CostPlus Hospital Pricing HR Specialty Products Services Catalogue

Cost-Plus Hospital Pricing HR Specialty Products & Services Catalogue Executive Summary A No Frills Distillation of Vendor’s Marketing Collateral Thomas A Ference President & CEO Human Resources Mining & Distribution Co Locating, Validating and Accelerating HR Innovation Office: 219 -662 -0201 Cell: 630 -240 -2583 Fax: 219 -661 -0236 e-mail: tference@hrmdco. com Website: www. hrmdco. com

Cost Plus Hospital Pricing • Hospital-related costs typically represent 45% of total healthcare costs • For hospitals, billed charges for the same procedures are not the same for all networks and/or carriers thereby leaving room for manipulation of network discounts • Under this repricing system, each hospital-related claim is individually negotiated to be on a cost-plus basis not a “billed charge minus” basis. • National and up-to-date databases are used to develop benchmark pricing onto which a fair profit margin is added for the hospital provider. • There is 95% hospital provider acceptance of the negotiated rate as it is typical higher than what the networks pay under the provider contracts • For hospital related claims, equivalent discounts off billed charges under this pricing method equate to minus 64% on average vs. minus 33% for typical major U. S. insurance carrier’s PPO

Actual Example-PPO Network vs. Cost Plus $1, 880, 795 $1, 130, 134 377% difference 41. 33% $299, 602 77. 83%

Next Steps • This product/service is contained in the HR Specialty Products & Services Catalogue™ • Operational level details about this particular service provider can be obtained in conference with the vendor • The HR Mining &Distribution Co. is an independent and contracted representative of the vendor • Upon your request, we will arrange for an introduction that can range from a simple, quick conference call to a services overview / system demo • Tom Ference 219 -662 -0201 (Chicagoland area) or tference@hrmdco. com • Thank you for your potential interest in this fresh thinking