[mjamilkowski]

Product: It is possible that in the future we would roll out a PPO based product to have a broader out of network option. Right now we do not have any plans to do so. Our target employer groups are focused geographically which fits nicely with our EPO approach. Sales to larger groups and greater, or prolonged work from home trends, may accelerate our consideration of PPO product development.

Pharmacy benefit: We integrate the pharmacy benefit into the overall benefit plan. We are selling a full package, and to fully insured groups. We work with a great, NCQA/URAC accredited national pharmacy benefits manager. I think we provide pretty good pharmacy benefits (broad network, comprehensive formulary, decent prices) but it has been an interesting process to standup. Still not a lot of price transparency (even for the insurer). There is broad opportunity in this space for other players.

Sales: We are using a combined approach of direct and brokered sales efforts. As Jay responded to another question, we have been expanding our broker relationships.

Network: I am not sure I understand what you mean by two-sided network. We are building our network from scratch, which enables us to establish relationships with physicians and collaborate with them on the outcomes-based approach we prefer to use in our contracting. We use a national network to wrap around the direct contracted network so there is national coverage for emergencies. We do not believe high deductible plans and pervasive use of high copays translates into effective consumer use of healthcare services because at these levels the cost to the individual has become punitive and encourages delaying care not accessing care. incidentally, we have had a couple of self-insured employers’ express interest in our approach because even with the high deductible plan, their stop loss expenses were so high that the combination of self-insured administration fees and stop loss protection was just as expensive as being fully insured (as we offer better benefits and more care support).

There are employers and physicians that don’t see eye to eye will not want to work with us on this basis. Regardless we have built a network that satisfies all regulatory requirements. Some things will always be more expensive because of the specialization. Neonatology, for example, will always be extremely expensive for us because of the limited number of medical providers.