Keeping in touch and being concerned about the health of members is what UPMC Health Plan employees do every day. For Terri Rosen, a registered nurse in our Health Management department, this includes coordinating a community outreach program based at UPMC Braddock and UPMC McKeesport hospitals.

Her efforts have increased the number of members who receive mammograms and childhood health screenings. Such preventive screenings can help diagnose cancer and other medical problems in the early stages, when treatment is more effective and less expensive. In addition, she says, “Childhood visits to a primary care physician can help prevent a lifetime of poor health habits."

• Commercial Customers
• Medicare Population
• Medicaid Members
• Prescription Choices
• Investing in Technology
• Keeping Expenses down

  

Commercial Members Rate UPMC Health Plan Superior to Other Plans
		Health Plan 2002	Health Plan 2001	National Average 2002
	Doctors' Communication Skills	91.60%	93.2%	90.24%
	Claims Processing	84.19%	81.5%	80.93%
	Personal Specialist	82.49%	81.3%	76.48%
	Getting Needed Care	82%	82%	76.07%
	Getting Care Quickly	80.55%	79.7%	78.83%
	Personal Doctor or Nurse	79.53%	77.5%	74.47%
	All Health Care (Last 12 Months)	78.84%	75.5%	72.58%
Source: 2002 HEDIS/CAHPS Member Satisfaction Survey

Commercial Customers
Our offerings for commercial customers now include enhanced-access health maintenance organization plans, enhanced-access point-of-service plans, and preferred provider organization plans. We continue to refine existing products and develop new ones that satisfy member needs and market demand.

Medicare Expansion
	Medicare Coverage Area in 2001
	Additional Medicare Coverage Area in 2002

Medicare Population
Nearly 20 percent of western Pennsylvania residents are 65 or older, and Allegheny County has the second highest percentage of Medicare-eligible residents in the country—more than 440,000 in the greater Pittsburgh area alone. We’re committed to serving this population.

While other insurers have cut back or withdrawn from the Medicare HMO business, we’re expanding our offerings. With a program called UPMC for Life, we’ve extended our Medicare HMO to six more western Pennsylvania counties, bringing the total of UPMC for Life HMO counties to 13.

Medicaid Expansion
	Medicaid Coverage Area in 2001
	Additional Medicaid Coverage Area in 2002

Medicaid Members
We provide benefits to a sizable Medicaid population as well. In 2002, we renamed our Medicaid program. “Best Health Care of Western Pennsylvania” is now “UPMC for You.” The new name better reflects the program’s connection to the University of Pittsburgh Medical Center. Our 72,000 UPMC for You members make up 20 percent of our total enrollment.

Prescription Choices

UPMC Health Plan pharmacy guides help doctors and patients choose cost-effective alternatives to brand-name drugs.

Some Retirees Look Abroad
for Prescription Drugs
—The New York Times, Sept. 24, 2002

Drug Maker Threatens
to Stop Supplies to Canada
—The Associated Press, Jan. 11, 2003

States Organizing a Nonprofit
Group to Cut Drug Costs
—The New York Times, Jan. 14, 2003

These headlines reflect the interdependent financial concerns of insurance carriers and employers who pay for drug benefits. Nationwide, the search is on for ways to halt the spiraling cost of drugs, which already exceeds $120 billion a year.*

To help solve this problem, we introduced three strategies in 2002:

• We encouraged employers to use our three-tier Your Choice program, with incentives for choosing generic and preferred medications.
• We developed guides to help remind physicians and to educate patients about cost-effective alternatives to heavily advertised brand-name drugs. The guides address pain management, generic drug effectiveness, and overuse of antibiotics.
• We added CuraScript, a national mail-order pharmacy, to our selection of benefits. CuraScript provides maintenance drugs and injectable medications as well as a program that helps patients stay on their drug regimens.

Investing in Technology

Strategic investments in online technology have improved our efficiency, customer satisfaction, and cost effectiveness:

• Member OnLine, introduced as a test program, gives employees easier access to benefit information. In 2003, Member OnLine will be available to all members.
• Provider OnLine now includes a messaging function that allows physicians and hospitals to communicate securely with our claims department. We also created a CD-ROM tutorial to walk physician office staff through the online program.
• Broker OnLine, introduced in 2002, enables us to process group enrollments 75 percent faster than we could in 2001.
• Employer OnLine has attracted a dedicated user group since it was introduced in 2001. More than 300 employer groups are using this service, and we’ve processed 21,900 enrollments or plan changes online.

More than 4,600 western Pennsylvania employers—including some of Pittsburgh’s largest companies—now offer UPMC Health Plan to their employees. These employers appreciate the competition we bring to the region, our network of quality hospitals and facilities, and the range of health benefit choices we offer.

Keeping Expenses Down

Operating Expense Ratio
2002 UPMC Health Plan		8.97%
2001 UPMC Health Plan		10.6%
2002 National Average*		12%
Source: Sherlock Company, 2002

Our 2002 operating expense ratio—the percentage of premiums that goes toward payroll, equipment, leases, and other overhead expenses—was just 8.97 percent, less than half the rate of our major competitor. And our trend in the first quarter of 2003 is less than 8 percent.