1. Diversified Industries Corporation (DIC) is an international conglomerate with offices throughout the United States. It maintains an administrative function center in Cedar Rapids, Iowa which employs 1,500 people out of the 30,000 employees of DIC worldwide. DIC maintains a self-funded health insurance plan and utilizes a mechanism where its workers are essentially enrolled in high deductible plans that can be paired with health savings accounts created by DIC and supported by a separate employee benefit that permits employees to contribute dollars on a tax free basis (Section 125 on Cafeteria Plan). DIC has chosen an annual deductible of $1,400 for individual plans and $2,800 for a family plan. The out of pocket maximum is $2,800 for the individual plan and $5,600 for the family plan. The plan has an 80/20 coinsurance requirement above the deductible. Additionally, the employee is responsible for a $50 co-pay. DIC has chosen Wellmark Blue Cross/Blue Shield of Iowa to act as a third party administrator of its health care program in the United States. Wellmark has agreed to assist DIC in the administration and payment of claims and, further, has offered its Iowa preferred provider physician network and hospital organization to DIC for all Iowa employees for which it will receive a per member per month fee from DIC. All DIC employees are entitled to state statutory mandate benefits. DIC employees are encouraged to participate in DIC wellness programs and, if the employee achieves targeted goals for blood pressure, weight control, and smoking cessation the employee will receive a lower copayment, deductible and out of pocket maximum than employees that do not participate in the wellness program or do not achieve the targeted goals. DICs prescription plan requires its employees to use Walgreens as a health hub for all prescription drugs. Answer the following questions:

1. Construct a health care system depicting DICs arrangement in Iowa utilizing a boxes and arrows diagram. Be certain to identify and illustrate the three elements common to all health care systems. (Hint: Isolate the Third Party Payer function using a separate diagram if necessary.) (15 POINTS)
2. Identify three (3) patient financial strategies that DIC is utilizing to bring its health care costs down. Briefly explain the economic function of the patient financial incentives and give me your opinion if they will reduce health care costs for DIC and its employees. (5POINTS)
3. What role will utilization of Walgreens health hub model play for Iowa employees? How will it assist DIC in controlling its healthcare costs? (5 POINTS)
4. If you could change one aspect of DICs high deductible health plan using the HSA concept, what would it be? (5 POINTS)