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HMO SPENDS ITS DOLLARS PRUDENTLY

A recent letter called into question the legitimacy of the rising cost of drugs as the main reason behind Independent Health's need to adjust premiums. Further, the writer accused Independent Health of paying "extravagant" salaries and perks for employees, including a "free" holiday party and hotel rooms at the Adam's Mark for all employees. Quite simply that is not true.

While we do have a holiday party, employees contribute to the cost by purchasing a ticket. And although the Adam's Mark is gracious enough to extend a room discount to our employees, employees who choose to stay pay for their own rooms.

For the past 20 years, Independent Health has dedicated itself to providing high quality and high value in health coverage to our members. This includes maintaining prudent administrative expenses, which are among the lowest of all HMOs in the country.

Administrative expenses, including salaries and all other non-medical expenses, total 10 percent of our operating budget. The national average is more than 16 percent. What does this mean? It means that compared to other HMOs, more of our members' premium dollars (90 percent) are used to pay for their medical care.

Further, to ensure appropriateness, the administrative budget is reviewed and approved by our board of directors. Surely it is understandable that maintaining competitive salaries and a positive work environment attracts and keeps the best and brightest employees, which translate into the award-winning customer service that Independent Health has been recognized for nationally on numerous occasions.< There are many things we do at Independent Health to reduce the need to adjust premiums. Unfortunately despite our best efforts, one cannot ignore or downplay that medical costs, especially the cost of drugs, are rising at an alarming rate. Unfortunately as well, until drug prices are brought under control, that translates to higher costs for all of us.

JUDITH BOYLE

Vice President,

Human Resources

Independent Health

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