UnitedHealth Tells Medicare How to Look for More Savings

Janice Simmons, for HealthLeaders Media , May 28, 2009

UnitedHealth Group, one of the nation's largest insurers, said in a working paper released Wednesday that if many of its currently used cost-saving programs and methods were adapted by Medicare over the next decade, roughly $540 billion could be saved by the federal program.

The new UnitedHealth paper provides "building blocks" that Medicare could build on to save money and promote quality, according to UnitedHealth Executive Vice President Simon Stevens, who heads the company's new Center for Health Reform.

The paper lists 15 suggestions for lowering the growth of health costs. "We do think that this is going to produce better health results" and generate savings, Simon said at a Washington briefing. The paper has been forwarded to congressional and White House officials.

The report comes just two weeks after an agreement among several health industry groups, including America's Health Insurance Plans, American Medical Association and American Hospital Association, to find ways to reduce cost growth in the health sector by $2 trillion over 10 years. The move had been seen by some as a way to head off a push by Congressional Democrats to create public plans that would compete against private insurers.

These savings are not made through squeezing hospital reimbursements or physician pay, Stevens said. "This is about improving the appropriateness of care delivered across the healthcare system."

Among the cost-saving proposals cited by UnitedHealth are:

  • $165.5 billion by providing skilled nurse practitioners at nursing homes to manage illnesses, coordinate primary care, and prevent avoidable hospitalizations.
  • $55.1 billion for transitional case management programs that provides a bridge between hospital inpatient admission and discharge.
  • $24.8 billion for disease management programs using predictive modeling to identify high-risk patients.
  • $23.8 for a physician compensation program that rewards medical groups for providing high quality and cost-effective care for patients. (The program focuses on primary care physicians, but can include specialists.)
  • $57.3 million by prospectively reviewing claims before they are made.

Anticipating questions that some would see their measures as rationing, UnitedHealth officials said that much of the current healthcare system is fragmented and has knowledge gaps—and it could therefore benefit by reducing unnecessary care.

This is "really a far cry from the 'R' word that’s often bandied about, said Lewis Sandy, MD, UnitedHealth’s senior vice president for clinical advancement, in reference to rationing.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.

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