Fewer Hospitalizations Key to UnitedHealth Group’s $540 Billion Savings Plan

Friday, May 29th, 2009
This post was written by Melanie Matthews

Reduced hospitalizations would account for almost half of $540 billion in potential healthcare savings suggested by UnitedHealth Group, based on a review of its 15-step cost-saving proposal released this week. The self-described health and well-being company says preadmission programs at nursing homes and evidence-based care management programs can trim the number of unnecessary hospitalizations. The company has 13 other ideas for saving the federal government a total of $540 billion in healthcare costs over the next 10 years, including transitional case management, health coaching and the medical home model, according to a report from its new Center for Health Reform and Modernization.

The 15 cost-saving suggestions fall into four key areas:

A. Incentivizing Member / Beneficiary Use of High Quality Providers

  • Option 1: Member Incentives to Use Highest Quality Providers (Potential Savings ~$37 Billion)

    Assessment of quality and efficiency of providers using “episodes of care” analytics measured against evidence-based standards and efficiency benchmarks. Provides members with incentives to use highest quality physicians.

  • Option 2: Cancer Support Programs (Potential savings ~$5 billion)

    Voluntary guidance on cancer treatment best practices and patient options, including hospice care. Case management to prevent hospital readmissions between therapy sessions.

  • Option 3: Transplant Solutions Program (Potential savings ~$0.7 billion)

    Voluntary guidance for patients on selecting the best transplant centers in the nation for their condition.

B. Reducing Avoidable and Inappropriate Care

  • Option 4: Institutional Preadmission Program (Potential savings ~$166 billion)

    Provision of onsite nurse practitioners at skilled nursing facilities to manage illnesses and prevent avoidable hospitalizations.

  • Option 5: Transitional Case Management Program (Potential savings ~$55 billion)

    Follow-up with patients after leaving the hospital to reduce readmissions by checking on recovery progress and supporting adherence to discharge plans and recommended medical care.

  • Option 6: Advanced Illness Program (Potential savings ~$18 billion)

    Provides information and guidance to patients and their families about both their condition and the benefits of further treatment options including palliative care at the end of life.

  • Option 7: Disease Management for Congestive Heart Failure (Potential savings ~$25 billion)

    Voluntary coaching for members with higher-acuity chronic illness to ensure treatment compliance.

  • Option 8: Gaps In Care Program (Potential savings ~$1.4 billion)

    Voluntary intervention for members with chronic illness, but relatively good health to ensure ongoing treatment compliance.

  • Option 9: Integrated Medical Management (Potential savings ~$102 billion)

    Application of clinical evidence-based care management tools with targeted preventive care and patient education tools to reduce admission rates.

C. Incentivizing Physicians to Encourage High-Quality Care

  • Option 10: Patient-Centered Medical Home (Potential savings ~$20 billion)

    Establish a primary care physician as the central ongoing coordinator of patient care. Reduces inappropriate or duplicative treatments while ensuring needed ‘anticipatory’ care is provided.

  • Option 11: Physician Additional Compensation Program (Potential savings ~$24 billion)

    Rewarding physicians for providing comprehensive medical care and utilizing resources appropriately.

  • Option 12: Specialist Data Sharing (Potential savings ~$15 billion)

    Sharing comparative quality and effectiveness data with physicians to induce behavioral change towards evidence-based clinical practice.

D. Applying Evidence-Based Standards to Reimbursement Policies

  • Option 13: Radiology Benefit Management (Potential savings ~$13 billion)

    Application of clinical evidence to determine clinically appropriate diagnostic radiology studies.

  • Option 14: Radiology Therapy Management (Potential savings ~$5 billion)

    Application of clinical evidence to determine clinically appropriate usage of radiology therapies.

  • Option 15: Prospective Claims Review (Potential savings ~$57 billion)
    Analysis of claims before they are paid to detect upcoding, duplicate billing and billing for non-existent patients.
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