• SPNet, as a part of Select Medical (NYSE:SEM) is the first clinical network company to develop a boutique specialty network for workers' compensation solutions. In April 2008, SPNet was started as an alternative solution for stakeholders in the workers' compensation arena. As networks became more prevalent, it was clear that an opportunity existed to create a model that would allow the stakeholders (the injured worker, employer, insurance companies, TPAs, claims management team and providers) to benefit from a partnership environment where the focus was on clinical outcomes and as well as overall program cost reductions.

    After their due diligence, a group of senior level clinical executives within the organization approached the Select Medical board about developing a "boutique specialty network" concept. Within this concept, the team felt they could build a new model to deliver a "win-win" solution to the stakeholders.

    We decided to offer a customized network designed to meet the individual demands of each client. Additionally, we "right sized" our model to provide competitive pricing and unprecedented clinical management. We don't need every provider in a particular region; only an appropriate number to meet the geographic needs of the client. By utilizing a "Select Provider Network" (SPNet), we are able to work collaboratively with our provider partners to deliver better outcomes. Providers benefit from having an option to participate based on volume, rates and clinical peer to peer interaction. Our claims management partners benefit from concurrent clinical management and increased case closure velocity. Our clients benefit by getting quality outcomes and reduced program costs.

    As part of the commitment to the upstream payor and downstream providers, SPNet adopted the "messenger model" philosophy. The Messenger Model philosophy prevents networks from brokering services based on the lowest purchase price to the network. SPNet pays all providers equally based on the specific upstream payor contract. As a result, the pricing component is removed as a factor for direction of care, and our incentive is to direct care to the appropriate provider based upon location and service needs. This model also affords motivation to the provider to earn more business based on dashboard scores for customer services, clinical outcomes and cost containment strategies. Furthermore, if the upstream payor rates are not suitable to the provider's delivery-to- cost ratio, he/she can opt out of that specific contract.

    Through this model, working with engaged leadership with our clients and clinicians, we have been able to deliver market leading cost containment strategies that produce competitive discounts AND 15-25% reductions in overall utilization. In August 2008, SPNet signed its first customer and has grown annually each year. We currently service a variety of industry sectors.