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8 Health Care Resource Guide • 2016 – 2017 Financial instability Though Elsawy said Reliant will have a surplus this year, annual financial gains have not been consistent, the company's filings with the Internal Revenue Service show. Besides this year, the company's biggest recent gain was in 2010, when the medical group raked in $13.6 million in net income. The nonprofit reported a more modest $7-million gain the following year, and a small gain of $30,197 in 2012. Reliant lost $615,002 in 2013, but returned to profitability in 2014, with a $2.4 million gain. The tax forms do not include wholly-owned subsidiaries such as Lakeview Medical, the Reliant Medical Group Foundation and the Massachusetts Assurance Company, Reliant's malpractice company. Elsawy said he was able to turn last year's loss into a gain by focusing on accountability and position control – essentially streamlining process and hav- ing workers stick within the responsibilities of their position – and managing total medical expenses. "For awhile there was a tendency to not probably pay as much attention to [position control]," he said. "The other thing is ... management of our total medical expenses. We're a group that is highly capitated at full risk, so our abil- ity to control medical expenses is absolutely essential." Profitability issues Seema Naravane, the chair of Reliant's board, said factors influencing the unpredictability of the company's profits include insurance reimbursements that don't keep up with expenses. A bad flu season or the introduction of new drugs can also be contributing factors. "In general, there's a shift towards high-deductible insurance plans, and reimbursements are low. There's also a shortage of primary care physicians – it's multi-factorial," she said. "It's a tough time to be in the healthcare field." Joe Poats, a partner at HBI, which is owned by Burlington-based consulting firm Decision Resources Group, said shifts in reimbursements have been a major driving factor in profitability issues for independent medical groups. Competition for patients with larger, hospital-based healthcare networks is another factor, Poats said. Changing care model The transition into population health management is happening because the previous care model didn't focus heavily enough on prevention, Elsawy said, and therefore wasn't sustainable. This is something Reliant was doing "before it Harrington HealthCare offers a full continuum of outpatient behavioral health services, including psychotherapy and medication management for children, adolescents and adults. Four convenient locations put us close to where you are: • 29 Pine Street, Southbridge • 336 Thompson Road, Webster • 161 West Main Street, Dudley • 10 North Main Street, Charlton We also offer school-based services, couples counseling and family therapy. To schedule an appointment for any of our offices, please call our central intake line at (508) 765-2222. Community mobile outreach available 24/7 for youth and adults by calling (508) 765-3078. Harrington Behavioral Health. Let the dialogue begin. Most insurances accepted. No referral needed. Servicios disponible en español. 100 South Street, Southbridge, MA 01550 (508)765-9771 • harringtonhospital.org Reliant profits Reliant's financials were inconsistent in the years leading up to Tarek Elsaway taking over as president and CEO in January. 0 $100 $200 $300 $400 $500 $600 0 $3 $6 $9 $12 $15 REVENUE (in millions) NET INCOME (in millions) '10 '11 '12 '13 '14 '10 '11 '12 '13 '14 -$615,000 Source: Guidestar, 990 tax form

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