January 2007 e-Update

2006 Ends with a Flurry of Successes, Staging 2007 to be a Very Good Year…

Like any revolutionary process, we have been both hailed as innovators and buffeted by skepticism and fear. Early in 2006, the skeptics rule the day with responds like, “I’ve been around forever and I don’t believe anything will ever control health care costs. Come back to me in ten years when your program has been proven on 20 million people. By then, I will be retired and on Medicare.” Later in the year as we released the impressive cost containment findings from our trials, we noticed that the skeptics gave way to the fearful. Their responses went something like this, “We really like MedEncentive, but we think it will take too much of our resources to implement at this time,” or “We think a new program like MedEncentive will cause employee complaints, so we just can’t risk it right now.” And we didn’t get much help from a few of our health plan administrator friends when they advised their customers that, “MedEncentive will cause us all kinds of problems with processing your claims, so we suggest that you wait until we are ready.” Now, I’m guessing you think these are exaggerations - but not by much.

We took note of these objections, both real and exaggerated, and went to work on solutions. Thanks to the extraordinary efforts and skills of Jim Dempster, Robert Purser, Cindy Williams and our valued collaborators, some really creative modifications were made to MedEncentive’s physician compensation structure and enrollment, as well as the employer implementation process (see below). Then we got busy testing these improvements for market acceptance.

The preliminary results of our program refinements are in, and I am very pleased to report that 2006 ended with a flurry of successes. These successes include:

• The execution of a landmark provider organization license agreement with the Wichita Clinic on December 28th (refer to the press release link below).
• Implementing the Program with the City of Yukon, effective 12/15/2006.
• The addition of the Oklahoma Blood Institute as a customer, effective 1/1/2007.

If you forgive me for being a bit immodest; these program refinements are “way cool.” In effect, we can now make a straight-forward sales pitch to any self-insured employer that goes something like this...

So how can any self-insured employer say no?

We are anxious to get started offering our enhanced product to the market and are stepping-up our marketing and sales efforts. As is reported below, Cindy Mitas and the good folks at Francis-Tuttle will be sponsoring a three day MedEncentive sales and implementation training workshop in February. We expect this will be a successful event, attracting health benefit consultants and brokers from Oklahoma and from across the country.

2007 is shaping up to be a very good year…

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The following are some of the highlights for the fourth quarter of 2006 and expectations for early 2007:

Wichita Clinic and MedEncentive Consummate Landmark Partnership
Trial’s Second Year Results Compiled – Even Better than the First
Oklahoma Blood Institute Adopts MedEncentive Program
City of Yukon Implementation Goes Smoothly
MedEncentive Intern Featured in University of Oklahoma Entrepreneurship Program
Physician Can Now Enroll in MedEncentive from Gotebo to Tokyo
MedEncentive’s New Employee Kits Introduced to INTEGRIS Health and Oklahoma Blood Institute
Upcoming Presentations and Speaking Engagements
Strategic Advisors
E-Update Archives

Wichita Clinic and MedEncentive Consummate Landmark Partnership – Wichita Clinic has become MedEncentive’s first provider organization licensee. As a licensee, Wichita Clinic will help distribute and administer the MedEncentive Information Therapy Program in Wichita and the surrounding counties. The Clinic’s Chief Medical Officer, Robert Kenagy, M.D. is convinced the MedEncentive program will lead to healthier patients and lower overall costs for the health care purchaser.  

“Wichita Clinic’s mission is to provide high quality and cost effective health care to our patients.   After considering the causes of rising costs that plague health care delivery, we chose to proactively search for a pay-for-performance program that would be consistent with our mission,” said Dr. Kenagy.  “When we learned of the MedEncentive Information Therapy Program and how it uses financial incentives to balance the interests of the patient, the provider and the purchaser, we wanted to do more than simply adopt the Program – we wanted to help promote the Program in our community.”

Wichita Clinic is also a collaborator in the MedEncentive demonstration project proposal that was submitted to Medicare in Sep. 2006. We are very excited about a relationship with such a prestigious medical organization. We believe this is a milestone in health care reform.

Click on this link to learn more about this landmark development, and the reaction in the local press:
http://www.medencentive.com/sharedfiles/press/Wichita%20Clinic%20Articles.pdf

Trial’s Second Year Results Compiled – Even Better than the First – As was reported in the previous newsletter, the City of Duncan’s second year results showed improvement over the impressive first year results. Doctor and patient participation levels were significantly higher and non-catastrophic costs were significantly lower than the first year, further confirming the study’s findings and validating MedEncentive’s efficacy.

Click on this link to view the preliminary results over the two year trial period:
http://www.medencentive.com/sharedfiles/press/
MedEncentive%20Second%20year%20trial%20Results.pdf

Oklahoma Blood Institute Adopts MedEncentive Program – Oklahoma Blood Institute (OBI) is the seventh largest regional not-for-profit blood center in the United States, providing blood to patients in 114 hospitals in 61 Oklahoma counties and 5 North Texas counties. OBI adopted the MedEncentive Information Therapy Program effective Jan 1 for its approximate 600 employees in 7 statewide locations. To have yet another prominent health care provider like OBI adopt MedEncentive for its own employees speaks to the viability of our Program.

Refer to MedEncentive’s website to read the recent OBI press release.

City of Yukon Implementation Goes Smoothly – The MedEncentive Information Therapy Program was implemented with the City of Yukon’s employee health plan on Dec. 15. Interviewed on KTOK radio during the implementation, Yukon Assistant City Manager, Tim Rundel said, “Our medical insurance costs over the past three to four years had skyrocketed, and it was devastating to our budget, so we began an exhaustive search for a solution.  We were in a position where cutting employee benefits, raising deductibles or increasing the monthly contribution from employees was being discussed, and we needed to find a better alternative.  We like the way that MedEncentive is both an added benefit for our employees as well as it helps control costs.”

MedEncentive Intern Featured in University of Oklahoma Entrepreneurship Program – MedEncentive has participated in the University of Oklahoma’s College of Business Center for Entrepreneurial Studies for the last three semesters. It has been a rewarding experience for both the students and the Company. We are particularly proud of our most recent intern, Kimberly Stenstrom, a finance and pre-med major from Jenks, Oklahoma. Kimi was featured in the Center’s Annual Report, in which she stated, “I feel lucky to have been given the chance to work for such as company.” We feel lucky, too.

Physician Can Now Enroll in MedEncentive from Gotebo to Tokyo – The first official online registration by a physician using MedEncentive new provider enrollment website took place in December. Enrollment in MedEncentive is now as easy as 1-2-3, allowing physicians to sign-on, help their patients, and make more money from essentially anywhere on earth. We get a kick out of saying that doctors can now enroll and participate in the Ix Program from Gotebo to Tokyo.

This new website is part of our efforts to streamline and simplify the MedEncentive processes, and is accessible by selecting the “Provider” tab on MedEncentive’s main website (www.medencentive.com).

MedEncentive’s New Employee Kits Introduced to INTEGRIS Health and Oklahoma Blood Institute – MedEncentive Employee Kits were distributed for the first time to INTEGRIS Health and Oklahoma Blood Institute (OBI) employees for the 2007 plan year. Constructed as mailers, these kits are designed to significantly simplify Program implementation and enhance the employer’s image with its employees. Each kit contains an informational DVD video, a customized message from the employer, and health ID cards for the employee and covered dependents. The kits three instructions to the beneficiary are straight-forward:

1. Ask your doctor for a MedEncentive information therapy prescription.
2. Once you receive your prescription, access MedEncentive’s website and take your information therapy.
3. Enjoy your financial reward and better health.

INTEGRIS used the kits to announce its increased rewards structure for 2007 and had us mail them to its employees. OBI handed the kits to each employee during benefits orientation. As expected, the response by employees has been very positive.

Click on this link to view the MedEncentive Employee Kit:
http://www.medencentive.com/sharedfiles/press/
MedEncentive%20Employee-Member%20Kit.pdf

Upcoming Presentations and Speaking Engagements – The following are some of the upcoming presentations and speaking engagements:

• Oklahoma Venture Forum – Oklahoma City, January 10 -
  http://www.ovf.org/frame-meetings.html
• Pay-for-Performance Summit – Los Angeles, February 15 -
  http://www.pfpsummit.com/index.html
• Southern Association of College and University Business Officer –
  Oklahoma City, April 23-24 -
  http://www.mra-services.com/clients/sacubo/2007/pag.asp?id=220803eaf76b6400346

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

• Drs. Susan Chambers and David Parke, MedEncentive co-founders
• Greg Main, Tom Francis, Daniel Mercer, and company with i2E
• Mike Joseph, Mike LaBrie, Bill Hall, Jennifer Wheeler and company with McAfee and Taft law firm
• Dick Rush and company with the Oklahoma State Chamber of Commerce
• Chuck Rahill with Wedel Rahill and Associations
• Renzi Stone and company with Saxum Strategic Communications
• Cindy Mitas, Business Development Marketing Director, Francis Tuttle
• Lloyd Hildebrand, M.D., special advisor
• Ken Schuerman, special advisor

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