UnitedHealthcare was an early proponent of value-based care and is well positioned now that value is increasingly seen as a healthcare solution. Providers will have to demonstrate that they provide better care at a lower cost.
Value-based care is gaining attention as one way to address the rising costs of healthcare and insurance. And one of the nation's biggest insurers is finding it made the right choice by adopting this reimbursement strategy early on.
UnitedHealthcare started tying healthcare reimbursement to outcomes when that was still a radical new idea, but its experience now leaves the company well suited for what seems to be the future of healthcare.
Lisa McDonnel, senior vice president of national network strategy and innovation at UnitedHealthcare, notes that UnitedHealthcare was heavily invested in the value-based care concept long before the ACA became law. The insurer has been using bundled payments for transplants for more than 25 years.
It recently expanded its value-based care efforts into new products and lines of business, lining up with the increased focus on accountable care organizations and other value-based programs.
In the early 2000s, UnitedHealthcare had about $12 billion of its total $100 billion spent on medical care tied to value-based care, McDonnel notes. Now it has about $54 billion tied to value-based care, she says.
That increase came from incorporating value-based reimbursement with Medicaid, expanding Medicare Advantage offerings across the country, and through the increased use of pay-for-performance and bundled payments in the commercial space.
'Part of Our DNA'
The health plan has pledged to hit the $65 billion mark with value-based care in the next two years, McDonnel says. More than 15 million UnitedHealthcare members, or one in almost every three enrollees, are accessing care from a physician who now has a value-based relationship with UnitedHealthcare.
“We consider this part of our DNA now, how we contract with providers. Fee-for-service alone is not getting the results in terms of quality and efficiency that will sustain healthcare as we know it in this country, so we recognized that we had to change how providers are reimbursed to something based on value,” she says.
“We are well down that path across all our business, not just the products that were on the exchange.”
UnitedHealthcare also is diversified with its insurance products, McDonnel notes. With all the uncertainty over healthcare legislation, that diversification couples well with the focus on value-based care, she says.
Ready for What Comes Next
“Value-based care prepares us better for whatever might be coming in terms of the Affordable Care Act or other legislation, and our diversification allows us to flex perhaps more easily, more readily with changes that might occur,” she says.
UnitedHealthcare is focusing more than ever on providers who can demonstrate that they deliver better care at a lower price, McDonnel says.
“Now it’s not just that they’ve been working on their performance, but when we measure their performance relative to their peers, we are looking for the ones that have emerged and are delivering higher value care,” she says.
“We’re figuring out how we can align higher volume to those providers that are delivering higher value. We’re seeing narrow networks emerging, tiered networks, different iterations depending on the market. But we are definitely focused on shifting volume to providers who can demonstrate they are delivering that improved value.”
It’s not a one-way street, however. Providers are questioning how much additional volume they can expect by providing better care at a lower cost, McDonnel says, seeking to find the right balance in terms of volume and reimbursement.
“They’re trying to figure out how much steerage they can expect and who is participating. If everyone is in that network, they’re not going to get as much increased volume and they will be less inclined to step up and do something for less money,” McDonnel says.
“They can’t manage that patient population most effectively and really focus on our population of members unless they can depend on that steerage.”
Gregory A. Freeman is a contributing writer for HealthLeaders.