Jim Dempster
Executive Director, MedEncentive
mailto:jdempster@componeltd.com

800 Research Parkway
Suite 380
Oklahoma City, Oklahoma 73104

Telephone: 405-319-8450
Fax: 405-319-8455

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Summer/Fall 2006 E-Update

Healthcare’s Tripartite and the Will to Win-Win…Win

We developed the MedEncentive Program, with three key health care stakeholders in mind - patients, doctors, and purchasers. We refer to these parties as “healthcare’s tripartite.” We created our program because it was apparent to us that America’s health care system would remain in a state of perpetual hyper-inflation as long as there were winners and losers in this three-legged stool. Our objective was clear - create a “tripartite balance” with a common sense win-win-win solution. Over time, we began to test our solution against other cost containment strategies for this all important win-win-win equilibrium.

The best example of an imbalance is the case against HMOs in which providers were paid (capitated) to ration care as a means to control overall health care costs. In order for providers and purchasers to win, care had to be restricted . Medical costs were contained; however, patients became the losers when needed care was withheld in the name of cost control. This imbalance spurred the Patients Bill of Rights, which led to the demise of capitated HMOs as a cost containment tool.

If you use this tripartite balancing test against pay-for-performance programs that only reward providers, it is apparent that we run the risk of recreating the imbalance that caused the demise of HMOs. In our examination of other cost containment strategies such as consumer-driven health care or disease management, the conclusions predict something less than success.

Unlike any other cost containment solution, what makes the MedEncentive Program work is the fact that it achieves the perfect balance between patients, doctors and purchasers. In the Program, purchasers compensate doctors and patients for each encounter in which they voluntarily access MedEncentive’s web-based applications to declare adherence to evidence-based care and then confirm the other’s declaration. This “declare and confirm” feature adds the key incentive that forms a delicate balance between the patient and the doctor. In the process, information therapy is prescribed by the doctor to the patient so the patient can learn how to better self-manage his or her health. Thus, patients win and doctors win.

So, what about the purchaser? Multiple studies have established that evidence-based medicine (EBM) and information therapy (Ix) improve clinical outcomes and lower costs. Based on these studies and the economics, we knew that if the purchaser invested strategically in financial rewards to doctors and patients to interactively adopt EBM and Ix, there was more than ample opportunity for the purchaser to realize a substantial return on this investment.

On Sept. 25th, the study entitled: Pay-for-Performance Success Using Doctor-Patient Interactive Rewards was released. It proves the concept works. Now the proposition is simple: If a health care purchaser wants a proven method to control health care costs that simultaneously makes employees/subscribers healthier and happier, then they need to simply bolt-on MedEncentive.

In the two years since we launched our solution, we learned great lessons about how to balance healthcare’s tripartite in a simple and effective manner. And now we can share the secret with others. It’s all about a common sense approach and having the will to win…win…win…Do you have the will?

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Exciting developments are occurring each day at MedEncentive. The following are some of the highlights for the summer and expectations for the fall 2006:

Med Encentive's Duncan Study is Released at Annual Ix Conference
Duncan's Second Year Better than the First
City of Yukon Adopts MedEncentive
Healthwise and MedEncentive Announce Relationship
Wichita Clinic and MedEncentive Sign a Letter of Intent
Provider Consortium Teams with MedEncentive to Submit a Medicare Proposal
MedEncentive Proposes to the Commonwealth of Virginia
Strong Interest in Ohio
Patient First Champion
News Articles, Press Releases and Broadcasts
Growing Interest in the Market
Strategic Advisors
Past E-Updates

MedEncentive’s Duncan Study is Released at Annual Ix Conference - On Sept. 25, at the 5th Annual Information Therapy Conference in Park City, Utah, we released the Duncan study entitled: Pay-for-Performance Success Using Doctor-Patient Interactive Rewards. You may access the study and the press release announcement through the links provided in this e-Update or through our website at http://www.medencentive.com/. Jeff Greene presented the study at the conference. The response has been very favorable. Matthew Holt of The Health Care Blog was in attendance and wrote the attached article.

Duncan’s Second Year Better than the First - The final version of the study contains a Postscript that describes how the City of Duncan installation has progressed in its second year. A number of enhancements described in this e-Update were implemented, as were adjustments in the patient and doctor reward structures. The bottom-line, through ten months of year two, doctor and patient participation levels are significantly higher and non-catastrophic costs are significantly lower than the first year, further confirming the study’s findings.

City of Yukon Adopts MedEncentive – In September, the City of Yukon, Oklahoma signed an agreement to adopt the MedEncentive Program. The current implementation date is set for Nov. 1, 2006. During the presentation to the City Council, one council member kept repeating the cost-benefit analysis and concluded that the Council’s decision was a “no-brainer.” Jim Dempster concurred by noting this is the case for all employers.

Healthwise and MedEncentive Announce Relationship – Healthwise, Inc. and MedEncentive have partnered to provide patients with information therapy (Ix®) as part of their health care. Healthwise has been helping people make better health decisions since 1975. Nearly 75 million times a year, people turn to Healthwise information for help in making health decisions. Healthwise works with hospitals, employers, clinics, and health plans to provide decision-support and self-management information to the people they serve. Healthwise coined the term information therapy (Ix). Like MedEncentive, Healthwise is leading a major change in health care to prescribe information therapy to patients as part of every health care encounter.

“Healthwise is excited about the MedEncentive approach,” said Don Kemper, Healthwise founder and CEO. “Nowhere have I seen a more powerful alignment of patient and physician incentives than in the MedEncentive plan. This system demonstrates the true power of information therapy.”

Wichita Clinic and MedEncentive Sign a Letter of Intent – In September, the Wichita Clinic and MedEncentive signed a letter of intent to execute a provider license agreement. We anticipate executing the license agreement in October for the purpose of jointly developing the Wichita market.

Provider Consortium Teams with MedEncentive to Submit a Medicare Proposal – In September, the Central Oklahoma Physician Alliance in association with the Wichita Clinic and the University of Oklahoma’s Colleges of Public Health and Medicine submitted a proposal for a pay-for-performance demonstration project in Oklahoma and Kansas using the MedEncentive Program. This proposal was the product of months of development and communications with associated federal agencies including the Department of Health and Human Services (DHHS) and the Center for Medicare and Medicaid Services (CMS).

MedEncentive Proposes to the Commonwealth of Virginia – In August, we met with the Virginia’s Secretary of Technology, Aneesh Chopra, and other state officials about conducting a demonstration project in the Commonwealth. A proposal was submitted in September. We are currently in the process of refining this proposal with assistance of state officials.

Strong Interest in Ohio – One area of the country that has shown strong interest in our Program is in the state of Ohio. Originally invited by Dr. Jeff Schwarz of the Region I Physician Association in Toledo, we have traveled on three separate occasions to the Buckeye state to meet with the following organizations:

•  Mercy Health Partners – A proposal was requested and has been submitted
•  Ohio State Chamber of Commerce – A presentation was made to President and
    CEO Andrew Doehrel and
•  Ohio Academy of Family Physicians – This presentation was attended by
    Dr. Brian Bachelder who invited us to present to the…
•  Ohio State Medical Association – This meeting included Dennis Garlington
    of the Ohio State Chamber of Commerce and Dr. Bachelder

As a result of Dr. Bachelder’s interest in our Program, we will be return to Columbus to make a presentation to the Ohio Medicaid agency.

Patient First Champions - To recognize excellence in the practice of the MedEncentive Program, we designated 29 physicians as the initial "Physician First Champions." Each physician received a certificate that read; "For demonstrating a commitment to Evidence-based Medicine and Information Therapy in the care of patients." These physicians will also be highlighted in our provider directory. The response to this honor by the recipients was very gratifying.

News Articles, Press Releases and Broadcasts – There have been a number of news articles, press releases and broadcast over the last few months that indicate a growing interest in MedEncentive. These include:

•  Three separate broadcasts on the popular talk radio station, KTOK,
•  A Jim Dempster television interview on Oklahoma City’s
    CBS affiliate NEWS 9,
•  A featured article in The Oklahoman,
•  An article in The Health Care Blog about Jeff Greene’s presentation in Utah.
   
   Some of the articles, press releases and broadcasts can be found
   on MedEncentive’s website at http://www.medencentive.com/.

Growing Interest in the Market – In order to provide physicians some advance notice of employers and insurers’ interested in adopting the program, we have asked prospective customers to execute letters of intent and/or confidentiality agreements. The number of parties that have executed these types of agreements is growing and include several noteworthy employers such as Dollar-Thrifty Automotive Group of Tulsa and the Oklahoma Blood Institute. We also executed a non-disclosure agreement with Revolution Health of Washington D.C.

Strategic Advisors –We always want to take this opportunity to recognize and thank MedEncentive’s list of strategic advisors and supporters who include:

E-Update Archives
April 2005 E-Update
May-June 2005 E-Update
Summer 2005 E-Update

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