Michigan Purchasers Health Alliance

MedEncentive Goes to Lansing

A Proposal to the State of Michigan

Presented by Dale Moretz

September 27, 2012

•

Michigan Purchasers Health Alliance

• First, a Review of MedEncentive

• Identification that 2 major issues are:

• - Medical Illiteracy

• - Poor Physician/Patient Communication

“What factor is the strongest indicator of an individual’s health status? Is it age, income

level, race, or health literacy? Would it surprise you to know that it is literacy skills?” says Barbara A. DeBuono, MD, MPH, chair of

the Board for Partnership for Clear Health

Communication at NPSF.

The first issue that needs addressed is

health illiteracy

Northwestern and Emory Research

TeamMortality Rate Based on Medical Literacy

19%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Literate Illiterate

Fiv

e Y

ear

Mo

rtal

ity

Rat

e

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

Poor doctor-patient communications…

Employers/Insurers(plan sponsor/risk-bearing entity)

Physicians

No health care cost containment solution can be sustained without balancing the interests of the

essential stakeholders...like a three-legged stool

The Key to Health Care Cost Containment

Alignment-of-interests to create a win-win-win proposition

Consumers/Patients

Employers/Insurers(plan sponsor/risk-bearing entity)

$ $

PhysiciansConsumers/

Patients

This model has proven time and again to produce large ROI

Mutual Accountability

The MedEncentive approach is fundamentally different...

$ Savings

Triangulation

MedEncentive is a patented, one of a kind, web-based incentive system designed to control healthcare costs by financially rewarding both doctors and patients for engaging one another in better health and healthcare.

It’s effectiveness has been proven time and again in multiple, multi-year trials, the results of which have been confirmed by independent analysts and academic researchers.

So what is MedEncentive...

The Program basics...• Plan sponsor underwrites Program and pockets the savings

• Doctors and patients can earn financial rewards immediately by voluntarily accessing MedEncentive’s website in conjunction with each office visit

• Patients earn back their office visit co-payment (experimented with $5 to $30)

• Physicians are compensated $15 with each office visit

MedEncentive: Does it work?Independent studies of the healthcare cost containment

capabilities of the MedEncentive Information Therapy Program

Jeffrey C. Greene, CEO and Founder MedEncentive, LLC

Amy Chesser, PhD, Research Assistant Professor, Department of Preventive Medicine and Public Health,

University of Kansas School of Medicine

Tom Forsberg, Benefits Consultant, The Loomis Company

Economic Case Study of City of Duncan (in south-central Oklahoma)

MedEncentive’s original and longest running demonstration 2004-2011

1. Duncan's population was 22,505 in 2000 census. 2. The City of Duncan enrolled an average of 527 health plan members,

in study period, 2004-2008.

City of Duncan Employer's Return on Investment on the validated non-catastrophic and total claims

• MedEncentive's annual ROIs ranged from: • $3.1 to $14.5 saved for each $1 invested (e.g., patient/

physician rewards and fees), when claims costs were com-pared against the Bureau of Labor Statistics MCPI inflation for claims.

• $5.9 to $17.7 saved for each $1 invested (e.g., patient/ physician rewards and fees), when claims costs were com-pared against the Kaiser/HRET inflation for family coverage premiums.

The Washington TrialThe Loomis Company Analysis of MedEncentive

at Lourdes Health Network

Debbie Hayes, Benefits Consultant, The Loomis Company

• Wyomissing, Pennsylvania-based award winning insurance services company

• Founded in 1955, family-owned and operated• Offices located across the country• Third party administrator for Lourdes Health Network

• Located in Pasco, Washington• Founded in 1916• Faith-based hospital system• 1,100 health plan members• Unionized workforce• Escalating healthcare costs prior to adopting the

MedEncentive Program in 2008• An Ascension Health facility

Patient and physician participation in MedEncentive increased and hospitalizations decreased

Patient and physician participation in MedEncentive increased and cost per member per year decreased

Projected healthcare cost per member per year increased while Lourdes’ actual all-in PMPY costs decreased

• Two year savings vs. MedEncentive program investment = 13:1 ROI

Two Year Savingsvs. Projection

$1,640,945

Total Investment $124,774

1 Projected values based on average of Kaiser HRET Employer Survey, Segal Health Trend, and U.S. Bureau of Labor MCPI

1

Data Source: The Loomis Company

Cost Comparison to Pay-for-Performance plus Wellness Programs

SourceBeneficiary Incentive

Provider P4P Compen-

sation

Program Adminis-

trationTotal Costs

         

Edington $300.00 N/A N/A $300.00

Credit Suisse N/A N/A $60.00 $60.00

BTE N/A $9.26 $5.76 $15.02

Totals $300.00 $9.26 $65.76 $375.02

         

MedEncentive $29.12 $6.47 $36.01 $71.60

         

Difference ($270.88) ($2.79) ($29.75) ($303.42)

Key points…

2. Using “precision-guided, interactive financial incentives” to invoke “doctor-patient mutual accountability” is the most efficient and effective way to control costs through better health and healthcare

3. If we are not improving “patient health literacy” we are not controlling costs. Compensating doctors to prescribe “information therapy” and administer literacy tests, plus rewarding patients for demonstrating their literacy to their doctors is the best way to accomplish this priority

4. Information therapy is only the first of multiple medical interventions that can be integrated with MedEncentive

1. We must “triangulate”the interests of the payer, physician and consumer to achieve sustained cost containment

Michigan's Medicaid Costs

MichPHA’s Medicaid Proposal

Total Medicaid expenditures in Michigan, with the current Medicaid population, amount to approximately $8 Billion annually, about $1 Billion of which comes from state funds, with the rest being federal funds.

MichPHA’s Medicaid Proposal

With the current Medicaid population, total savings, with a 15% reduction of costs, would be approximately $1.2 Billion annually, about $150 Million of which would benefit the budget of the State.

•

MichPHA’s Medicaid Proposal

• Recommended a pilot utilizing Michigan's Federally Qualified Health Centers-- serve a large proportion of Michigan's Medicaid population

• Similar demographics provide a “control”

Savings on Medicaid benefits employers

MichPHA’s Medicaid Proposal

• ERs pay the state and federal taxes that pay for Medicaid

• Uncompensated and under-compensated care is reflected in the published prices for medical procedures, as well as being reflected in the premiums we pay for employee insurance, or reinsurance if we are self-insured

• Failure to achieve and maintain optimum health status for our citizens costs business in terms of absenteeism and unhealthy "presenteeism," and lost productivity

MichPHA’s Medicaid Proposal

Q & A

For more information:

Marilyn H Bell

269-668-4149

mhbell@michpha.org