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Press Release

University of Pennsylvania Health System and Independence Blue Cross Reach Contract Agreement

Philadelphia, PA - July 16, 2007 - The University of Pennsylvania Health System (UPHS) and Independence Blue Cross and its affiliates (IBC) announced today that they have signed new five-year contracts, effective August 1, 2007.

One important new component of the agreement is quality-based pay for performance, which provides the opportunity for UPHS to earn additional compensation for delivering increasingly high quality health care to IBC members. This merit-based compensation approach measures quantitative criteria such as minimizing hospital acquired infections, preventing adverse drug events, and reducing surgical complications to improve performance on patient safety and quality of care.

“We are pleased to have reached a fair and reasonable agreement that reflects our ongoing partnership in providing care with a focus on quality and patient safety,” said Ralph W. Muller, chief executive officer of the University of Pennsylvania Health System, which includes Penn Presbyterian Medical Center, Pennsylvania Hospital, and the Hospital of the University of Pennsylvania.

“I am thrilled to continue our very progressive relationship with UPHS and feel especially proud of the professionalism and the fact-based, data-driven approach that both organizations used to arrive at this five-year agreement,” said Joseph A. Frick, president and chief executive officer of IBC.

“We are committed to striking a balance between reasonable provider reimbursement and reasonable customer premiums for health care coverage,” said Frick, who heads Southeastern Pennsylvania’s leading health insurer, providing coverage to nearly 3.4 million people nationwide. “We look forward to continuing to work with UPHS hospitals and physicians in striving to deliver high-quality, safe and affordable heath care. We also look forward to continuing to share with UPHS a serious commitment to enhancing patient safety and quality of care for our members and the community as a whole.”

Over the years, UPHS has received consistent recognition for health care excellence. The clinical specialties at the Hospital of the University of Pennsylvania have been consistently ranked among the nation’s best by U.S. News & World Report, most recently as July 2007. Penn Presbyterian Medical Center was the only hospital in Philadelphia to be selected as one of the nation’s “100 Top Hospitals” in November 2006 for cardiovascular care by Solucient, a Thomson health care business. In May 2004, AARP’s Modern Maturity ranked Pennsylvania Hospital as one of the Top Ten Hospitals in America.

About the University of Pennsylvania Health System
The University of Pennsylvania Health System includes three hospitals, (the Hospital of the University of Pennsylvania; Pennsylvania Hospital, the nation’s first hospital; and Penn Presbyterian Medical Center); a faculty practice plan; a primary-care provider network; two multi-specialty satellite facilities; and home care and hospice.

About Independence Blue Cross
Independence Blue Cross is a leading health insurer in Southeastern Pennsylvania. IBC and its affiliates provide coverage to nearly 3.4 million people. For nearly 70 years, Independence Blue Cross has offered high-quality health care coverage tailored to meet the changing needs of members, employers, and health care professionals. In 2006, IBC was nationally recognized by the Disease Management Association of America for ConnectionsSM, its outstanding disease management program that improves the health and wellbeing of people with chronic illnesses. IBC’s HMO and PPO health care plans have consistently received the highest ratings from the National Committee for Quality Assurance.

Independence Blue Cross is an independent licensee of the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield Plans.