Executive Summary

         PR I Z E


    The US spends $2.2 trillion per year on health care and that ...

              WHAT MARkET fAILuREs DOEs

    Health care is expensi...

                                     THIs Is AN X PRIZE

        Addresses Market Failure             Lower quality ...

The development of the WellPoint Health X PRIZE (WHXP) brought toge...

                             sTRuCTuRE Of COMPETITION
    The competition will take place over a five year period an...

                                                  sAMPLE sCOREBOARD

 Different approaches comparable
  Comparison o...
Healthcare X PRIZE - Executive Summary
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Healthcare X PRIZE - Executive Summary


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An overview of the Initial Design and Prize Guidelines for a proposed $10M+ Healthcare X PRIZE, released for public comment on April 14, 2009. Please help us design the best competition possible in creating an Optimal Health paradigm that engages and empowers individuals and communities in a way that will dramatically improve health value.

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Healthcare X PRIZE - Executive Summary

  1. 1. WELLPOINT HEALTH X PRIZE Executive Summary FO U N DAT I O N PR I Z E 1
  2. 2. 2 OvERvIEW Of THE WELLPOINT HE ALTH X PRIZE The US spends $2.2 trillion per year on health care and that spend is increasing at a rate much higher than inflation. The annual cost of hospitalizations and employee sick days alone is $1 trillion dollars per year in the US, with about 38 million Americans hospitalized annually. We spend 55% of our health dollar on the sickest 5% and the healthiest 50% see an investment of only 3% of total health dollars. The current health care model incentivizes expensive reactive care over proactive care. This has resulted in the unsustainable growth in medical spend we see today. The WellPoint Health X PRIZE is a $10 million 5 year competition for teams to design and implement new models for health care that dramatically improve health for a community of 10,000 people over 3 years. The centerpiece of the competition is a comprehensive measure of health for the community and the individual. Teams will have unprecedented access to information and will be able to improve the incentives, interactions, and relationships between employers, payers, providers, and consumers. They will engage consumers in the healthiest behaviors and programs and thereby drive dramatic improvements in their community health score. The community health score is a composite of objective measures across health incidents (e.g., hospitalizations, sick days), functional health status (e.g., fitness, activities of daily living), and the total spend on health. The winning team will cause the greatest increase in the community health score in a community of 10,000 people over 3 years. In the process they will showcase a more affordable, results oriented health system whose lessons can be adopted across the globe.
  3. 3. 3 WHAT MARkET fAILuREs DOEs THE WELLPOINT HE ALTH X PRIZE ADDREss? Health care is expensive ($2.2T in 2007, or $7500/capita). The government reform effort is focused on im- proving people’s access to the system, by changing how we pay into the system. The WellPoint Health X PRIZE is focused on what we get for the dollars being spent; we look to optimize the return on our >$2T investment. Specific market failures this prize will address are: Market Failure Today Post-Prize Incentives focused on Payment tied to visits, tests, and Payment tied to measurable improve- volume, not value procedures ments in health Lack of visibility into Medical, health, and payment Community Health Score provides baseline and priorities records scattered, even at individual standard definition and unified health level picture at a population level Medical-only solution set “Coverage” limited to medical solu- Programs across wellness and illness tions compete on results Short term focus Focus on diagnosis and treatment of Personalized recommendations and immediate issue feedback tie you into longer-term programs Engagement of people in programs Doctor tells you to do “x” with no Programs incent and engage you to follow-up participate in highest impact solu- tions There is no standard definition or measurement for health. Because there is no definition for health, our system can- not focus on solving the biggest issues; in fact, there is no way to track progress or outcomes. In the absence of data highlighting the bigger picture, our health system has become increasingly reactive and procedure-based, with only 3% of dollars spent on the healthiest 50% of the population; even as that “healthy” 50% has become increasingly obese and at-risk for chronic illness. In fact, innovators who have created programs to improve health in a way that reduces medical visits/services have been punished by the market because the current system pays for treatments not outcomes.
  4. 4. 4 THIs Is AN X PRIZE Addresses Market Failure Lower quality currently rewarded with higher revenue Scalable 10,000 person pilot will be adopted across 34M individuals (via WellPoint) Achievable Numerous historical outcome improvements undermined due to poor financial incentives Dramatic Numerous personal stories of lives saved or improved Empiric Credible measures exist to document success Leverage $10M prize across $1.2B in industry spend in $2.2T industry Transformative Opportunity to change the paradigms of health system. Not incremental but transformative. INDIvIDuALs WHO suPPORT THE PRIZE Sample of advisors expressing support for the prize effort: • Elliott Fisher, M.D., Jim Weinstein, D.O of the Dartmouth Institute for Health Policy • Mark McClellan, M.D., former head of Medicare, currently at Brookings • Newt Gingrich, Former Speaker of House, Founder, Center for Health Transformation • Bill Bradley, Former US Senator • Glenn Steele, M.D., CEO of Geisinger Health System • Sam Nussbaum, M.D., Chief Medical Officer, WellPoint • Dean Ornish, M.D., founder of Preventive Medicine Research Institute • Susan Dentzer, Editor-in-Chief, Health Affairs • Prof. Richard Thaler, Professor of Behavioral Science, University of Chicago • Prof. Clay Christensen, Author: Innovator’s Prescription, Prof. Harvard Business School • Herbert Pardes, M.D., CEO of NY Presbyterian • Betsy Dietz, Partner at IBM Global Services • Ginny Proestakes, Program Leader, GE Group Health Program
  5. 5. 5 DEsIgN Of THE WELLPOINT HE ALTH X PRIZE The development of the WellPoint Health X PRIZE (WHXP) brought together leading thinkers on health from across a wide range of stakeholders. We interviewed >50 thought leaders on the market failures and potential areas of focus for the prize, refining them across an idea summit and a design summit. We announced an initial design for the prize on April 14 and have refined the initial ideas via input from hundreds of emails/comments, numerous interactions with leading thinkers, and a 2-day measurement summit that involved the leading organizations in measuring health system impact. The WHXP looks to transform the way health is delivered by defining health, measuring it, and incenting programs that best deliver improved health. The WHXP creates a uniform measure, tentatively called the community health score, that allows us to allocate resources to programs that make the biggest difference in the real world. We believe the WHXP can dramatically improve the health of our families by creating a standard measure for health that is transparent, accountable, and incents better results. The Wellpoint Health X PRIZE will be a catalyst for rewarding the innovators who find the most effective and efficient means of improving real world health outcomes. Our challenge is to demonstrate a health system that optimizes health, and engages individuals in impactful and personal- ized programs across wellness and illness. While messaging will continue to be refined, our goals of measurably improv- ing the health of a community through better programs and incentives continued to be met by excitement in the health community: The winner of the WellPoint Health X PRIZE will be the team that designs and implements a new model for health care that causes the greatest improvement in the health of a community of 10,000 people over 3 years, as demonstrated by a drop in sick days and hospitalizations, an increase in health status and reduction in total cost. The winner of the $10M competition is the team achieving the greatest increase in the community health score: • Reduced number of health incidents, including sick days and hospitalizations; • Increased health status of a population; and • Achieved at a lower cost. WINNINg CRITERIA Community Health Health Total Health Incidents Status Cost Score • Hospitalization • Self-reported • Provider claims • ER visit health • Disability • Major morbidity • Physical fitness • Pharmacy • Death • Sick days • Team intervention
  6. 6. 6 sTRuCTuRE Of COMPETITION The competition will take place over a five year period and will be divided into two stages: 1. Team Concept/Selection Phase: The first phase of the competition requires each team to model how their solution will achieve the required im- provement in the community health score for a representative 10,000 person community. WellPoint, Inc. will supply each team with access to a data sample containing 10,000 records. Teams will model their interventions against that data sample until they have reached the minimum threshold improvement in the community health score. As they reach the minimum threshold, they will share their modeled impact with judges, who will outline what the teams will need to do to validate their assumptions. The selection of finalists will be based on the pro- jected impact of their solution, the degree to which their assumptions have been validated, and their plan and resources to deploy and operationalize their model. Five finalist teams will be matched to five test communities at the conclusion of this phase. This phase will occur over an 18-month period. Following team matching, there will also be a 6-month window in which Finalist teams will ready themselves for deployment in the final phase. 2. Finalist Competition Phase: The second phase of the competition is a three-year, real-life demonstration of the finalist’s model in a real 10,000 person community (with population coming from employers in WellPoint, Inc. markets). Each finalist will be judged on how they actually impact the health outcomes and cost of their pre-selected 10,000 person population. These results will be compared to the community’s previous year baseline. The teams will need to implement the programs they will have designed in the Team Concept/Selection Phase, and drive significant participation, likely using the community, local providers, and employers to engage their targeted users in their solutions. Five total teams and test communities will be involved in the Finalist Competi- tion. We expect >75 teams to enter the competition, coming from diverse backgrounds with expertise in predictive modeling, care coordination, risk assessment, engagement, lean operations, etc. The most qualified entrants are likely to be existing companies in the health sector, whose products or services would benefit significantly by the ability to offer improved in- centives or through greater transparency. Since solutions will need to be comprehensive, we anticipate the need to attract another 500+ experts and vendors into a “health innovator’s ecosystem,” an online and offline community facilitating introductions, to help teams flesh out their concepts and deploy them into real world test populations.
  7. 7. 7 sAMPLE sCOREBOARD Different approaches comparable Comparison of Two Competitors in Year 3* Team A Team B Aggressive Disease Mgmt Wellness for all Baseline Team result, Year 3 Team result, Year 3 Incidents 40 pts 16 pts • Mortality 25 deaths 12 deaths 5 20 deaths 2 • Hospitalization 9,000 bed-days 5,000 bed-days 22 8,000 bed-days 6 • Top 10 conditions 5,000 episodes 3,000 episodes 12 4,000 episodes 6 • Disability 100,000 days 90,000 days 1 80,000 days 2 Status 2 pts 35 pts • Self-reported N/A 1,000 people, 2 5,000 people, 20 avg 5 percentile avg 10 percentile improvement improvement • Fit test N/A No participation 0 2,500 people, 15 avg 15 percentile improvement Cost $80M $75M 6 pts $80M 0 pts Community Health Score 48 pts 51 pts *Note: Percentage improvement across incidents calculated from weighting given to specific sub-categories. Percentage improvement for health status calculated from aggregate documented improvement in percentile for performance EXECuTION After much consideration, we have decided to suspend work on the Health X PRIZE effort. While we still believe strongly in the need to improve the results and costs of health care, the current environment has added significant challenges to running a successful competition over the next 5 years. We feel we need to have a better understanding of how health reform efforts will impact the health care system. Reform could result in cost impacts, impacts to accessibility, or impacts that health experts haven’t yet foreseen. We greatly appreciate your support in helping to craft this ambitious endeavor. We believe that the insights gained through your participation are valuable and will continue to shape the dialogue on improving the outcomes and affordability of health. For more information or questions, please contact: Vijay Goel, MD Pam Rogers Sr. Director, Health Prize Development Staff VP, Innovation X PRIZE Foundation WellPoint, Inc. vijay.goel@xprize.org pam.rogers@anthem.com