UnitedHealthcare Pushes the Pace on Value

Today’s forays toward value-based healthcare are not entirely new to UnitedHealthcare, the nation’s second-largest insurer. The company has long worked to distance itself from fee-for-service medicine both directly and through recent acquisitions.

In 2005 the Minnetonka, MN-based private payer purchased PacifiCare Health Systems, which has been involved in capitation and shared risk arrangements in the Medicare and commercial space for 25 years. United Resource Networks, a UnitedHealthcare company that creates specialized networks for transplants and other complex medical conditions, has been participating in bundled payment contracting programs for more than 20 years. Through its Medicare Advantage Plans, UnitedHealthcare has had shared savings arrangements in place—some for over 10 years.

More than 850 hospitals and 100,000 physicians are tied into one of UnitedHealthcare’s value-based programs—a reach that gives more than 11 million participants enrolled in its plans access to care from its expanding list of providers compensated based on quality, better patient outcomes and lowering cost of care.

This shift away from a fee-for-service model is a big change for care providers, and payers need to support it, says Lisa McDonnel, senior vice president of network strategy and innovation for UnitedHealthcare.

“To really maximize that value, we have to align incentives on the provider side between providers and payers as well as align incentives with consumers so they are incented to take better care of themselves, seek care from better-performing providers, and utilize tools and services available to make good choices,” she says.

UnitedHealthcare has more than 520 active accountable care programs across its Medicare, Medicaid and commercial business. It is committed to contract with up to 250 new ones in 2015. But since not everyone is ready to transition to a value-based approach, UnitedHealthcare offers a full suite of programs geared to meet a provider’s individual level of readiness.

“Most providers, out of the gate, are not ready to manage a full population of patients across the full continuum of care,” says McDonnel. “They probably want to get started with a pay-for-performance contract where they start gathering experience in being accountable, but the risk is less.”

Such an agreement might incentivize a hospital to focus on reducing readmissions, explains McDonnel. That is a different level of risk or accountability than being responsible for several thousand patients no matter what level of care they require.

“Care providers can work with payers to get experience, build upon it and hopefully through that success, they can take on more accountability over time and then have more opportunity for upside gain-sharing,” she adds.

Daniel Casciato is a freelance writer and social media consultant from Pittsburgh, PA.