“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 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…
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… 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... • 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
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
If patient participation in health programs is the first step toward healthcare cost containment, then…
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 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.
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? • 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… • 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? 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
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... • 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...
•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…
•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 ...
•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 to 8th 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
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.
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
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 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
Integrating a personal health record (PHR) to Success Acknowledgment...
An example of integrating a commercial PHR to a physician electronic health record (EHR) systems...
An example of integrating a commercial PHR with Success Acknowledgment...
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 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 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 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 • 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 $1,834,212 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
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