MD PRACTICE PATTERN VARIATION Las Vegas HEREIU Fund Elizabeth B. Gilbertson Chief of Strategy

Overview: Las Vegas HEREIU Fund 2003 Number of lives: 120,000 Total annual medical spend: $235 million Demographics Low income immigrant population 43% Latino; 13% Asian; 10% African American All located in Southern Nevada 1,800 physicians in network All doctors in the same specialty paid the same rates 2

MD Network Restructuring Project 2003 Profiled all physicians in the network for efficiency Utilized software with clinical indicators to profile for quality Restructured based on Practice patterns Geography Language & culture Sub-specialty Terminated 50 doctors 3

Four Episode Treatment Groups How the Costs Vary 1. Ear Infection – Family Practice $412 $109 $46 SPECIALTY AVERAGE 4

Four Episode Treatment Groups How the Costs Vary 2. Acute Bronchitis – Family Practice $771 $150 $89 SPECIALTY AVERAGE 5

Four Episode Treatment Groups How the Costs Vary 3. Urinary Tract Infection – Internal Medicine $778 $140 $81 SPECIALTY AVERAGE 6

Four Episode Treatment Groups How the Costs Vary 4. Knee Joint Derangement – Orthopedic Surgery $9,383 $4,473 $2,727 SPECIALTY AVERAGE 7

Medical Cost Savings $67M 8

Sources of Savings ($26 Million) 9

Results: Worker Raises 50,000 workers Average wage: $13/hour Average raise: 60 cents/hour each year for 2 years 10

Results: Medical Cost Control Average medical trend increase: % 11