NEWPORT BEACH, Calif. - June 30, 2010 - In a response to healthcare reform legislation in Washington and the rise of high-deductible plans in the workplace, The TriZetto Group, Inc. and affiliated industry leaders called for processes and systems that can align consumer and physician incentives, encourage proven best practices, discourage unwarranted variations in care and dramatically improve the U.S. healthcare system.

They spoke at the recent America's Health Insurance Plans (AHIP) Institute 2010 in Las Vegas, Nev.

"The challenge is not solely one of cost-containment, but of value improvement," said Jeff Margolis, TriZetto's chairman and CEO, in remarks to health plan executives attending a forum sponsored jointly by the AHIP Foundation and Harvard School of Public Health. "We must get more value for every healthcare dollar spent, and to do that we must address benefits design along with both the unit cost and unit volume of care."

Margolis advocated a holistic, systems-science approach called Integrated Healthcare Management (IHM). IHM, he said, is the systematic application of processes, shared information and aligned incentives to optimize the coordination of benefits and care for the healthcare consumer. Core elements of IHM include value-based insurance design (VBID), value-based reimbursement, Systematic Health Management™ (SHM) and the active engagement of all constituents using evidence-based medicine guidelines.

"In a nutshell," said Margolis, "IHM targets cost and quality improvement in three areas: demand-side personal choices and behaviors of consumers, supply-side volume excesses and inefficiencies among providers, and administrative inefficiencies in transactions, communication and information sharing."

IHM taps the "rich repository of already digital data" in the information systems of healthcare payers to get the right information, such as proven best practices, to the right constituents at the right time and place.

"For some 80 percent of Americans, health plans are in the best position to enable the coordination of healthcare information because they maintain patient data across the multiple clinicians, facilities and pharmacies that one typically uses over time," he added.

In leading an AHIP Institute panel on aligning provider and member incentives, Jeff Rideout, M.D., TriZetto's senior vice president, care and cost management, and chief medical officer, argued that "healthcare payers today have an opportunity to align value-based provider reimbursement models and member incentives to drive behavior and impact the volume of care, not just the unit cost of care." Dr. Rideout made a compelling case for reducing unwarranted costs through incentive alignment and SHM; for improving health outcomes by using member rewards and provider reimbursement; and for reducing administrative costs of value-based benefits and reimbursement through automation.

"The key, though, is to design processes, incentives and technology solutions that are dynamic – that adjust to the workflows of clinicians' practices and to the wide-ranging responses of consumers," noted Dr. Rideout.

These comments were echoed by panelist A. Mark Fendrick, M.D., co-director of the University of Michigan Center for Value-Based Insurance Design and a professor at the university in the departments of internal medicine and health management and policy. Established in 2005, the Center develops, evaluates and promotes value-based insurance initiatives in order to ensure the efficient expenditure of healthcare dollars and maximize benefits of care.

"Consumer behavior ranges greatly," he acknowledged. "Up to 60 percent of chronically ill patients have poor adherence to evidence-based treatment, and poor adherence is responsible for up to one-quarter of all hospital and nursing-home admissions and more than $100 billion in yearly healthcare costs. Further, U.S. adults receive only about half of the care that's recommended, and the quality of care varies significantly by medical condition and geographic location."

These problems are exacerbated by high-deductible health plans with high co-pays, deductibles or co-insurance that often lead to decreases in essential, evidenced-based care. One part of the solution, said Dr. Fendrick, is VBID. VBID programs adjust patients' out-of-pocket costs and physician reimbursement for specific services based on an assessment of the clinical benefits. The more clinically beneficial, the lower the patient's cost share and the higher the physician's reimbursement. The less clinically beneficial the screening, test, treatment or office visit, the greater the cost to both patient and clinician.

"Today's archaic 'one-size-fits-all' model of member benefits and provider reimbursement fails to acknowledge the differences in clinical value among medical interventions and among individual patients," he said.

VBID is yielding productivity gains and improved health outcomes for many employers, Dr. Fendrick noted in several examples. And new information technology automates the adjudication of claims on a value basis, something that for years has been a manually intensive process.

Consumer behavior, specifically poor adherence, also served as a departure point for remarks by another panelist on the TriZetto-sponsored workshop, Swati Abbott, president and chief executive officer of MEDai, Inc. MEDai enhances healthcare quality and cost-efficiency by providing payer organizations, clinicians and facilities with predictive analytics and data mining capabilities.

"Patient care is fragmented. Patients are discharged with prescriptions, education and instructions on how to comply, but without coordination across the various care settings that they will need to follow up with. This often leads to non-compliance due to misunderstanding and the overall complexity of living with their diseases," said Abbott. "Patients need to be managed consistently across care settings and complexities; this is where the patient-centered medical home is most valuable.

"The key, though, is to provide consistent information regarding patient care across the care continuum -- actionable patient data for physicians, consumers, disease and care management nurses, and hospitals," she added. "The starting point is accurate analytics that determine which patients are high-risk and who is non-compliant with evidence-based chronic care guidelines and most likely to have a hospital or ER visit. From there, payer, patient and physician can collaborate to craft and update an individual's plan for evidence-based care."

Margolis, Dr. Rideout, Dr. Fendrick and Abbott are available for interviews. Interested reporters should contact Schwartz Communications at trizetto@schwartz-pr.com or 781-684-0770.

About TriZetto
Founded in 1997, TriZetto is the leading privately held healthcare information technology company to the healthcare payer industry, with its technology touching half of the U.S. insured population. TriZetto's vision for the industry, Integrated Healthcare Management, is the optimized coordination of benefits and care for healthcare consumers to improve the value of every healthcare dollar spent. The company's offerings include enterprise and component software, hosting, outsourcing services and consulting that help payers implement and optimize their operations and minimize the risk of bringing to market new products that drive competitive differentiation.

Media Contacts:

Loren Finkelstein
The TriZetto Group
303-542-2460
loren.finkelstein@trizetto.com

Davida Dinerman
Schwartz Communications
781-684-0770
trizetto@schwartz-pr.com