Accountability and Innovation in Care Delivery Models

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1 Accountability and Innovation in Care Delivery Models Lisa McDonnel Senior Vice President, Network Strategy & Innovation, United Healthcare November 6, 2015

2 Today s discussion topics Vision Our strategic vision for network and clinical value Create Create networks of high performing providers Collaborate Collaborate with providers through our Accountable Care Platform Connect Connect individuals with the best, most effective care 2

3 Percent Industry Cost Trend National Health Expenditures as a Percent of Gross Domestic Product

4 A Snapshot: Health Care Reform Law COVERAGE EXPANSION 25M People COST OF COVERAGE $1.21 T over 10 Years Exchanges 22M Key Costs Include: Individual Policies Employer-Based <4M> <7M> Businesses pay through taxes and penalties $254 B Subtotal Medicaid 11M 14M 25M $48,000 cost per covered person over 10 years In 2025, 27 M People will remain uninsured The uninsured pay through penalties Insurers, Manufacturers & Others pay through additional taxes and fees Cost Shifting to individuals and others $43 B $788 B $202 B 4

5 Our vision for network & clinical value Creating the most effective, enduring connections between care providers and consumers to achieve the best health outcomes, cost of care and experience 1 CREATE networks tailored to each market s unique needs and competitive cost structure COLLABORATE with providers to share data and insights to support consistent, high-quality clinical outcomes, improve individual experience, and reduce cost of care CONNECT empowered individuals with information, education, and the right, most effective care 5

6 Creating differentiated value Tools and resources to engage and activate members Flexible Network Design Payment Reform Effective Clinical Models Integrated Benefit Design High-value physicians Customized networks Sustainable cost structures Pay for value Risk sharing Population management Patient-centric care models Focused on highest-risk Sharing actionable data Consumer-directed plans Aligned incentives Innovative consumer tools Intentional Integration Delivering quality access at a competitive cost structure 6

7 Components of value creation CREATE A positive, simplified consumer experience Networks designed around collaborations with consistently high-performing, costeffective care providers Innovative clinical & performance models tailored to specific consumer needs 7

8 Create Features of a high-value medical practice Provider characteristics Financial accountability (Value-based payments, risk-sharing) and quality Exemplary member access & experience Configured for specific populations & markets High performance in cost, quality & member experience 8

9 Create Distinct types of high value networks UnitedHealthcare networks are configured for the needs of specific populations and cost strategies Broad Tiered Network powered by Premium Narrow Primary Care Centered Centers of Excellence ACO Tiered Largest single health plan network Members are incented to use physicians who have met quality and cost efficiency criteria, a virtual narrow network Choices within defined, narrow, high-value network driven by local market dynamics Primary care physician helps to navigate referrals and care needs Claims and outcomes plus market surveys help us identify high performing facilities and surgeons for our Centers of Excellence A market-tailored network of high value health care providers Members are incented to use physicians and hospitals who have set goals for quality and outcomes (ACO) 9

10 Create High-value provider opportunity Comparison of UnitedHealth Premium Tier 1 physicians to non-tier 1 physicians Cost variation All specialties Care variation Implantable Cardiac Device Care variation Knee Replacement Surgeries Premium Tier 1 specialists for all 25 specialties evaluated had: Premium Tier 1 specialists with cardiology procedure episodes had: Premium Tier 1 specialists with orthopedic procedure episodes had: 16% 29% 28% 17% 41% Lower costs between a Premium Tier 1 physician and a non-tier 1 physician Lower average complication rates Fewer average redo procedures Lower average complication rates Fewer average redo procedures 16% Lower Cost 23% Lower Cost 26% Lower Cost Savings estimates based on UnitedHealthcare's 2012 analysis for 25 specialties and 147 markets. Figures are based on book-of-business results and represent the national average expected cost differential between Tier 1 and non-tier 1 providers for entire episodes of care. Actual savings achieved will vary by customer depending on geographic availability and customer-specific service mix. All figures and estimated savings represent historical performance and are not a guarantee of future savings. 10

11 Components of value creation COLLABORATE Enabling providers to increase responsibility and manage population health through payment models, tools, & best practice sharing Integrating across the continuum of clinical care Incentives aligned with consistent high-quality consumer outcomes and appropriate cost management 11

12 In billions Collaborate Aligning incentives 37% of spend covered by value-based contracts $70 $60 Value-Based Contracting Growth Total Value-Based Spend ($ Billions) $65+ >13M members impacted by value-based programs $50 $40 $30 $43+ 1%-6% lower medical cost across a range of Value-Based Care Programs $20 $10 $0 $ P 2018P All figures are reflective of all lines of business and programs in aggregate. 12

13 Level of financial risk Collaborate Driving consistency in quality care by changing the way we pay $15B Managing entire POPULATION HEALTH Capitation + PBC $24B Achieving specific METRICS $2.5B Managing a specific CONDITION or SERVICE LINE Condition or Service-Line Programs Shared savings Shared risk Performance-based contracts Primary care incentives Fee-for-service Performance-based Bundles & Episodes Accountable Care Degree of care provider integration and accountability 13

14 Collaborate Driving consistency in quality care by changing the way we pay UnitedHealthcare s experience & results >650 Accountable Care Agreements 100,000 physicians >1,000 hospitals impacting over 13 million members Performance-based Bundles & Episodes Accountable Care 3.6% readmit reduction 9% inpatient length of stay reduction 34% 25% reduction in medical cost savings for cancer therapy pilot decrease in average length of stay for transplants 1-6% lower medical cost 10-15% Over the long term, our goal is to deliver 10 15% lower medical cost through our accountable care programs 14

15 Collaborate Sharing actionable data Sharing data Managing care Measuring results Patient profiles and specific HEDIS gaps Community-based care coordination Quality & efficiency metrics Patient care plans Care transitions Incentive payments Real-time ER and inpatient admissions Patient navigators Practice-based process improvement Virtual Integration Reducing avoidable ER visits Reducing avoidable admissions Improving consistent access to care Enabling practice transformation 15

16 Collaborate Bundled Payment Drivers Payers Employers Support narrow networks and centers of Excellence Align provider incentives Encourage providers to move toward increased accountability Reduce costs and improve quality Reduce cost & care variability Ensure quality and appropriateness of care Increase worker productivity Providers State & Federal Government Taking early steps toward population health Experiment with risk while sharing in cost savings Improve relationships between hospital and physicians Increase market share through steerage Community recognition, e.g. Center of Excellence Aging population (Medicare/ duals) Encourage innovation to reduce cost/improve quality (SIM grants active in many states) State budget crises Using influence and purchase power to drive reform across all populations 16

17 Collaborate Bundled Payment Model Comparison CMS Example Risk share measured and reconciled retrospectively between CMS and the hospital. Bundle begins upon admission and continues for 90 days post-discharge. UHC Example Payment is made prospectively. COE contracts with surgeon and all specialists and establishes reimbursement and risk sharing terms. Pre-admit Acute Post-admit Bundle Variables CMS Proposed Rule for Joint Replacement UHC Total Joint Replacement COE Hospital at Risk Physician/Surgeon at risk Patient Steerage Appropriate Utilization Incentive Hospital/Physician Collaboration Incentive Quality Requirement(s) 17

18 Collaborate Oncology Episode Payment Program UnitedHealthcare launched a three-year episode payment pilot focused on oncology services that rewards participants for best treatment practices and better health outcomes Treatment savings for 810 patients: $33 Million Rewards physicians for improved quality and reduction in total cost of cancer Retains oncologist income at present levels (may reduce revenues) Separates oncologist s income from drug sales Ends oncologist dependence on drug selection for practice survival Builds a learning system to identify best practices for cost and quality Identifies and rewards best practices and consistent, evidence-based care Changing Physician Incentives for Affordable, Quality Cancer Care: Results of an Episode Payment Model, The Journal of Oncology Practice, July, 2014, Lee Newcomer; M.D.; Bruce Gould, M.D; Ray D. Page, D.O., Ph.D..; Sheila A. Donelan, M.S. and Monica Perkins, Ph.D. 18

19 Components of value creation CONNECT Activated, knowledgeable, & engaged consumers Give consumers the information to find the right providers Community relationships for behavioral, social and medical 19

20 Connect Consumers to High Value Providers We take every opportunity to identify UnitedHealth Premium Tier 1 physicians Centers of Excellence ACO Products Advocate4me TM Premium Program *UnitedHealth Premium Tier 1 physicians have received the Premium designation for Quality & Cost Efficiency, or Cost Efficiency and Not Enough Data to Assess Quality 20

21 Creating differentiated value Deploying a set of locally driven sustainable models for how care is paid for, delivered and integrated with consumer tools and benefit designs within a culture of collaboration and accountability. 21

22 Questions? 22

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