“Incentives--Win/Win/Win for Employers/Insurers, Physicians and Employees – Part 2” by Jeff Greene September 23,2010
The Key to Health Care Cost Containment Physicians Consumers/Patients $ $ No Physician Accountability No Patient Accountability Employers/Insurers No health care cost containment solution can be sustained without balancing the interests of the essential stakeholders...like a three-legged stool Mutual Accountability Triangulation • Provider Accountability • Capitated HMO • P4P • Episodic care payments • Medical home • Patient Accountability • Wellness and prevention • Disease/care mgt 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 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 eHealth Initiative, a not-for-profit 501 3c organization
Why is information therapy so important? Medical illiteracy and poor doctor-patient communications is a bigger problem than expected…
Health literacy drives motivation and empowerment... The World Health Organization defines health literacy as: The cognitive and social skills which determine the motivation and ability of individuals to gain access to, understand, and use information in ways which promote and maintain good health. In other words, if patients are unaware, don’t understand or are confused about treatments or the impact of unhealthy behaviors, then they will be unmotivated and unable to maintain good health. It is apparent that persuading a person to improve their health when they don’t know how or why is just short of impossible. So, health literacy is as much about providing the motivation as it is about empowering the individual.
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.
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.
U.S. Department of Health and Human Services says 9 out of 10 of us are afflicted with some degree of health illiteracy... Universal Precautions: A Model for Health Literacy?By Laura LandroWall Street JournalJuly 6, 2010Low health literacy is a growing concern in the U.S.as medical-treatment decisions become more complex,chronic diseases more prevalent and doctors’ face timewith patients more limited, today’s Informed Patient column reports.While poor and minority groups may be disproportionately affected, HHS says the inability to read, understand and use health-care information to make informed decisions is a problem for nearly nine out of ten adults, cutting across all ages, races, incomes and education levels. So the best approach might be to assume that most patients will have difficulty understanding health information, and to present it in the simplest terms.
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? • 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
Program participation is voluntary for both doctors and patients Doctors and patients can earn financial rewards immediately for each office visit Physicians are compensated $15 for each office visit, which is approximately a 20% increase, 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 $5 to $30, depending upon the employer Some Information Therapy Program basics...
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? • 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...
•Doctors are asked to declare their adherence to the EBM guideline and agree to allow their pa-tients to confirm their declaration...... Doctors earn up to 20% more for declaring adherence to evidence-based medicine and for patient education … •Flow chart hyperlinks allow the doctor to review the source of each guideline and gain decision support
MedEncentive’s “anti-cookbook medicine” feature is key to physician acceptance ... •By selecting a reason for non-adherence to a guideline that is shared with the patient, the Pro-gram allows and encour-ages doctors to deviate from a guideline each time it is appropriate... ..and the doctor still earns additional compensation. •This feature resolves one of the principal physician objections to pay-for-performance programs...
Doctors earn up to 20% more for declaring adherence to evidence-based medicine and for patient education…fast and easy...yet very important... •Physicians prescribe information therapy to the patient by selecting one or more relevant articles. •Physicians can also tag favorite articles to speci-fic diagnoses, plus view previous information therapy prescriptions to the patient.
•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… MedEncentive’s patient website provides: • Medical information in easy-to-understand language (6th grade reading level) • Patients are required to read and answer a series of questions in each section to earn their financial reward.
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
Patients are given every opportunity to learn the information and pass the test…
Patient must declare their compliance to recommend-ed treatments...
Patients must agree to have their questionnaire re-sponses shared with their doctor…creating the first step toward “mutual accountability”...
The patient is also asked to rate the doctor’s perform-ance against the recommended care, which creates an even greater “check and balance”… • The patient must demonstrate medical literacy of the recommend-ed 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.
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
Celebrating Five Years of Success Examining a groundbreaking solution for controlling health care costs using financial incentives to invoke doctor-patient mutual accountability By Jeff Greene November 2009 Abstract Our nation is in the midst of an important debate on health care. The issues revolve around affordability, accessibility, quality and funding. Of these issues, the one that all experts agree must be resolved for the good of the country is the high cost of healthcare. Supported by years of testing and overwhelming empirical evidence by independent research, the MedEncentive Program has surfaced as a real breakthrough in resolving the issue of healthcare affordability. This report presents the findings from five years of testing and the independent research that validates the Program’s efficacy and its underlining design principles. using incentives to align these stakeholders’ interests to improve both health behaviors and practice patterns. This thought process led to development of what would become a web-based incentive system called MedEncentive. In August 2004, the first installation of the MedEncentive healthcare cost containment program was launched with the municipal government in Duncan, Oklahoma. This unique web-based incentive system functioned as designed and the City of Duncan realized significant cost savings in the very first year of installation. Two studies1,2 were published that attributed these Background - From 1997 though 2007, a small group of innovators consisting of practicing physicians, a medical academician, a self-insured business owner, a medical practice management consultant, and a health insurance executive sought to find ways to align the interests of healthcare consumers, providers and insurers. After years of studying the issues, the group concluded that the single most pressing problem in healthcare was affordability. Understanding that the majority of healthcare costs are driven by people’s poor health habits and medical providers’ variable practice patterns, the group focused on Expanded Trials – Five Year Report is a must read...
Academic Acceptance of Five Year Report and the MedEncentive Model The following slide is a poster developed by a research team at the University of Kansas School of Medicine (KUSM) that summarizes the health literacy findings from MedEncentive’s Five Year Report. This poster was presented in October 2009 at the National Institutes of Health Conference on Health Literacy in Washington, DC. This poster is an indication of a growing acceptance of and interested in MedEncentive’s design and trial results by academicians. The subsequent slides present the key findings from the Five Year Report.
SpecificCare Recommendations from Information Prescription Therapy Amy Chesser, PhD; Traci Hart, PhD(Cand.); Douglas D. Bradham, DrPH Using Information Therapy as a Part of Patient Care Background: Unaffordable healthcare is symptomatic of three root causes: (1) An inefficient healthcare delivery system (2) American’s poor health habits (3) Medical illiteracy of patients Incentives to improve consumer health behaviors and medical provider adherence to guidelines hold a promising key to addressing root causes and making healthcare affordable and accessible to all Americans. The MedEncentive® Information Therapy Program has several years’ experience in development and successful testing of using financial rewardsto both providers and patients encouraging “mutual accountability”. Their key to success also entails creating an environment that includes health promotion or a “Culture of Health” and “triangulating” the interests of the health insurer, provider and consumer. MedEncentive® uses care guidelines developed by leading medical schools plus patient content from Healthwise®, a national resource for consumer-grade health information. The term “information therapy”, and its symbol “Ix®”, were coined by Healthwise® to mean: “providing patients with the right information at the right time, in understandable terms, so patients can make an informed decision about their health.” Table 1: Information Therapy (Ix) Process for Medical Conditions “I have learned so much from the MedEncentive program so much more than from what my doctors are telling me.” Patient “I had the symptoms of a sinus infection again. With the imformation (sp) I learned here; to contain it before it got any worse, I used the therapies I learned from my last lessons and I didn’t have to go to the doctor. The infection got better…” Patient “I was doing this for the $ but found learning more very helpful.” Patient “We are very impressed with the MedEncentive program. The additional information has helped us understand our health conditions more fully. We can gain this help by using our own time, not being rushed with the Dr’s time. We also can refur (sp) back to this info as we need to do so. We are more relaxed as we deal with health isses (sp) with this program. Makes life less stressful. Of course the rewards have been a life savior (sp) to our budget as well.” Patient Figure 1: Conceptual Model Both parties agree to allow the other party to confirm performance OUTCOMES % Patient Participation % Clinician Participation Δ Health Status Process of Care Ix Δ Health Literacy Δ Health Cost • Limitations: • There were several limitations to this study as well as areas of opportunity for future research. • Current literacy outcomes are implied by pt. assessment of benefits to personal health. More direct measures of literacy need to be examined. • Findings are not generalizable to a broader population. • Need to have a comparison group to determine impact. • Future studies should focus on identification of disease states for vulnerable populations. • The role of physicians as an effect modifier needs to be further investigated. • Implications: • Medically informed and empowered person is better equipped to self-manage his/her health, which leads to lower health care costs. • Most people need to be financially incented to become health literate. • Health literacy is advanced when patients are financially rewarded to read pertinent health information and are held accountable for the knowledge by their doctor. • Web-based applications have a viable future for improving health literacy. • Doctors and patients are motivated to respond to one another in ways that improve health literacy, health and health care, which leads to cost containment. • Methods: • This study independently examined the Information Therapy Program’s effectiveness, during a five year period across 7 companies, on key outcomes • and effect modifiers of: • (1) provider and patient participation • (2) patient satisfaction and Ix® prescription compliance • (3) changes in overall healthcare costs • Secondary, Retrospective Cohort Analysis was conducted. • All participant data was transmitted to the Investigators from the Ix® Program. • Study was approved by KUSM-W IRB and qualified for a waiver of consent. % Clinician Non-Participation System-generated Ix from Claim Dx Table 2: Preliminary Results from 5 Year Data Analysis • Preliminary Results: • Doctor prescribed information rates higher than system generated information (Table 1) • Patient participation rates increased over time (Table 2, A) • Physician participation rates decreased over time (Table 2, B) • Ix rated as moderate to highly beneficial by patient participants (Table 2, C) • Creating a “culture of health” impacts health outcomes, utilization and cost containment for plan participants (Table 2, D) • Improved cost containment for 5 of 7 trial plans (Table 2, E)
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 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 trials... Trial results for year ending 6/30/2009, cont’d... • The overall annual physician participation rate in the Program was 21.4%. In view of the relatively low market penetrations, this level of overall physician participation is considered to be good. • Since 2006, the participation rate among the 90 physicians with 100 opportunities or more was 58.7%, clearly indicating that market concentration has a significant impact on physician participation. • The highest rates of physician participation were achieved with installations in which the local medical community had a contractual relationship with MedEncentive. • Physicians choose to deviate from EBM guidelines only 1.3% of the time.
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 • 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 Duncan Distributed Kits to employees made orientation and start-up quick and easy
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 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
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
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
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
4th year PMPY costs = $3,005 PMPY vs. Baseline = $3,287 PMPY 1st Year 2nd Year 3rd Year 4th Year 4 years of cumulative cost savings based on PMPY* validates MedEncentive impact on costs • The 4 year average “all-in” PMPY claims cost is essentially flat (0.6% more than the baseline year). • The 4th year “all-in” PMPY claims cost is 8.6%less than the baseline 5 years ago. Baseline Year * Based on per Member per Year costs (“PMPY”)
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
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… In effect, MedEncentive harnesses the strength of the doctor-patient relationship to create “mutual accountability” that promotes better health and healthcare, which leads to lower costs.
What Makes MedEncentive So Effective? As you know, your responses are being made available to your physician. On a scale from 1 to 10, with 10 being the most, how much does the knowledge that your physician has access to your questionnaire responses motivate you to improve your health literacy and health behaviors? 8.7 On a scale from 1 to 10, with 10 being the most, how important is it to you that your doctor is aware that you understand how to self-manage your health? 8.9 On a scale from 1 to 10, with 10 being the most, how important is it to you that your doctor is aware that you are trying to accomplish or are accomplishing health objectives? 9.0