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Commitment to QualityReport for 2008

CareNet and Health Partners Report on Clinical Integration

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From the Executive Director ..........................................................................................................................2

From the Clinical Integration Committee ......................................................................................................3

Clinical Integration Defined ............................................................................................................................4

CareNet Systems and Mount Carmel Health Partners: Facts and Overview ................................................5

Mission and Vision ..........................................................................................................................................6

Clinical Integration and Quality Activities for 2008 ......................................................................................7

Clinical Integration Program Summaries ........................................................................................................8

Diabetes Care

PROGRAM ONE: NCQA Diabetes Recognition Program ..............................................................................9

PROGRAM TWO: Diabetes Control in an Elderly Population ....................................................................13

PROGRAM THREE: Diabetes Control in a Commerical Health Plan ..........................................................15

NCQA Heart Stroke Recognition Program....................................................................................................17

Generic Antidepressant Initiative ..................................................................................................................19

Patient Satisfaction..........................................................................................................................................22

Electronic Medical Record and Information Technology Adoption ..........................................................24

Physician Credentialing and Board Certification..........................................................................................26

Table of Contents

Contents

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From the Executive Director

2008 is a very important year for the physician and hospital members of CareNet Systems and Mount Carmel HealthPartners. While the organizations have worked closely together over the years, I am pleased to announce that CareNet

and Health Partners are poised to become one physician hospital organization this year.

CareNet and Health Partners Boards of Directors and staff have undertaken two years of education, deliberation and duediligence concerning the future of healthcare and how the 1,400 physician members and four acute care hospitals thatform CareNet and Health Partners can best be prepared to excel in the future. This research with the assistance ofhealthcare experts, has shown that health plans, managed care companies, employers and the government are movingtoward a model that rewards and reimburses physicians and hospitals based on quality measures, clinical outcomes andprovider demonstration of quality care. In order to meet this challenge, primary care physicians, specialists and hospitalsmust work together using proven protocols and measures to demonstrate clinical and quality outcomes. This is thebackbone of "Clinical Integration" — a strategy that the CareNet and Health Partners Boards of Directors have determinedis vital to the success of our physician and hospital members.

As a result of this due diligence and to meet the goals of Clinical Integration outlined in this document, the Boards ofDirectors of CareNet and Health Partners are taking the necessary steps to combine the two organizations to form oneentity. When structured, Clinical Integration provides the platform needed to retain and potentially increase revenues formember physicians and hospitals. Similar organizations have been extremely successfully using this approach with healthplans and payers responding positively to their efforts.

Other exciting news in 2008 is that CareNet and Health Partners have developed the first edition of the Commitment toQuality Report. Throughout the past few years, our physician members have successfully launched and implementednumerous quality programs demonstrating that CareNet and Health Partners physicians provide high quality care andimprove clinical outcomes while reducing cost. The Commitment to Quality Report for 2008 demonstrates theseaccomplishments. Together the CareNet and Health Partners’ Board of Directors thank the physicians and their staffs whoinvested their time and energy to achieve the successes documented in this report.

The Commitment to Quality Report is designed to educate a broad audience, which includes patients, physicians, hospitals,employers and health plans, regarding the value CareNet and Health Partners physicians and Mount Carmel Health Systembring to greater Columbus. It also outlines past quality programs, along with background information supporting theselection of these programs. I hope you find this document engaging and thought-provoking.

The Boards of Directors, staff, and I look forward to working with you in the upcoming year as we embark on newopportunities and share more success stories. The Commitment to Quality Report will be updated as we go forward.

— Michele HelbigExecutive DirectorCareNet and Mount Carmel Health PartnersJuly 2008

Executive Director

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From the Clinical Integration Committee ofCareNet and Health Partners Boards

CareNet and Health Partners are pleased to present our first annual Committment to Quality Report highlighting themany programs being managed and implemented to improve patient care and to aid our 1,400 physicians in managing

their patients. CareNet and Health Partners physicians have been leaders in quality care for years. We are now prepared tostrengthen our market position through a concentrated effort utilizing the components of clinical integration to support andcommunicate with each other.

Over the past two years, we have negotiated and administered Pay for Performance programs with a Medicare AdvantagePlan, commercial health plans and an employer sponsored health plan. Member physicians have also had the opportunityto earn National Center for Quality Assurance (NCQA) recognition in diabetic care with CareNet and Health Partnerscoordinating and assisting in this process. As of this date, CareNet and Health Partners has 70 physicians who have earnedNCQA diabetes recognition. In addition, our popular coding seminars, newsletters, and educational offerings help busyphysicians and their staff stay up to date with trends in healthcare. CareNet and Health Partners will continue to serve as aquality improvement resource for our member physicians, by providing member physicians with access to qualityimprovement programs and services that they may not have available to them in their individual practices.

Experts predict that "pay for performance" programs, grading of physician quality, and the concept of tiered payments for"underperforming" physicians will continue to grow. More of a physician's income will be tied to "performance". Now,more than ever, it is time for our organization to be the leaders in all quality initiatives and embark on new dimensions inhealthcare.

Our goal is to provide efficient patient-centered care, in the right setting, at the right time. Ultimately this is what is bestfor the patients and what employers and insurance companies require. This involves electronic health records, datagathering and analysis, and adopting evidence-based medicine guidelines. While it can take years to make some of thishappen, our plan is to facilitate systems that can easily be accessed and utilized knowing that currently not all physiciansare prepared to invest in electronic health records or similar systems. We believe there are alternatives that will work formost of our physician membership. In the coming year, we will continue to offer our current quality related services andprograms and launch new industry driven programs.

We think you will agree that CareNet and Health Partners are off to a great start. As you review this Commitment toQuality Report, your comments and suggestions are welcome and appreciated. These are "our" organizations. Your input isimportant and valued and your support imperative.

Clinical Integration

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What is Clinical Integration? Clinical Integration is the process of physicians and hospitals workingtogether to improve patient care, improve patient outcomes and controlhealthcare costs. Unlike some healthcare initiatives, Clinical Integration isphysician led and driven.

Clinical Integration is:• A physician led and driven quality improvement program.• Primary care physicians, physician specialists and hospitals working

together to demonstrate and improve clinical and quality outcomes.• The collaboration among independent doctors and hospitals to

increase quality and efficiency of patient care. • The adoption of a comprehensive and reportable program of inpatient

and ambulatory quality improvement that allows physicians to set organizational benchmarks for quality and thatprovides resources to physicians to excel in care delivery.

• Sharing our physicians’ and hospitals’ quality track records with health plans, employers and patients, thus making usthe preferred physician network in central Ohio.

• Building an infrastructure that supports quality and enables joint negotiations when beneficial to the parties.

We should become Clinically Integrated to:• Continually improve the quality of care our patients receive.

• Demonstrate and prove to health plans, employers, the government and patients that we deliver high quality and cost-effective care.

• Reverse the tide of declining physician and hospital reimbursement.

We become Clinically Integrated through:• Physician leadership and involvement in CareNet and Health Partners programs which demonstrate high quality and

positive clinical outcomes in the physician practice and hospital settings.

• Physician leadership and involvement in health plan quality programs that demonstrate quality, improve care processesand clinical outcomes in a cost-effective manner. This demonstrates our willingness to work with our health planpartners to improve care.

• Physician leadership and participation in the National Committee on Quality Assurance (NCQA) Physician RecognitionPrograms and other national and local physician and quality programs to demonstrate that CareNet and Health Partnersphysician members provide care at or above national standards.

• Mount Carmel Health System and physicians forming partnerships in quality health plan programs that provide benefitsto both physicians and the hospital.

Why must CareNet and Health Partners be merged together?• A united physician hospital organization will foster the necessary collaboration between primary care physicians,

specialists and Mount Carmel Health System which is essential to Clinical Integration.

• One organization will reduce redundancies and decrease cost incurred by two separate organizations.

• One organization will allow us to share our physician-hospital partnership and Clinical Integration successes in acohesive, positive manner.

Clinical Integration is not:• A loss of physician or practice autonomy• A hospital or government mandate• A means to "weed out bad physicians"• A means to force a physician to purchase an electronic health record (EMR)• "Cookbook medicine" • Messenger model contracting

Simply put, Clinical Integration is CareNet and Health Partners member physicians and Mount Carmel Health Systemcollaborating to improve patient care, improve patient outcomes and reduce healthcare costs. These are mutual goals thatpatients, physicians, hospitals, employers and health plans all agree upon.

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CareNet Systems and Mount Carmel Health Partners:Facts and Overview• Physician-hospital organization comprised of physicians throughout

Central Ohio.

• 600 primary care physician members in central Ohio.

• 800 specialty physician members in central Ohio.

• CareNet and Health Partners were formed in partnership with Mount Carmel Health System in 1994.

• The organizations establish physician contracts with managed care plans on behalf of member physicians.

• Physician credentialing (the in-depth review of a physician's training,expertise and experience) is performed for managed care planscontracted with CareNet and Health Partners.

• Quality improvement initiatives are undertaken to raise the quality ofhealthcare in Central Ohio.

CareNet and Health Partners Executive Director Michele Helbig

CareNet Systems Board of Directors Michael J. Cooney, M.D., Chair, Cooney & RicaurteJames J. Barr, M.D., Dublin Family Care IncWilliam Buoni, M.D., Stonecreek Family HealthDouglas Finnie, M.D., Southwestern Internal MedicineWilliam J. Morris, M.D., Family Physicians of ColumbusDaniel J. Wendorff, M.D., Grove City Internal MedicineJackie Primeau, Mount Carmel Senior Vice President and CFOCindy Sheets, Mount Carmel Senior Vice President and CIOPatty Callahan, Mount Carmel Director of FinanceTeri Watson, Mount Carmel Vice President Planning & MarketingMichele Helbig, ex-officio, Executive Director

Mount Carmel Health Partners Board of DirectorsGeorge Ho, M.D., Chair, Scioto Valley UrologyFranklin Bressler, M.D. Bressler & SchaefferJason Keith, M.D, Metropolitan Surgery, Inc.Alan J. Murnane, M.D., Westar Obstetrics & GynecologyThomas Archer, M.D., Columbus Cardiology ConsultantsJackie Primeau, Mount Carmel Senior Vice President and CFOCindy Sheets, Mount Carmel Senior Vice President and CIORobert Martin, Mount Carmel Vice President Finance Ron Whiteside, Mount Carmel Senior Vice President and System COOMichele Helbig, ex-officio, Executive Director

CareNet and Health Partners6150 East Broad StreetColumbus, OH 43213(614) 546-3000www.carenetsystems.comwww.mchp.com

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Mission and Vision

MissionThe mission of CareNet and Health Partners is for physicians and Mount Carmel Health System to venture collaborativelyto provide high quality, cost effective, coordinated and innovative patient care in all healthcare settings and to be thepremier healthcare provider network in central Ohio.

VisionPatients, employers, government agencies, healthcare providers and the community place a high value on the quality andcost of healthcare services provided in central Ohio. CareNet and Health Partners will utilize the expertise and knowledgeof member physicians and the Mount Carmel Health System to develop innovative methods to continuously improve thequality and reduce the cost of healthcare provided in the central Ohio community. Through this innovation and excellence,CareNet and Health Partners will be the premier healthcare provider network in central Ohio. Through innovation andexcellence, physician members along with Mount Carmel Health System’s hospitals will be recognized by the communitieswe share.

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Clinical Integration and Quality Activities for 2008CareNet and Health Partners will be launching new quality programs and continuing many of the quality programsoutlined in this Commitment to Quality Report for 2008. Continuous quality improvement requires a systematicexamination of the operations of our physician and hospital network and focuses on identifying and implementingimprovement in performance. Quality improvement is a participative, systematic approach to planning and implementing acontinuous network improvement process (Deming, 1986).

National Committee on Quality Assurance (NCQA) Physician Recognition programsThe National Committee for Quality Assurance (NCQA) has developed Diabetes and Heart Stroke Physician RecognitionPrograms. These are voluntary programs that were developed to help physicians use evidence-based measures to provideexcellent care to their patients with diabetes and/or heart disease. CareNet and Health Partners have audited memberphysicians for the diabetes and heart stroke recognition programs, and will continue these audits with the goal of havingthe majority of our eligible physician membership recognized by NCQA. These programs are further explained in thisreport.

Diabetes Control in an Elderly PopulationCareNet and Health Partners primary care physicians have been participating in a diabetes quality improvement programwith a Medicare Advantage Plan since 2005. This program has focused on diabetes control throughout the past three yearsand has resulted in an increasing number of physicians meeting the program's goal for diabetic care. This program willcontinue in 2008 focusing on diabetic and cardiac care. Measures will be based on NCQA guidelines. This program isfurther explained in this report.

Healthcare Quality Improvement and Cost Reduction in an Employer-Sponsored Health PlanCareNet and Health Partners, in collaboration with an employer-sponsored health plan, will launch multiple qualityinitiatives focusing on improving health outcomes and reducing costs in the health plan. The health plan has partneredwith CareNet and Health Partners to launch a robust healthcare database that will give CareNet and Health Partnersmember physicians the ability to systematically evaluate their care delivery, network performance and ensure health planmembers receive appropriate, cost-effective, high quality care. The quality initiatives are comprehensive in nature with astrong focus on working with health plan members to ensure they take the appropriate steps to improve their personalhealth.

Patient Satisfaction Improved patient experience can indicate high quality care and can lead to more satisfied staff, fewer preventable medicalmistakes, fewer malpractice lawsuits and economic savings. Measuring and tracking patient satisfaction will continue togain importance as healthcare becomes increasingly more consumer-driven. CareNet and Health Partners will continue tooperate a patient satisfaction program that incorporates a self measurement tool to give physicians and practices the abilityto learn of other practices’ strengths and learn of opportunities for improvement from their patients.This program is furtherexplained in this report.

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Clinical Integration Program SummariesNCQA Diabetes Physician Recognition Program: A voluntary program that was developed to help physicians useevidence based measures to provide excellent care to their patients with diabetes. CareNet and Health Partners have 70member physicians who have demonstrated high quality diabetic care and are currently recognized by NCQA. Bridges toExcellence estimates that recognized physicians save an estimated $1,059 in healthcare expenses per diabetic patient, peryear.

Diabetes Control in an Elderly Population: The objective of the diabetes quality improvement program is to increasethe number of diabetic elderly members who obtain appropriate diabetic screenings. Since the program was implementedin 2005, the number of CareNet physicians who have met the program's goals has increased by 133%. Elderly membershave also benefited from this program by receiving proper diabetic preventive care that may reduce diabetic complicationsin the long run.

Diabetes Control in a Commercial Health Plan: The program's goal was to improve health plan members'compliance with select diabetes measures. These measures are intended to prevent the onset of diabetes complications andto reduce the cost of diabetes due to complications. Three hundred and sixty (360) CareNet and Health Partners physiciansparticipated in the program and were responsible for the treatment and care of over 5,700 health plan members with

diabetes. Of the CareNet physicians who participated in the program, 214 met the program's measurement goals.

NCQA Heart Stroke Physician Recognition Program: A voluntary program that was developed to help physiciansuse evidence based measures to provide excellent care to their patients with cardiovascular disease. The economic cost ofcardiovascular diseases and stroke in the United States for 2007 is estimated at $431.8 billion, and an estimated 79,400,000American adults (one in three) have one or more types of cardiovascular disease. CareNet and Health Partners will initiallyaudit 70 physicians for this program in 2008. Our intent is to grow the program in the future.

Generic Antidepressant Initiative: Depression is among the most costly common medical conditions, and estimatesindicate that depression costs US employers $24 billion annually in lost productive work time. Pharmaceuticals are a keycost in depression treatment. The program's goal was to increase the use of generic antidepressant medications prescribedto health plan members from 43% to 55% or greater. During the measurement period, 58% of all antidepressantmedications prescribed to health plan members were generic, surpassing the goal.

Patient Satisfaction: Patients are increasingly demanding customer-friendly service along with the quality care they havealways expected, both in physician offices and in the hospital. Understanding patients' needs and expectations is the firststep in identifying the components of healthcare services that will lead patients to return or to recommend a physician orhospital — a situation in which both patients and providers benefit. The program's goal is to operate a patient satisfactionprogram that gives physicians the ability to evaluate their care processes, meet patient expectations and remove barriersthat inhibit communication between patient and provider.

Electronic Medical Record (EMR) and Information Technology Adoption: EMRs and advanced informationtechnology such as billing and practice management software, support physicians' efforts to improve quality across allpatients. CareNet and Health Partners will facilitate the adoption of EMRs and new information technology among memberpractices through education and by providing access to financial assistance through Mount Carmel Health System's EMRprogram.

Physician Credentialing and Board Certification: Credentialing and re-credentialing is the process of formalrecognition and attestation of current medical or technical competence and performance by evaluating and monitoring aphysician's clinical or medical decision-making. The impact of credentialing physician members, along with setting boardcertification as a criterion for membership, further supports the establishment of a physician network that is high quality,minimizes risks to patients and provides the means to ensure physician quality is maintained and measured.

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Medical and Economic ImpactMedical Impact

The medical complications of diabetes include: heart disease and stroke, high bloodpressure, blindness, kidney disease, nervous system disease, amputations, dental disease,complications of pregnancy, sexual dysfunction and illnesses such as pneumonia andinfluenza.2

Total prevalence of diabetes in the United States, all ages, 2005:

• Total: 20.8 million people — 7.0% of the population — have diabetes

• Diagnosed: 14.6 million people

• Undiagnosed: 6.2 million people1

Total prevalence of diabetes among people aged 20 years or older, United States, 2005:

• Age 20 years or older: 20.6 million or 9.6% of all people in this age group have diabetes

• Age 60 years or older: 10.3 million or 20.9% of all people in this age group have diabetes

• Men: 10.9 million or 10.5% of all men aged 20 years or older have diabetes

• Women: 9.7 million or 8.8% of all women aged 20 years or older have diabetes1

Economic Impact

Direct economic costs of diabetes:

• Estimated at $92 billion in 2002, compared to $44 billion in 1997.

• Diabetes alone represents 11% of US healthcare expenditures.

• $40.3 billion was spent for inpatient hospital care and $13.8 billion for nursing home care for people with diabetes.3

Indirect economic costs of diabetes:

• Estimated to be $40 billion in 2002.

• In 2002, diabetes accounted for a loss of nearly 88 million disability days.

• 176,000 cases of permanent disability were caused by diabetes, at a cost of $7.5 billion.3

PROGRAM ONE: NCQA Diabetes Physician Recognition Program

DefinitionDiabetes: a group of diseasesmarked by high levels of bloodglucose resulting from defects ininsulin production, insulin action, orboth. Diabetes can lead to seriouscomplication and premature death,but people with diabetes can takesteps to control the disease andlower the risk of complications.

There are many forms of diabetesbut the disease takes three primaryforms:

1. Type 1 diabetes: develops whenthe body's immune systemdestroys pancreatic beta cells,the only cells in the body whichmake the hormone insulin thatregulates blood glucose.

2. Type 2 diabetes: accounts forabout 90% to 95% of alldiagnosed cases of diabetes. Itusually begins as insulinresistance, a disorder in whichthe cells do not use insulinproperly.Type 2 diabetes isassociated with older age,obesity, family history ofdiabetes, history of gestationaldiabetes, impaired glucosemetabolism, physical inactivityand race/ethnicity.

3. Gestational diabetes: a form ofglucose intolerance diagnosed insome women during pregnancy.It is more common among obesewomen and women with a familyhistory of diabetes.1

NCQA: The National Committee forQuality Assurance (NCQA) is aprivate, 501(c)(3) not-for-profitorganization dedicated toimproving healthcare quality. Sinceits founding in 1990, NCQA hasbeen a central figure in drivingimprovement throughout thehealthcare system, helping toelevate the issue of healthcarequality to the top of the nationalagenda.7

Diabetes Care

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CareNet and Health Partners Program Goals To provide primary care physicians andendocrinologists with tools to supportthe delivery and recognition ofconsistent, high quality care, the NationalCommittee for Quality Assurance(NCQA) and The American DiabetesAssociation (ADA) developed theDiabetes Physician Recognition Program.This is a voluntary program developed tohelp physicians use evidence-basedmeasures and provide excellent care totheir patients with diabetes.

Physicians who participate in theprogram enhance their delivery of highquality diabetic care through the use of aphysician and practice evaluation tooland by individual physicianbenchmarking to national diabeticperformance standards. Additionalresources are provided to participatingphysicians to help them control diabetesin their patients.4

The program focuses on preventing diabetic complications by focusing on four main areas. When these four clinical areasare properly managed in diabetic patients, clinical outcomes are dramatically improved for diabetic patients.

• Glucose control: In general, every percentage point drop in A1C blood tests results (e.g. from 8% to 7%) reduces the riskof microvascular complications (eye, kidney and nerve disease) by 40%.

• Blood pressure control: Blood pressure control reduces the risk of cardiovascular disease (heart or stroke) amongpersons with diabetes by 33% to 50%, and the risk of mircovascular complications (eye, kidney, and nerve diseases) byapproximately 33%.

• Control of blood lipids: Improved control of cholesterol or blood lipids (for example, HDL, LDL and triglycerides) canreduce cardiovascular complications by 30% to 50%.

• Preventive care practices for eyes, kidneys and feet:

— Detecting and treating diabetic eye disease with laser therapy can reduce the development of severe vision loss by anestimated 50% to 60%.

— Comprehensive foot care programs can reduce amputation rates by 45% to 85%.

— Detecting and treating early diabetic kidney disease by lowering blood pressure can reduce the decline in kidneyfunction by 30% to 70%.2

NCQA Diabetes Physician Recognition Program cont’d

Diabetes Care

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The American Board of Family Medicine (ABFM) and NCQA recently announced an agreement under which ABFMDiplomates recognized for quality care through NCQA's diabetes or heart/stroke recognition programs will receive credittoward their Maintenance of Certification for Family Physicians. Maintenance of Certification for Family Physicians is themeans by which ABFM continually assesses its more than 70,000 Diplomates to ensure that they meet the highest standardsof accountability and clinical excellence. ABFM Diplomates who successfully complete NCQA's diabetes or heart/strokephysician recognition program are eligible to receive credit for the completion of a MC-FP Part IV Performance in PracticeModule. Diplomates are required to complete one such module during each stage of the Maintenance of Certificationprocess.6

CareNet and Health Partners Measurement and ResultsCareNet and Health Partners have used the NCQA Diabetes Physician Recognition Program to evaluate the diabetic careprovided by over 100 primary care physicians in 2007. Each physician received a comprehensive evaluation of his or herdiabetic care according to program standards.

As of publication, 56% (70 of 126) of the recognized physicians in greater Columbus were CareNet or Health Partnersphysician members.

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CareNet and Health Partners Program ImpactTo date, CareNet and Health Partners have 70 primary care member physicians who have demonstrated high qualitydiabetic care and are currently recognized by NCQA. In addition, CareNet and Health Partners have audited over 100primary care physicians to qualify for the recognition. Even if NCQA recognition was not achieved by an individualphysician, he or she had the opportunity to use the audit experience to improve diabetic care processes.

Bridges to Excellence is a national not-for-profit organization developed by employers, physicians, healthcare providers,researchers, and other industry experts with a mission to create significant leaps in the quality of care. Bridges toExcellence noted the following about NCQA-recognized physicians who meet the standards of the NCQA diabetes programand who fully control diabetes in their patients:

• Physicians who are NCQA-recognized save an estimated $1,059 in healthcare expenses per diabetic patient, per year.5

• When NCQA-recognized savings are applied to a typical patient population composed of over 100 diabetic patients, theNCQA-diabetes-recognized physician savings can be in excess of $100,000 per year.

By improving the care diabetic patients receive, CareNet and Health Partners physicians are contributing to reducinghealthcare expenditures associated with diabetes and are improving clinical outcomes for their patients with diabetes.

References

1. The Centers for Disease Control and Prevention. National Diabetes Fact Sheet, 2005. 2. The American Diabetes Association, Complications of Diabetes in the United States, www.ada.org3. The American Diabetes Association, Direct and Indirect costs of diabetes in the United States, www.ada.org4. The National Committee on Quality Assurance, The Diabetes Physician Recognition Program, www.ncqa.org5. Bridges to Excellence, Diabetes Care Analysis — Savings Estimate. www.bridgestoexcellence.org 6. The National Committee on Quality Assurance, NCQA, ABFM Align Physician Measurement Standards, www.ncqa.org7. The National Committee on Quality Assurance, www.ncqa.org

NCQA Diabetes Physician Recognition Program cont’d

Diabetes Care

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Scope of Diabetes in an Elderly PopulationIn 2005, there were 10.3 million or 20.9% of all people aged 60 years or older with diabetes. CareNet primary carephysicians have been participating in a diabetes quality improvement program with a Medicare Advantage Plan since 2005.The medical impact of diabetes is especially burdensome among individuals 60 years or older, which is the vast majority ofMedicare Advantage Plan's member population.

CareNet and Health Partners Program GoalThe objective of the diabetes quality improvement program is to increase the number of elderly diabetics who obtainappropriate diabetic screenings. As stated in the previous diabetic section, the proper management of glucose, blood lipids,eye disease and kidney disease will dramatically improve clinical outcomes for diabetic patients.

This program also established a bonus program that financially rewarded physicians who met three of the four measureslisted on the next page. The financial bonus was intended to reward physicians who took extra time and effort to moreeffectively manage their diabetic patients.

PROGRAM TWO:Diabetes Control in an Elderly Population

Diabetes Care

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CareNet and Health Partners Measurement and ResultsThe CareNet diabetes quality improvement program measured physicians on the following measures:

• Greater than 50% of a participating physician's diabetic patients must have obtained an annual eye exam

• Greater than 85% of a participating physician's diabetic patients must have obtained an HbA1c less than 9

• Greater than 85% of a participating physician's diabetic patients must have obtained an LDL-C less than 130

• Greater than 20% of a participating physician's diabetic patients must have obtained an annual microalbuminuria screen

Since the program was implemented in 2005, the number of CareNet physicians who have met the program's goals hasincreased by 133%. The program has increased the awareness of proper diabetic control. Elderly members have alsobenefited from this program by receiving proper diabetic preventive care that may reduce diabetic complications in thelong run.

PROGRAM TWO:Diabetes Control in an Elderly Population cont’d

Diabetes Care

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CareNet and Health Partners Program GoalCareNet primary care physicians have been participating in a local health plan's diabetespay for performance programs since 2005. The program goals are to improve health planmembers’ compliance with select diabetes measures. These measures are intended toprevent the onset of diabetes complications and to reduce the cost of diabetes due tocomplications. The elements of the diabetes program for the measurement period were thefollowing:

1. HbA1c Testing: a minimum of one HbA1c test

2. Lipid Profile Testing: a minimum of one Lipid Profile Test

3. Dilated Eye Exam: a minimum of one Dilated Eye Exam

4. Nephropathy Monitoring: a minimum of one Microalbuminuria test, unless patient alreadyhas confirmed Microalbuminuria or is receiving either ACE and/or ARB therapy.

5. Diabetes Advantage Program: Increased participation in this program by referring eligiblepatients to a diabetes control and education program.

CareNet and Health Partners Measurement and ResultsCareNet performance in the diabetes program is demonstrated below. CareNet was able tomeet four out of the five measures that were established under this program.

Three hundred and sixty (360) CareNet physicians participated in the program and wereresponsible for the treatment and care of over 5,700 health plan members with diabetes. Ofthe CareNet physicians who participated in the program, 214 met the program’smeasurement goals and had the minimum number of health plan members (CareNet set theprogram participation level at 6 or more diabetic patients during the measurement period inorder to simplify the administration of this program). In total, there were:

• 2,567 individuals who received appropriate HbA1c testing,

• 2,456 individuals who received appropriate lipid profiles,

• 1,145 individuals who received appropriate dilated eye exams,

• 2,473 individuals who received appropriate nephropathy screenings.

Pay forPerformance:The rewarding of providers (i.e., hospitals, medical groups,and/or physicians depending on the program) according to theattainment of a predetermined level of performance or accordingto improvement. Paying accordingto the level of performance iscommon to the majority of pay-for-performance programs.1

PROGRAM THREE:Diabetes Control in a Commercial Health Plan

Diabetes Care

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This program demonstrates a willingness of CareNet physicians to participate in a pay for performance program with amajor health plan and the achievement of diabetic measures that prevent the onset of diabetic complications.

1. Rosenthal, Grank, Li, Epstein. Early Experience with Pay for Performance, JAMA, Vol 294, No 14.

PROGRAM THREE:Diabetes Control in a Commercial Health Plan

Diabetes Care

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Medical and Economic ImpactEconomic Impact

The economic cost of cardiovascular diseases and stroke in the United States for 2007 isestimated at $431.8 billion. This figure includes health expenditures (direct costs, whichinclude the cost of physicians and other professionals, hospital and nursing home services,the cost of medications, home healthcare and other medical durables) and lost productivityresulting from morbidity and mortality (indirect costs).

Medical Impact

An estimated 79,400,000 American adults (one in three) have one or more types ofcardiovascular disease, of whom 37,500,000 are estimated to be age 65 or older. Mortalitydata shows that cardiovascular disease is the underlying cause of death for 36.3% of all2,398,000 deaths (870,500 deaths attributed to cardiovascular disease) in 2004, or one ofevery 2.8 deaths in the United States.

Nearly 2,400 Americans die of cardiovascular disease each day, an average of one deathevery 36 seconds. Over 147,000 Americans killed by cardiovascular disease in 2004 wereunder age 65. In 2004, 32 percent of deaths from cardiovascular disease occurredprematurely (i.e., before age 75, which is close to the average life expectancy).3 Also, thepresence of cardiovascular diseases in individuals with certain conditions such as diabetescontributes significantly to co-morbidities and co-mortalities.

CareNet and Health Partners Program Goal In order to provide primary care physicians and cardiologists with tools to support thedelivery and recognition of consistent, high quality care, the National Committee for QualityAssurance (NCQA) and the American Heart Association/American Stroke Associationdeveloped the Heart/Stroke Recognition Program. This is a voluntary program that wasdeveloped to help physicians use evidence-based measures as a basis to provide excellentcare to their patients with cardiovascular diseases.

Physicians who participate in the program enhance their delivery of cardiovascular carethrough the use of a physician and practice evaluation tool. Physicians are alsobenchmarked to national cardiovascular performance standards. Additional resources areprovided to participating physicians to help them control cardiovascular diseases in theirpatients.4

The program focuses on preventing cardiovascular complications by focusing on five mainareas:

1. Maintaining a patient’s blood pressure control of less than 140/90mmHG

2. Ensuring each patient receives a complete lipid profile

3. Maintaining a patients’ cholesterol control (LDL) of less than 100 mg/dL

4. Use of aspirin or another antithrombotic

5. Smoking status and cessation advice or treatment4

DefinitionCardiovascular disease: theconditions and illnesses that affectthe cardiovascular system.Cardiovascular can be defined asthose body systems that pertain tothe heart and blood vessels.("Cardio" means heart, "vascular"means blood vessels.) Thecirculatory system of the heart andblood vessels is the cardiovascularsystem.1

NCQA: The National Committee forQuality Assurance (NCQA) is aprivate, 501(c)(3) not-for-profitorganization dedicated toimproving healthcare quality. Sinceits founding in 1990, NCQA hasbeen a central figure in drivingimprovement throughout thehealthcare system, helping toelevate the issue of healthcarequality to the top of the nationalagenda.6

NCQA Heart Stroke Physician Recognition Program

Heart & Stroke

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The American Board of Family Medicine (ABFM) alsorecognizes NCQA’s heart/stroke physician program ascredit towards their maintenance of certification for familyphysicians. Please see page 11 for more information.

CareNet and Health PartnersMeasurement and ResultsCareNet and Health Partners will use the NCQAHeart/Stroke Recognition Program to evaluate thecardiovascular care provided by primary care physiciansand cardiologists beginning in 2008. Each physician willreceive a comprehensive evaluation of his or hercardiovascular care according to recognition programsstandards.

At the time of this publication, there are no physicians inCentral Ohio who have been recognized by NCQA underthe Heart/Stroke program. CareNet and Health Partnerswill audit a minimum of 75 physicians for the recognitionprogram.

1. The American Heart Association, the Heart and How it Works,www.americanheart.org2. The American Heart Association, Economic Cost of CardiovascularDiseases, www.americanheart.org3. The American Heart Association, Cardiovascular Diseases,www.americanheart.org4. The National Committee on Quality Assurance, Heart-StrokeRecognition Program, www.ncqa.org5. The National Committee on Quality Assurance, NCQA, ABFM AlignPhysician Measurement Standards, www.ncqa.org

NCQA Heart Stroke Physician Recognition Program cont’d

Heart & Stroke

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DefinitionDepression: A temporary mentalstate or chronic mental disordercharacterized by feelings ofsadness, loneliness, despair, low self-esteem and self-reproach;accompanying signs includepsychomotor retardation or lessfrequently agitation, withdrawalfrom social contact, and vegetativestates such as loss of appetite andinsomnia.1

Generic Pharmaceuticals: A genericdrug is a copy that is the same as abrand-name drug in dosage, safety,strength, how it is taken, quality,performance and intended use.2

Medical and Economic ImpactEconomic Impact

Estimates indicate that depression costs US employers $24 billion annually in lost productivework time.3

Employees with depression, on average, reported significantly more lost productive timethan those without depression (depressed employees lost an average 5.6 hours ofproductive time per week versus non-depressed employees who lost 1.5 hours ofproductive time per week due to health-related concerns).

Depression is one of the most costly common medical conditions among employee becauseit is highly prevalent and comorbid with other conditions. Furthermore, although workerswith depression are usually present at work, their performance can be substantiallyreduced.3

Spending in the U.S. for prescription drugs was $188.5 billion in 2004, over 4½ times morethan the $40.3 billion spent in 1990.4

The economic and cost savings generated from switching from brand name pharmaceuticalsto generic pharmaceuticals is tremendous. Health Plan data shows brand nameantidepressants cost 3 times more per day than generic antidepressants cost per day.

Medical Impact

Depression is classified as a mood disorder. Mood disorders include major depressivedisorder, dysthymic disorder, and bipolar disorder. Depression and related mood disordersare prevalent in the United States and affect a large number of individuals. Some statisticsinclude:

• Major Depressive Disorder is the leading cause of disability in the U.S. for ages 15-44.5

• Major depressive disorder affects approximately 14.8 million American adults, or about 6.7percent of the U.S. population age 18 and older in a given year.5

• While major depressive disorder can develop at any age, the median age at onset is 32.5

• Major depressive disorder is more prevalent in women than in men.5

CareNet and Health Partners Program Goal CareNet, in collaboration with an employer sponsored health plan, launched a qualityinitiative focused on the medical treatment of depression. The decision to focus ondepression included:

1. The employer sponsored health plan has seen a dramatic increase in the cost ofhealthcare associated with depression for employees and their dependents. A focus onmanaging depression can also reduce employee absenteeism which can result inadditional cost savings to the employer.

Generic Antidepressant Initiative

Antidepressant

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2. The employer sponsored health plan members were also heavy utilizers of brand name pharmaceuticals. 56% of allantidepressants prescribed during the baseline measurement period were brand name. Health Plan data shows brandname antidepressants cost $3.51 per day while generic antidepressants cost $1.29 per day during the program timeframe.By moving a substantial number of prescriptions from brand name to generic, a cost savings for the Health Plan and themembers can be achieved through reduced copays.

The goals of the depression initiative were to:

1. Increase the use of generic antidepressant medications prescribed to health plan members to 55% or greater from 43%.Baseline results were taken from July 1, 2005 through December 31, 2005. This data showed that 43% of antidepressantsprescribed to all health plan members were generic. A new measurement period took place from July 1, 2006 throughDecember 31, 2006.

2. Encourage appropriate screening and appropriate treatment of depression.

CareNet and Health Partners Measurement and ResultsDuring the measurement period, 58% of all antidepressant medications prescribed to health plan members were generic,resulting in the program's goals being achieved.

Physician participation details include:

• 313 CareNet primary care physicians participated in the program.

• 180 primary care physicians (58% of participating physicians) had a 55% or greater generic antidepressant prescribingrate

• 154 primary care physicians (49% of participating physicians) had a 65% or greater generic antidepressant genericprescribing rate

*Rates are not accumulative

Percent of Generic Antidepressants

Prescribed by CareNet Physicians

Generic Antidepressant Initiative cont’d

Antidepressant

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CareNet physicians were successful at driving down the costs of brand name antidepressants by prescribing effectivegeneric equivalents when appropriate, resulting in:

• 11.3% decrease in brand name antidepressant costs for the health plan

• 4.6% decrease in brand name antidepressant costs for the employee

• 19.6% decrease in brand name antidepressant days prescribed

Overall, the total cost of antidepressants (brand name and generic) for the Health Plan increased by 4.3%, which wasprimarily fueled by a 6.4% increase in antidepressant utilization (increased antidepressant prescribing/days of medication).While this was an overall increase, when compared to the average pharmaceutical cost increase of 10.7% which wasexperienced nationally from 2000 to 2005, this program was effective in implementing appropriate use of antidepressants,resulting in a trend lower than the expected and lower than the national trend.

1. Stedman's Concise Medical Dictionary for the Health Professions, 3rd Edition. 2. Frequently Asked Questions about Generic Drugs, www.fda.gov3. Stewart, et al. Cost of Lost Productive Work Time Among US Workers With Depression, JAMA, Vol 289, No. 234. Kaiser Family Foundation, Prescription Drug Trends, www.kff.org5. The National Institute of Mental Health, www.nimh.nih.gov 6. The Common Wealth Fund, Slowing the Growth of U.S. Health Care Expenditures: What are the Options? January 2007, www.commonwealthfund.org

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DefinitionPatient satisfaction: the perceivedquality of service provided topatients. Along with othermeasures of quality, significantattention has been devoted towardthe measurement of patientsatisfaction. Employer groups viewpatient (employee) satisfaction asan important indicator for assessingthe performance of health plans,hospitals and physicianorganizations.1

Medical and Economic ImpactAn improved patient experience has many rewards and benefits including the following:

• Outcomes and compliance: Patients who have positive interaction during their visits aremore likely to follow the physician's medical instructions, resulting in more effectivetreatment.

• Perceived credibility: Physicians who are able to gain the respect of their patients duringthe visit are more likely to be perceived as credible sources of medical advice.

• Skill: A patient's perception of the physician's skill is often skewed based on whether ornot the patient was content with the physician's interpersonal communication skills.

• Choice: Patients identify the ability to choose their physician as a top concern indetermining healthcare service satisfaction.

• Loyalty: Patients who are treated with respect and compassion are more likely to returnto that physician or hospital for subsequent treatment.3

Other benefits from improved patient satisfaction include a more satisfied office staff, fewmalpractice lawsuits, economic savings, and increased visits.

CareNet and Health Partners Program Goal Measuring and tracking patient satisfaction will continue to gain importance as healthcarebecomes increasingly more consumer-driven. Patients are demanding customer-friendlyservice along with the quality care they have always expected, both in physician offices andin the hospital. Understanding patients' needs and expectations is the first step inidentifying the components of healthcare services which will lead patients to return or torecommend a physician or hospital — a situation in which both patients and providersbenefit. Patients gain the advantage of continuity of care while providers benefit frompatients returning and recommending the physician or hospital.2

Physician-patient interactions are the most influential factor regarding patient satisfaction.Patients who experience trouble during the admission or registration processes, dislike theatmosphere of a facility, or have difficulty with the nursing staff may still report highsatisfaction with their healthcare experience if their physician treats them well.3

CareNet and Health Partners’ patient satisfaction program goal is to develop a self-measurement tool that gives physicians and practices the ability to evaluate their careprocesses, determine if they meet patient expectations and enable them to remove barriersthat inhibit communication between patient and provider. If this can be accomplished, apartnership between the patient and physician is certain to succeed.

Patient Satisfaction

Satisfaction

23

CareNet and Health Partners Measurement and ResultsCareNet and Health Partners have been measuring physician patient satisfaction with a group of physician practices.CareNet and Health Partners' patient satisfaction survey contains 15 questions with "Likelihood of you recommending ourpractice to others" being the key question. Over the past six years, over 95% of patients surveyed have indicated they arevery likely to recommend the practice to other patients.

1. Stephen J Williams and Paul R Torrens, Introduction to Health Services, fifth edition. 2. Reinventing the Patient Experience, Tequia Burt, Health Care Executive 21:3, May/June 2006. 3. Key Drivers of Patient Satisfaction, The Advisory Board Company, Washington DC.

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DefinitionElectronic Medical Records (EMR): allclinical data and records for apatient, complemented by a set oftools that completely replace thepaper patient charts. The U.S.Department of Health and HumanServices defines EMRs as: "A digitalcollection of a patient's medicalhistory that could include items likediagnosed medical conditions,prescribed medications, vital signs,immunizations, lab results andpersonal characteristics like ageand weight."

Medical and Economic ImpactMedical Impact

• Electronic Medical Records (EMRs) support physicians' efforts to improve quality acrossall patients. EMRs help ensure that health maintenance — things like mammograms ortetanus shots — being performed. EMRs can also check for drug interactions whenprescriptions are written.

• Practice-wide, EMRs can assist physicians with population-based medicine looking, forexample, at diabetic patients by LDL or Hemoglobin A1c.

• The EMR system provides the documentation and reporting to demonstrate compliancewith quality initiatives, such as the NCQA Diabetes and Heart/Stroke PhysicianRecognition programs as well as with quality pay for performance programs.

Economic Impact

• Reduced costs for paper-based medical records and associated resources needed tosupport them

• Decreased transcription expenses

• Improved workflow and intra-office communication (office visits, prescription refills,processing of test results, etc).

• Reduced malpractice insurance premiums (Some malpractice carriers now offer discountsof 5-10 percent for using EMRs).

CareNet and Health Partners Program GoalCareNet and Health Partners will link physician members to Mount Carmel PhysicianInformation Systems, a vendor for NextGen EMR, and, if need be, with third party vendorsthat support EMRs. CareNet and Health Partners will provide education, return oninvestment resources and contacts to assist practices with implementing EMRs regardless ofthe vendor. Mount Carmel Physician Information Systems is a division of Mount CarmelHealth System and has been supporting and operating information technology forphysicians offices for over fifteen years.

In addition, CareNet and Health Partners will provide information to our member physiciansto help them purchase modern practice management systems. Many CareNet and HealthPartner physicians are currently using practice management systems that are archaic, nolonger supported by the product's vendor and which do not contain tools or processes thatallow physicians to participate in quality improvement activities. The transition to a modernpractice management software from obsolete systems will ensure practice survival andfacilitate a physician's participation in quality improvement activities.

TechnologyElectronic Medical Record and Information Technology Adoption

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CareNet and Health Partners Measurement and ResultsEMR adoption among CareNet and Health Partners practices has been limited. A number of factors influence a physician'sdecision to purchase and implement an EMR: years to retirement, available physician practice capital, comfort withinformation technology, practice specialty, practice setting (hospital based physician versus non-hospital-based physician),practice cash flow/debt, etc. A number of large practice groups in CareNet and Health Partners have implemented EMRsand others are in the planning stages.

An increasing number of practices are using the NextGen Practice Management System, a state-of-the-art practicemanagement system which greatly benefit a physician practice both in operations and quality improvement. Physicianmembers of CareNet and Health Partners do not have to select or operate NextGen. Rather, the organization is interestedmainly in physicians adopting a state-of-the-art practice management software. NextGen adoption is only used as abenchmark for EMR adoption. At the same time, we will be exploring other means to collect and evaluate quality so thatour member physicians can participate in quality programs.

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Medical and Economic ImpactMedical Impact

Credentialing and Board Certification of physicians ensures that patients served throughcontracts held by CareNet and Health Partners receive care from physicians who areappropriately qualified and experienced in their medical specialties and whose pastperformance and behavior are in keeping with acceptable medical professional standards.

Economic Impact

Credentialing and ensuring Board Certification of physicians may assist in the reduction ofmedical malpractice, reduction of medical errors and ensuring community medical standardsare upheld, all of which contribute to reducing healthcare costs.

CareNet and Health Partners Program GoalCareNet and Health Partners Credentialing Committees, which are composed of practicingmember physicians, perform a complete review of physicians applying to join theorganizations, and review all member physicians periodically. The committees obtainmeaningful advice and expertise from participating physicians when making credentialingdecisions.

The committee reviews:

• each physician's medical education and residency completion dates, medical licensureexpiration date

• DEA expiration date

• Medicare/Medicaid sanctions

• hospital privileges to ensure they are in good standing

• malpractice limits with expiration date

• settlements reported to the National Practitioner Data Bank

• work history and education gaps to determine a physician's ability to deliver care.

• reasons for physician’s inability to perform the essential functions of the position, with orwithout accommodation

• history of substance abuse (alcohol or drugs)

• history of felony convictions

• history of loss or limitation of privileges or disciplinary activity (hospital, professionalsociety, group practice, managed care organization).

CareNet and Health Partners utilize the National Committee on Quality Assurance (NCQA)credentialing policies to ensure national credentialing standards are met. Each physician’spersonal and professional information is protected and accessed only by appropriateindividuals. The organizations also serve as the delegated credentialing agent for themanaged care plans they contract with.

DefinitionCredentialing or re-credentialing is theprocess of formal recognition andattestation of current medical ortechnical competence andperformance by evaluating andmonitoring a physician's clinical ormedical review decision-making byadherence to the applicableprofessional standard for directmedical care or peer review. Inaddition, credentialing verifies anindividual's license, experience,certification, education, training,malpractice and adverse clinicaloccurrences, clinical judgment,technical capabilities, and characterby investigation and observation.1

Board certification demonstrates aphysician's expertise in a particularspecialty and/or subspecialty ofmedical practice. Certification by aboard involves a rigorous processof testing and peer evaluation thatis designed and administered byspecialists in the specific area ofmedicine.

CredentialingPhysician Credentialing and Board Certification

27

CareNet and Health Partners Measurement and ResultsThe impact of credentialing of physician applicants and periodic re-credentialing of physician members of CareNet andHealth Partners, along with setting Board Certification as a criterion for membership, is the establishment of a physiciannetwork that is high quality, minimizes risks to patients and establishes the means to ensure physician quality ismaintained and measured. The credentialing process ensures that patients are treated by physicians who meet a nationalstandard of care and that physicians are continuously held to these standards.

1. The American College of Medical Quality, www.acmq.org

570 totalphysicians

832 totalphysicians

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