Contact:
Al Lewis 781-856-3962, alewis@dismgmt.com

Wellesley, MA (March 1, 2007) — Al Lewis addressed the annual Susquehanna International Group conference in New York City today on the topics of disease management companies and Medicare Hierarchical Conditional Category (HCC) coding.

On disease management, Lewis presented a bullish picture, saying that the leading companies were continually reinventing themselves, most recently towards wellness. Therefore the idea that the market was becoming saturated was mistaken. While there is indeed a low ROI (except in Medicare Advantage, Medicaid disabled, and certain specialty situations), it is still greater than 1:1 for medical spending and therefore pays off.

Further, the business is quite sustainable at a low ROI because despite the many published proofs that ROI is overstated (including by the Disease Management Purchasing Consortium itself), because as he charitably put it, "most benefits consultants are too stupid to notice."

Also, no doubt employers benefit from productivity improvements as a result of their DM and wellness efforts, which can't easily or accurately be measured but which boost the ROI.

He expects another reinvention towards much more comprehensive programs, with much clearer value propositions. Because these more comprehensive programs would be applied on a true population basis rather than to cohorts, they would also be more easily measured.

He took specific issue with a recent Barrons interview in which the publisher of Off Wall Street presented a case for having recommended a short sale of Healthways, Inc. "They were about ten points too late in the initial recommendation [they had recommended a short at $44] and are trying to talk the stock down to where they can recommend a cover at a profit. I don't make stock recommendations but shorting Healthways now is a really dumb idea."

On the related category of Medicare HCC coding, Lewis sees an "unprecedented gap" between what's done and what's doable, which he attributes to three factors:

1. Maximizing ROI from revenue maximization efforts rather than maximizing net savings
2. Doing one "assembly line" RevMax approach for all members, rather than recognizing the "6 - 40 Rule" that the 6% homebound/SNF/nursing home segment needs a "job shop" approach -- actual physician visits in order to find the roughly $6000/year in missed codes which are missed in the standard approach . . . representing 40% of the total opportunity
3. Failing to create a "prospective" system to systematically code new people

All in, the difference between doing a good job and best practice is about $15,000,000 pretax per 10,000 members. "Medicare HMOs which adopt best practices will significantly outperform their peers in the year ahead."

Copies of the presentation are available gratis to DMPC members and at a $500 charge for others.

About the Disease Management Purchasing Consortium

The Disease Management Purchasing Consortium Int'l, Inc. (DMPC) provides strategy and procurement services to support the disease management and wellness efforts of more than a hundred health plans, employers and states. The DMPC is led by Al Lewis, cited as the founder and most influential leader in the disease management industry by four publications (see website). DMPC "invented" the science of DM outcomes measurement (source: Managed Healthcare Executive March 2002). DMPC also "invented" plausibility testing for the "planes on the ground effect." DMPC also offers Certifications in Savings Measurement Validity, Small Group Outcomes Measurement, and Critical Outcomes Report Analysis. Programs and services are available at www.dismgmt.com.