Allen Karp

So you don't have to generate as much clinical revenue to drive the same or better margins than you're doing today.

I think that learning is beginning to catch on.

What I see health systems doing is not employing physicians, but recruiting physicians into their clinically integrated networks where they're managing the relationships with the payers, the contract, providing the services that a small physician office can't do on their own.

They can't afford it.

And there are aggregators in the market that are aggregating groups of physicians.

The medical home model, where they have large enough contingents of primary care physicians.

And I'm starting to see specialists beginning to be organizing the model as well.

So if I put my health system hat on, I want to make sure that I have enough physician capacity to

that I have some control over where those services are being delivered, but more importantly, I think, is helping me manage total cost of care under these new arrangements.

So, for example, if there's a risk share arrangement or a shared savings arrangement, upside only,

It would be a tri-party agreement between the payer, the physician, and the hospital.

That allows them to get the assistance that they need at the physician level.

The physicians are the ones who are the drivers of both cost and quality.

There's also private equity money now in the health care space where private equity firms are buying interest in physician groups as well.

So we have built a private HIE, which we call HealthSphere, which allows us to take our claims data, marry it with the clinical data that the providers have, and then integrate

use our analytic capability to lay on top of that and provide insights to the health systems and the physicians about what's going on with their patients.

We have implemented other tools that allow physicians at the point of service

to identify prescription drugs that are generic versus brand, cost differentials, and then make a decision at the point of service for that patient to provide the most efficient drug for that particular condition.

We also provide a front-end system that runs through our portal that allows our members to be able to connect with the providers and schedule appointments

on their phone or on their iPad, much like you would in an open table scenario.