The RE·MEDI system is based on three new concepts designed to create intense competition among healthcare providers without significantly altering the structure of America's current healthcare system. The first concept motivates healthcare consumers to seek the best values in the marketplace, just as they do with other goods and services. It is called Ca$hback Coverage, an innovative way of paying for healthcare benefits. Under Ca$hback Coverage, a fixed dollar benefit is paid for each covered procedure, illness and pharmaceutical. If the patient goes to a provider who charges more than the benefit amount, then the patient must pay the full difference out-of-pocket; but if the patient goes to a provider who charges less than the benefit amount, the patient is mailed a rebate check for the full amount saved. (Or, to avoid income taxes on the rebate, a credit can be applied to the patient's Health Savings Account.) Thus, the patient must bear the full cost difference (but not the full cost) of her healthcare choices. Ca$hback Coverage motivates consumers to shop for the best values in healthcare, just as they do now for most other goods and services.

The second concept creates an opportunity to distribute to the patient information about provider prices and quality. It also eliminates unnecessary medical treatments and allows the patient total freedom of choice in choosing a doctor for her treatment, not to mention a free, second medical opinion. This concept entails separating treatment from diagnosis, activities that utilize different skill sets and knowledge bases. When a patient requires medical care, she first sees a physician in a managed care network. The primary goal of this physician is to determine the patient's diagnosis—hence we call him a Diagnostician. The Diagnostician examines the patient, orders or conducts all tests needed to establish the diagnosis, dispenses medical advice, administers routine (low-cost) treatment, and writes drug prescriptions. Most patients will have their problem solved by the Diagnostician. However, for patients needing nonroutine care, the Diagnostician prepares a written treatment plan.

Once the patient's diagnosis and treatment are determined, the Diagnostician's computer identifies several doctors who can treat the patient. Also in the database are the doctors' prices—collected from the claims that they submit for reimbursement—some quality measures and their credentials. This information is printed out in a personalized guide called The Doctor Shopper and handed to the patient along with the treatment plan. The patient now has good information with which to shop for a doctor for her treatment—better information than for about almost any other good that is purchased through the marketplace.

Because patients will tend to choose the providers that offer them the best values, providers will have to compete to earn the business of these patients. The two primary ways in which they compete are by reducing their prices and by improving the outcomes of their patients. Of course, these are precisely the responses that we are seeking.