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May 9, 2001 _______________ Director of Information
Technology __________ Health
Plan Any town, USA Dear _______: Thank you for allowing Healthwave, Inc. (“Healthwave”)
to respond to your Request for Proposal (“RFP”). The RFP indicates you are looking for a managed
care system vendor to replace your existing system. Although we would be honored to work with XYZ
Health Plan it is best that we not respond to the RFP for the
following reasons: §
Our
business model – with the exception of a couple of modules - is not
that of an information technology vendor.
Accordingly, if you are set on such a relationship for your core
system, we would not meet your needs. §
We
will not license certain modules of our Ovation2K Platform to TPAs. Given that XYZ also operates as a TPA, licensing
our core processing system would conflict with our business model and
plan. Healthwave’s business model is to form partnerships with selected organizations that seek to use advanced technology to provide highly efficient and cost-effective services to healthcare’s constituents. To this end, we have thus far established partnerships
with three MSOs that collectively manage provider-payer relationships
with about 7,000 practitioners. For
these organizations, we are developing electronic interfaces that connect
the practitioners to the MSO. The
MSOs will thereby act as the electronic gateway between the practitioners
and payers, receiving all forms of claims – paper, electronic, Internet
– which are then re-priced and forwarded to the appropriate payer for
payment. Either the MSOs will
utilize components of our Ovation2K Platform to process and re-price
the claims, or they will outsource these activities to us. Under these partnership arrangements, we will
also market our Interactive Office Dashboard to the doctors associated
with these organizations. The
Dashboard gives the practice a seamless and real-time connection to
Ovation2K, making possible real-time, point-of-care transactions including
claims, authorizations, referrals, eligibility checks and payments. As we add more doctors, IPAs and MSOs, the
Healthwave “eDelivery Network” likewise grows.
This Network will thereby serve our other objective
– using our technology to provide third-party administrative services
to self-insured employers. We
have therefore developed Ovation2K not to license it but to use it to
provide services. When approached by a nationally recognized TPA,
we declined to license this technology to them. At the moment, we are only licensing separate modules, like Credentialing,
Network Management, Communications or Claims Repricing. With regard to XYZ’s request, we could respond
in one of two ways: §
By
proposing to license certain modules rather than the full platform. Although this doesn’t seem to be your preferred
approach, we would do so for those modules that you specify. §
By
proposing a partnership arrangement whereby Healthwave would contribute
its technology and XYZ would contribute its resources and network to
(i) address XYZ’s MIS needs, (ii) begin the process of “connecting”
XYZ’s provider network, and (iii) introduce new products and services
to insured and self-insured employers in the region. This partnership approach is similar to the
programs that Blue Cross of Virginia, Blue Cross of South Carolina,
and Human have initiated in recent months.
They realize that having a comprehensive and dynamic web site
is not sufficient if doctors don’t use it.
We believe our “end-to-end” platform addresses this with a solution
that generates both savings and revenue to the health plan and the network
practitioners. Again, I understand that both of these approaches
are significantly different than what you have requested in your RFP,
and, therefore, may not be of interest at this time. If you would like us to discuss either of these
in more detail, please let me know.
Otherwise, I again thank you for keeping us in mind.
Richard A. Radoccia August 2, 2001 Re: a more efficient claims system: Dear Ms. ____, From 1995 to 2000, I was the CEO of a provider-owned HMO.
During that time, I became frustrated that our information system
just could not keep pace with changes in the business.
Moreover, because we did not have the scale of many of our competitors,
we needed to be as efficient as possible; but our system often stood
in the way. The system we used is both highly regarded and widely used. So in 1998, I initiated an effort to first enhance and then
replace this system with one developed using state-of-the-art tools
and completely redesigned workflows.
In April 2000, I left the HMO to further develop a system that
would: (i)
enable a more efficient administrative workflow design (ii)
dramatically reduce the use of paper, and (iii)
allow constituents access to a wide range of data. Our first client is an MSO that manages a network of 8,000
doctors. They are using our
system and services to re-price claims before they are sent to payers. The system "scrubs" claims so that
information sent to payers is "clean." The system is also capable of performing edits based on benefits
or other medical management criteria. Through the use of our system and services, this client will
realize a reduction in their unit-cost of 70%.
Please see our results, below. If you would be interested in additional information about
our company or system, please contact me.
I look forward to speaking with you soon.
Richard A. Radoccia
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