b'~\n\nMICHAEL E. JOSEPH\n\nMcAFEE&TAFT\nA\n\nPROFESSIONAL\n\n.\\:/~l"\n\nCORPORATION\n\nWRITER DIRECT\n\n\\\n\n_ _J\n\n(405) 552-2267\nmike.joseph@mcafeetaft.com\n\n10TH FLOOR. TWO LEADERSHIP SQUARE\n211 NORTH ROBINSON. OKLAHOMA CITY, OK 73102-7103\n(405) 235-9621 \xe2\x80\xa2 FAX (405) 235-0439\n\nwww.mcafeefaft.com\n\nORIGINAL\n\nMay 26,2011\n\n\\I-\\.. lRADE COMM/\nS\n\n~<0X-\\\\REc6gW1t/~\nFEDERAL EXPRESS\n\nMAY Z 7 2011\n\n5SJ.j~q3\n\nDonald S. Clark\nSecretary\nFederal Trade Commission\n600 Pennsylvania Avenue, N.W.\nRoom 135-H\nWashington, D.C. 20580\nRe:\n\n-\n\n\'uhit~\n\nNorman Physician Hospital Organization\n\nDear Mr. Clark:\nEnclosed is a request for an advisory opinion that we are submitting on behalf of Norman\nPhysician Hospital Organization and its members. The enclosures include:\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\nOne manually executed letter requesting an advisory opinion;\nTwo paper copies of the letter;\nOne electronic copy on compact disc; and\nOne copy of the letter with confidential information redacted.\n\nWe appreciate your prompt attention to this request.\nVery truly yours,\n\n~.~-J\nMichael E.~~p( _.\n\nEnclosures\n\n6989442JDOC\n\nOKLAHOMA CITY\n\nTULSA\n\n\x0c-_\n\n............\n\nPUBLIC\nMICHAEL E. JOSEPH\n\nMcAFEE&TAFT\nA\n\nPROFESSIONAL\n\nCORPORATION\n\nWRITER DIRECT\n10TH FLOOR. TWO LEADERSHIP SQUARE\n\n(405) 552-2267\n\n211 NORTH ROBINSON \xe2\x80\xa2 OKLAHOMA CITY, OK 73102-7103\n(405) 235-9621 \xe2\x80\xa2 FAX (405) 235-0439\n\nmike.joseph@mcafeetaft.com\n\nwww.mcafeetaft.com\n\nMay 26, 2011\n\nORIGINAL\nFEDERAL EXPRESS\n\nMr. Donald S. Clark\nSecretary\nFederal Trade Commission\n600 Pennsylvania Avenue, N.W.\nRoom 135-H\nWashington, D.C. 20580\nRe:\n\nNorman Physician Hospital Organization\n\nDear Mr. Clark:\nPursuant to FTC Procedure Rules 1.1 through 1.4, 16 C.F.R. \xc2\xa7\xc2\xa7 1.1-1.4 (2010), we\nrequest an advisory opinion regarding proposed, prospective activities of Norman Physician\nHospital Organization ("NPHO") and its members. Specifically, NPHO proposes to restructure\noperations and further develop a clinically integrated, centrally managed organization that offers\nmarket efficiencies and facilitates innovation in the efficient delivery of high-quality health care\nservices to patients. As described below, NPHO will operate in a manner that creates a high\ndegree of interdependence, interaction, and cooperation among the participating physicians and\nhealthcare providers in order to improve quality of care and control costs. We ask the FTC to\nauvise huw the FTC staff wuulu analyze this anallgeIIlellt and the recommendations, if any, that\nthe FTC staff would be likely to make if NPHO develops contract proposals, negotiates contract\nterms, and enters into contracts with third-party payers for the provision of the clinically\nintegrated services described in this letter.\n\nPart I of this letter provides background information about NPHO and its two founding\nmembers, Norman Physicians Association ("NPA") and Norman Regional Health System\n("NRHS"). Part II provides information about market characteristics and demographic\ninformation, including an overview of location and service area characteristics, NPHO service\narea hospitals, and physicians in the NPHO service area. Part III addresses NPHO\'s clinical\nintegration plan, including purposes and background of clinical integration; future plans for\nenhanced clinical integration, including participation requirements and costs; organizational\narrangements necessary for clinical integration; and community benefits of clinical integration.\nPart IV describes the contracting issues, including the historical approach to contracting, the\nproposed approach, and an explanation of why joint contracting is essential for meaningful\nclinical integration. Part V provides a brief legal analysis and commentary.\n\n\x0c-2I.\n\nBACKGROUND AND OVERVIEW\n\nA.\n\nNorman Physician Hospital Organization\n\nNPHO is based in Norman, Oklahoma, which is part of the greater Oklahoma City\nmetropolitan area. It was founded in 1994 by NPA and NRHS as a physician-hospital\norganization. NPHO\'s purpose is to provide, arrange for, and coordinate the delivery of high\nquality, readily accessible, cost-effective health care services to residents of the communities\nserved by the physicians, hospitals, and other healthcare providers that comprise NPHO. Since\nits inception, NPHO has helped to link health insurers, health plans, third-party administrators,\nand employers to an established network of healthcare providers and professionals who share a\ncommon interest in providing optimal healthcare. NPHO is organized as an Oklahoma limited\nliability company and is owned equally by its two founding members, NPA and NRHS.\nAdditional information regarding NPHO can be found on its website: www.normanpho.com.\nNPA is an Oklahoma limited liability company whose members are physicians that are\nmembers of the medical staff of affiliated NRHS hospitals. NRHS is operated by Norman\nRegional Hospital Authority, a public trust, and includes the following hospitals: Norman\nRegional Hospital in Norman, Oklahoma; Moore Medical Center in Moore, Oklahoma; the\nHealthPlex campus in Norman, Oklahoma; and Family Medicine Centers in Norman, Moore,\nNewcastle, and Blanchard, Oklahoma. NRHS has obtained a single hospital license from the\nOklahoma State Department of Health covering Norman Regional Hospital, Moore Medical\nCenter, and facilities at the HealthPlex campus, each of which is otherwise a separate facility.\nPurcell Municipal Hospital, which is a separately licensed hospital located in Purcell, Oklahoma,\nis a participating hospital in NPHO. For convenience in this letter, we have referred to Norman\nRegional Hospital, Moore Medical Center, the HealthPlex facilities, and Purcell Municipal\nHospital as the "Hospitals."\nNRHS and NPA shared equally in the initial funding of NPHO, and they continue to\nin the cost of\n.\nand\ncapital needs. The cost of operations_\nis covered principally through withholds of fees\npaid to NPHO for services provided in accordance with contracts entered into directly between\nNPHO and several employers. In addition, individual physicians and medical group practices\nare required to pay NPHO significant fees for the implementation and maintenance of electronic\nmedical records and an electronic interface software system. Each participating physician also\npays membership dues to NPA in the amount of $150 per year. While NPHO maintains a lean\noperation and expects to continue to do so in the future, the operating costs of NPHO - which\ncan be expected to increase as the clinical integration plan is implemented - reflect a meaningful\ninvestment by NPHO\'s members in the organization. NPHO believes that additional investment,\nalong with a substantial investment of time by participants in order to accomplish NPHO\'s\nobjectives, will result in significant clinical benefits and efficiencies in the organization\'s goal to\nprovide cost effective, quality health care services to patients.\nshare\n\nA chart showing the organizational structure and relationships among NPHO members is\nattached as Exhibit I to this letter. A copy of the NPHO Operating Agreement is provided as\nExhibit II to this letter.\n\n\x0c-3-\n\n1.\n\nNPHO Historical Operations\n\nNPHO was organized as a non-exclusive association of physicians in partnership with\nNorman Regional Hospital for the purpose of collectively providing cost-effective, quality health\ncare services to the residents of the region. Initial physician membership of NPHO was\ncomprised of approximately 125 physicians. This included multiple groups of Pediatricians,\nFamily Practitioners, Internal Medicine physicians, and Obstetricians-Gynecologists.\nMembership also included physicians specializing in Anesthesiology, Cardiology, Dermatology,\nGeneral Surgery, Gastroenterology, Neurosurgery, Neurology, Oncology, Ophthalmology,\nOrthopedic Surgery, Otorhinolaryngology, Pathology, Podiatry, Psychiatry, Radiology, and\nUrology.\nSince its inception, NPHO has offered specialized benefit plans developed for use by\nemployers, third-party administrators, commercial health care payers and other purchasers of\ncare ("Payers"). These special benefit plans have created savings for those Payers, which should\nin turn be passed along to the ultimate health care consumer, the patient. NPHO growth was\naccomplished through the addition of more direct employer accounts and by entering into\ncontracts with PPOs, HMOs, and other commercial insurance Payers.\n\n2.\n\nNPHO Membership Today\n\nAs of August 1, 2010, 237 physicians who practice in 38 specialties participate in NPHO.\nAll of these physicians are members of NPA. Participation in NPHO is open to licensed\nphysicians who are willing to commit to the goals, objectives, and plans of the organization.\nNPHO plans to continue to add physicians who practice throughout the service area.\nEach physician member of NPHO joins through an application process that requires\nsubmission of a letter requesting membership in NPA and, as a result, membership in NPHO.\nAn interested physician submits a completed application to the NPA Board of Directors, which\nreviews the application and votes on acceptance of the applicant as a member. If an applicant is\naccepted, NPA bills the new member a $350 membership fee and $150 annually for dues. After\nthe physician pays dues and enters into a contract with NP A, the physician signs all other\nnecessary documentation relating to NPHO membership. Membership fees and dues represent\n. for NPA. NPHO\nrevenue for its\nthe primary source of\nactivities\nexpects withholds to increase slightly in order to provide sufficient working capital to\naccomplish the clinical integration plan and objectives described in Part III.\nMost of the physicians in and around Norman have chosen to participate in NPHO.\nHowever, NPHO members represent less than 10% of all physicians in the NPHO service area\n(which, as described in Part II, is roughly coextensive with the greater Oklahoma City\nmetropolitan area), and less than 10% of the total number of physicians in anyone specialty in\nthe NPHO service area are members of NPHO. In addition, a number of physicians who\nmaintain medical practices in Norman, Moore, Purcell, and other parts of NPHO\'s primary\nservice area do not participate in NPHO. For example, one neurosurgeon who chose not\nparticipate believed he would not make enough money. Another pediatric specialist chose not to\n\n\x0c-4participate because he was the only pediatrician in the area offering a particular subspecialty and,\ntherefore, could charge higher rates for his services.\n\n3.\n\nNPHO Governance and Management\n\nNPHO is managed by a Board of Managers comprised of eleven representatives, one of\nwhom is the president of NRHS, two of whom are appointed by NRHS (with one vacancy at\npresent), and eight physicians elected annually by the members of the NPA. Physician managers\nare elected annually by the members of NPA. The physician representatives include four\nprimary care physicians representing general internal medicine, family practice, pediatrics, and\nobstetrics-gynecology, and four physicians practicing unduplicated specialties. The chairperson\nof the NPHO board is always a physician who typically also serves as chairperson of NPA,\nwhich assists in assuring organizational alignment. Each physician manager serves for a period\nof three years and may be re-elected for additional terms. A table listing the members of the\nNPHO Board of Managers is attached as Exhibit III to this letter.\nNPHO currently maintains a staff of eight, including a full-time Executive Director, parttime Medical Director, full-time Quality Assurance Director, a contracts supervisor, a Director of\nPhysician Informatics, and three full-time technical personnel who provide information systems\ntraining and support to participating health care providers and professionals. Additionally,\nNPHO contracts with a physician who serves as the Medical Informatics Officer. A brief\noverview of the background of each NPHO staff member is set forth in Exhibit IV to this letter.\n\n4.\n\nNPHO Contractual Arrangements\n\nNPHO is a non-exclusive network. Physicians who are members of NPHO may enter\ninto contracts directly with Payers and are not required to limit their contracting arrangements\nthrough NPHO. NPHO does not impose any restrictions or limitations on the ability of NPHO\nphysicians to become members of other physician networks or other provider networks. Some\nNPHO physicians are members of other physician networks.\nNPHO maintains a comprehensive credentialing oversight process for all participating\nhealth care professionals to ensure quality medical care and services are provided within its\nnetwork. NPHO\'s credentialing requirements satisfy the standards of The Joint Commission and\nguidelines of the National Council of Quality Assurance.\nTo the extent the services of specialists or other health care professionals are not\navailable through NPHO physicians, patients and Payers may obtain those services directly from\nother physicians and health care professionals. In those situations, NPHO physicians will\ntypically refer patients to other specialists in the greater Oklahoma City area for care. NPHO\ndoes not enter into contracts for those services. For example, if patients require care or treatment\nby pediatric gastroenterologists, pediatric oncologists, pediatric cardiologists, pediatric\npulmonologists, or other pediatric subspecialists who are not members of NPHO, then NPHO\npediatricians and other NPHO physicians will refer patients to those subspecialists for care.\n\n\x0c-5-\n\nB.\n\nNorman Physicians Association\n\nNPA was fonned as an Oklahoma nonprofit corporation 1987, seven years before the\ncreation of NPHO. The focus of NPA was to offer and promote high quality, reputable medical\nand dental care to employers and other consumer groups at the lowest rate commensurate with\nthe provision of high quality care. NPA also coordinated and administered contracts between its\nmembers and various Payers, and developed and operated a utilization review program for its\nmembers.\nNPA members are licensed physicians, dentists, and podiatrists who:\n\n\xe2\x80\xa2 satisfy the current admission criteria for the medical staff of affiliated Hospitals;\n\xe2\x80\xa2 comply with the credentialing plan of NPA;\n\xe2\x80\xa2 pay required fees, dues, and assessments;\n\n\xe2\x80\xa2 want to supply cost-effective, high quality medical care to qualified individuals;\n\xe2\x80\xa2 agree to be bound by and maintain the standards of medical care developed by NPA;\n\xe2\x80\xa2 execute a Participation Agreement with NPA; and\n\xe2\x80\xa2 are approved by the Board of Directors of NPA.\nNPA is governed by an eight-member Board of Directors elected by the membership.\nThe Board of Directors is responsible for managing and conducting the business of NPA. It has\nthe authority to select and remove officers, agents, and employees; to conduct, manage, and\ncontrol the affairs and business of NPA; to incur indebtedness on behalf of NPA; to assess and\ncollect membership fees and dues; and other powers necessary to manage the business affairs of\nNPA. The election of directors and the approval of any action by the members require the\naffinnative vote of a majority of the members present in person or by proxy at a meeting. A\ncopy of the Bylaws of NPA is included as Exhibit V to this letter.\nAs noted above, NPA members are assessed an initial membership fee and annual dues.\nof\nThe Board of Directors may assess additional dues from each member through the\nwithhold from fees\nthe\nMembership may be tenninated, without\nreimbursement of membership fees, when a physician no longer satisfies any of the membership\neligibility requirements.\nC.\n\nNorman Regional Hospital Authority and Norman Regional Health System\n\nNRHS traces its origin to Nonnan Municipal Hospital, a 61-bed hospital that opened in\n1946. In 1984, Nonnan Municipal Hospital changed its name to Nonnan Regional Hospital to\nbetter reflect the expanding geographic boundaries of the communities it serves. The stated\nobjective of NRHS is to offer easily accessible, cost-efficient health care services that prevent\ndiseases or lessen their severity, while promoting health and wellness in the communities served.\n\n\x0c-6Currently, NRHS is comprised of:\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\nNorman Regional Hospital, a 337-bed acute care hospital located in Norman,\nOklahoma, that offers a wide range of inpatient, outpatient, and emergency services;\nMoore Medical Center, a 46-bed community hospital located in Moore, Oklahoma;\nand\nHealthPlex, a new acute care hospital and medical campus in Norman specializing in\ncardiology and cardiovascular care, orthopedics and spine care, services for women\nand children, and emergency care.\n\nBefore 1969, Norman Regional Hospital was owned and operated by the city of Norman.\nIn 1969 Norman Regional Hospital Authority was created to operate Norman Regional Hospital.\nThe hospital is now owned in part by Norman Regional Hospital Authority and in part by the\ncity of Norman. Under a Lease Agreement dated April 1, 1970, the city leased the hospital\ncampus to Norman Regional Hospital Authority. In March 2007, Norman Regional Hospital\nAuthority acquired Moore Medical Center through a bankruptcy auction bid. In 2008 NRHS\ninitiated construction of the new HealthPlex facility. Norman Regional Hospital, Moore Medical\nCenter, and HealthP1ex operate under a single hospital license issued by the Oklahoma State\nDepartment of Health.\nNRHS is governed by the Board of Trustees. Trustees are appointed for terms of three\nyears by the Mayor of Norman and confirmed by the Norman City Council.\nThe Norman Regional Hospital campus is situated on approximately 30 acres. Nursing\nbeds are located in four towers: a five-story tower constructed in 1968 and expanded in 1972; a\nfive-story tower constructed in 1981; a three-story tower constructed in 1992; and a three-story\ntower constructed in 1995. In addition to the inpatient care towers, the main campus also\nincludes a Cancer Management Center, an Education Center, three support buildings, an\nambulance facility, and a hospitality house.\nMoore Medical Center includes the hospital and two medical office buildings. It is\nlocated approximately 8.6 miles from the principal campus of Norman Regional Hospital.\nNorman Regional Hospital Authority developed a third inpatient hospital and related\ncampus - the HealthPlex - on a 95-acre site located four miles west of the original Norman\nRegional Hospital campus and five miles south of the Moore Medical Center campus. Among\nother facilities and services, the HealthPlex includes a 36-bed heart hospital, a 36-bed women\'s\nand children\'s hospital, and a 28-bed orthopedic and neurosurgical hospital.\nPurcell Municipal Hospital is a 39-bed community hospital located in Purcell, Oklahoma.\nPurcell Municipal Hospital is not owned or operated by Norman Regional Hospital Authority,\nbut is a participating hospital in NPHO.\nA table highlighting services provided by the Hospitals is provided in Exhibit VI to this\nletter.\n\n\x0c-7The medical staff of the Hospitals is comprised of physicians, oral surgeons, and\npodiatrists who represent a broad range of medical and surgical specialties. Nearly all members\nof the medical staff of the Hospitals are NPHO participating physicians.\nNPHO participating physicians are not required to refer or admit patients to NHRS\nfacilities, Purcell Municipal Hospital, or other health care providers that participate in NPHO.\nReferral and admission decisions are based on the medical needs of the patient and patient\npreference. While these guidelines will continue to drive future referral and admission decisions,\nit is anticipated that enhanced clinical integration of NPHO will increase utilization of NPHO\nparticipating providers and help to assure that patients, insurers, health plans, employers, and\nhealth care providers benefit from NPHO\'s Clinical Integration Plan, as described in Part III.\nIf participating hospitals do not offer the programs, facilities, or capacity to provide\nmedically necessary care for patients of NPHO physicians, then NPHO physicians will typically\nrefer the patients to other hospitals in the Oklahoma City metropolitan area that can provide the\nneeded services. NPHO does not maintain contractual relationships with other hospitals relating\nto the provision of care to patients.\n\nII.\n\nMARKET AND DEMOGRAPIDC INFORMATION\n\nThis section and Exhibit VI to this letter contain market and demographic information.\nAs this information shows, the NPHO service area overlaps almost entirely with the boundaries\nof the Oklahoma City metropolitan area and the Oklahoma City Combined Statistical Area\n("CSA"). The NRHS Hospitals make up less than 10% of the hospitals in the CSA, and NPHO\ndischarges are similarly small percentages of the discharges of the Oklahoma City area hospitals\nas a whole. Likewise, NPHO physicians make up a small fraction of the physicians in the CSA.\nAs a practical matter, patients across the NPHO service area and the Payers that NPHO\nphysicians contract with enjoy numerous adequate substitutes for NPHO services.\nThe remainder of this section reviews and summarizes certain pertinent information\nregarding location and service area characteristics; NPHO service area hospitals; and physicians\nin the service area. Exhibit VI includes additional information about:\n\n\xe2\x80\xa2 Service area demographic information (Exhibit VI.A)\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\nPopulation and density data, and narrative profile, of NPHO Service Area (Exhibit\nVI.B)\nPatient Populations and Insurance Coverage Estimates (Exhibit VI.C)\nEmployers and employees in the service area (Exhibit VI.D)\nAvailable data regarding Health Insurance Plans, HMOs, Discount Medical Plans,\nand Third-Party Administrators (Exhibit VI.E)\nMedical, surgical, diagnostic, and ancillary services provided by participating\nhospitals (Exhibit VI.F)\nOther ancillary service providers (Exhibit VI.G)\nPhysician Shortages in Selected Specialties (Exhibit VI.H)\n\n\x0c-8A.\n\nLocation and Service Area Population and Characteristics\n\nNPHO Hospitals are located in central Oklahoma, in Cleveland and McClain counties.\nThe medical clinics and offices of the NPHO physicians and the facilities of other participating\nhealth care providers are located in Norman, Moore, Blanchard, Newcastle, Purcell and Noble.\nBased on hospital patient origin data, NPHO serves a six-county area, including patients from\nCleveland, Garvin, Grady, McClain, Oklahoma, and Pottawatomie counties. As seen in Exhibit\nVI.A and Exhibit VI.B, according the U.S. Census Bureau, an estimated 1.13 million persons\nresided in the six-county NPHO service area as of 2008. Almost 85% of these residents reside in\nOklahoma and Cleveland counties.\nThe contiguous six-county NPHO service area encompasses a land area of 4,511.8 square\nmiles with 759.5 residents per square mile. These counties are interconnected through a system\nof interstate highways, state highways, and major roads, all of which share comparatively low\ntraffic density and provide easy and unusually efficient access from one area to another. Indeed,\nOklahoma City (which is in Oklahoma County) is an integral point in the U.S. Interstate\nHighway system; the area is bisected north and south by 1-35 and west to east by 1-40 and 1-44.\nThe NPHO service area overlaps significantly (if not entirely) with the boundaries of the\nOklahoma City metropolitan area and the Oklahoma City CSA. With an estimated 2008\npopulation of 1.206 million, the metropolitan area is comprised of seven counties: Canadian,\nCleveland, Grady, Lincoln, Logan, McClain, and Oklahoma. The CSA also includes the microurban area of Shawnee (Pottawatomie County), which brings the region\'s population to 1.275\nmillion. Patients can cross the Oklahoma City CSA in nearly any direction in a drive of no\nlonger than 45 minutes to an hour.\nDemographic data for NPHO\'s six-county service area is available in Exhibit VI.A.\nPopulation data, land area information, and a narrative profile, by county, is available in Exhibit\nVI.B. Median household income and poverty statistics and insurance coverage estimates for the\nNPHO service area, also broken down by county, is available at Exhibit VI.C. A summary of\nNPHO service area employers and employees, and health insurance plans, are available at\nExhibit VI.D and VI.E, respectively.\nB.\n\nNPHO Service Area Hospitals\n\nAccording to the Oklahoma State Department of Health, 35 licensed hospitals are located\nin the six-county NPHO service area. Hospitals are licensed by the Department of Health as\nacute care/long term care hospitals, psychiatric hospitals, and rehabilitation hospitals. Of the\ntotal licensed hospitals in the six -county area, 24 are acute care hospitals, four are long term care\nfacilities, two are psychiatric hospitals, and four are rehabilitation hospitals. There are no critical\naccess hospitals in the NPHO service area.\nOf the 24 acute care hospitals, 16 are considered to be general acute care hospitals and\neight are specialty hospitals that limit services primarily to surgery, orthopedic, cardiology, or\nwomen\'s services. Nineteen of the acute care hospitals are located in Oklahoma and Canadian\ncounties, the two service area counties with the greatest concentration of service area residents.\nBisected by 1-35 and 1-40, and encompassing a 1,246 square mile area with 697 persons per\nsquare mile, these two counties account for 84% of the estimated 2009 NPHO service area\n\n\x0c-9population and 95% of NPHO service area physicians. Residents of the four surrounding NPHO\nservice area counties may reach nearly any metropolitan area hospital or physician in less than an\nhour of travel time.\nNorman Physician Hospital Association\nLocation of Acute Care Hospitals\n\no\n\nMcClain\n\nAcute care hospitals in the NPHO service area include a total of 4,429 staffed beds.\nCollectively, these hospitals admitted about 213,000 patients in 2006. As seen in Tables 1 and 2\nbelow, as of 2006, Hospitals affiliated with the NPHO represent approximately 9.96% of total\nbeds operated by acute care hospitals in the NPHO service area and 9.44% of reported hospital\nadmissions. As shown in Table 3, below, Norman Regional Hospital, Moore Medical Center,\nand Purcell Municipal Hospital captured a combined market share of 13 % of NPHO service area\nacute care hospital discharges. Table 3 also provides a breakdown of patients discharged from\nthe six-county area by county and hospital, which reveals that combined hospital market share\nranged from a low of 2% of Oklahoma County discharges to a high of 60% of McClain County\ndischarges.\n\n\x0c-10Table 1\nService Area Acute Inpatient (Non-Federal) Facilities, 2006\nAcute Care Facility\nBeds\nCounty\n\',,\'.\' <,:", .\' .. ,\'" \'.:\n\'\n,\n\'\n\'{:\'~i~{:.:;:c,\n:\'s~~l~t;Ar\xc2\xa2~M!l~ketk; . ,\xc2\xb7}t,\xc2\xb7\'\n\'::.":.,.,,,.\n>.,\';\'/\'::":,c." .).;.\'. . ,\nGrady Memorial Hospital\n55\nGrady\nPurcell Municipal Hospital\n30\nMcClain\n11\nBone and Joint Hospital\nOklahoma\n49\nCommunity Hospital\nOklahoma\nDeaconess Hospital\n273\nOklahoma\n92\nEdmond Medical Center\nOklahoma\n570\nINTEGRIS Baptist Medical Center\nOklahoma\n358\nINTEGRIS Southwest Medical Center\nOklahoma\n23\nLakeside Women\'s Hospital\nOklahoma\n78\nMcBride Clinic Orthopedic Hospital, LLC\nOklahoma\nMercy Health Center\n338\nOklahoma\n255\nMidwest Regional Medical Center\nOklahoma\n46\nMoore Medical Center\nOklahoma\nNorthwest Surgical Hospital\n9\nOklahoma\nOk. Center for Orthopedic & Multi-Splty\n10\nOklahoma\n78\nOklahoma\nOklahoma Heart Hospital\n18\nOklahoma Spine Hospital\nOklahoma\nOrthopedic Hospital\n8\nOklahoma\nOU Medical Center\n587\nOklahoma\n499\nSt. Anthony Hospital\nOklahoma\nUnity Health Center\n160\nPottawatomie\nTOTAL Non-NPHO Hospitals\n3,988\n,,\'\n\n\',".,\n\n.\n\nAdmission\n.:\n.\n\'\n\n,\n\n.,,"\n\n,\n\n....\n\n2,767\n1,436\n786\n1,412\n12,686\n3,903\n24,230\n16,128\n2,677\n2,820\n17,910\n16,919\n3,533\n594\n160\n7,410\n1,769\n190\n30,203\n19,212\n6,464\n193,375\n\nTable 2\nNPHO Service Area Acute Inpatient (Non-Federal) Facilities, 2006\nAcute Care Facility\n\xc2\xb7\xc2\xb7;~~)T\xc2\xb7.\nS\xc2\xa2UJ.;el\\rea Mltr~etc:,:\'~~:\nNorman Regional Hospital\nLindsay Municipal Hospital\nPauls Valley Hospital\nTotal NPHO Hospitals\nTotal Non-NPHO and NPHO Combined\nNPHO Percentage of Total Service Area\n\nCounty\n\nBeds\n\n\'::\',"\';\'\n\n\'\n\n. ". ,:., ~:\':: ;:.: .~ .\n\nCleveland\nGarvin\nGarvin\n\nAdmission\n,,\':::\n\n365\n26\n50\n441\n4429\n9.96%\n\n17,293\n1,034\n1,840\n20,167\n213,542\n9.44%\n\n\x0c-11-\n\nTable 3\nDischarges by Acute Care Hospital and County, 2006\n(NPHO Hospitals Highlighted)\nSubtotal\nHospital\nCleveland Garvin Grady\nMcClain Oklahoma Pottawatomie\n489\nBone and Joint\n27\n17\n40\n62\n9\n334\n916\nCommunity\n46\n272\n88\n34\n438\n38\nHospital\n10,515\nDeaconess\n47\n195\n648\n65\n9,423\n137\nHospital\n2,889\nEdmond Medical\n40\n9\n2,681\n47\n102\n10\n2,137\nGrady Memorial\n2,063\n43\n4\n23\n1\n3\n2\nHealdton\n1\n0\n0\n1\n0\n0\nMunicipal\n16,431\nIntegris Baptist\n274\n636\n211\n431\n1,716\n13,163\n14,479\n84\nInte~is Southwest\n574\n2,638\n190\n10,782\n211\n1,943\nLakeside\n231\n9\n89\n22\n11\n1,581\nLindsay Municipal\n527\n96\n10\n351\n1\n21\n48\n1,446\n56\nMcBride Clinic\n92\n236\n42\n904\n116\nOrthopedic\n12,275\nMercy Health\n305\n57\n87\n10,914\n175\n737\nCenter\n167\nMercy Memorial\n117\n4\n0\n28\n12\n6\n15,039\nMidwest Regjonal\n29\n60\n25\n1,173\n12,906\n846\n29\nnMqpie M~ajcal~{<:;; . .\n2,312\niI9\n\'>/&.,;~3, \'.\';}\';\' 79~~\' /;\'};; ,;\\,~/ 48 ,,<\'~:/.: 3,333\n~\'998 ;-;)~~" gHfs F.>;;,j/\':::< .\xe2\x80\xa2\xe2\x80\xa2.... \'406 )\\15,683\n1,293\n10;979\n.1~rdfib.aIi W~gi.onfif:&\xc2\xb7< ,.\n1,~97\n2\nNorthwest Surgical\n369\n17\n12\n45\n5\n288\n110\nOklahoma Center\n5\n8\n36\n3\n51\n7\nfor Ortho\n3,272\nOklahoma Heart\n340\n180\n60\n2,059\n351\n282\n846\n34\n71\nOklahoma Spine\n117\n19\n557\n48\n124\n2\n5\nOrthopedic\n26\n11\n0\n80\nHospital\n574\n21,269\nOUMedical\n2,072\n306\n187\n17,341\n789\nCenter\n1,651\nPauls Valley\n1,598\n8\n0\n9\n18\n18\nGeneral\n.\nPlItce,ll Mun!\xc2\xa2ipal \'. ....,., . \xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7,.326 .\xc2\xb7 . ),6$:. (~\', \'25\', .: . >\'- . 71fr;.\xc2\xb7\xc2\xb7\xc2\xb7 - ..\n1,39Z\n37:\nSeminole Medical\n1\n39\n31\n0\n4\n3\n0\n15,842\nSt. Anthony\n155\n434\n1,559\n92\n12,976\n626\n4,421\nUnity Health\n1\n3\n3\n4,283\n63\n68\n4,802\nAll Other\n113\n693\n78\n2,988\n571\n359\n152,936\nTOTAL\n7,677\n2,893\n26,591\n5,300\n101,276\n9,199\n\xe2\x80\xa2.\xc2\xb7.s\\\xc2\xb7\'aO%\n17%\', . .; 60% \':,\n/2%\n\'\xc2\xb7~$1.% \',.\'\nNPUQ Market\xc2\xb7\n]3%\n"\'~%~\n-\'-"":"\n.\n"\n-::./;:: . : ..>:,.- \'. .\n~-..:;;:~/\n.....\n. ...: ..... .. : .\n",,\' .\n......\nSh\xc2\xa3t\xc2\xb7\n:::~.\n/\n\'.\n\n\'\n\n.\',\n\n-, :,,:~. -.:\'\n\n,Ce\',I \xe2\x80\xa2.\':.,:;\n\n,-;"\':~~-\':-~:\':\'\n\n",.J\'\n\n.\n\nZ6\n\n"":"<"\' }\n\n;,\n\nThe data in the tables show significant competition and suggests a high cross-elasticity of\ndemand between the hospitals operating in the six-county area. By any of these measures,\nNPHO Hospital market share is constrained by competitors in the Oklahoma City CSA.\n\n\x0c-12-\n\nC.\n\nPhysicians in the Service Area\n\nAs with hospitals, when evaluating physician data, NPHO (whose physician members are\nmembers of the medical staff of NRHS or Purcell Municipal Hospital, with clinical privileges at\none or more of the NPHO Hospitals), make up a small fraction of the greater Oklahoma City\nCSA physicians. Specifically, as shown in Table 4 below, as of August 1, 2010, 237 physicians\nparticipated in NPHO. Information obtained from the Oklahoma Board of Medical Examiners\nand Oklahoma Osteopathic Association indicates that approximately 2,950 active physicians\nunder the age of 75 are licensed to practice medicine in the NPHO six-county service area.\nThus, physicians affiliated with NPHO currently comprise about 8% of service area physicians.\nApproximately 53% of active physicians under the age of 75 practicing in Cleveland and\nMcClain counties are NPHO providers.\nMany NPHO participating physicians also hold medical staff appointments at other\nhospitals in the Oklahoma City metropolitan area, exercise clinical privileges at other area\nhospitals, admit patients at other area hospitals, and provide patient care services at other area\nhospitals. For example, NPHO participating physicians hold medical staff appointments,\nexercise clinical privileges, admit patients and provide patient care services at INTEGRIS\nSouthwest Medical Center (Oklahoma City); Midwest Regional Medical Center (Midwest City);\nOU Medical Center (Oklahoma City); St. Anthony Hospital (Oklahoma City); INTEGRIS\nBaptist Medical Center (Oklahoma City); Mercy Medical Center (Oklahoma City); Deaconess\nHospital (Oklahoma City); Oklahoma Heart Hospital (Oklahoma City); Pauls Valley General\nHospital (Pauls Valley); Grady Memorial Hospital (Chickasha); Unity Health Center (Shawnee);\nand other area hospitals. Additionally, NPHO participating physicians hold medical staff\nappointments, exercise clinical privileges, admit patients, and provide patient care services at a\nnumber of ambulatory surgery centers in the Oklahoma City metropolitan area\nTable 4 below provides a breakdown of the number of participating NPHO physicians by\nspecialty. It does not include physicians employed or assigned by NorStar (the company\nresponsible for providing emergency physician coverage at the Hospital) who work on a parttime basis at the Hospitals.\n\nTable 4\nNorman Physician Hospital Organization\nParticipating Providers by Specialty\nAugust 1, 2010\nI Specialty\n\n\xc2\xb7\xc2\xb71!rimary.(3are;\n\nProviders\n.\'\n\n:,.;\'.\'"\n\nFamily Medicine\nInternal Medicine (General)\nOB/GYN\nPediatrics (General)\n\nSurgical SpecioJists\':\nThoracic Surgery\nGeneral Surgery\n\n\'/~.(\n\n.......,.\n\n.,\'\n\n\xc2\xa3:,\n\nI Specialty\nM~dlcalSpt!cialists\n\n30 Cardiology\n18 Dermatology\n17 Endocrinology\n11 ENT\nj/\'i Gastroenterology\n1 Geriatrics (1M)\n9 Infectious Disease\n\nI Providers I\n.. \'.\n\n"\n\n9\n3\n\n1\n6\n6\n\n1\n1\n\n\x0c-13GSNascular Surgery\nGeneral Surgery!Breast\nNeurosurgery\nOphthalmology\nOrthopedic Surgery\nPlastic & Reconstructive Surgery\nUrology\n\'iliis.PltaiJ1ise\'ft\'~1C\n,a ... \' "!,,,\n.\n\n.\n\n.. \', \xe2\x80\xa2 . ,\n\n\'.\n\nr, ..\n\n3\n1\n2\n5\n10\n\n1\n3\n\n\'. .. \' ;. \'<!\\~,t:\\\xc2\xb7\n.\n.~:h.: :."\';"/\'.\n\n... "\n......\n.: ....... c)."\n\nAnesthesiology\nAnesthesiology (CRNA, MSN)\nEmergency Medicine\nHospitalist (1M)\nPathology\nRadiology\n\nNeonatology\nNephrology\nNeurology\nOncology!Hematology\nPhysical MedicinelRehabilitation\nPodiatry (DPM)\nPsychiatry\nPulmonology/Critical Care/lntensivist\nRadiation Oncology\nRheumatology\nWound Care\nOther\n\n11\n17\n12\n6\n4\n8 TJ1J@i~~/\\\' ."\n\n,,;},\'f\'\n\n5\n2\n4\n5\n3\n3\n7\n7\n4\n3\n3\n0\n\n.\' . . "~\':;<\';?\'<f\';;\'< .\n\n\'.\';\';\n\n:Z37j,~;\n\nTable 5 below sets forth information about all physicians under 75 years of age across the\nsix-county NPHO Service area, broken down by specialty area.\nTable 5\nService Area Physicians by Specialty (Age <75)\n\nI Specialty\npri",i{~ tJij/re\n\nI Providers I Specialty\n\n\xe2\x80\xa2. ,<:, . .\n\n:\xc2\xa3,.\'\nFamily Medicine\nInternal Medicine (General)\nOB/GYN\nPediatrics (General)\n\nSlltgicat$;peciitlists "~;\';;\n\nMedical S.p1~tillists\n461\n342\n156\n180\n\n\',:, ,~:%C{~;i:\'~liF:;:.\xc2\xb7r\n\nThoracic Surgery\nGeneral Surgery\nGSNascular Surgery\nGeneral Surgery!Breast\nNeurosurgery\nOphthalmology\nOrthopedic Surgery\nPlastic & Reconstructive Surgery\nUrology\nHospital}iJa!$~d\n\n..:,.\n:.\'.\'.\n\nAnesthesiology\nAnesthesiology (CRNA, MSN)\nEmergency Medicine\nHospitalist (1M)\nPathology\nRadiology\n\n14\n116\n4\n112\n36\n86\n135\n27\n48\n\'.\'::\'\n\n\':\n\n,.\'.\n\n223\nNA\n151\n6\n81\n153\n\nProviders\n\n>l"r;,:,\n\n:".;(?:~:.;:iDF;;.\n\nCardiology\nDermatology\nEndocrinology\nENT\nGastroenterology\nGeriatrics (1M)\nInfectious Disease\nPediatric - Neonatology\nNephrology\nNeurology\nOncology!Hematology\nPhysical Medicine/Rehabilitation\nPediatric Medical Subspecialty\nPodiatry (DPM)\nPsychiatry\nPulmonology/Critical Care/Intensivist\nRadiation Oncology, Therapeutic Rad\nRheumatology\nWound Care (Multiple Specialties)\nOther\n.\n\xc2\xb7T()TAL;;.,\xc2\xb7~F .... ,,)W~\' . ...\n\'"\n\n~\n\n97\n34\n16\n42\n34\n9\n12\n16\n17\n50\n23\n17\n32\nNA\n157\n39\n20\n18\nNA\n102\n-_ ..\n. "\'2;950\'\n\n\x0c-14Further infonnation regarding medical, surgical, diagnostic, and ancillary services\nprovided by participating Hospitals is available at Exhibit VI.F. Information regarding other\nancillary service providers is available at Exhibit VI.G. Infonnation reflecting physician\nshortages in selected specialties as applied to the 2010 estimated population of the NPHO service\narea is compiled in Exhibit VI.H.\nIII.\n\nCLINICAL INTEGRATION PLAN\n\nA.\n\nPurposes and Background\n\nWhile NPHO has not fully reached its potential for clinical integration, clinical\nintegration has been a major focus of NPHO almost from its inception. For many years, the high\ncost and limitations of the resources available to support clinical integration served as barriers to\nplan development and implementation. During a planning retreat five years ago, the NPHO\nBoard of Managers initiated a detailed evaluation of the potential benefits of clinical integration\nand concluded that clinical integration would result in the following benefits to patients,\nproviders, and purchasers of health care services:\n\xe2\x80\xa2\n\nImproved care through the rapid electronic transfer of patient clinical infonnation\namong the participating providers responsible for the diagnosis of illnesses, injuries,\nand diseases, along with collaborative development and implementation of treatment\nguidelines and plans.\n\n\xe2\x80\xa2\n\nImproved patient outcomes through the development, implementation, and\nmonitoring of evidence-based clinical practice guidelines that reflect good practices.\nGuidelines established and actual perfonnance would be benchmarked against NPHO\nprovider peers at the regional and national levels.\n\n\xe2\x80\xa2\n\nImproved utility of data resulting from NPHO\'s ability to collect, analyze, and\ncommunicate data compiled from providers and Payers.\n\n\xe2\x80\xa2\n\nReduced cost of care through sharing of laboratory, imaging, and other tests and\ncorresponding elimination of the unnecessary duplication of these services.\n\n\xe2\x80\xa2\n\nImproved patient satisfaction through the elimination of repetitive completion of\nregistration paperwork, and timely provision of infonnation regarding current\ntreatments, resulting in more effective care management.\n\n\xe2\x80\xa2\n\nImproved care and reduced cost of care by reduction in medical errors, better\ninfection control rates, shorter hospital stays, lower Hospital re-admission rates,\nearlier disease detection, and better disease control procedures.\n\n\xe2\x80\xa2\n\nImproved patient access to care through immediate referrals, electronic patient file\nsharing, and e-prescribing.\n\n\xe2\x80\xa2\n\nElimination of the need for Payers to complete independent and redundant\ncredentialing and peer review processes.\n\n\xe2\x80\xa2\n\nElimination of the need for Payers to create, implement, and monitor independent and\nredundant quality improvement processes, while improving provider participation.\n\n\x0c-15-\n\n\xe2\x80\xa2 Creation of a competitive advantage for Payers and self-insured employers through\ndocumentation of enhanced outcomes, reduced cost, and increased patient\nsatisfaction.\n\n\xe2\x80\xa2 Position NPHO to participate more fully with Medicare and Accountable Care\nOrganizations.\nFurther, as a result of historic working relationships among NPHO Members, the Board\nrecognized that NPHO was well positioned to rapidly implement and quickly achieve the\nbenefits of clinical integration. Accordingly, the Board authorized the leadership of NPHO to\nmove forward with the development of a plan to use the power of clinical integration to deliver\nbetter health care to patients.\nDuring the subsequent planning process, NPHO Chairman Stephen Connery, MD and\nNPHO Executive Director Gary Clinton attended conferences in Las Vegas, Atlanta, and\nOrlando hosted by the American Association of Integrated Healthcare Delivery System that\ndetailed the impact of clinical integration through the use of electronic medical records and better\ncollaboration among physicians. These concepts were also discussed at numerous NPHO Board\nmeetings and annual NPA meetings. Planning guidance was also requested of NPHO legal\ncounsel.\n\nElectronic Medical Records. Selection of an electronic medical record system has been\na cornerstone of the NPHO Clinical Integration Plan to date. In 2007, after the NPHO staff\nevaluated several options for the electronic medical record and related electronic information\ninterface, NPHO selected the Medicare-approved electronic medical record solution developed\nby eClinicalWorks, a company based in Westborough, Massachusetts, now serving 40,000\nproviders in all 50 states.\nIn addition, the company has developed an electronic information interface, Electronic\nHealth Exchange (eEHX), which allows for the two-way communication of clinical information\nbetween a physician\'s office and hospital information systems. eEHX is the foundation of the\nOklahoma Physicians Health Exchange (OPHX\xc2\xae). eEHX serves as a local "hub" for the\ncoordination of patient data so that NPHO providers can collectively and more effectively\nmonitor and manage patient care and promote patient safety, while reducing costs due to the\ncontinuity and coordination across providers. eClinicalWorks includes an electronic prescription\nsystem that interfaces with local pharmacies. OPHX\xc2\xae will allow NPHO providers to\nappropriately share outpatient information with participating providers across the state.\n\n\x0c-16-\n\nIn 2008, NPHO hired a full-time support person to service its network members by assisting with\nthe installation of the technology, training physicians and staff, and providing ongoing\nmaintenance and supportto physicians for eClinicalWorks and eEHX. In addition to purchasing\nthe software licenses for its network providers, including ancillary providers, NPHO pays the\n18% annual maintenance fee for the electronic data services. NPHO plans to continue offering\nthis support to its network members at its expense, while participating physicians incur the\ninstallation costs for their individual offices. NPHO\'s financial investment in eClinicalWorks\nand eEHX was approximately\nNRHS has also committed to facilitating NPHO\'s utilization of electronic medical\nrecords. In 2007, NRHS purchased and implemented the Medi-Tech System to transition the\nNRHS facilities to an electronic medical record system. NRHS, in conjunction with NPHO, has\nbeen able to provide interfaces between eClinicalWorks and Medi-Tech so physicians have bidirectional reporting on laboratory, radiology, and other hospital reports. NRHS also hosts the\neEHX\xc2\xae (OPHX\xc2\xae) software for exchange of information between physicians, the hospitals, and\nemergency departments. OPHX\xc2\xae is also connected to the RHIO (Regional Health Information\nOrganization) through SMRTNET, providing NRHS with a single source for information about\npatient care delivered by health care providers that do not participate in NPHO.\n\nClinical Practice Guidelines. NPHO is currently utilizing the Healthcare Effectiveness\nData and Information Set ("HEDIS") for clinical practice guidelines.\nHEDIS is a\ncomprehensive set of standardized performance measures developed by the National Committee\nfor Quality Assurance. HEDIS is a tool used by more than 90% of America\'s health plans to\nmeasure performance on important dimensions of care and service.\nThe primary goal of the NPHO Clinical Integration Plan is to improve patient care and\nresulting clinical outcomes. Secondary goals include increased efficiency of care delivery and\ncorresponding reductions in the cost of providing care. The electronic medical record system\nsets the framework for continued and enhanced clinical integration. But the full benefits of\nclinical integration have not yet been achieved.\n\nOrganizational Structure. In support of the clinical integration plan, NPHO has created\na separate organizational structure for clinical integration that will work under the direction of\nthe Board of Managers to accomplish identified goals. Key organization steps that NPHO has\ntaken thus far include:\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\nAppointed Jim Love, MD, to serve as Medical Director;\nContracted with Brian Yeaman, MD to serve as the Medical Informatics Officer;\nHired a registered nurse to serve as the Quality Assurance Director;\nEstablished a "Mentor\'s Committee" to oversee global quality improvement planning\nincluding approval of protocols, monitoring of implementation and enforcement of\nadherence to guidelines; and\nCreated "Specialty Advisory Groups," which include all members of NPHO, to\nestablish specialty specific clinical practice guidelines and consult on tracking,\ncollection, and analysis of data to identify improvement opportunities.\n\n\x0c-17-\n\nB.\n\nPlans for Continued and Enhanced Clinical Integration Going Forward.\n\nAttached as Exhibit VII to this letter is a copy of the proposed, new Participation\nAgreement that NPHO plans to distribute to its members. The NPHO board has approved the\nnew form of Participation Agreement, but NPHO has not yet entered into the new Participation\nAgreement with any member. Under the proposed, new Participation Agreement, each\nparticipating physician must agree to actively participate in, and fully comply with, NPHO\'s\nclinical integration plan, policies and procedures, including:\n\n\xe2\x80\xa2 participate in NPHO\'s electronic medical record and electronic information interface\n\xe2\x80\xa2\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\xe2\x80\xa2\n\nor an acceptable data equivalent;\nparticipate in quality assurance and utilization management programs;\ncomply with clinical practice protocols and guidelines;\nparticipate in peer review; and\nutilize NPHO physicians and practitioners, as well as NPHO hospitals and health care\nfacilities, for the care and treatment of patients, subject to the patients\' medical needs\nand preference.\n\nThe NPHO Board of Managers and Members believe that continued and enhanced\nclinical integration will allow NPHO to reduce waste and improve communication among\npractitioners, with resulting improvements in patient care, reduction in health care costs, and\nenhanced competition with other area health care providers. It will also provide NPHO with a\nbuilt-in mechanism to achieve a community electronic medical record system at low cost and\nwith local technical support. As the AMA has recognized, clinical integration may offer the\nmost efficiency in multi-specialty settings (like NPHO) "in which primary care physicians\ncoordinate patient care with specialists and the various specialists coordinate care among\nthemselves."l\nWhile clinical integration is a somewhat imprecisely defined concept within the health\ncare industry, NPHO believes that its goals for clinical integration can best be achieved if certain\ncore elements are included:\n\nI\n\nSee American Medical Association, "Competing in the Marketplace: How Physicians can Improve Ouality and\n\nIncrease their Value in the Health Care Market through Medical Practice Tntegration," al 10 (2nd Rd.) 2010,\navailable at http://www.ama-assn.orglamal/pub/upluad/mm/368lcumpeling-in-markeLpdf.\n\n\x0c-18-\n\n\xe2\x80\xa2 a unified electronic medical record links each participating physician and provider,\n\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\noffering the potential for improved patient care, reduction in waste, reduction in\nmedical errors, better assessment of care, and enhanced communication among\npractitioners;\nall participating physicians and providers participate in meaningful and ongoing\nimprovement activities, including developing and utilizing clinical practice\nguidelines, monitoring patient care outcomes, and sharing data with other\nparticipating physicians;\nthe organizations hold physicians and other providers accountable for achieving\nefficiencies in providing care, continuously assessing care in an effort to improve care\nprocesses and reduce waste;\nall participating physicians and providers demonstrate a significant commitment of\ntime and financial resources; and\nall participating physicians and providers are required to participate in all agreements\nwith Payers.\n\nThe following sections address how NPHO plans and proposes to achieve these objectives.\n\n1.\n\nRealizing the Full Potential of an Electronic Medical Record System\n\nA robust electronic medical records system will allow physicians to share clinical\ninformation concerning patients and enable physicians to collaborate in and coordinate patient\ncare by providing immediate access to medical data. Going forward, NPHO\'s electronic medical\nrecord system will be a critical component of NPHO\'s infrastructure to facilitate implementation\nof NPHO\'s clinical integration plan. It will facilitate data collection, outcomes measurement,\nutilization management, and performance reporting required by Medicare and other Payers.\nAs of this time, NPHO has invested in 130 licenses for its participating physicians to\ninstall and use eClinicalWorks and eEHX on their office systems. To date, 130 physicians and\nother health care professionals have purchased those licenses. Upon implementation of the\nproposed, new clinical integration plan, all physician members will be required to install and use\neClinicalWorks and eEHX (or an acceptable data equivalent). As explained below, to do so\nPhysicians will be required to make a significant financial investment to update their existing\nhardware and office computer systems, and then install the technology for use. They will also be\nrequired to invest significant "sweat equity" and staff time in terms of training, implementation,\nand use in order to take full advantage of the benefits of the electronic medical records system.\nWhile in its early stages of use, when fully implemented the electronic medical record\nsystem developed by eClinicalWorks will enable health care providers and professionals to\nmanage patient flow, immediately access patient records in-house or remotely, electronically\ncommunicate with referring and consulting physicians, and securely send clinical data. Unified\nwith its practice management solution, the electronic medical record system will allow users to\neasily review and complete patient histories, past visits, current medications, allergies, laboratory\ntests, and diagnostic tests. Its registry reporting and clinical decision support features elevate the\nrole of the system from passively collecting information to actively helping physicians provide\noptimal medical care.\n\n\x0c-19-\n\nWith increased use of eClinicalWorks, physicians should be better able to monitor and\nmanage care for patients, promote patient safety, reduce costs, and improve overall patient health\nbecause of better continuity and coordination in patient care. NPHO will have mechanisms in\nplace to monitor individual physician use of electronic medical records, and eClinicalWorks will\nallow performance reports based in part on practice patterns. Data on NPHO physicians\n(including utilization, outcomes, etc.) will be made available to the NPHO board, the Quality\nAssurance Committee, and the entire panel of participating physicians. NPHO staff, at the\ndirection of the NPHO board, will track and identify the data, and share the aggregate data\namong the appropriate parties. Key components of the electronic medical record system include:\n\nThe Oklahoma Physicians Health Exchange (OPHX\xc2\xae) will allow NPHO to extend the\nbenefits of the electronic medical records beyond the participating physicians to include hospitals\nand potentially other providers. The interface creates the ability for health care providers to\nsecurely share facets of patient care, including electronic referrals, patient record summary, lab\nresults and registry reporting. Using the OPHX\xc2\xaeencourages community-wide reporting and\nregistry that facilitate outcomes analysis and increases compliance by measuring actual time and\ncost performance and care improvements, creating efficiencies that benefit purchasers of health\ncare and their recipients.\nUse of eClinicalWorks as a common platform for a community-wide health record\nefficiencies.\neClinicalWorks has built-in\n\nwill facilitate referrals among participating physicians, minimize errors in\n\n\x0c-20sharing medical history and demographic data, and minimize duplication of laboratory and\nradiology testing. This capability will enhance care with every patient referral.\nFurther use of OPHX@ will allow NPHO to\n\nAdditionally, OPHX@ plans to participate in SMRTNET, a statewide network that is\nbeing developed in Oklahoma. SMRTNET affiliation will allow further savings by allowing\naccess to some patient medical information that is generated or maintained by health care\nproviders who do not participate in NPHO. Because many NPHO patients receive care outside\nof the NPHO network, inevitably important medical events (such as surgeries, allergic reactions,\nimmunizations, ER visits, and other events) occur without the knowledge of NPHO network\nproviders. SMRTNET will provide an additional opportunity for NPHO physicians to access\nthat information and, thus, to improve care for patients. OPHX\xc2\xae allows the Nurse Director of\nQuality Assurance to examine patient files and make sure that physicians are following HEDIS\nprotocols, which is performance evaluation based on applicable evidence-based clinical\nperformance measures and benchmarks.\nBy joining the SMRTNET network, NPHO anticipates realizing even greater efficiencies\narising from expanded use of electronic records management. For example, participation in\nSMRTNET will improve the coordination of patient care among patients in the Oklahoma City\nmetropolitan area, reducing the likelihood of unnecessary laboratory testing, improving\nmedication reconciliation, reducing hospital readmissions, decreasing some practice\nadministrative costs, and improving patient satisfaction, while lowering the cost of health care in\nthe region overall.\nContinued investment from and participation of NRHS and other ancillary service\nproviders will also help to ensure that improvement initiatives cross the entire continuum of care,\nimproving access to all services, while better managing their utilization.\n\n2.\n\nSelectivity of Physician Members\n\nNPHO recognizes that the ongoing selectivity of only those physicians who are\ncommitted to NPHO\'s goals and requirements is essential to the Clinical Integration Plan\'s\nsuccess. The proposed, new Participation Agreement will require participation in the Clinical\nIntegration Plan as a condition of membership in NPHO. Once implemented, the new\nParticipation Agreement will obligate physicians to participate in all NPHO agreements, care\nimprovement activities, and electronic medical record initiatives described in this letter. NPHO\nwill also require that physicians agree to implement and be subject to performance evaluation\nbased on applicable clinical performance measures and benchmarks.\nPhysicians will initially be allowed to participate in or continue to participate in NPHO if\nthey satisfy the c.redentialing criteria, but their membership will be denied if they do not enter\n\n\x0c-21into the new Participation Agreement, and expelled if they sign the Participation Agreement but\nultimately and chronically fail to comply with that Agreement. While NPHO is not being\nespecially "selective" per se in the first instance - by excluding in a significant way local\nphysicians from participation in the proposed program - NPHO\'s new, proposed program will\nimpose a number of requirements that are likely to discourage some physicians who are not fully\ncommitted to the program from continuing participation and, thus, assure that those who do\nchoose to participate will be fully committed to its goals and requirements.\nNPHO physicians will at first be largely self-selected by those physicians who recognize\nthe efficiency, value, and clinical benefits of an integrated practice and, therefore, agree to the\nproposed, new Participation Agreement. Then, going forward, NPHO anticipates that some\nNPHO physicians will "opt-out" on their own accord, as some physicians may not want to be\nsubject to the participation obligations. Importantly, in addition to this form of self-selection,\nNPHO will implement comprehensive review processes to ensure physician commitment to\nNPHO\'s objectives. These measures will largely take place under the auspices of the Quality\nAssurance Committee, which will endeavor to be a fair arbiter of the Quality Assurance Plan.\n\n3.\n\nDevelopment of Clinical Performance Measures - Quality Assurance\nCommittee\n\nNPHO plans to expand current quality improvement initiatives to accelerate\nimprovements in the delivery of health care services that could not be achieved if physicians\nworked independently. NPHO will obtain input, advice, direction, and recommendations from\nall NPHO participating physicians to ensure that the measures tracked are appropriate and\nmeaningful. To this end, NPHO has already formed a Quality Assurance Committee and has\nrecently hired a full-time nurse to help design and implement the program. Going forward,\nNPHO expects that the Quality Assurance Plan will include incentives and mandate corrective\naction, potentially including education, counseling, financial withholds or penalties, and, in some\ncases, expUlsion from NPHO for physicians whose practices are incompatible with NPHO\'s\nobjective of offering high-quality, clinically integrated care in an efficient manner.\n\nClinical Practice Guidelines and Disease Management. As noted above, NPHO is\ncurrently utilizing HEDIS clinical practice guidelines. While the details remain to be specified,\nNPHO is in the process of developing clinical practice guidelines and believes that the utilization\nof the electronic medical record system by the Quality Assurance Committee and NPHO staff\nwill allow it to supplement nationally-recognized performance measures with additional\nevidence-based practice guidelines across a number of specialties.\nFor example, NPHO is beginning the process of implementing disease management\nprocesses for reducing health care costs, improving quality of life for individuals, and preventing\nor minimizing the effects of a disease (usually a chronic condition) through integrative care. To\ndate, NPHO staff, through its recently hired quality assurance nurse, has acted primarily in a\ndata-collecting mode. Going forward, NPHO initially will consider monitoring some of the\nchronic disease processes that most affect its patients: coronary heart disease, chronic\nobstructive pulmonary disease, kidney failure, hypertension, heart failure, obesity, diabetes\nmellitus, asthma, cancer, arthritis, and other common ailments. NPHO envisions health care\ncosts decreasing and quality of care improving as a result of this effort. NPHO also believes that\n\n\x0c-22the collaboration required for implementing the benchmarks and disease management processes\nwill be an excellent means of fostering interdependence between NPHO physicians. 2\n\nQuality Assurance Committee. As previously noted, a Quality Assurance Committee\nwill manage and oversee quality improvement activities. At least one full-time quality assurance\nnurse will review patient charts and records for adherence to the HEDIS disease-state, evidencebased medicine guidelines adopted by NPHO and the Quality Assurance Committee. The\nQuality Assurance Committee will seek to identify instances of both overutilization and\nunderutilization of services, and work with physicians to address these issues. For its disease\nmanagement program, NPHO will begin with nine disease states, with an expectation of\nincreasing to as many as 50 disease states over time.\nThe NPHO will develop clinical guidelines with the goal of reducing morbidity and\nmortality and minimizing unnecessary costs. NPHO will initially focus on disease states that\naffect the largest number of patients (such as hypertension) and on diseases that carry the highest\nmorbidity (such as diabetes). The selection of specific disease states will be made at the\nphysician specialty level. For example, the primary care specialists may choose to focus on\ndiabetes care, while the surgeons may decide to focus on post-operative infection issues, and\nobstetricians may choose to focus on C-section rates. This will ensure broad participation by\nparticipating physicians and will ensure that guidelines are developed by those with the expertise\nto implement them. The Quality Improvement Committee will provide input and oversight, but\nthe initial oversight will be placed on the specialists. NPHO expects that over time new\nguidelines will be established as old ones become incorporated into standard practice, thus\nensuring ongoing improvement.\nThe Quality Assurance Committee will provide the general management and oversight of\nthe clinical practice guidelines and disease management processes. The Quality Assurance\nCommittee, with the use of ad hoc sub-committees as necessary, will:\n(a) set the measures for individual and group performance;\n(b) monitor individual physicians\' compliance with the network\'s standards;\n(c) counsel physicians to improve their performance, as necessary; and\n(d) evaluate aggregate network performance against stated goals and, as necessary, reevaluate and modify the stated goals and processes.\nIn the process of establishing the performance goals and standards, specialists will have\nthe opportunity to participate in the Quality Assurance Committee\'s (and any sub-committees\')\n\n\x0c-23-\n\ndevelopment and implementation of the measures. Committee participation will be mandatory,\nwhich should assure broad participation in the development of clinical practice guidelines.\nTo facilitate monitoring, NPHO staff, at the direction of the Quality Assurance\nCommittee, will perform medical records audits remotely via the Electronic Health Exchange\nsoftware (eEHX/OPHX\xc2\xae). NPHO will generate regular reports on individual and aggregate\nphysician compliance rates. NPHO anticipates that the reports will include the following\ninformation: (a) individual physicians\' compliance rates under applicable measures; (b)\ncomparison of the physicians\' compliance rate with their previous performance (i.e., an\nindividual baseline comparison) and with their peers; and (c) calculation of a cumulative\ncompliance rate for each clinical measure for all physicians for whom the measure is applicable.\nTo ensure compliance, reports will be shared with NPHO physicians as a group. Internal\npublication of this data should not only make individual physicians and NPHO as a whole\naccountable for their performance, but will also highlight the benefits of NPHO\'s practices to the\nmarketplace and facilitate physician interdependence. Moreover, in recognition of the fact that\nan inability to consistently enforce the Clinical Integration Plan would frustrate the NPHO\'s\nstated goals, NPHO will require, as a condition of participation, that physicians agree to be\nsubject to performance evaluations based on compliance with appropriate and applicable clinical\nperformance guidelines.\nWhile NPHO is in the earliest stages of determining the precise metrics that will be\nmeasured, it expects to identify physicians who appear to be high-cost providers or inappropriate\nusers of resources, to measure physicians\' compliance with clinical practice guidelines, and to\ntrack intra-network referral rates. Mter the precise metrics are determined, NPHO anticipates\nthat physicians will receive regular performance evaluations from NPHO staff, and those who do\nnot adhere to guidelines will be formally subject to a series of progressive corrective steps,\nbeginning with education, counseling, and corrective action plans, and, as necessary, moving on\nto reprimands and financial penalties, with removal from NPHO as the ultimate action.\nHistorically, NPHO has not had to deal with physicians who perform at unacceptable levels.\nHowever, NPHO will implement an active and ongoing program to evaluate participating\nphysicians and create a high degree of interdependence, interaction, and cooperation among the\nphysicians to control costs and ensure high standards of care. Non-compliance may also be\nmanaged using financial withholds or penalties.\nTo further encourage compliance with the Clinical Integration Plan, NPHO anticipates\nthe use of appropriate incentives. For example, based on data collected, NPHO may seek to\nnegotiate with Payers for fee increases based on its efficiency and quality initiatives, for sharing\nin cost savings, or other financial incentives. Moreover, if the Clinical Integration Plan is\nsuccessful, NPHO as a whole expects to be able to receive higher physician reimbursement rates\nfrom Payers because of the demonstrated benefits to patients and Payers. To be clear, NPHO\'s\nanticipated higher fee levels or shared cost savings are part of a program that seeks, and has the\nreal potential to achieve, overall greater efficiency and improved care, resulting in ultimately\nlower costs of medical care for Payers. Increased reimbursement rates, as part of a clinical\nintegration plan, should not raise a concern for competition if it is part of an overall goal of\nproviding improved patient outcomes and lower total costs. Cost savings and quality\nimprovement require a significantly higher lise or physician resources to (lchieve. Tncre()sefl\n\n\x0c-24reimbursement will be justified in part because of the increased use of resources, including\nincreased physician and staff time commitments and technology costs.\nThe comparison and evaluation of aggregate network performance data will be an\nessential component of NPHO\'s Clinical Integration Plan. The Quality Assurance Committee\nwill review regular reports on the Plan\'s progress, and will periodically re-evaluate whether the\nstandards of care and efficiency goals are being achieved. The Committee will retrospectively\nreview whether particular measures were effective in modifying physician behavior, and whether\nsuch measures and processes helped NPHO reach its goals of improved and more efficient\npatient care.\n\n3.\n\nThe Costs of Clinical Integration\n\nAlthough NPHO physicians will not operate under common ownership, some level of\nfinancial integration and interdependence will occur by virtue of required investment in the\nelectronic medical records system, withholds (which will likely increase depending on the\nrevenues generated as a result of the new plan), membership dues, and time commitment.\nFinancial integration will likely be increased to some degree, as the percentage of revenues\ngenerated by NPHO increases and is specifically linked to quality through clinical integration.\nWhile the Clinical Integration Plan is still in many respects in the early stages of\ndevelopment, NPHO believes that full implementation of the Clinical Integration Plan will\nrequire that NPHO retain at least two specified full-time-equivalent employees - one quality\nassurance nurse and one eClinicalWorks trainer - dedicated to the implementation and execution\nof the Plan. This will come at an estimated annual cost of\n.\n$150 000 for salaries\n\nEach physician who plans to become or continue as a member of NPHO going forward\nwill be encouraged to obtain a license for the electronic medical record and electronic interface\nsoftware\nas further described below will also be\nto make\nand\n\nvU,,,"V"U,,"\n\nOne-Time Costs for Electronic Medical Records System\n\n\x0c-25-\n\nAnnual Costs\n\nIn addition, each physician that obtains a license for the eClinicalWorks software will\nalso have to obtain extensive training for the physician, office manager, nurse, receptionist, and\nbilling person. The time commitment and allocation of staff resources for implementation is\nsubstantial. NPHO estimates that the dollar value of lost patient revenue due to time spent on\ntraining of physicians and their staff in the utilization of the electronic medical records system\nwill exceed $3,000 per physician.\nFinally, physicians will be required to commit substantial time in developing,\nimplementing, and monitoring compliance with clinical practice guidelines. As noted above,\nNPHO will initially take volunteers to participate in the Quality Assurance Committee and assist\nthe Committee on an ad hoc basis with such tasks as providing medical education and\ninformation about clinical practice guidelines and disease management protocols; conducting\nmedical records audits and making recommendations for improvement; assisting with risk\nNPHO expects that virtually all of\nmanagement; and mentoring other NPHO physicians.\nNPHO\'s members will actively participate in the implementation of some component of the\nQuality Assurance Plan. It would require speculation in advance of the implementation of the\nQuality Assurance Plan to estimate the time commitment required. NPHO believes that, on\naverage, this commitment will be equal to or greater than the requirements for implementing the\nelectronic medical records system.\nC.\n\nOrganizational Arrangements for Clinical Integration\n\nNPHO leadership, designated members of NPHO committees, and mentors, along with\nNPHO staff (including the additional staff members that NPHO proposes to be hired), will be\nresponsible for implementation of the Clinical Integration Plan. Their duties will be as follows:\n\xe2\x80\xa2\n\nThe Medical Director will provide medical leadership for the Clinical Integration\nPlan working with NPHO participating providers, committees, and staff to direct\ntimel y and consistent implementation.\n\n\xe2\x80\xa2\n\nChaired by the Medical Director, the Mentor\'s Committee will oversee global quality\nimprovement planning. Membership of the committee will be comprised of physician\nleaders elected by their respective clinical departments within NRHS.\no The members will include one General Internist, one Family Practitioner, one\nGeneral Surgeon, one Obstetrician/Gynecologist, one Pediatrician, one specialty\n\n\x0c-26Surgeon (representing, but not limited to, one of the following surgical\nspecialties: Cardiovascular Surgery, Otorhinolaryngology, Neurosurgery, and\nOrthopedic Surgery), one specialty Internist (representing, but not limited to, one\nof the following medical specialties: Cardiology, Nephrology, Neurology,\nEndocrinology, Gastroenterology, and Pulmonology) and one Emergency\nMedicine specialist.\no The Mentor\'s Committee will be responsible for establishing and approving\nevidence-based medicine clinical guidelines that may cross specialty lines,\napproving performance targets and enforcing adherence to approved guidelines\nthrough mandated educational activities, increased monitoring, financial\nwithholds and, if necessary, removal from participation in NPHO.\no The Mentor\'s Committee will continue to approve additional clinical practice\nguidelines. The Mentor\'s Committee may also develop a patient satisfaction\nsurvey. The results of this survey may be used as one measure of quality of care\nfor NPHO providers.\n\n\xe2\x80\xa2 Specialty Advisory Groups (SAGs) will be established for each medical department\nof NRHS and will be chaired by the chief of each department. All of the NPHO\nphysicians will be members of the appropriate SAG and will be required to actively\nparticipate in the SAG. The groups will meet at least once annually to establish or\nreview clinical practice guidelines and performance targets applicable to their\nrespective specialties and report their decisions and performance targets to the\nMentor\'s Committee. Meetings will also serve as a forum for monitoring peer\nperformance and working with peer\'s to address significant deviations.\n\n\xe2\x80\xa2 The Medical Informatics Officer has specialized in the management and processing\nof data, information, and knowledge in the health care arena and will help to\ntransition the NPHO participating physicians who invest in electronic medical records\nand electronic interface from their current data and record-keeping environment. The\ncurrent Medical Informatics Officer also serves in a similar capacity for the\nOklahoma Hospital Association and will ultimately assist NPHO to network with the\nlocal RHIO and other RHIOs across the country.\n\n\xe2\x80\xa2 The Director of Quality Assurance will assist the Mentor\'s Committee and support\nthe activities of each SAG. The Director of Quality Assurance will participate as a\nnon-voting member of each SAG.\no\n\no\no\n\nShe has begun supervising the collection of performance data, and will report\nsummary results to the Mentor\'s Committee and individual data to individual\nproviders.\nAs clinical practice guidelines are developed, she will also perform chart audits to\nassess compliance with guidelines.\nIn addition, she will assist with the promotion of the benefits of clinical\nintegration by engaging in discussions with Payers to maximize understanding\nand use of clinical integration.\n\n\x0c-27-\n\no The Director of Quality Assurance will also work with the NRHS Utilization\nReview/Quality Assurance Department to facilitate improvements in care and\nutilization where appropriate.\no Additionally, she may work to develop programs to promote the mission of\nNPHO, including direct patient education, a disease registry to target high risk\npopulations of patients for special intervention, disease management programs,\nreadmission prevention protocols, and physician education.\n\n\xe2\x80\xa2 The Executive Office of NPHO will be responsible for the administrative functions of\nthe Clinical Integration Plan, including the coordination of personnel managing the\nclinical integration process, maintaining membership rosters and status, administering\nannual payouts of earnings to successful providers based on pre-determined criteria\nand formulas established by the quality improvement team members, cataloging of all\nprotocols, preparing minutes of meetings of the SAGs and Mentor\'s Committee,\nconducting contract negotiations, arranging withholds to create a reimbursement pool,\nand recruiting and supervising additional support staff as needed. The Executive\nOffice will also work with purchasers of health care to elicit feedback on the utility of\ncurrent efforts and to guide future efforts at improvement in care. At the discretion\nof the Board, NPHO may pursue public relations and advertising activities designed\nto bring quality initiatives to public attention.\nNPHO Organizational Chart\n\n\x0c-28An extensive time commitment will be required on the part of physicians serving in\nleadership positions and as members of the various committees identified. NPHO pays Board\nmembers a nominal fee for attendance at Board meetings. With the exception of the PHO Board\nChair and the Director for Medical Informatics, NPHO does not compensate physicians for their\nadministrative services.\n\nClinical integration is a complex endeavor. It requires planning, expenditures and\nimplementation at multiple levels of medical practice. NPHO has hired four full-time staff\nmembers for electronic medical records management and training, rewritten its Physician\nParticipation Agreement to increase physician involvement and facilitate contracting on behalf of\nmember physicians, developed the OPHX\xc2\xae system, affiliated with SMRTNET, developed\noutlines for organization of contracting specialty and quality improvement committees, and\nbegun "dry run" data extraction in anticipation of monitoring clinical quality data.\nNPHO has yet to complete a number of important activities, such as:\n\n\xe2\x80\xa2 Establishing the Mentor\'s Committee and recruiting physicians to serve on the\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\n\xe2\x80\xa2\nD.\n\ncommittee.\nDeveloping the final details on clinical practice guidelines.\nEstablishing the Specialty Advisory Groups (SAGs) and coordinating an annual\nmeeting.\nDetermining membership for the Quality Improvement Committee.\nDeciding the details relating to reimbursement for practitioners comply with clinical\npractice guidelines and other aspects of the Clinical Integration Plan.\nMarketing the Clinical Integration Plan to physicians and other providers.\nExecuting the new Physician Participation Agreement.\nCommunity Impact of Clinical Integration\n\nClinical integration should have a favorable impact on NPHO participating providers,\nPayers who contract with NPHO and patients in the community served by NPHO providers.\n\n\xe2\x80\xa2 Participating health care providers should experience increased practice efficiency\n\n\xe2\x80\xa2\n\n\xe2\x80\xa2\n\nthrough consolidated NPHO contracting efforts, reduction of paperwork, greater ease\nof scheduling, improved patient diagnosis and treatment plans through timely receipt\nof diagnostic information and availability of patient care guidelines, seamless\nreferrals to specialists and admission to ancillary and hospital providers, reduction of\nstaff time required to duplicate medical records, and timely scheduling of patient care\nservices.\nPayers should experience an immediate benefit from centralized NPHO credentialing\nand contracting, as well as increased satisfaction among beneficiaries. In addition,\nover time, NPHO\'s improvement initiatives should help to eliminate unnecessary\nduplication of services, avoid preventable hospitalizations, reduce medical errors,\nimprove infection control rates, decrease hospital length of stay, lower re-admittance\nrates, and provide for earlier disease detection, resulting in lower cost of care.\nPatients should benefit from all of the above with the over arching benefit of improved\nlevels of care and better patient outcomes. Patients should also experience more\n\n\x0c-29-\n\ntimely scheduling of primary and specialty care appointments, reduction of repetitive\ncompletion of registration paperwork, and improved access to medications through eprescribing. Patients should also see improved adherence to preventive service, such\nas mammograms and colonoscopies. The community should also benefit from\nclinical integration efforts through an overall improvement in community health\nstatus. In addition, enhanced control over health care costs and the potential for cost\nreductions will serve as economic development tool for the recruitment of new\nbusinesses and jobs.\nBy way of example of the community benefits to be achieved as a result of NPHO\'s\nclinical integration, NPHO is currently participating with the University of Oklahoma in a\n$500,000 Agency for Health Care Quality grant to assess the impact of the use of an electronic\nmedical record on quality improvement and cost reduction. This should help to demonstrate the\nfavorable impact for the benefit of Payers and patients alike. A copy of the research study\nsummary is provided as Exhibit VIII to this letter.\nNHRS has also been awarded a Beacon Community Grant to demonstrate the impact of\nelectronic medical record and electronic health information exchange on the quality and cost of\nhealthcare. The Health-E Pyramid Project builds on current adoption of electronic medical\nrecord by NHRS and NPHO to integrate a Personal Health Record (PHR) interface with unique,\npatient-interactive features into SMRTNET. The PHR will provide patients with one centralized\nlocation to digitally access their health care information and services, increasing patient\neducation, awareness, accountability and compliance with treatment plans. A detailed narrative\nfor the Beacon Community Grant and Health-E Pyramid Project is provided as Exhibit IX.\nIV.\n\nCONTRACTING ISSUES\n\nNPHO currently contemplates that it will establish a contracting committee with primary\ncare and specialty representation. NPHO believes that the benefits of clinical integration will be\nenhanced by allowing a contracting committee to commit all members of NPHO to those\ncontracts that the committee believes serve the best interests of NPHO members, with\nreimbursement levels reflecting these improvements in cost and quality. The contracting\ncommittee will be charged with evaluating each proposed agreement to determine whether\nNPHO goals can be achieved within the framework of each specific plan.\nThe plan for future Payer contracting through NPHO encompasses the following steps.\nFirst, a Payer would contact NPHO with respect to a contract. The NPHO Executive Director\nwill obtain information about contract terms from the Payer and will inform the Payer that\nNPHO is contracting as a single integrated network of providers. If NPHO is able to reach\nagreement with the Payer following negotiations, then NPHO would enter into the contract,\nrequiring all NPHO participating physicians, Hospitals, and ancillary providers to participate.\nNPHO believes that this should create efficiencies for the Payers in terms of contract\nnegotiations, provider credentialing, and network development. In addition, for reasons\naddressed above, Payers and their beneficiaries should benefit from better and more efficient\nclinical care.\n\n\x0c-30-\n\nA.\n\nHistorical Approach to Contracting\n\nFrom inception, NPHO used a messenger model to facilitate contracting between\nparticipating providers and professionals, on the one hand, and area insurers, health plans, thirdparty administrators, and employers, on the other.\nThe NPHO Executive Director has served as the messenger. The Executive Director\nmeets with the individual Payers and discusses economic and non-economic terms of the\ncontract. If specific provisions raise a concern to of the Executive Director, a change or\nclarification may be requested. Mter this process is complete, the Executive Director sends a\nletter to NPHO physicians summarizing the terms of the contract and the fee schedule that the\nPayer has offered. An Accept/Reject form with the name of the participating physician is\nincluded with the summary, giving the physician the opportunity to either accept or reject\nparticipation in the offering. The physician is not considered to have accepted until the form has\nbeen returned. The Executive Director does not participate in price negotiations or make any\nrecommendations regarding fees and charges.\nNPHO has signed agreements with a variety of Payers, including PPOs, HMOs, and\nMedicare Advantage plans, and directly with employers that are large enough to be partially selfinsured and utilizing third-party administrators. These are fee-for-service arrangements. As of\nAugust 1, 2010, NPHO has 24 separate agreements with various Payers. Exhibit X includes a\ntable showing the number NPHO physicians participating in the various networks, which ranges\nfrom 107 to 237.\nB.\n\nProposed Approach to Contracting\n\nGoing forward, physicians will continue to join NPA and NPHO through the NPA\napplication process described above. NPHO proposes that it will manage and direct the\ncontracting process with Payers, including negotiation of all contract terms.\nPhysicians, hospitals, and other health care providers and professionals who are\ninterested in participating (or continuing their participation) in NPHO will be required to enter\ninto a new Participation Agreement with NPHO. Under the proposed, new Participation\nAgreement, health care providers and professionals will be required to actively participate in\nquality assurance programs and activities of NPHO. Historically, NPHO has not required\nparticipating health care providers and professionals to participate in any specific provider\nnetwork. Instead, NPHO health care providers and professionals have historically decided\nindependently whether or not they wish to participate in any specific network or networks.\nThe proposed, new NPHO Participation Agreement provides that participation in NPHO\nis non-exclusive so that each health care provider and professional may contract directly with\nhealth insurers, health plans, third-party administrators, and employers to participate in their\nrespective networks. NPHO will not require any participating physician to negotiate and\ncontract exclusively through NPHO. As a result, NPHO health care providers and professionals\nmay continue to provide care to patients outside the provider networks established by NPHO.\n\n\x0c-31-\n\nAs noted in Part IILB above, the NPHO board has approved the new form of\nParticipation Agreement (see Exhibit VII), but NPHO has not yet entered into the new\nParticipation Agreement with any member yet. If a physician who is a member of NPHO plans\nto continue as a member of NPHO, the physician will be required to enter into the new form of\nParticipation Agreement.\nUnder the proposed, new Participation Agreement, in addition to the electronic medical\nrecord and clinical commitments noted in Part IILB above, each participating physician must\nagree that if NPHO has entered into an agreement with a Payer, the physician will provide\ncovered services under NPHO\'s agreement with the Payer and will not separately contract with\nthat Payer for the provision of covered services. Additionally, the participating physician must\naccept the terms and conditions of each Payer agreement, including terms relating to prices, fees,\ncharges, reimbursement, withholds, and risk pools, where applicable. The Participation\nAgreement further provides that a participating physician may otherwise participate in any other\nhealth network and provide medical services independently of NPHO, as long as such\nparticipation does not preclude the physician from complying with the terms of the NPHO\nParticipation Agreement.\nThe proposed, new Participation Agreement will permit NPHO to market products to\nPayers that are approved by its Board of Directors; use its best efforts to enter into Payer\nagreements with financial incentives for use of participating physicians; and use its best efforts to\nsecure agreements that require Payers to provide members a greater level of coverage of\nservices, if such services are obtained from participating health care providers.\nC.\n\n.loint Contracting is Subordinate, Ancillary, and Reasonably Related to the\nClinical Integration Plan\n\nNPHO believes that this proposed joint contracting with Payers on behalf of its\ncompeting physician members is subordinate, ancillary, and reasonably related to its plan to\nclinically integrate its members\' provision of services and to deliver coordinated care by a group\nof health care providers committed to the Plan because it will provide a stable and identifiable\nroster of physicians and facilitate in-network referrals, thus increasing patient volume and\nharnessing network effects and economies of scale, while providing efficiencies and reducing\ntransaction costs to both physicians and Payers. Finally, NPHO will take steps to limit any\nanticompetitive "spillover" effects from the proposed joint contracting.\nProviding a Stable and Identifiable Roster of Physicians. All NPHO physicians will be\nrequired to participate in all Payer contracts negotiated by NPHO, and NPHO believes that\nclinical integration will be facilitated by this requirement. Specifically, NPHO believes that this\nrequirement will help to assure that the panel of physicians providing services under the program\nis clear, identifiable, and consistent and unlikely to vary from contract to contract.\n\nEnsuring a consistent panel of physicians will necessarily be complicated by periodic\nphysician attrition, as well as the periodic addition of new physicians and perhaps dismissal of\nnon-compliant physicians, but the fundamental goal of having a stable, clearly identified, and\nconsistent panel of physicians will not change. In any event, joint contracting would be better in\nthis regard than the nearest alternative - the messenger model.\n\n\x0c-32-\n\nFacilitating In-Network Referrals. Mter the new Participation Agreement is in place,\nNPHO will operate as a single integrated network with all participating providers working\ntogether to achieve clinical integration. Accordingly, NPHO physicians will be required to refer\npatients to other NPHO physicians when it is medically appropriate to do so and the patient is\namenable to the referrals. NPHO believes that joint contracting will reinforce the in-network\nreferral requirement because, if different physician panels represented a subset of NPHO\'s\nmembership for each Payer contract, physicians are more likely to have to refer to physicians\noutside the NPHO network.\nIncreasing Patient Volume and Harnessing Efficiencies of Scale. Related to the topic\nof in-network referrals, to best integrate the program\'s quality improvement initiatives into the\nphysicians\' practices and to reap the full benefit of the network effects of the electronic medical\nrecords system, NPHO believes is desirable to maximize the number of patients in each\nphysician\'s practice. In this regard, the more patients that each NPHO physician sees, the more\ninterdependent they become with other participating physicians, because all physicians indirectly\nbenefit from the network effects of additional data points and experience gained from treatment\nof each patient. With increased patient volume, joint contracting will necessarily encourage\nincreased information (and improved clinical practice). Each additional data point provides\nbroader benefits to all network physicians, patients, and Payers. Without joint contracting,\nNPHO\'s ability to obtain information on both patients and physicians would be more difficult,\nthe results of its data collection less robust, and its evaluation of that data and implementation of\npractice protocols - key components all - would be undermined and rendered less effective.\nAbsent joint contracting, the physicians may lack the patient volume that would provide\nsufficient incentives for their substantial investment in the success of the integrated program.\nNPHO believes that the more patients a physician sees in the proposed program, the more likely\nthe physician will be willing to invest the necessary time and effort in the various aspects of the\nprogram\'s operation.\n\nProviding Efficiencies and Reducing Transaction Costs to Payers and Physicians.\nJoint contracting as part of a broader suite of clinically integrated services should be attractive to\nPayers not only because it helps to control costs and minimizes transaction costs, but also\nof\nbecause it provides going-forward\nto health\ncontact. As evidence of these\xc2\xb7 benefits\n\nJoint contracting will likewise provide an incentive to physicians to join the network, as\nphysicians will not only benefit from the clinical network effects, but will also be able to\ndelegate this function to a central organization and avoid the negotiation process, which is often\ndisruptive to their practice as it requires them to get up to speed on various contractual matters.\nOn the whole, this allows doctors to focus their time and energies on patient care, rather than\ncontracting matters, which should ultimately benefit both patients and their physicians.\n\n\x0c-33-\n\nLimiting Anticompetitive "Spillover" Effects. The FfC has noted that it would have\nserious concerns if a proposed clinical integration would facilitate physicians\' agreements to sell\ntheir services outside of the joint venture network. 3 To be clear, NPHO physicians will not\ncollectively set the prices they will charge to any patients who are not covered by the health\nplans with which NPHO bargains. NPHO will take steps to ensure this, including limiting its\nphysician members\' access to competitively sensitive information (such that only non-physician\nstaff will see actual physician prices). Additionally, NPHO will inform physicians of restrictions\nto ensure that harm to competition does not occur from the possibility of coordinated interaction.\nFinally, NPHO hospitals and physicians do not have a large market share in the NPHO service\narea, and NPHO is a non-exclusive network. It would make little sense for a non-exclusive\nnetwork with very limited, if any, ability to exercise market power to go to the expense of\nimplementing a clinically integrated collective negotiation arrangement in order to reduce output\nor increase prices if, as here, Payers could simply avoid contracting with NPHO.\nIn sum, the success of NPHO\'s program depends significantly on all of its physician\nmembers participating in all of its contracts. Achieving NPHO\'s goals - collecting and\nharvesting robust and meaningful data, providing practical and effective clinical guidelines and\ndisease management protocols, and ensuring efficient care - would be far more difficult if\ndifferent physicians were participating in different Payer contracts, referral patterns had to be\nadjusted accordingly to keep patients within the applicable network, patient volume was lower,\nand information on patient treatments and health care provider behavior were less robust and\nuniformly available. Absent the joint contracting, the planned benefits, while theoretically\npossible, are not practical given business realities.\n\nv.\n\nLEGAL STANDARD AND CONCLUSION\n\nThe FTC and DOl\'s 1996 Statements of Antitrust Enforcement Policy in Health Care\n("1996 Health Care Statements") explain that clinical integration may be demonstrated, by way\nof example:\nby the network implementing an active and ongoing program to evaluate and\nmodify practice patterns by the network\'s physician participants and create a\nhigh degree of interdependence and cooperation among the physicians to control\ncosts and ensure quality. This program may include:\n(1) establishing\nmechanisms to monitor and control utilization of health care services that are\ndesigned to control costs and assure quality of care; (2) selectively choosing\nnetwork physicians who are likely to further these efficiency objectives; and (3)\nthe significant investment of capital, both monetary and human, in the necessary\ninfrastructure and capability to realize the claimed efficiencies. 4\n\n3\n\nSee, for example, the FrC/DOJ 1996 Statements of Antitrust Enforcement Policy in Health Care, Statement 8, \xc2\xa7\nB, available at http://www.ftc.gov!bc!healthcare/industryguide/policy/statement8.htm.\n\n4\n\nJoint 1996 Health Care Statements 8, \xc2\xa7 B.l. The Joint 1996 Health Care Statements emphasize that these are\nonly examples, rather than "the only types of arrangements that can evidence sufficient integration to warrant rule\nof reason analysis."\n\n\x0c-34-\n\nNPHO submits that, with implementation of its Clinical Integration Plan, it will be a fully\nclinically integrated, centrally managed joint venture offering substantial market efficiencies and\nfacilitating innovation in the delivery of health care services to patients as described in\nStatements 8 and 9 of the Health Care Statements. Its proposed joint contracting system is not\ninherently anticompetitive and should be analyzed under a truncated rule of reason analysis,\nrather than per se prohibited.\nSpecifically, and by way of review, through its electronic medical records system,\nproposed clinical guidelines, disease management program, Quality Assurance Committee,\nmonitoring and enforcement mechanisms, and substantial financial and "sweat equity"\ncommitments, NPHO will operate in a manner that creates a high degree of interdependence,\ninteraction, and cooperation among participating physicians and health care providers in order\nimprove access to care, enhance quality of care, and control costs. NPHO has created an\ninfrastructure of pooled resources; has approved and is beginning to monitor and establish\nprotocols and evidence-based clinical practice guidelines; and has formulated a plan that should\nresult in delivery of improved quality of care in a more efficient manner that the participating\nproviders and professionals could not otherwise achieve independently.\nNPHO is implementing an active, dynamic, and ongoing Clinical Integration Plan.\nComponents of the Plan include outcomes reporting, managing the care continuum, reducing\ncosts, information sharing, creating clinical practice guidelines, monitoring utilization,\ncontrolling compliance with clinical practice guidelines and related protocols in an effort to\nprovide better patient care and treatment, and taking corrective action when necessary. The\nanticipated results include improving access to care, enhancing quality and efficiency of care,\nand ultimately improving the health of the communities served. Participation requires a\nsignificant investment of time and capital in the necessary infrastructure and capability to realize\nthe anticipated benefits and effectiveness. The use of the eClinicalWorks electronic medical\nrecord is critical to clinical performance and organizational viability. It positions the\nparticipating providers and professionals to better manage patients, successfully control costs,\nlimit practice variations, and achieve significant differentiation in the market. Also, the\nelectronic medical record will enable the participating providers and professionals to adopt and\neffectively execute clinical practice guidelines and new concepts anticipated from comparative\neffectiveness research initiatives.\nThe attributes of NPHO under the Clinical Integration Plan will transform from a\ntraditional physician-hospital organization into one with:\n\n\xe2\x80\xa2 Information continuity\n\n\xe2\x80\xa2 Care coordination and transition\n\xe2\x80\xa2 Peer review and teamwork for high-value care\n\xe2\x80\xa2 Easy access to appropriate care\n\n\xe2\x80\xa2 System accountability\n\xe2\x80\xa2 Continuous innovation\nThe Plan allows the participants to re-position their services to align with market trends,\nas well as transparency in quality and cost in order to demonstrate better outcomes and\nsuccessfully compete in a value-based purchasing environment. It facilitates meaningful use by\n\n\x0c-35participating hospitals, physicians, and others of a fully integrated and coordinated electronic\nmedical record. It bears the commitment from medical leadership to share outcomes data - peer\nto peer - and evaluate the findings in a coordinated and quality-focused manner. It presents an\nopportunity for medical leadership to intervene and make improvements where outcomes data\nreveal that quality is not at targeted or required levels. And it ensures that medical leadership\nwill receive continuing and useful training, education, and support to successfully manage high\nintegration and top quality challenges.\nThe proposed collective negotiations with Payers, including price negotiatIOns, are\nsubordinate and reasonably necessary to achieve substantial efficiencies arising from clinical\nintegration. Joint negotiation through NPHO will ensure that a sufficient, stable, and identifiable\nnumber of physicians across multiple specialties will continue to participate in NPHO. It will\nfacilitate in-network referrals and ensure adequate patient volume to benefit from economies of\nscale and incentivize physician involvement. It will allow participating physicians the\nopportunity to reduce transaction costs, including costs of legal review, that are incidental to the\ncontracting process, in part offsetting the substantial time and financial investment made in\nconnection with NPHO participation. Additionally, collective negotiations will allow NPHO to\noffer a single, comprehensive, integrated network, allowing for pricing in the aggregate, instead\nof separate contracts. Finally, NPHO will take steps to limit any anticompetitive "spillover"\neffects from the joint contracting, such as coordinated physician agreements with regard to nonnetwork Payers.\nNPHO\'s proposed, new Clinical Integration Plan involves a powerful platform for\nhospitals, physicians, other health care professionals, and other health care facilities and\ninstitutions to build relations and foster integration. NPHO believes that its proposed joint\ncontacting should be considered ancillary and subordinate to the joint venture, reasonably\nnecessary to the Clinical Integration Plan\'s success and the efficiencies it will make possible, and\nthus analyzed under the rule of reason.\nREQUEST FOR ADVISORY OPINION\n\nOn behalf of NPHO, we request an advisory opinion as to how the FTC would analyze\nNPHO\'s activities if, based on the foregoing information and proposed clinical information plan,\nNPHO develops contract proposals, negotiates contract terms (including price terms), arranges\ncontract participation, and enters into contracts on behalf of NPHO participating health care\nprofessionals and providers.\nIf you have any questions, please\n(dan.loeffler@mcafeetafLcom, (405) 301-7406).\n\ncontact\n\neither\n\nVery truly yours,\n\nMichael E. Joseph\n\nme\n\nor\n\nDan\n\nLoeffler\n\n\x0c-36-\n\ncc:\n\nMr. Markus H. Meier\nMr. David Narrow\nMr. Daniel A. Loeffler\n\n\x0cExhibit I\nOrganizational Structure\n\nThe following chart shows the organizational structure and relationships among NPHO\nmembers:\n\n\x0cExhibit II\n\n\x0cExhibit III\nNPHO Board of Managers\n\nThe following table lists the members of the NPHO Board of Managers.\nNorman Physician Hospital Organization\n2009 Board of Managers\n",;"\n\n,\n\n\xc2\xb7. . )\'\'\';~:z,t,{{< .\n\nN~m~\xc2\xb7\xc2\xb7\xc2\xb7\n\n....!,(y<\',.\n\nStephen Connery, M.D., Family Practice (Chairman)\nRobert Holbrook, M.D., Gastroenterologist\nTadgy Stacy, M.D., Pediatrician\nJoe Voto, M.D., Anesthesiologist\nCarol Anderson, D.O., Ob-Gyn\nTom Connally, M.D., General Surgeon\nJames Love, M.D., Internal Medicine\nChris Paskowski, M.D., Otorhinolaryngologist\nMeegan Carter, VP Revenue Cycle\nDavid Whitaker, President & CEO\n\n,\n.\'\n\nI\'iit;\n\n:..\n<\'2".: Teriif.~*pit~s ... ;" . ?".\n2011\n2011\n2011\n2011\n2012\n2012\n2012\n2013\nNRHS Board Representative\nNRHS Board Representative\n\'\n\n\'\n\n\'"\';.\n\n~\n\n\x0cExhibit IV\nNorman Physicians Hospital Organization Staff\nA brief overview of the background of each NPHO staff member appears below.\nGary P. Clinton, D.Ph. has served as the Executive Director of NPHO since 1995,\nhelping to guide and manage the organization through various stages of evolution and\ngrowth. Beginning his healthcare career as a pharmacist, he has owned or managed\nseveral healthcare organizations including a pharmacy, durable medical equipment\nprovider, and home health agency providing him with the clinical and business\nbackgrounds necessary to function as an effective leader of NPHO. He is a graduate of\nthe University of Oklahoma.\nStephen E. Connery, MD has chaired the NPA and NPHO since 2004. Board certified\nin family practice, Dr. Connery has operated a private practice in Norman since 1989 and\nmaintains medical staff privileges at Norman Regional Hospital, and Seminole Hospital\nin Seminole, Oklahoma. He also serves as chairperson of the medical staff evaluation\ncommittee at Norman Regional Hospital. Dr. Connery received his graduate medical\neducation and family practice residency training at the University of Oklahoma College\nof Medicine. Professional memberships include the American Medical Association,\nOklahoma State Medical Association, and American Association of Family Practice.\nKathryn Roberts, R.N. has served as the Director of Quality Assurance for NPHO since\nIn this role, she is responsible for the design, development,\nFebruary, 2009.\nimplementation, maintenance, and evaluation of all quality improvement programs and\ninitiatives for NPHO. She develops all policies, procedures, protocols, and guidelines,\nutilizing national standards of evidence-based medicine. Additionally, she assists the\nNPHO Board regarding performance improvement. As the Director of Quality\nAssurance, she also plays a primary role in all clinical integration efforts.\nAudene Eubanks is the Supervisor, Contracts and Accounts Payable for NPHO. She\nalso coordinates special NPHO projects and serves as a liaison with the physician\nmembers. In addition, she is responsible for the NPHO website encompassing: links to\nthe NPHO participating providers; a health resources guide for patients and family\nmembers; and secured physician access to NPHO information. Before joining NPHO,\nMs. Eubanks worked for 11 years as a medical assistant with responsibility for patient\nevaluation and treatment, billing office management, and employee training.\nLynnette Chafin brings over 20 years of clinical and physician practice management\nShe is certified as an\nexperience to her position as eClinicalWorks Trainer.\neClinicalWorks trainer and provides physician practices with the support necessary to\nevaluate, tailor, implement, and operate the eClinicalWorks electronic medical record\nsystem.\nLeigh Anne McGregor brings over 20 years of clinical and physician practice\nmanagement experience to her position as eClinicalWorks Trainer. She is certified as an\neClinicalWorks trainer and provides physician practices with the support necessary to\n\n\x0c-2-\n\nevaluate, tailor, implement, and operate the eClinicalWorks electronic medical record\nsystem.\nRhonda LeMay is a trained eClinicalWorks "super user" who assists with the initial\nimplementation of the electronic medical record in physician practices and provides\nongoing staff and physician support. She has 16 years of experience in the medical field\nand uses her knowledge of front office, back office, and clinical functions to ensure\nsmooth physician office transition to electronic medical record.\nBrian Yeaman, MD is the director of physician informatics for NPHO and installation of\neClinicalWorks in Norman. He is leading the effort in Norman to create the local\nnetwork through NRHS and NPHO and has played a key role in the quality improvement\nand quality assurance processes of the clinical integration model. The local network\ndesign and governance has been facilitated by SMRTNET and NPHO. Dr. Yeaman is also\nthe chief medical information office at the NRHS and is the Medical Director for the\nGOCHC SMRTNET effort. Dr Yeaman trained at Tufts University in Boston and\ncontinues to operate a family practice at the Norman Clinic.\n\n\x0cExhibit V\n\n\x0cExhibit VI\nMarket and Demographic Information\n\n\x0cExhibit VI.A\nNorman Physician Hospital Organization\nService Area Profile\n\nCharacteristic\nPopulation, 2000\nPopulation, 2008\nLand area, 2000\n(square miles)\nPersons/square mile\nPersons 65+, 2007\nWhite persons, 2007\nBlack persons, 2007\nAmerican Indian &\nAlaska Native persons,\n2007\nPersons of Hispanic or\nLatino origin, 2007\nForeign born persons,\n2000\nHigh school graduates\n(age 25+), 2000\nBachelor\'s degree or\nhigher (age 25+), 2007\nMean travel time to\nwork (min., workers\nage 16+), 2000\nHomeownership, 2000\nMedian household\nincome, 2007\nPersons below poverty,\npercent 2007\n\nOklahoma\n\nCleveland\n\n660,450\n706,617\n709.9\n\n208,016\n239,760\n536.1\n\n65,519\n69,616\n787.7\n\n45,513\n51,066\n1101\n\n27,210\n27,247\n807.5\n\n27,742\n32,365\n569.7\n\n931.5\n12.4%\n74.5%\n15.5%\n3.3%\n\n388.1\n9.1%\n83.1%\n4.9%\n7.9%\n\n83.1\n13.9%\n79.6%\n3.3%\n11.4%\n\n46.4\n12.4%\n88.2%\n3.0%\n5.2%\n\n33.7\n17.6%\n85.9%\n3.0%\n7.7%\n\n48.7\n13.0%\n89.7%\n0.9%\n5.6%\n\n12.3%\n\n7.2%\n\n3.1%\n\n4.3%\n\n4.3%\n\n5.7%\n\n7.2%\n\n4.4%\n\n1.1%\n\n1.1%\n\n1.6%\n\n2.6%\n\n82.5%\n\n88.1%\n\n79.3%\n\n79.5%\n\n73.0%\n\n79.3%\n\n25.4%\n\n28.0%\n\n15.5%\n\n14.4%\n\n12.0%\n\n15.7%\n\n20.9\n\n22.3\n\n25.0\n\n26.9\n\n23.4\n\n27.3\n\n60.4%\n$41,598\n\n67.0%\n$51,052\n\n72.1%\n$38,614\n\n75.7%\n$43,341\n\n73.8%\n$38,360\n\n81.4%\n$48,654\n\n15.9%\n\n10.0%\n\n18.8%\n\n14.1%\n\n16.6%\n\n10.0%\n\n\x0cExhibit VI.B\nNorman Physician Hospital Organization\nProfile of the Oklahoma City Metropolitan Area and NPHO Service Area\n\nCounty\n\n2000\nPopulation\n\n\xc2\xb7~j,Q,$~~i\'~e~Are~:t~{ni\\\xc2\xb7P"~}\xc2\xb7.\xc2\xb7.\xc2\xb7.\xc2\xb7,\xc2\xb7\xc2\xb7\' .\n\nCleveland\nMcClain\nGarvin\nGrady\nOklahoma\nPottawatomie\nSA Total\n\n208,016\n27,742\n27,210\n45,513\n660,450\n65,519\n1,034,450\n\n2008\nPopulation\n\':;?,~~;}\\\n\n. . . \'.\'\n\n239,760\n32,365\n27,247\n51.066\n706,617\n69,616\n1,126,671\n\n\':Pl(J.M~tropolititij;,;Are~\xc2\xb7\'!;\'\xc2\xb7:;\xc2\xb7::f;;c;>L?;\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7\xc2\xb7:\n\n2000-2008\nPopulation\nchange\n\nLand Area\n(square miles)\n\nF~:f };\' ~)2~h> .~\\\n447.2\n536.1\n56.8\n569.7\n33.7\n807.5\n46.4\n1,101.0\n995.4\n709.9\n88.4\n787.7\n249.7\n4,511.8\n.\'~\\);. \'S. ?~,.\' . . ~\n\xc2\xb7l~~;.\xc2\xb7.H~~\\\n117.9\n899.71\n447.2\n536.1\n46.4\n1101.0\n33.6\n957.7\n51.2\n744.5\n56.8\n569.7\n995.4\n709.9\n218.\n5,519\n\n\'~\n\n15.3%\n16.7%\n0.1%\n12.2%\n7.0%\n6.3%\n8.9%\n\n:";-:i,\xc2\xb7t:\'~;i\\.",\n\n\'.\n\n2008 Persons\nper Square\nMile\n.\'\n\n87,697\n106,079\n21.0%\nCanadian\n208,016\n239,760\n15.3%\nCleveland\n45,513\n12.2%\n51,066\nGrady\n32,080\n32,153\n0.2%\nLincoln\n33,924\n38,102\n12.3%\nLogan\n27,742\n32,365\n16.7%\nMcClain\n660,450\n706,617\n7.0%\nOklahoma\n1,095,422\n1,206,142\n10.1%\nOKC MA Greater\nOKC\n;iOJ(C Cc)mJ>ine~le$t~tisti,~Ji~~i;ZAddit\'QI).of ShawneeMicroUrban;Ar\xc2\xa2fllPoJtaw~t6Ihi~~G:6\'unty":\n88.4\n787.7\n65,519\n69,616\n6.3%\nPottawatomie\n202.3\n6,306.2\n1,160,941\n1,275,758\n9.9%\nOKC CSA Total\n\n\x0cExhibit VI.B (Cont\'d)\nNorman Physician Hospital Organization\nProfile of the Oklahoma City Metropolitan Area and NPHO Service Area\nOklahoma City\n\nOklahoma City is the capital and largest city in Oklahoma, with city limits extending\nbeyond Oklahoma County into urban, rural, or suburban areas in Canadian, Cleveland, and\nPottawatomie counties. The city\'s estimated 2008 population was 551,789. Of the city\'s land\narea of 607.0 square miles, 322.3 square miles are urban, resulting in 871.5 residents per square\nmile. Oklahoma City is one of the most important livestock markets in the U.S. and receives\neconomic and employment support from several prominent energy companies, varied light and\nheavy industries, Tinker Air Force Base, and the federal government. Oil, natural gas, and\npetroleum products are major components of the economy.\nMoore\n\nMoore is a suburb with estimated 52,361 residents in the south Oklahoma City\nmetropolitan area with city limits extending into southwestern Oklahoma County and northern\nCleveland County. The city surrounds 1-35 between Oklahoma City and Norman. Moore\'s\npopulation density has grown from 1,892.8 residents per square mile to an estimated 2,412.9 in\n2009 reflecting a 27% population increase since the 2000 census. Moore is centrally located\nbetween the state\'s capital to the north and the University of Oklahoma to the south. The city\nhas experienced recent growth in residential additions and commercial developments.\nNorman\n\nNorman is located in Cleveland County, approximately 20 miles south of downtown\nOklahoma City and immediately south of Moore. Norman is a well-established "college town"\nwith approximately 30,000 students. It is also the state\'s third largest city with a growing fulltime population of over 106,000 residents. The city\'s 2006 estimated population density was\n540.6 residents per square mile.\nNorman is the home of the National Storm Prediction Center, National Severe Storms\nLaboratory, the National Weather Center, and many weather-related private businesses. In\naddition to several research companies, the city has a variety of major employers and industries,\nincluding SouthWest NanoTechnologies, York International/Johnson Controls, Hitachi, Astellas\nPharma, Albon Engineering, Xyant Technology and Office Max\'s National Sales Center.\nPurcell\n\nPurcell is south of Norman along the 1-35 and US-77 corridors. The city is a retail hub of\n45,600 residents, including residents of neighboring communities and unincorporated rural areas\nof McClain and southern Cleveland counties. The area\'s commerce benefits from several multimillion dollar horse farms.\n\n\x0cExhibit VI.C\nPatient Populations and Insurance Coverage Estimates\n\nAs illustrated in the table below, U.S. Census data indicate that median household\nincomes in the service area range from a low of $38,360 in Garvin County to a high of $51,052\nin Cleveland County. Consistent with median household income data, almost 40% of Garvin\nCounty households earn less than $25,000 per year as compared with about 25% of Cleveland\nCounty households. Pottawatomie County has the highest percentage of persons living in\npoverty.\nNorman Physician Hospital Organization\nMedian Household Income & Poverty\n\n% Households\nMedianHH\n\nPottawatomie\nState Average\n\n34.4%\n$41,551\n\n16.6%\n14.1%\n10.0%\n15.9%\n18.8%\n15.8%\n\nResident age distribution and household incomes drive the percentage of county residents\ncovered by Medicare and Medicaid. According to the Oklahoma Health Care Authority, almost\n220,000 NPHO service area residents were covered by Medicaid in 2007, with another 134,000\ncovered by Medicare. The estimated percentage of residents who are uninsured approximates\n200,000, ranging from a low of 15.8% of McClain County residents to a high of 19.6% of\nPottawatomie County residents. The economic downturn in the last two years has likely\nincreased the percentage of uninsured in all NPHO service area counties.\n\n\x0c-2-\n\nNorman Physician Hospital Organization\nInsurance Coverage Estimates\n\nCleveland\nGarvin\nGrady\nMcClain\nOklahoma\nPottawatomie\n\n16.4%\n17.3%\n16.0%\n15.8%\n18.2%\n19.6%\n\n14.3%\n24.6%\n19.6%\n14.2%\n21.6%\n25.0%\n\n9.7%\n17.5%\n13.6%\n12.9%\n12.2%\n14.1%\n\n75.8%\n57.7%\n66.6%\n72.7%\n66.0%\n60.7%\n\nNPHO serves the entire population of the NPHO service area, including the underinsured, uninsured, indigent, and self-insured through many forms of medical care. Among the\nmost frequently used facilities are the Emergency Departments of NRHS and Moore Medical\nCenter. Indigent patients and self-insured with limited resources can also utilize the Health for\nFriends Clinic across the street from Norman Regional Hospital.\nMost, if not all, NPHO participating physicians participate in Medicare and serve the\nMedicare population, but the Medicaid population is not as well served. This is primarily due to\nthe fact that Medicaid is difficult to work with and hard to obtain reimbursement for services.\nMost physicians would prefer to see a patient on Medicaid without compensation in their offices,\nrather than work through the process of securing payment from Oklahoma\'s Medicaid program.\nNorman Physician Hospital Organization\n2008 Market Discharges by County and Payer Class\nVN\n\n2\nredact3.doc\n\nWorkers\n\nOther\n\n\x0cExhibit VI.D\nService Area Employers and Employees\nNearly 525,000 individuals in the NPHO service area were employed as of February\n2008, with the unemployment averaging 3.5%. In Oklahoma County, Tinker Air Force Base, the\nU.S. Postal Service, INTEGRIS Health, City of Oklahoma City, Oklahoma City School District,\nW.H. Braum & Company, OU Medical Center, Federal Aviation Administration, AT&T, OGE\nEnergy, SSM Health Care of Oklahoma, Putnam City Independent School District, Edmond\nPublic Schools, Mercy Health Center, Moore Public Schools, Homeland Stores, and United\nParcel Service each employ 2,000 or more individuals and collectively represent 29% of total\ncounty employment.\nIn Cleveland County, the University of Oklahoma is the largest employer in the area,\nfollowed by Norman Regional Hospital. Other major employers in Cleveland County include\nNorman Public Schools, Chickasaw Nation Industries (Riverwind Casino), York International,\nand the City of Norman. The top 23 employers in Cleveland County collectively employ only\n14.5% of county employees. A large percentage of employers in Cleveland County employ\nfewer than 50 employees. Chickasaw Nation Enterprises is one of the largest employers in\nMcClain County, along with Purcell Municipal Hospital.\nAlthough a few manufacturing companies are located in the service area, the largest\nemployers typically include local government, small community hospitals, small businesses, and\nfarms.\nBased on the experience of NPHO, an increasing percentage of area employers, both\nlarge and small, obtain insurance coverage for their employees through health plans and\nnetworks established by third-party administrators, with a decreasing percentage of employers\nmaintaining self-funded plans.\nNPHO currently serves as the primary healthcare provider network for the PPOs of three\nemployers in the service area, including NRHS, Oklahoma Electric Coop, and the student\npopulation of the University of Oklahoma\'s Norman campus. NPHO also serves as the\nsecondary healthcare provider network for several employers with employees in the service area.\n\n\x0cExhibit VI.E\nHealth Insurance Plans, HMOs, Discount Medical Plans, Third-Party Administrators\nInformation regarding employee enrollment by health insurer is generally viewed as\nproprietary and not readily available. However, health insurance plans, HMOs, Discount\nMedical Plans, and third-party administrators are regulated by the Oklahoma State Department\nof Insurance. While the data obtained from the Department of Insurance and provided below\nreflect the state as a whole, the information is illustrative of the market served by NPHO.\nAccording to the 2009 Annual Report and Directory issued by the Department of\nInsurance, the following top 10 accident and health insurance companies have a combined\nmarket share of over 70% of the $1 billion in premiums written in Oklahoma for group accident\nand health insurance policies.\nNorman Physician Hospital Organization\nTop Oklahoma Accident and Health Insurance Companies\n;ePIDpany\')J\\~:,/{1;:~>,:\\. \':\'!~J;~,: .... \'. 1,.\'i\':(Direc,t\'\xc2\xb7~remilinrs\':\' \'~;:~ark~t"Share;\'~: \xc2\xb7!.j,\'CmnUlative% ,~\n\nUnited Healthcare Insurance\nAetna Life Insurance\nPrincipal Life Insurance\n\n249,245,727\n169,289,023\n169,112,491\n\n23%\n16%\n16%\n\n23%\n39%\n55%\n\nTime Insurance\nMetropolitan Life Insurance\nAmerican Fidelity Assurance\n\n31,295,034\n29,279,597\n28,403,124\n\n3%\n3%\n3%\n\n58%\n61%\n64%\n\nHartford Life & Accident\nInsurance\nConnecticut General Life\nGolden Rule Insurance\nUnum Insurance of America\nAll Other\nTotal\n\n26,882,047\n\n3%\n\n66%\n\n22,749,114\n22,285,619\n22,212,976\n292,844,420\n1,03.599.172\n\n2%\n2%\n2%\n28%\n100%\n\n68%\n70%\n72%\n100%\n\nHMOs in Oklahoma wrote about $2.9 billion in health benefit premiums in 2009 including:\n\xe2\x80\xa2\n\xe2\x80\xa2\n\xe2\x80\xa2\n\n$1.4 billion in premiums for group and individual coverage\n$.59 billion in premiums for federal employees health benefits\n$.7 billion in premiums for Medicare beneficiaries\n\n\x0cExhibit VI.E (Cont\'d)\nNorman Physician Hospital Organization\nTop Oklahoma HMOs\n\n.\'\xc2\xb7,;U;1,j\'2:h;<:u~.:<:.\' :;.\'?\' Qi~.~~rfreniillms \'. ,,:. \xc2\xb7\xc2\xb7::M;~tket Shai~,;r .\xe2\x80\xa2. CupIlUatjve %\n\xc2\xb7CgmpanY..Mt::\xc2\xb7\xc2\xb7\xc2\xb7\n47%\nHealthcare Service Corporation\n1,366,531,365\n47%\nCommunityCare\n69%\n626,017,668\n22%\nPacifiCare\n81%\n12%\n340,528,140\nAetna Health, Inc.\n86%\n137,163,761\n5%\n89%\nGlobalHealth, Inc.\n100,553,538\n3%\nHCHC\n91%\n67,207,526\n2%\nInsurance\nServices\nCompany\n94%\n65,828,369\n2%\nDelta Dental Plan of Oklahoma\nSterling Life Insurance Company\n96%\n55,958,412\n2%\n97%\nCoventry Health and Life Insurance\n51,478,375\n2%\nBlueLincs Inc.\n98%\n22,717,209\n1%\nAll Other\n100%\n54,040,248\n2%\nTotal\n2,888,024,611\n100%\nThe Department of Insurance also regulates discount medical plan organizations that\ncontract on behalf of plan members, in exchange for fees, with a healthcare provider or provider\nnetwork for access to medical services at a discounted rate and third-party administrators that\ncollect premiums and settle claims for health or life insurance coverage. The Department of\nInsurance 2009 report lists 26 discount medical plans and 288 third-party administrators. NPHO\nhas helped to facilitate agreements between NPHO members to participate in the provider\nnetworks established by CommunityCare, Aetna, BlueLincs, and PacifiCare, as well as other\nsmaller insurance plans.\nInformation regarding enrollment by specific insurance plan is considered proprietary by\nmost plans and is not readily available. However, based on data obtained from the Oklahoma\nState Department of Health, residents of the service area generated about 154,000 hospital\ndischarges in 2008. Of these, about 40% were covered by Medicare, 2% by Commercial carriers\nincluding managed care plans, and 22% by Medicaid. About 6% were classified as\nuninsured/self-pay.\n\n\x0cExhibit VI.F\nNorman Physician Hospital Organization\nMedical and Surgical Services Provided by Participating Hospitals\n\nHospital Service\niY:~dical!SurfdffitJ$J{rYices\n\nNorman\nRegional\nHealth System\n(NRH&MMC)\n...\n\n~esthesiology\n\nBariatricIWeight Control Services\nCardiovascular Services\nCardiology\nCardiac Catheterization Laboratory\nThoracic Surgery\nCardiac Rehabilitation\nChemotherapy\nMedical/Surgical Critical Care\nCardiac Intensive Care\nNeonatal Intensive Care\nGeriatric Services\nHemodialysis\nEndoscopic Department\nObstetrics/Gynecology\nBirthing Room/LDRP\nGeneral Medicine\nGeneral Surgery\nAmbulatory Surgery Center\nOncology\nOutpatient Surgery\nOrthopedic Services\nComputer Assisted Orthopedic Surgery\nOrthopedics\nPediatrics\nPediatric Medical Surgical Care\nBehavioral Health Psych Consultation\nPsychiatric Emergency Services\nPsychiatric Geriatric Services\nTobacco Treatment/Cessation Program\nNeurological Services\nNuclear Medicine\nPain Management\nPulmonary Medicine\nShaped Beam Radiation System\nTissue Transplant\nTrauma Center (Certified)\nUrology\n\n\'.1~i,};i\xe2\x82\xac!):::\n\n"<..\n\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\n\n.:\n\nMoore\nMedical\nCenter\n(NRHS)\n\nNorman\nRegional\nHospital\n(NRHS)\n.\xe2\x80\xa2\n\n.\n\n.. . \';;0:,:\nX\nX\nX\nX\nX\nX\nX\n\n,~:\n\n.~ ....\n\nX\n\nPurcell\nMunicipal\nHospital\n\n., .,\n\n.\'i~;lb \'S(;1;S~:\'\n"j.\\""\n\nX\n\nX\n\nX\n\nX\n\nX\nX\n\nX\nX\n\nX\nX\n\nX\nX\n\nX\nX\nX\nX\n\nX\n\nX\nX\n\nX\nX\n\nX\nX\n\nX\nX\n\nX\nX\nX\nX\n\nX\nX\n\nX\n\nX\n\n\x0c-2-\n\nExhibit VI.F (Cont\'d)\nNorman Physician Hospital Organization\nDiagnostic and Ancillary Services Provided by Participating Hospitals\nNorman\nRegional\nHealth System\n(NRH& MMC)\n\nHospital Service\n~fJjuignostilS~iifl~:es\n\n\',,::,C\';\',i; \',\'\n\n" /\'>;:{"r:~:Eit,\n\n\'/\'~;/\'\n>->,"\n\nDiagnostic Imaging\nDiagnostic Radioisotope Facility\nBreastlMammography\nFull Field Digital Mammography\nCT Scanner\nMRI\nUltrasound\nPathology\n~-n,c:{[lary $ubp6tt&\n\nOtbet\'Seff{ttii(!;\'\n\nX\nX\nX\nX\nX\nX\nX\n\n\'."-\';-:;\n\n,-,-",-,\n\n\',:,;,:,\n\n\'::",,:"\'.:-\'.::":/\n\nOccupational Health\nOccupational Therapy\nPhysical Therapy\nPhysical Rehabilitation Outpatient\nServices\nRespiratory Therapy\nRenal Dialysis\nIntermediate Nursing Care\nSwing Bed Services\nSleep Disorder Center\nSpeech Therapy\nAmbulance Services\nAmbulatory Surgery Center\nHospital-Based Outpatient Care\nServices\nFreestanding Outpatient Care Center\nImmunization Program\n\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\nX\n\n2\nredact3.doc\n\nNorman\nRegional\nHospital\n(NRHS)\n\nMoore\nMedical\nCenter\n(NRHS)\n\n\\~\';\':jX~t ?~iiF~~f~(~;~]l\'{~:\' ,\' ,"\n\nX\n\n\',\'\n\nPurcell\nMunicipal\nHospital\n~"~,Ii,:;\\,\n\nX\n\n",>;\'{)\';f\nX\n\nX\nX\nX\nX\n\nX\nX\n\'/?\'~;;F;\';\';L,<\n\nX\n\n\' ">:\n\n"\'/;;\';:"\',"\n\n<:-\'.,;,\';:\': -\',\n\nX\nX\nX\nX\nX\nX\n\nX\n\nX\nX\n\nX\n\nX\n\nX\nX\nX\n\nX\n\nX\n\n\x0cExhibit VI.G\nAncillary Service Providers\nAs noted in the table below, other healthcare providers affiliated with NPHO include a wide\narray of outpatient diagnostic, treatment, and rehabilitation services providing Payers and\npatients with increased access to care.\nNorman Physician Hospital Organization\nAncillary Service Providers\n\nMedical Plaza Endoscopy Unit\nPhysicians Surgical Center\nWest Norman Endoscopy Center\nNorman Endoscopy Center\n\nMaysville Rural Health Clinic\nImmediate Care of Oklahoma (3 locations)\nPulmonary Clinic\n\nNorman Behavioral Health\nApple Medical\nNorman Regional DME\n\n.\n\nLifecare Oklahoma, Inc.\nHome Health Care\nLifecare Oklahoma Hospice, Inc.\n\n.....\n\nBrookhaven Diagnostic Imaging Center\nMoore Medical Center Diagnostic Imaging\nNorman Open MRI\nNorman Regional HealthPlex\n),: Norman Radiology Services, Inc .\nNorman Regional Hospital Diagnostic Services\nNorman Regional Radiology Services\n<~~ Norman Regional PET/CT Center\nOrthopedic & Sports Medicine Center\n\nMoore Medical Center\nNorman Regional Hospital Diagnostic\nServices\nNorman Regional HealthPlex\nNorman Regional Lab Service (3 locations)\nNorman Regional Hospital\nPurcell Municipal Hospital Laboratory\n\nPurcell Municipal Hospital Radiology\n\nNorman Regional Cardiac Rehabilitation\nNorman Regional Occupational Medicine\nNorman Regional Physical Performance Center\n\n\x0cExhibit VI.H\nPhysician Shortages in Selected Specialties\nApplication of physician demand models based on the current utilization and distribution\nof physicians across the U.S. to the NPHO service area population suggests that there are\ncurrently shortages of selected physician specialties. Shortages have been exacerbated by the\ngrowth of specialty hospitals and ambulatory surgery centers in the market, making it difficult to\nmaintain specialty coverage for the general, acute care hospitals. In addition, about 20% of\nNPHO service area physicians are age 60 and over, and they are likely to retire in the next five to\nten years when demand for healthcare services by the Baby Boom generation will reach its peak.\nPhysician supply and demand reports published by the Health Resources and Services\nAdministration (HRSA) of the U.S. Department of Health and Human Services in October 2006\nand December 2008 indicate that the supply of Total Patient Care Physicians (including\nresidents) in the U.S. will increase by 13% from 2005 to 2020, falling short of the projected\nrequired growth rate of 22%. Given changing physician practice patterns and the potential for\nearly retirement, these estimates may be conservative.\nThe table below applies HRSA current supply requirements to the 2010 estimated\npopulation of the NPHO service area and indicates that the market may already be experiencing\nshortages in internal medicine, pediatrics, general surgery, and obstetrics/gynecology before\nconsideration of the broader service area population that relies on the Oklahoma City\nMetropolitan Area for healthcare services. Continued population growth, combined with\nphysician retirement and aging of the population, will extend physician shortages across many\nother specialties.\nNorman Physician Hospital Organization\nNPHO Service Area Physician\n\nActive Physicians by Specialty (Age<75)\nTotal\nTotal Non-Patient Care\nTotal Patient Care\nPrimary Care\nGeneral Family Practice\nGeneral Internal Medicine\nPediatrics\nMedical Specialties\nCardiology\nOther Internal Medicine\nSurgical\xc2\xb7 Specialties\nGeneral Surgery\nOB/GYN\nOphthalmology\nOrthopedic Surgery\nOther Surgery\nOtolaryngology\nUrology\n\nCurrent\nSupply\n\n461\n342\n180\n97\n\n120\n156\n86\n135\n42\n48\n\nNote: Numbers in red indicate current shortage areas.\n\n2010 SA Requirements\nHigh Economic\nGrowth\nBaseline\n3,304\n3,177\n179\n178\n3,125\n3,000\n1,140\n1,108\n462\n449\n473\n460\n205\n199\n391\n375\n93\n90\n298\n285\n704\n670\n175\n167\n171\n167\n86\n79\n108\n102\n74\n70\n45\n41\n45\n45\n\n\x0cExhibit VII\n\n/\nI\n\n\x0cExhibit VIII\n\n\x0cExhibit IX\n\n\x0cExhibit X\n\n\x0c'