D2Hawkeye Introduces Innovative Predictive Modeling Tool Developed in Collaboration with the Operations Research Team at the Massachusetts Institute of Technology.

D2 Presents Risk Buckets Tool at Self-Insurance Institute of America's National Education Conference in Phoenix

PHOENIX -- D2Hawkeye (D2), a leader in health care data analytics, today introduced "Risk Buckets", an innovative predictive model, to D2HawkeyeExplorer, the Company's integrated medical management system. The Risk Buckets were formally introduced with delivery of a major paper titled "Mathematical Prediction of Healthcare Costs and Algorithmic Discovery of Medical Knowledge" at the world's largest Operations Research conference in Europe this summer.

The Massachusetts Institute of Technology's (MIT) Operations Research Center worked in collaboration with D2's clinical team to develop the Risk Buckets, which have achieved a 70 percent positive predictive value. According to MIT's review of the literature, this is the highest accuracy rate for prospective cost prediction ever achieved using claims data analysis.

The collaborative research team applied modern data mining methods used in financial models. Three years of longitudinal cost data (prescription drugs, medical procedures, and diagnoses) from 2.4 million individuals were combined with the Company's complex medical rules library to predict risk and cost. The Risk Buckets predict five levels Co greater than $55,000, greater than $19,000, greater than $8,000, greater than $3,000 and less than $3,000 Co within which individuals are likely to be grouped in the upcoming year.

"The Risk Buckets in D2HawkeyeExplorer are based on algorithms that weight for diseases and treatments based on past claims records," said Dimitris Bertsimas, Ph.D., Boeing Professor of Operations Research and co-director of the Operations Research Center at MIT, who led the MIT team. "By applying advanced operations research techniques to medical cost data, MIT and D2 were able to create a tool that dramatically improves prediction rates. Risk Buckets provide a 'snapshot' of people who are at most risk for future, costly care."

Risk Buckets are designed to be used in concert with D2's existing medical prediction tools, called the risk index (RI) and the adjusted risk index (ARI), to quickly identify members who will benefit most from care interventions, such as enrollment in a disease management program.

As of October 1st, Risk Buckets are being provided to current D2 clients as a no-cost enhancement to D2HawkeyeExplorer. "D2 is committed to the ongoing development of tools that add value for our clients," said Chris Kryder, M.D., founder and CEO of D2Hawkeye. "With the new Risk Buckets, our clients now have additional access to innovative technology that allows for superior cost prediction and provides a competitive advantage when managing medical costs and risks."

The Risk Buckets are featured in a demonstration at the Company's exhibit at this week's Self-Insurance Institute of America National Educational Conference in Phoenix (SIIA; booth #414).

Also at SIIA, Bruce Campbell, Ph.D., M.D., Chief of Health Services at D2Hawkeye, will discuss the use of administrative health information to help control plan costs. The session takes place on Tuesday, October 17, 2006 at the JW Marriott Desert Ridge Resort & Spa in Phoenix.

About D2Hawkeye

D2Hawkeye is a pioneer in the use of data analytics to help health care purchasers realize the value in clinical data and better manage risk. Founded in 2001 by physicians, D2Hawkeye's lead product is the D2HawkeyeExplorer, a Web-based program that integrates disparate data and applies evidence-based medical rules to identify individuals and populations that will benefit most from medical management programs. D2HawkeyeExplorer is used by payers nationwide and is the top analytics choice of mid-size third-party administrators, benefit consultants, and health plans. In fall 2006, D2Hawkeye introduced the D2HawkeyeAnalyzer and launched D2Consulting to help customers extract more meaning from their data and take action to manage care and costs. D2 is headquartered in Waltham, Mass. and has more than 160 employees worldwide. For more information, please log on to www.d2hawkeye.com.