Rising health care cost part 3

TO: Airborne Employees

FROM: Gene Rhodes, Corporate Director, Human Resources DATE: June 28, 2001

SUBJECT: Rising Health Care Costs

This is the third in a series of memos discussing the rising cost of health care at Airborne Express. This important topic affects all of us at Airborne. In this memo I would like to focus on our Preferred Provider Organization (PPO) Network.

Network Providers – How They Work

Network providers are physicians, hospitals or other health care professionals who contract with United HealthCare to provide health services. Contracted providers have agreed to discounted fees, utilization review and quality management programs. They agree to discounted fees in exchange for being listed as a network provider, which can increase the number of patients they see, thus optimizing their patient base. As a result, the aggregate cost of coverage to the Company from network providers can be lower than non-network providers with the savings passed along to you in the form of lower out-of-pocket costs and higher benefit levels.

Providers who join the PPO network are screened carefully and monitored regularly by United HealthCare to meet established standards for high-quality medical care. They are selected based on a review of their professional qualifications, including educational background, medical training and experience.

Why Use Network Providers

Here is why you may prefer to receive care from PPO network providers whenever possible:

		Your benefits are higher for most services from network providers. Typically, most services are covered at 100% after your co-payment instead of 60%.
		Network providers have agreed to limit their charges to amounts generally equal to or less than reasonable and customary (R&C) charges; non-network providers may charge more than the R&C charges, and you would be responsible for the excess amount.
		You do not need to file claims for services from network providers – they do it for you.

Non-Network Provider Care vs. Network Providers:
How Do They Compare?

You can choose to seek care from a non-network provider. However, this results in a lower level of benefits and shifts the responsibility for pre-certification and claims filing to you. Also you will need to meet the plan deductible before coinsurance takes effect.

Following are several examples that illustrate the difference in charges to both you and Airborne for network and non-network providers.

For example, assume that you go to a physician for a routine check-up (preventive care).

	Billed Charges	Discount	Airborne’s Responsibility	Your Responsibility
Network Provider	$118.00	$34.31	$73.69	$10.00
Non-network Provider	$118.00	$0	$0	$118.00 ⁽¹⁾

As a second example, assume that you go to a physician for treatment of an illness.

	Billed Charges	Discount	Airborne’s Responsibility	Your Responsibility
Network Provider	$142.00	$55.39	$76.61	$10.00
Non-network Provider	$142.00	$0	$85.20	$56.80 ⁽²⁾

As a third example, assume that you are admitted to the hospital for an inpatient stay for heart surgery.

	Billed Charges	Discount	Airborne’s Responsibility	Your Responsibility
Network Hospital	$59,719.75	$14,929.94	$44,789.81	$0.00
Non-network Hospital	$59,719.95	0	$54,719.95	$5,000.00 ⁽³⁾

Network Providers are a Winner for Everyone

Choosing a network provider makes good sense for both you and Airborne. By using network providers you receive a higher benefit level and Airborne pays lower costs on an aggregate basis. And you can be assured of high quality care from participating providers on account of United Health Care’s medical care standards and ongoing provider monitoring. Currently about 85% of all claims are with preferred providers, which is an excellent percentage. But we could do better.

If you need a listing of the network providers for your area you can request one by calling United Health Care at (888)-350-5607. They will be happy to send you one. You can also locate a network provider by logging on to United HealthCare’s website at www.myuhc.com.

Again we invite you to provide cost saving suggestions or ideas to your employee benefits department for consideration. You may e-mail your comments to abx.benefits@airborne.com or send written comments to ILN Benefits Dept. 2061B. Attn: Health Care Cost.

Thank you.

^{⁽¹⁾
A routine check-up is "preventive care" and is not covered for
non-network providers.}

⁽²⁾

⁽³⁾ Assumes participants have no other claims against their annual out-of-pocket maximum.