Fall 2007 e-Update

Medical Literacy Study Helps Explain Why MedEncentive is So Effective

Recently, I experienced a bout of medical illiteracy.  For someone who is considered learned in the ways of health care, you may ask, “how can this be?”  Well, it is surprisingly easy.

Having failed at self-medicating a sinus infection, I ended up in our local urgent care facility over a weekend. Experiencing considerable pain, I asked my wife to accompany me.  The doctor prescribed a decongestant and antibiotic.  On our drive home, my wife and I argued about the doctor’s medication instructions.  Upon receiving proper drug therapy information, I learned my wife was right as usual, and I got well.

Now the point to this story is not that my wife is a better listener or wiser than I am – which she is on both counts - but that had this been a more severe medical condition in the absence of my wife and some good medical information, there is a high likelihood I would have ended up in the emergency room or hospitalized.  This type of medical illiteracy scenario is played out countless times each day, taking its toll in human misery and economic consequences.  And this doesn’t begin to account for the vast majority of Americans who would be tested as medically illiterate.

In June, a team of researchers from Northwestern and Emory released a study that examined the impact of medical literacy on mortality among elderly people.  A standardized medical literacy test was administered in 1997 to divide an elderly population into medically literate and illiterate groups.  Mortality causes were measured for these two groups through 2003.  The results were then studied to normalize outcomes for other variables. While most of us would have predicted that the medically literate population would have a lower mortality rate, what the study revealed astonished even the Northwestern and Emory researchers.

As the adjacent graph indicates, the medically literate group had a 19% mortality rate during the five year study, while the medically illiterate group had a 40% mortality rate.  The researchers also noted that the medically illiterate group experienced far more hospitalizations, which obviously translates to higher health care expenditures.

So what’s so significant about this finding?  The magnitude of the difference in mortality is huge!  In the research park were our business resides, we asked our life-sciences friends if they know of any single medical condition that causes a 21% difference in the rate of mortality.  The answer is no.  In fact, if you take a half dozen or more high frequency diseases together, the answer is still no.  All of this leads us to conclude that medical illiteracy must be taken seriously.

Think of this way – the best treatments known to man become marginally effective and perhaps harmful when patients do not understand how or why their doctors have ordered these treatments.  And not only is medical illiteracy harmful and expensive, it is also prevalent.  I would venture to say that most all of us have experienced medical illiteracy personally or with a family member.  My recent sinus infection is case in point.

With the full weight of the evidence and commonsense, I believe the following conclusions can be derived:

• Medical illiteracy:
  • is a bigger problem than expected;
  • is a leading cause of premature death;
  • is a principal driver of health care cost; and therefore,
  • should be diagnosed and treated by physicians.
• To effectively treat medical illiteracy:
  • physicians should be compensated; and
  • patients should be rewarded for demonstrating health knowledge.

So what is the absolute best method for treating medical illiteracy?  For over three years, we have been testing a simple, yet powerful system of doctor-patient interactive incentives.  One of the principal features of this system is its ability to effectively treat medical illiteracy.  The system accomplishes this by compensating physicians for prescribing what is called “information therapy” to patients.  Since the system is web-based, doctors are able to do this in a matter of seconds.  In effect, our system provides physicians with a powerful tool to treat a serious medical condition that takes physicians merely seconds to use, and yet can increase a physician’s office visit compensation by 20%.

Now the great challenge of any treatment is to get patients to be compliant with the recommended therapy.  This is where the real power of our system exists.  Patients are financially compensated for taking their information therapy online.  This financial compensation is typically in the form of a rebate of the patient’s out-of-pocket costs.  To earn this financial reward, patients must: 1) read information about their medical condition, 2) demonstrate their knowledge, 3) declare their compliance to the recommended care, and 4) agree to have their responses shared with their doctors.  Once patients “pass the test” of knowledge and compliance, they are asked to rate their doctor’s adherence to the recommended care.  By paying patients to read and be tested on information they need to self-manage their health, our system is able to effectively and efficiently treat medical illiteracy.

And if a financial incentive was not enough to achieve patient participation, here is the real kicker.  Patients are made aware that their doctors: 1) are prescribing the information therapy and; 2) will have access to patient online responses.  These two factors are important because studies have shown that we trust our doctors above all other sources when it comes to medical information, and we do not want our doctors to learn that we are non-compliant or that we do not understand how to manage our own health.  This is especially true if we have a chronic condition.  Because of its design, our system creates powerful financial and non-financial incentives to encourage medical literacy.

As the Northwestern and Emory study discovered, medical illiteracy is profoundly harmful and expensive.  Our system of interactive doctor-patient incentives is the most effective and efficient means to treat medical illiteracy.  This is one of the primary reasons why our system of incentives improves health and controls costs.  This is why our system is called MedEncentive. Just ask my wife.

The following are some of the highlights for the summer and fall of 2007:

Dollar Thrifty Automotive Group Adopts MedEncentive Program
MedEncentive Joins the IxAction Alliance
MedEncentive Closes Seed Round Financing and Identified as Future IPO
Candidate
Speaking Engagements and Conferences
Strategic Advisors
E-Update Archives

Dollar Thrifty Automotive Group Adopts MedEncentive Program – Dollar Thrifty Automotive Group is adopting the MedEncentive Program effective January 1, 2008. This engagement represents over eighteen months of effort between Dollar Thrifty and MedEncentive.  It also represents our first Fortune 1000 customer and our first collaboration with a national health insurer and administrator (UnitedHealthcare).  Obviously, we are very excited about this positive development and commend Dollar Thrifty’s leadership, including President and CEO Gary Paxton, Executive Vice President of Administration Rich Holbrook, and Senior Director of Human Resources Angel Stacey, for their forward thinking and employee commitment.  This development has already received good press coverage.  To read The Oklahoman newspaper story by Jim Stafford and the press release, click on the News & Press Releases button in the left-hand column, above.

MedEncentive Joins the IxAction Alliance - In October, MedEncentive signed on as a member of the IxAction Alliance.  This organization is sponsored by the Center of Information Therapy in Washington, DC.  It assembles the most committed organizations and individuals in the advancement of information therapy.  We are proud to have joined this outstanding organization and look forward to taking an active roll.

MedEncentive Closes Seed Round Financing and Identified as Future IPO Candidate – The Company is pleased to announce it has completed its first round of financing.  New Series B unit owners include friends, family, angel and strategic investors, and founders.  These funds are now hard at work selling, servicing, and developing MedEncentive products.
In the October 14, 2007 edition of the Sunday Oklahoman, MedEncentive was identified as a future initial public offering candidate.  This was a surprise to us, but we certainly welcome the publicity.  The newspaper article can be found by clicking on the News & Press Releases button.

Speaking Engagements and Conferences – Listed below are the speaking engagements and conferences that took place during the summer and fall of 2007:

National Consumer Driven Healthcare Summit – Washington, D.C. - September 26-28, 2007 – Jeff Greene was an invited presenter at the annual Consumer Driven Healthcare (CDHC) Summit.  Jeff was also asked to write a white paper on the future of CDHC.  A number of journalists from the industry press attended Jeff’s presentation.  His presentation and white paper were well received.  Joanne Wojcik wrote a good article for Business Insurance entitled: “Improving medical literacy helps lower health plan costs” that can be found by clicking the News & Press Releases button.  It is worth reading.

Sedgwick County Health Care Roundtable – Wichita, Kansas – October 31, 2007 – This organization is involved in finding solution to the high cost and marginal quality of health care in the Wichita area.  Jeff Greene and Jim Dempster were invited to attend the Roundtable’s annual meeting by Wichita Clinic.  Jeff made a presentation at the meeting that attracted a large number of Wichita employers, providers and health care administrators.

National Business Coalition on Health Annual Conference – Scottsdale, Arizona – November 11-13, 2007 – The National Business Coalition on Health (NBCH) is a trade association of regional coalitions comprised of employer members dedicated to value-based purchasing of health care services through collective action.  NBCH has a membership of nearly 60 employer-led coalitions across the United States, representing over 10,000 employers and approximately 34 million employees and their dependents.

MedEncentive was one of 50 exhibitors at the NBCH Annual Conference.  There were other cost containment vendors at the conference, but nothing like MedEncentive.  We are actively responding to leads generated at this gathering. We are planning discussions with NBCH about possible collaborations.

Leadership Discussion on Health Care Policy – Washington, D.C. – November 19, 2007 – We were honored to be invited to join a rather select group of interested parties in a one day roundtable discussion on federal government health care policy that impacts the private business sector.  The intent of this effort is to craft health care positions that are favorable to private business.  These positions will be proposed to the presidential candidates in hopes of adoption during next year’s campaign.

Wilson Partners of Troy, Michigan and Alston & Bird of Washington, D.C. sponsored the gathering.  David Wilson served as moderator.  The gathering consisted of 25 attendees included large employers such as Wal-Mart, UPS, Marathon Petroleum, and Dollar Thrifty Automotive Group, plus lobbyists and public opinion researchers.  Positions on healthcare were introduced but no consensus was reached.  All attendees agreed to meet again in the near future.

Business Health Care Group – Milwaukee, Wisconsin – November 20, 2007 – The Business Health Care Group is a membership organization of 500 large and small employers in southeast Wisconsin.  Its objective is to manage escalating health care costs and provide employees with access to more efficient and effective health care services by pooling its membership’s common interests, efforts and purchasing power.

BHCG has achieved considerable momentum in 2007.  In the spring, U.S. Health and Human Services Secretary Mike Leavitt recognized the Business Health Care Group as a “Community Leader” of public-private cooperative efforts to implement value-driven health care.  In July, the coalition announced it had achieved a 13.7% reduction in health care costs in 2006 among 15 of its employer members.

BHCG is seeking innovative ways to sustain its momentum.  Executive Director, Dianne Kiehl invited Jeff Greene to present to BHCG’s steering committee.  The presentation received positive feedback.  Follow-up discussions were suggested.

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, Jim Rogers, and company with i2E
• Mike Joseph, and Jennifer Wheeler with McAfee and Taft law firm
• Larry Grable with Tomlinson & O’Connell 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
• Ken Schuerman, special advisor

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