Since our inception, at CorVel we have had a vision of patient-friendly, automated and timely workers' compensation administration. Each year we have endeavored to enhance our product line, meeting the continually changing needs of the marketplace and our customers. Through these years, we have had a consistent strategy and that has allowed our past investments to fully support future programs. The bill review services begun in the late 80s supported the entry into PPO (Preferred Provider Organizations) programs in the early 90s. Having chosen to build proprietary software for both case management and medical bill review, we were prepared to launch the CareMC healthcare website in 1999.

CorVel began building the foundations of our vision many years ago. We chose to build our own software so that we could be certain that its architecture would support a view of the future that few shared at that time. Our investments in technology and systems total over $150 million and leverage the knowledge of a few hundred dedicated product development and systems support associates. Although traditionally managed care may have been associated with case files and medical bills, our real service is one of information management. We communicate with all the constituencies in disability management, managing the information involved. Particularly in recent years, technology has become a critical factor in our service offering.

Several key external developments, coupled with CorVel's long history of technology investment, have come together to create a unique platform from which to implement new claims administration processes. CorVel has been able to achieve practical implementations of technology that have supported the Company's growth and throughout these development years we have always built for the future. We committed to building our own data centers, to distributing computing to reach customers and to building our own healthcare transaction portal. Our investments have been expensive and consuming, but they are fed by our passion to find our way to a different future. We have chosen to make a difference.

Four years ago, during the dot.com wave, we began building our healthcare portal, CareMC. We chose, though, to spend at a rate we could afford to maintain. Since then, there have been other managed care websites, but each lacks either the financial staying power or the foundation of decades of software development. Our ability to succeed with CareMC, is supported by our ability to maintain a service development commitment over decades.

CareMC allows information used by payors and providers to be combined in one database. Access is universal with the internet, and yet secured by CareMC's design. The new healthcare security mandated by HIPAA's national legislation is addressed using our role-based security interface. Immediate access to information allows time delays to be substantially reduced. In turn, this eases the stress caused in the past by the cumbersome paper processes.

Information can be collected once, and shared as appropriate, with all responsible constituents. Information transfer errors are eliminated. Outcomes reporting is available much more readily and in a more timely manner. The cost of communicating is substantially less in the internet model than in the paper processes of the past.

At the same time, we are also enjoying the wave of innovation in communications technology. Telephones have moved to our pockets and merged with our computers. The web has made sending messages cheaper and much more intuitive. The key external factors making our technology strategy timely, include: a) ongoing increases in computer processing power, b) the emergence of the internet as a uniquely useful tool in healthcare administration and c) the application of modern document and workflow management techniques in the administration of claims.

Much of what makes disability management complex is the number of constituents, each with different interests and information needs. Bringing all of those people and issues together, with efficient and powerful processes, can be done with much more ease, capitalizing on today's technology. We believe that internet services will continue to grow. Although the levels of enthusiasm reached in 2000 were excessive, the intuitive sense of the power of the internet was an accurate assessment.

Timely communication eliminates delays. Powerful databases connected to the web make information inexpensive, accurate and available. The internet not only gives us access, but offers easy and friendly access. When everyone involved in a patient's care can see the right information in timely manner, workers' compensation solutions become simpler, more affordable and understandable. CorVel provides those solutions.

Fair and prompt reimbursement for healthcare providers is a big concern for all involved parties. CorVel's bill review and PPO management software, MedCheck, facilitates prompt review of the costs of healthcare and provides an automated process for appropriate reimbursement. Automated adjudication provides consistent application of the related regulations. Medical bills can be approved for reimbursement online. The reduced cost for payors processing reimbursement, offsets the cash flow loss created by prompt reimbursement. As a result, when the cumbersome paper reimbursement system is replaced by CorVel's automated process, both the providers' and payors' positions are enhanced.

Healthcare administration is increasingly like the transaction processing in financial services, and we see automation use at the levels existing in commercial banking. Workflows will be significantly changed by available automation techniques. Timely, secure access to appropriate information will ease the tasks that support healthcare professionals and reduce the cost of processing claims.

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