Rewarding Both Doctors and Patients for Mutual Accountability

Jeff Greene

October 20, 2008

National Healthcare Incentive Institute

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A Completely Different Approach to Healthcare Incentives

A four year trial in Oklahoma, Kansas and Washington involving:– a unique web-based incentive system that…– “bolts-on” to any health plan to…– improve healthcare and health by… – rewarding both doctors and patients, interactively, for…– incorporating evidence-based medicine (EBM) treatment

guidelines and information therapy (Ix®)…– all of which has been proven to achieve high and

sustainable participation that control costs.

® Ix is a registered trademark of Center for Information Therapy

Doctor-Patient Mutual Accountability…

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What is MedEncentive?

A incentive system that:• recruits doctors and patients to participate in

quality improvement, care management and wellness programs…

• …and, more importantly, tabs into the power of the doctor-patient relationship to drive behavior improvement.

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Information Therapy Program

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Information therapy (Ix)that patients can

understand and use 4Timely, substantial, and per-

occurrence-of-care P4P incentive payments to both

physician and patient1Proprietary web-based

applications

Physician-friendlyevidence-basedmedicine (EBM) guidelines

The essential “declare and

confirm”adherenceverification

67 Better healthCost savings

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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

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How are Employees/Beneficiaries Oriented?

1. The Kit folder

2. A personal message from the employer’s leader

3. Additional Kit inserts emphasize Program features or explain customized benefits.

4. An informational video describes how and why the Program works.

5. The Kit can include a health ID card

Employees are oriented through benefit meetings or by distributing Member Kits or both. The Kits are designed to make Program implementation and maintenance easy.

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Doctors can practice the Ix Program 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%

$7.50 = 10%

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The Physician Log-in Screen

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Doctors earns up to 20% more for declaring adherence to evidence-based medicine and for treating medical illiteracy

through MedEncentive’s physician website…

• 2 simple but profound questions

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

•Doctors get to tell their patients why a guideline does not fit

•Patients get to express an opinion

•The employer/ insurer wins

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• Web access to all

• URL and User ID/Password helps insure privacy

• Allows patients a 2-week

• Values the reward

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

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

•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.

MedEncentive’s patient website provides:

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• 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

The patient questionnaires create powerful behavior shaping “checks and balances” to the physician’s

input and vice-versa when…

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The patient is also asked to rate the doctor’s performance against the recommended care, which

creates an even greater “check and balance”…

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3/8/2008

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

patients for compliance

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• The City has been handsomely rewarded in the first 2 years of the program.

• Most recent year’s spike in catastrophic cases is accelerating MedEncentive’s pre-certification/ hospitalization product.

The City of Duncan realized a significant ROI

Two year program investment vs. non-catastrophic claims cost

Physician Compensation* $21,144Patient Rewards* $27,835MedEncentive Fees $25,978

Total Investment $74,957

Two Year Savings vs. Projection $820,520

Return on Investment 995%

* Conservative approximations

Patient participation in health programs is key to cost containment...

MedEncentive Participation Rate

Patient satisfaction with health programs is also key to cost containment...

MedEncentive Satisfaction Rate

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A Dollar Thrifty/Wilson Partners/UnitedHealthcare/MedEncentive Collaboration

A UnitedHealthcare health plan member ID card…

…for Dollar Thrifty Automotive Group employees…

…with MedEncentive bolted-on

“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. PaxtonPresident and CEODollar Thrifty Automotive Group, Inc.

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Physician Organization Licensee

“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 OfficerWichita Clinic

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Pharmacy Benefit Mgt, e-Prescribing and Rx-Ix

Hospital Care Mgt

Wellness and Prevention(health risk assessments,

screenings, fitness, smoking cessation, etc)

Personal Health Records Adoption

Pre-certification

Patient-centric Health Home

Disease Mgt

Purchase/Payer + MedEncentive =

ROI

Provider + MedEncentive = Treatment Tools and More $

Patient + MedEncentive = Empowerment, $ and Health

MedEncentive will add the missing value proposition to cause these interventions to be adopted…

What is coming in the near future?

MedEncentive is a perfect partner for other

care management, wellness and HIT

initiatives

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Mortality Rate Based on Medical Literacy

19%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Literate Illiterate

Fiv

e Y

ea

r M

ort

alit

y R

ate

Northwestern and Emory Research Team

Why is information therapy so important?

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NEW REPORT ESTIMATES COST OF LOW HEALTH LITERACY BETWEEN $106 - $236 BILLION DOLLARS ANNUALLY

Experts discuss if improving health literacy is the solution to providing coverage for the nation’s 47 million uninsured people

            STORRS, 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.

UCONN Reports on the Cost of Medical Illiteracy

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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

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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

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No health care cost containment solution can be sustained without balancing the interests of the

essential stakeholders...like a three-legged stool

Purchasers/Payers

PhysiciansConsumers/Patients

The Key to Health Care Cost Containment

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

Triangulation

Web-based Solution

Payers

PMPMProgram Fee

Reduction inTotal Claims

Cost

Purchasers

Physicians

Out-of-Pocket Rebates

10% to 20% FFS Premium Payment

Patients

• Declare performance against a standard

• Confirm each other’s declaration

…create a “Triangulation” that produces a Win-Win-Win

MedEncentive functions as an “Informediary” to...

Winner

Winner

Winner

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

®

®

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In effect, MedEncentive’s methods combine Maslow’s Hierarchy of Needs, Pavlov’s Conditional Response, and the process of transference with free market principles taught by Adam Smith and Milton Friedman to achieve behavior modification, which leads to better health and lower costs…

The Behavioral Science Behind MedEncentive

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In other words, doctors exert considerable influence on patient behavior and vice versa. MedEncentive taps into this influence by offering financial and psychological motivation that strengthens the doctor-patient partnership in a way that promotes patient medical literacy, empowerment and compliance, which leads to better health and cost containment.

The Behavioral Science Behind MedEncentive

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Summary…

At the end of the day, no health care cost contain-ment solution can be sustained until there are incentives to do three things:

All previous attempts to reform healthcare failed because the incentives missed achieving these three fundamental objectives.

1. Attract a high level of provider and consumer adherence to beneficial performance standards and healthy behaviors.

2. Recognize and harness the power of the doctor-patient relationship.

3. Align the interests of the provider, the consumer and the payer.

Q&A

Jeff Greenejgreene@medencentive.com

405-319-8450www.medencentive.com