems that link medical professionals and
pharmacists to save time and reduce medical errors. Using electronic systems, companies can computerize patient files,
enable prescriptions to be sent electronically from physicians to pharmacists, search for drug interactions and reactions,
and track whether patients have bought prescribed medications.

Consumer-Directed Plans Popular - Some MCOs offer consumer-directed health plans (CDHP) to help employers cut
costs. The features of such plans vary, but typically allow employees to choose health reimbursement accounts that
cover preventative care coupled with high deductible PPOs and educational websites about the costs and quality of care
available. Critics contend that only the healthy will choose these plans, creating a wellness divide and decreasing HMO
revenues.

Internet Information Sites - Managed care plans use sophisticated interactive websites to lower costs and enhance
member service. Such sites provide a range of advice about medical conditions and current research, in addition to
administrative information, and private information specific to each member. A study by Fulcrum Analytics shows that 80
percent of Internet users want to manage their health insurance benefits online.

Executive Insight
CHIEF EXECUTIVE OFFICER - CEO
Supporting Legislative Initiatives Favoring Managed Healthcare
Managed care organizations (MCOs) are regulated by state insurance and health commissions and must conform to
federal laws if they accept Medicare. Companies work through industry associations such as the American Association of
Preferred Provider Organizations (AAPPO) to assure that managed care interests are represented as legislation and
regulations are drafted and enacted. Company executives participate in legislative and regulatory hearings and publish
material supporting their positions.

Improving Industry Image

Managed healthcare’s image has been tarnished by rising costs, alleged fraud, and the combative positions of the
American Medical Association (AMA) and some public interest groups, which often oppose how managed care is
administered. Companies work to educate the public about why healthcare costs are rising and how MCOs are helping
contain them. Companies participate in ad campaigns to both promote their services and reestablish public trust.

CHIEF FINANCIAL OFFICER - CFO

Establishing Premiums
Since most contracts are negotiated for one-year periods, premiums are normally fixed for the fiscal year. If actual costs
are greater than the premiums charged, a firm’s costs aren’t recovered in that year, so care is required in establishing
premium rates for the forthcoming year. Companies examine past costs, use actuarial assumptions to estimate future
costs, factor in medical inflation, and claim inventory levels and receipts to determine premiums for various plans.
Companies may lose members if premiums are set too high, but if profits are too high, political consequences may result.

Managing Risk
MCOs bear business risk due to malpractice claims and disputes regarding benefit coverage. Companies reduce such
risk by insuring coverage for losses in excess of their retained limits with third-party insurance companies. Companies
use underwriting criteria to determine the level of risk they’re willing to assume and insure the remainder.

CHIEF INFORMATION OFFICER - CIO

Installing Utilization Management Systems

To establish a basis for treatment and subsequent reimbursements, MCOs define practice standards, and examine
procedures used in actual services to determine the most effective practices. This review is then used to establish the
practice standards for doctors and hospitals.

Computerizing Medical Records

Using paper records is expensive, time-consuming, and can result in errors. Many MCOs, encouraged by the federal
government, are converting to systems using standardized electronic health records (EHRs) that link hospitals,
laboratories, physicians, and pharmacies to increase the quality of care and reduce back-office costs. Companies are
computerizing individual medical records and monitoring patient reactions to various drugs to better evaluate patient
outcomes.

HUMAN RESOURCES - HR

Training Employees on Products and Regulations

MCOs offer multiple plans that their employees need to be familiar with. Most office functions are automated, so
customer service and claims representatives are trained in computer skills and insurance products. Companies conduct
periodic refresher courses on applicable government regulations and publish digests of new federal legislation such as
Medicare reform and HIPAA.

Hiring Qualified Workers

MCOs are competing with other healthcare organizations for individuals with medical and bioscience training and
education. MCOs pay wages above the national average and offer consistent pay raises to retain good workers. To
attract new workers, MCOs offer complete benefit plans and pleasant working conditions.

VP SALES/MARKETING - SALES
Offering Multiple Plans
While healthcare costs are increasing faster than inflation, MCOs are developing programs to control cost growth. Most
companies offer multiple plans that may cost the individual more for some services or for services at non-network
providers. Similar plans are used with prescription drugs where the co-pay for generic drugs may be lower.

Building Networks
MCOs’ success is a function of efficient operations and contracts with a sufficient number of providers to attract
members. MCOs strive to have as broad a base of providers in their networks as possible to decrease the number of
patients served by non-network providers. Companies negotiate non-exclusive contracts with providers that allow
company plan members to access that facility or physician at the prescribed rates.

Call Preparation Questions

CONVERSATION STARTERS
How do rising healthcare costs impact the company?
Healthcare spending by private health insurers increased 70 percent between 1998 and 2004.

How are tighter government regulations impacting the company?

Government mandates concerning management and medical practice have increasingly restricted actions managed care
organizations (MCOs) can take to improve profitability.

How does the company mitigate lags in healthcare costs and premium increases?
Because health insurance premium rates are usually based on actual historical rather than prospective future costs,
premiums can be insufficient when costs rise rapidly.
How might the company benefit by offering supplemental products, such as life or disability insurance?
Many managed care companies offer products to supplement their basic managed care plans (MCPs), such as
supplemental health, disability, traditional indemnity, and life insurance as well as various investment products.

Does the company plan to offer low-cost products to the uninsured?

More than 40 million Americans lack health insurance, and the number is increasing.

If the company has an electronic communication system, what benefits are gained?
Some HMOs are adopting electronic systems that link medical professionals and pharmacists to save time and reduce
medical errors.

QUARTERLY INDUSTRY UPDATE

What are the major challenges facing the company in 2007?

Experts see controlling medical costs and developing lower-premium options as primary challenges.

How is the company affected by the increased number of industry consolidations?

The changing managed care marketplace of more PPOs and new plans continues to cause some players to leave the
business rather than invest in new products.

OPERATIONS, PRODUCTS, AND FACILITIES

Is the company for- or non-profit?
Kaiser Permanente and Harvard Pilgrim Health Care pioneered the nonprofit concept, but most consumers are enrolled
in for-profit plans.

What insurance products does the company provide?

Health maintenance organizations (HMO); preferred provider organizations (PPO); point-of-service (POS) plans; and
traditional fee-for-service plans are examples.

What proportion of customers is in each type of plan?

Nationally, about 40 percent of health plans are PPO, 30 percent HMO, 5 percent POS; the remaining 25 percent are
traditional non-managed, fee-for-service.
How many plans does the company offer?
Typically, companies offer several standard alternatives and will customize plans for large employers.
In how many states does the company operate plans?
Large companies or nonprofits may operate in dozens.

How many doctors are in the company's provider network? How many hospitals?

Do these providers participate in all of the company's plans?

Usually providers participate in more than one plan from the same company, but possibly at different rates.
CUSTOMERS, MARKETING, PRICING, COMPETITION

Are the company's plans accredited by national organizations, like the National Committee for Quality
Assurance (NCQA)?
Accreditation is a voluntary, but useful, marketing tool.

What proportion of revenue is from large employer, small group, and individual plans?
Small group and individual plans have historically been more profitable, but more difficult to assemble.

Does the company use a sales force or independent agents to sell its plans?
Large companies use a variety of sales channels.
Does the company use historical or anticipated costs to establish necessary premium rates?
State insurance commissions often require the use of historical costs.
Does the plan reward physicians who maintain standard levels of care at below-average costs?
Nationally, health plans are changing how they reward physicians. Most new incentive programs reward doctors for
meeting certain quality-of-care standards; some pay bonuses to best performers who provide above-average care at
lower costs.

How much has the company raised employer premiums in the past year?
Employer premiums have risen at double-digit rates in recent years.

REGULATIONS, R&D, IMPORTS AND EXPORTS

What does the company think about proposed legislation to force insurers to cover specific treatments,
such as bone-marrow transplants, and to offer specific benefits like prescription drugs?
These issues are being debated at state and federal levels.

Is the company involved in lawsuits with healthcare providers or members?

Doctor groups have recently sued a number of large managed care companies.

ORGANIZATION AND MANAGEMENT

Does the company have utilization review and quality assurance committees?
Many companies use these mechanisms to set treatment standards and identify poor treatment.

If the company operates several subsidiaries, does each have a separate administrative staff?

FINANCIAL ANALYSIS

What percentage of the company's medical costs is "capitated," or fixed?

This can vary considerably, depending on the plan. The higher the percentage, the lower the financial risk to the plan of
unexpected costs.

How much has the average plan premium increased in recent years?
Since 2000, annual employer sponsored health insurance premiums have increased more than 10 percent per year,
according to the Kaiser Family Foundation.

How much has the average provider contract increased in recent years?
For some large companies, the increase is only 2 to 3 percent.

How much have the company's costs for prescription drugs risen in the recent past?
Drug costs have risen sharply in recent years.
BUSINESS AND TECHNOLOGY STRATEGIES

How has the company's market share changed in recent years?

With the pace of new enrollments falling, companies now compete more for market share.

Has the company grown through acquisitions? Will it continue to?

Large companies have considerable economies of scale.
What has been the recent medical loss ratio for the company's major plans?
The medical loss ratio is medical expenses divided by premium revenue. Usually above 80 percent, the ratio can rise to
90 percent when costs are unexpectedly high.

What sort of management information system does the company operate?

Most companies have sophisticated systems to track costs and treatment outcomes.
Does the company use computerized medical records or a traditional paper system?
To save time and reduce medical errors, many providers are adopting electronic systems that link medical professionals
and pharmacists. Some computerized systems monitor for drug interactions and reactions, and track whether patients
have purchased prescribed medications.

Financial Information

VALUATION MULTIPLES

Managed Healthcare

Acquisition multiples below are calculated using at least 5 private, middle-

market (valued at less than $1 billion) industry transactions completed between
12/1997 and 10/2005. Last update: February 2007.

Valuation Equity/Net Equity/Net MVIC/Net

MVIC/EBIT
Multiple Sales Income Sales
Median Value 0.8 31 0.8 27.9

Equity (Equity price) = Reported selling price

MVIC (Market Value of Invested Capital) = Equity price + Long-term liabilities
assumed
EBIT (Earnings Before Interest & Taxes) = Net Income + Interest expense +
Taxes

SOURCE: Pratt's Stats™ (Portland, OR: Business Valuation Resources, LLC) To purchase more detailed
information, please either visit www.BVMarketData.com sm or call Business Valuation Resources
at 888-287-8258.

Industry Forecast
US personal consumption expenditures for various types of healthcare, a primary indicator for managed healthcare
services, are forecast to grow at an annual compounded rate of 5.7 percent between 2006 and 2009.

Steady Consumer Spending Growth for Health Services

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research
Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures
the links between industries and the aggregate economy.

First Research Opportunity Rating

The First Research Opportunity Rating is First Research’s estimate of industry performance vs. industry risk over the
next 12 to 24 months.

Health care costs continue to rise

Consumer laws restrict cost-cutting opportunities
But greater demand for managed-care services

Web Links & Acronyms

INDUSTRY WEBSITES
Agency for Healthcare Research and Quality
Government agency. Healthcare cost statistics, surveys.
American Association of Preferred Provider Organizations
News and policy issues.
American Medical Association
Legislative positions that frequently oppose MCPs.

America's Health Insurance Plans (AHIP)

Industry association representing 1,000 companies. Legislative positions, some statistics.

BCBS Health Issues

News about national health care issues.

Centers for Medicare & Medicaid Services

Government agency that oversees Medicare and Medicaid. Healthcare cost statistics at Statistics & Data, Health
Accounts.

Health Affairs
News and policy issues.

Health Leaders
News.

Kaiser Family Foundation

Employer Health Benefits Annual Survey.

Managed Care Magazine

Capitation, articles, and etc.

Managed Care On-Line Glossary

Explanation of managed care financial terms and ratios.

Managed Healthcare Executive

 Magazine.
National Center for Health Statistics

GLOSSARY OF ACRONYMS

BCBS - Blue Cross Blue Shield

CDHP - Consumer-directed health plans

CSHSC - Center for Studying Health System Change

CMS - Centers for Medicare & Medicaid Services

CPT - Common Procedural Terminology

DM - Disease Management

HCFA - Health Care Financing Administration

HIPAA - Health Insurance Portability and Accountability Act of 1996

HMO - Health Maintenance Organization

HPEDIS - Health Plan Employer Data Information Sets

HSA - Health Savings Accounts

IBNR - Incurred But Not Reported

MCO - Managed Care Organization

MCP - managed care plans

NCQA - National Committee for Quality Assurance

PBM - Pharmacy Benefit Manager

POS - Point of Service

PPO - Preferred Provider Organization

ROI - Return on Investment

URAC - Utilization Review Accreditation Committee

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