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UnitedHealthcare Cut Costs through Value-Based Care Programs

UnitedHealthcare expanded value-based care programs such as accountable care organizations, which led to reduced spending and a drop in acute inpatient admission rates.

By Vera Gruessner

Last month, UnitedHealthcare released a report outlining the benefits of value-based care programs. The report called Collaborative and Coordinated: How Value-Based Care Programs are Driving Improvements in Quality and People’s Health began by detailing the fee-for-service payment system and how it affects patient care.

Bundled Payment Models

Under the fee-for-service payment system, providers are reimbursed for offering more services and procedures instead of care coordination meant to bring better population health outcomes,  the paper stated.

Fee-for-service could lead to duplicative testing and a lack of coordinated care. Value-based care programs, on the other hand, are being created to bring more positive patient health outcomes. For example, accountable care organizations (ACOs) such as the Great Lakes Organized System of Care have been working to reduce hospital readmission rates due to their value-based care payment program.

Value-based care programs have brought forward healthcare delivery changes such as the creation of patient-centered medical homes and accountable care organizations. Additionally, value-based care programs have led to the development of new payment models such as bundled payments and shared savings.

UnitedHealthcare invested in expanding value-based care programs in recent years, which has brought positive results for their members. For instance, commercial accountable care organizations saw better results on 83 percent of quality measures when compared to non-ACOs. Also, acute inpatient admission rates among Medicaid ACOs in Tennessee dropped by double digits.

“UnitedHealthcare is leading the way helping to popularize the VBC model, which holds profound benefits for all healthcare stakeholders. UnitedHealthcare is applying nearly 40 years’ worth of experience to augment and enhance new payment models that integrate clinical support to place greater focus on quality and patient health outcomes,” the report stated.

“In July 2013, UnitedHealthcare announced its goal of getting to $65 billion of spend through value-based contracts by 2018. As of November 2016, the company has reached $52+ billion, representing a tripling of its total payments to physicians and hospitals tied to value-based arrangements over the past three years.”

When looking at Medicare accountable care organizations versus non-ACOs, UnitedHealthcare found a 2.3 percent decrease in readmission rates among those treated in the value-based care program. The Medicare ACOs also showed a 3.3 percent higher rate of  eye screening for diabetic retinal disease among diabetes patients. Medicare ACOs exhibited a 6.3 percent increase in breast cancer screening when compared to non-ACOs as well as 7.8 percent rise in colorectal screening rates.

In 2015, UnitedHealthcare spent $148 million for performance-based bonuses on Medicare Advantage physicians, which shows how value-based care programs could benefit both hospitals and the patient community. Providers are able to boost their revenue by meeting quality measures while patients receive more coordinated care.

Implementing value-based care programs

To reach some of the positive results that UnitedHealthcare has gained, private and public payers will need to adhere to a number of steps. The Office of the Inspector General (OIG) outlined on its website several tips that public payers should follow when transitioning to value-based care.

While transitioning, many payers are incorporating multiple payment models including fee-for-service, bundled payments, and pay-for-performance. As such, the OIG recommends to analyze the financial incentives of each payment model and the risk of fraud, abuse, or waste related to varying reimbursement structures.

When it comes to designing value-based care programs, payers will need to “review the underlying market and provider practice assumptions,” the OIG stated.

“Designing payments and programs with incentives in mind is essential, but it is only one facet. The Department must track and coordinate new models to ensure effective administration and must be alert to issues that impact more than one program, such as provider participation and beneficiary alignment,” according to the OIG website.

Payers will also need to ensure that the medical data shared among providers is reliable. Since data is key to quality performance measures, documentation will need to be complete, accurate, and timely. Also, claims data will need to be usable by providers to improve the quality of care and patient health outcomes.

The transition to value-based care reimbursement has been positive for UnitedHealthcare. For instance, the payer has saved $33 million by implementing a pilot bundled payment program for oncology treatment among 810 cancer patients, the report stated. Bundled payments also showed decreased costs for spine and joint surgeries.

Other payers are advised to follow the steps outlined above in order to benefit from value-based care reimbursement much like UnitedHealthcare.


Dig Deeper:

How to Overcome the Challenges of Bundled Payment Models

How Payers Should Prepare for Value-Based Reimbursement


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