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“Incentives--Win/Win/Win for Employers/Insurers, Physicians and Employees” by Jeff Greene September 17,2009. Background. The Issue - Unaffordable healthcare that is bankrupting us individually, our communities, our businesses and our country

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slide1
“Incentives--Win/Win/Win for Employers/Insurers, Physicians and Employees”

by Jeff Greene

September 17,2009

background

Background

The Issue - Unaffordable healthcare that is bankrupting us individually, our communities, our businesses and our country

Team – Self-insured business owner, medical practice management expert, practicing physicians, medical academician, health insurance executive

The Challenge - Align the interests of the key stake-holders to produce a “win-win-win” that results in cost containment by improving health and healthcare…

slide3

The Key to Health Care Cost Containment

Physicians

Consumers/Patients

Employers/Insurers

No health care cost containment solution can be sustained without balancing the interests of the essential stakeholders...like a three-legged stool

Triangulation

Alignment-of-interests™ to create a win-win-win proposition

Registered trademarks of Xerox Corp., Ford Motor Co., General Motor Corp., and Center for Medicare and Medicaid Services are used for illustrative purposes only. These organizations have no relationship with nor do they endorse MedEncentive

what we knew

What We Knew…

Patient behavior and provider performance drives most of healthcare’s cost

The doctor-patient relationship is special

Existing solutions such as wellness and prevention, information technology, and care management lack provider and consumer engagement

The first goal is patient medical literacy, empowerment and motivation spurred on by the physician.

what we did
What we did...
  • Set-out to align the interest of the insurer/ employer, the physician and the patient/consumer
  • Decided to use the Internet to have insurers offer financial rewards to “both” doctors and patients for demonstrating to one another adherence to a performance standard – “doctor-patient mutual accountability”
  • Choose “information therapy” as the first perform-ance standard
slide6

More affordable healthcare

Ultimate Objective

Improved health

Better healthcare

Goals that support the Ultimate Objective

Wellness and prevention

Personal health records

Smoking cessation

Rx compliance

e-prescribing Rx

Wellness and medical interventions that support the Goals

Patient centered medical home

Physician directed disease mgt

Weight mgt

Patient directed precertification

Adoption of health IT

Health risk assessment

Patient medical literacy

and empowerment

Provider application of

evidence-based medicine

Catalyst that recruits and motivates doctors and patients to the interventions

Doctor-patient interactive incentives that achieves “mutual accountability”

Pyramid of Health and Healthcare Transformation

slide7

If patient participation in health programs is the first step toward healthcare cost containment, then…

why is information therapy so important
Why is information therapy so important?

Medical illiteracy and poor doctor-patient communications is a bigger problem than expected…

northwestern and emory universities research team medical literacy study
Northwestern and Emory Universities Research Team Medical Literacy Study

What You Don't Understand Could Kill YouBy LINDSEY TANNER – CHICAGO - July 23 2007

Plenty of evidence suggests that having trouble understanding medical information is bad for your health. Now new research says it could even be deadly.

“Inability to understand medical information and instructions makes it hard to manage chronic illnesses from asthma to diabetes to heart disease,” said lead author Dr. David Baker, chief of general internal medicine at Northwestern University's Feinberg School of Medicine. “That in turn can lead to declining health, frequent hospitalizations and ultimately death, especially in older patients whose health may be more precarious to begin with,” he said.

Almost 40 percent of those deemed medically illiterate died during the study, compared with 19 percent of those who were literate. Factoring in health at the outset and other variables, medically illiterate patients were 50 percent more likely to die than the others.

The difference in death rates "was much higher than we expected," Baker said.

slide11

UCONN Reports on the Cost of Medical Illiteracy

NEW REPORT ESTIMATES COST OF LOW HEALTH LITERACY BETWEEN $106 - $236 BILLION DOLLARS ANNUALLYExperts discuss if improving health literacy is the solution to providing coverage for the nation’s 47 million uninsured peopleSTORRS, CT– October 10, 2007 – A new report released today from the University of Connecticut states that the cost of low health literacy to the United States economy is in the range of $106 billion to $236 billion annually.  According to the report, Low Health Literacy: Implications for National Health Policy, the savings that could be achieved by improving health literacy translates into enough funds to insure every one of the more than 47 million persons who lacked coverage in the United States in 2006, according to recent Census Bureau estimates.“Health literacy” is defined as the degree to which individuals have the capacity to obtain, process and understand basic health information.  According to the U.S. Department of Education’s 2003 National Assessment of Adult Literacy (NAAL), which contained a health literacy component for the first time, 36 percent of the adult U.S. population – approximately 87 million people – has only Basic or Below Basic health literacy levels.

slide12

Related to health literacy - Poor doctor-patient communications…

A battery of studies have determined:

  • Doctors interrupt patients within the first 23 seconds
  • 15% of patients fully understand their doctor
  • 50% of patients comply with doctors’ orders
  • Causes misdiagnosis, inferior clinical outcomes, malpractice, and higher costs
what do the medical literacy and doctor patient communication studies suggest
What do the medical literacy and doctor-patient communication studies suggest?
  • Medical illiteracy and poor doctor-patient communication:
    • is a bigger problem than expected
    • is a leading cause of premature death
    • is a principal driver of health care cost
    • should be diagnosed and treated by physicians
  • Physicians should be compensated for treating medical illiteracy
  • Patients should be rewarded for demonstrating medical literacy
design objective
Design objective…
  • Create the best and most efficient means for physicians to treat medical illiteracy and poor doctor-patient communications
  • Create the best means for patients to become medically literate and become an informed and empowered consumer
what is medencentive
What is MedEncentive?

A patent-pending web-based incentive system that:

  • “bolts-on” to any health plan to…
  • improve healthcare and health by…
  • rewarding both doctors and patients, interactively, to…
  • achieve “mutual accountability” for…
  • incorporating evidence-based medicine (EBM) treatment guidelines and information therapy (Ix®)…
  • all of which has been proven to control costs and align the interest of doctors, patients and insurers/employers.

® Ix is a registered trademark of Center for Information Therapy

some program basics
Program participation is voluntary for both doctors and patients

Doctors and patients can earn financial rewards immediately for each office visit

Physician compensation is approximately 20% more for each office visit for additional effort and responsibility, not for merely doing what they are already being paid to do

Patient financial rewards are in the form of office co-pay rebates ranging from $10 to $30, depending upon the employer

Some Program basics...
doctors can practice medencentive in two ways

Doctors can practice MedEncentive in two ways...

  • Real-time while the patient is in-office or shortly thereafter, or...
  • After-the-fact...
    • As a result normal insurance claim, MedEncentive sends an email
    • Time limits to respond
    • MedEncentive also sends a fax reminder

$15.00 ≈ 20% of an office visit

$7.50 ≈ 10% of an office visit

is the patient deprived if the doctor fails to participate

Is the patient deprived if the doctor fails to participate?

  • Patients are not deprived of their opportunity to benefit from the program even when their doctors fail to participate, because…
  • We use diagnoses from the office visit claim submitted by the doctor to generate the information therapy prescription...
slide20

•Flow chart hyperlinks allow the doctor to review the source of each guideline and gain decision support

•2 or 3 simple questions makes this application fast and easy to use, yet the doctor’s answers allow the patient to vali-date the doctor’s com-pliance to the EBM guideline.

Doctors earns up to 20% more for declaring adherence to evidence-based medicine and for treating medical illiteracy through MedEncentive’s physician website…

medencentive s anti cookbook medicine feature is key to physician acceptance

•By simply selecting a reason for non-adher-ence to a guideline that is shared with the patient, the Program allows and encourages doctors to deviate from a guideline each time it is appropriate. And the doctor still earns up to 20% more.

MedEncentive’s “anti-cookbook medicine” feature is key to physician acceptance ...
slide22

•Letter suggests alternative web access options so all patients can participate.

• Log-on instructions with the URL and User ID/Password helps insure privacy.

•Allows patients a 2-week timeframe to complete instructional course.

•Offers patient a financial incentive to participate in the Program that can be customized to each employer and/or particular health promotion.

The physician’s website response triggers a patient “information therapy” prescription letter…

•Ix letter is initially sent by mail, but after first prescription, patient can elect to have future prescriptions sent electronically.

patients are educated with the same guideline content as their doctor specific to their diagnosis
Patients are educated with the same guideline content as their doctor - specific to their diagnosis…

MedEncentive’s patient website provides:

  • Medical information in easy-to-understand language (6th to 8th grade reading level)
  • Patients are required to read and answer a series of questions in each section to earn their financial reward.
slide24
The patient questionnaires create powerful behavior shaping “checks and balances” to the physician’s input and vice-versa when…
  • The patient demon-strates medical literacy…
  • The patient records health status…
  • The patient declares compliance to EBM…
  • The patient agrees to have responses sent to the physician, thus creating a powerful compliance motivator
slide27
The patient is also asked to rate the doctor’s performance against the recommended care, which creates an even greater “check and balance”…
  • The patient must demonstrate medical literacy of the recommended care before rating the doctor…
  • Individual patient ratings do not directly impact the doctor.Only aggregate patient ratings are used to measure physician performance. Doctors consider this method of quality rating to be much fairer and more appropriate than ratings by insurance companies or the government using claims data or other controversial criteria.
slide28

3/8/2008

Timely completion of “information therapy” results in immediate financial reward to patients for compliance

•MedEncentive triggers an automatic transaction notifying the TPA to generate a patient payment

•The voucher serves as another co-brand-ing opportunity and a vehicle for other patient communica-tions

slide29

What is coming in the near future?

e-Prescribing and Patient Rx Compliance

Personal Health Records Adoption

Purchase/Payer + MedEncentive = ROI

Patient-centric Health Home

Disease Mgt

Provider + MedEncentive = Treatment Tools and More $

Patient + MedEncentive = Empowerment, $ and Health

Pre-certification

Hospital Care Mgt

Wellness and Prevention

(health risk assessments, screenings, fitness, smoking cessation, etc)

MedEncentive will recruit doctors and patients to these health programs and inspire mutual accountability…

success acknowledgment an important final step
“Success Acknowledgment” – An important final step

Success Acknow-ledgment creates another important check and bal-ance that is de-signed to achieve mutual account-ability between the doctor and the patient.

Congratulations for completing your informa-tion therapy prescription! You are now eligible to earn an additional $ xx.xx when you update your personal health record and have your doctor acknowledge your health accomplish-ments, for which he/she will also be paid.

We call this process “Success Acknowledgment.” It is simple, yet very important. Studies indicate that when patients inform their doctors of their health successes and doctors acknowledge these successes, better health and healthcare will occur.

Click “Next” to learn how Success Acknowledgment works.

Next

Exit

an example of integrating a commercial phr to a physician electronic health record ehr systems
An example of integrating a commercial PHR to a physician electronic health record (EHR) systems...
how success acknowledgment works
How Success Acknowledgment Works…

The objective of Success Acknow-ledgment is to use financial incentives and the Internet to motivate both doc-tors and patients to encourage and challenged each other to do better.

This specific re-ward is contingent while other MedEncentive rewards may not be.

Success Acknowledgment, how it works…

When your doctor acknowledges your accomplishments on the MedEncentive website, then both you and your doctor will earn an ad-ditional financial reward. Your doctor will have 15 days to respond to our notification before this opportunity expires. You will be notified by email the moment your doctor responds.

If we do not hear from your doctor within 5 days, then we will notify you by email or telephone so you can call your doctor to request a response. This is voluntary for both you and your doctor, but your doctor must ac-knowledge your success for both of you to earn the financial rewards.

That’s all there is to it…

Click next to see the list of health objectives you have accomplished that are pending your doctor’s acknowledgment.

Next

Exit

how success acknowledgment works38
How Success Acknowledgment Works…

The first health objective is cur-rently available for acknowledgment

Here are your completed health objectives that are pending your doctor’s acknowledgment…

  • Demonstrated knowledge of: How to Live with Hypertension and declared adherence to the recommendations in this article
  • Refilled your prescription for: Lipitor on: July 14, 2009
  • Passed a drug literacy test for and declared adherence to taking: Lipitor on: July 14, 2009
  • Enrolled in a smoking cessation program on: June 14, 2009
  • Completed a health risk assessment and followed-up on the findings with Beverly Jones, M.D. on: June 7, 2009
  • Had a consultation visit with Tom Smith, M.D. about back pain on: June 9, 2009
  • Completed SilverSneaker® sessions 9 times in: June 2009
  • Completed SilverSneaker® sessions14 times in: July 2009
  • Executed a living will on: July 14, 2009
  • Completed obesitytasks assigned by my Healthways® Care Support coach on: July 20, 2009
  • Updated my personal health record on: July 31, 2009
  • The remaining health objectives are a sampling of potential future ad-ditions

Next

Exit

the value proposition
The Value Proposition

Once the doctor acknowledges the patient’s health accomplishments through the MedEncentive web portable, then MedEncentive will authenticate the transactions and transmit financial reward approvals to the health plan for both the patient and their doctor, for both the Information Therapy Program and the Success Acknowledgment Program.

the value proposition40
The Value Proposition

Why two separate financial rewards?

The Information Therapy reward is made to the doctor and the patient independently. In other words, the doctor’s opportunity to earn his/her reward is not dependent on the patient’s participation and vice versa.

The Success Acknowledgment reward is made to the patient and the doctor only when the doctor performs the simple task of acknowledgment.

Obviously, we want both parties to earn both rewards. However, patients should not be deprived of being rewarded for completing information therapy simply because their doctors fail to acknowledge the patient’s health accomplishments. Health literacy is simply too important. Plus, patients will switch doctors if a doctor’s failure to acknowledge patient health accomplishments becomes an issue...

trouble in duncan

Trouble in Duncan

  • Skyrocketing health care costs
  • Union contract negotiations
  • Tax revenues were not increasing
  • Medical providers unwilling to reduce compensation
  • Needed to contain health care costs while improving care
  • Other cost-control efforts not working
what we did in duncan

What We Did in Duncan

  • Implemented quickly (within 30 days)
    • Simple “bolt-on” to existing health plan
    • Issued employee information kits
    • Distributed doctors education materials
    • Plan administrator sent daily claims data
    • Mailed incentive payments…fast
what we did in duncan44

What We Did in Duncan

Distributed Kits to employees made orientation and start-up quick and easy

four year results rewarding better care patient education and compliance lowers cost

Total Investment $181,227

Four Year Savingsvs. Projection

$1,834,212

Four Year Results: Rewarding Better Care, Patient Education and Compliance Lowers Cost

Four year program investment vs. “all-in” absolute claims cost = 9:1 ROI

four year results rewarding better care patient education and compliance lowers cost46

Total Investment $181,227

Four Year Savingsvs. Projection

$1,612,985

Four Year Results: Rewarding Better Care, Patient Education and Compliance Lowers Cost

Four year program investment vs. “all-in” claims cost = 8:1 ROIBased on per Member per Year (“PMPY) data

4 years of cumulative absolute cost savings validates medencentive impact on costs

4 year average since implementing MedEncentive = 1,729.287

1st Year

2nd Year

3rd Year

4th Year

4 years of cumulative absolute cost savings validates MedEncentive impact on costs
  • The 4 year average of “all-in” claims cost since implementing MedEncentive is 2.1%less than the baseline year.

Baseline Year

Based on absolute costs

4 years of cumulative absolute cost savings validates medencentive impact on costs48

The 4 year “all-in” claims cost since implementing MedEncentive is 20.0% less than expected costs using average healthcare inflation.

1st Year

2nd Year

3rd Year

4th Year

4 years of cumulative absolute cost savings validates MedEncentive impact on costs
  • The 4 year average of “all-in” claims cost since implementing MedEncentive is 2.1%less than the baseline year.

Baseline Year

Based on absolute costs

slide49

4 year average since implementing MedEncentive = 1,048.258

1st Year

2nd Year

3rd Year

4th Year

MedEncentive’s office-based solution used in Duncan is most effective at controlling the underlying non-catastrophic costs
  • The 4 year average of non-catastrophic claims cost since implementing MedEncentive is 13.2% less than the baseline year.

Baseline Year

Based on absolute costs

slide50

The 4 year non-catastrophic claims cost since im-plementing MedEncentive is 29.3% less than expected costs using average healthcare inflation.

1st Year

2nd Year

3rd Year

4th Year

MedEncentive’s office-based solution used in Duncan is most effective at controlling the underlying non-catastrophic costs
  • The 4 year average of non-catastrophic claims cost since implementing MedEncentive is 13.2% less than the baseline year.

Baseline Year

Based on absolute costs

a win for everyone

A “Win” for Everyone

  • “We save money and everyone loves it.”
    • Clyde Shaw, City Manager, City of Duncan
  • “If I hadn’t read my husband’s information therapy about a dangerous side effect of medication, my husband might not be here today.”
      • Betty E., Duncan, OK

Triangulation

“MedEncentive is easy and quick to use... I think it serves as a good second opinion for me and provides valuable information to my patients. And to top it off, the program increases my reimbursement and my patients are very motivated to get their co-pays back.“

Todd Clapp, M.D., Internal Medicine and Pediatrics, INTEGRIS Health

results from medencentive s expanded trials
Results from MedEncentive’s expanded trials...

What we have learned through the year ending 6/30/2009 from 7 separate installations representing approximately 7,000 covered lives in Oklahoma, Kansas and Washington:

  • 5 of the 7 installations have demonstrated or are reporting cost savings after implementing MedEncentive (the remaining 2 are indeterminate).
  • Patient/member participation rates above 55% consistently produced cost savings.
  • The overall annual patient/member participation rate in the Program for the year was 61.3%.
  • From the trial data, financial rewards less than $15 are inadequate to achieve patient/member participation rates sufficient to bend the cost curve.
results from medencentive s expanded trials53
Results from MedEncentive’s expanded trials...

To measure the efficacy of the information therapy delivered through the Program, all patients are required to answer the following question:

“On a scale of 1 to 5, how helpful has this information been to you in self-managing your health (5 being most helpful)?”

  • The aggregate score of the 13,673 responses was 4.07.
  • In addition, patients are asked to voluntarily comment on the Program. 1,194 patient/members offered comments out of 3,603 patient/member participants (33.1% response rate).

The volume and quality of these responses coupled with the aggregate benefit score present a strong case for the clinical and economic efficacy of information therapy.

results from medencentive s expanded trials54
Results from MedEncentive’s expanded trials...

The Program passes the ease of installation and scalability tests...

The Lourdes Health Network Story...

what makes medencentive so effective

What Makes MedEncentive So Effective?

The process of “Declare and Confirm” or “Demonstrate and Acknowledge” between doctors and patients invokes powerful behavioral science:

Studies show that patients don’t want their doctors to think they are medically illiterate and non-compliant…

Conversely, doctors don’t want patients to think they practice sub-standard care…

MedEncentive taps into the doctor-patient relationship to cause “mutual accountability” that leads to better health and lower costs.

a win for physicians

A “Win” for Physicians

“The employees think it’s (MedEncentive) a very good concept, and the primary care physicians find it easy to use and applicable to what they’re doing. As a physician, I’m enamored with it because it enhances the communication between the doctor and patient…”

Robert Kenagy, M.D.

Chief Medical Officer

Wichita Clinic

Quote from Employer Benefit Adviser Magazine

a win for physicians58
A “Win” for Physicians

Why physicians like MedEncentive...

  • It’s good for the doctor’s patients
  • It pays physicians well
  • It’s fast, easy and flexible for doctors to use
  • It’s anti-cookbook
  • It can reduce medical malpractice risk
a win for physicians59
A “Win” for Physicians

Provides physician protection from frivolous lawsuits

  • Has agreed to offer its best (lowest) pricing to physicians who participate in the MedEncentive Program...
  • Has agreed to grant physicians who participate in MedEncentive’s demonstrations free coverage during the 3 year evaluations...
a win for physicians60
A “Win” for Physicians

Endorsements and partnerships

  • The IPA Association of America (TIPAAA)
  • Oklahoma Academy of Family Physicians
  • Wichita Clinic
  • Northern New Jersey IPA
  • Duncan Physician Association
  • Plus many more pending…
a win for patients

A “Win” For Patients

MedEncentive is patient centric…

Educates, empowers and motivates…

Strengthens patients’ relationship with their doctors…

Rewards patients for taking responsibility for their health...

Patients really like it.

slide62

MedEncentive Participation Rate

If patient participation in health programs is the first step to cost containment, how does MedEncentive compare…

a win for employers insurers
A “Win” for Employers/Insurers

“We are excited about adding the MedEncentive program as both a health benefit improvement for our employees and an effective health care cost containment tool. The MedEncentive program will assist in our efforts to attract and retain quality employees while helping us improve their health and well-being.”

Gary L. Paxton

President and CEO

Dollar Thrifty Automotive Group, Inc.

slide64

A UnitedHealthcare health plan member ID card…

…for Dollar Thrifty Automotive Group employees…

…with MedEncentive bolted-on

A Dollar Thrifty/Wilson Partners/UnitedHealthcare/ MedEncentive Collaboration

what have we learned

What have we learned?

Our solution saves money

Doctor-patient mutual accountability is a powerful process

Financial incentives are necessary to invoke mutual accountability

Information therapy is very powerful medicine if delivered correctly

MedEncentive leapfrogs the issues that have plagued the pay-for-performance movement

If we want affordable, accessible and high quality healthcare, we must align the interests of the insurer, physician and consumer, and our solution accomplishes this…

slide66

More affordable healthcare

Ultimate Objective

Better healthcare

Improved health

Goals that support the Ultimate Objective

Wellness and prevention

Personal health records

Smoking cessation

Rx compliance

e-prescribing Rx

Wellness and medical interventions that support the Goals

Patient centered medical home

Physician directed disease mgt

Weight mgt

Patient directed precertification

Adoption of health IT

Health risk assessment

Patient medical literacy

and empowerment

Provider application of

evidence-based medicine

Catalyst that recruits and motivates doctors and patients to the interventions

Doctor-patient interactive incentives that achieves “mutual accountability”

Pyramid of Health and Healthcare Transformation

what value does medencentive offer or what purpose does it serve going forward
What value does MedEncentive offer or what purpose does it serve going forward?

Leonard Schaeffer, former CEO and Chairman of Wellpoint-Anthem said in an interview with McKinsey:

“We insurers can see the opportunities, but when we offer solutions we're at a disadvantage relative to some third parties. For one thing, many doctors don't trust us.”

“Unfortunately, insurance companies aren't seen (by doctors) as sources of accurate, timely, and unbiased information, so most likely we'll see third-party ‘infomediaries’ emerging that will gather and correlate industry data.”

key points

We must “triangulate”

the interests of the payer, physician and consumer to achieve sustained cost containment.

Key points…

Using “interactive incentives” to achieve “doctor-patient mutual accountability” is the most efficient and effective way to control costs through better health and healthcare.

If we are not improving “patient health literacy” we are not controlling costs. Compensating doctors to prescribe “information therapy” and administer literacy tests, plus rewarding patients for demonstrat-ing their literacy to their doctors is the best way to accomplish this priority.

slide70

Engages and rewards physicians

Educates, empowers and motivates patients

Enriches employer/insurers

Easy to use and implement

Collaborates with other solutions

Effectively and efficiently controls costs

Everyone benefits

q a jeff greene jgreene@medencentive com 405 319 8450 www medencentive com

Q&AJeff Greenejgreene@medencentive.com405-319-8450www.medencentive.com