Value-Based Contracting. Optum Life Sciences March 22, 2018
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1 Value-Based Contracting Optum Life Sciences March 22, 2018
2 Our vision Better cost controls CREATE networks & products tailored to each market s unique needs and competitive cost structure Maximizing new market opportunities to make health care more affordable are foundational to helping our members live healthier lives. HEALTH TRIPLE AIM Better health COLLABORATE Better experience CONNECT individuals with tools, information & plan designs to engage them in finding the right providers and the right care with providers to share data, insights, & programs to achieve consistent, high-quality clinical outcomes 2
3 The move to value-based care Current (traditional) care Fee for Service provider payment Care delivery ACO (value-based) care Pay for Value and increased risk sharing care transformation Lack of technology and incentives for physicians to proactively coordinate patient care Care coordination Physicians empowered by technology, data and access to UnitedHealthcare programs Data and analytics are not routinely shared Data and information Analytics provide a full picture of a member s health risks, care and enhance efficiency Costs climb without corresponding health improvements Costs New shared focus with care providers to manage health care costs and quality Complicated health care system confuses and frustrates members Member experience ACO providers provide trusted support in navigating the system 3
4 The Value-Based Care Spectrum Fee for Service Performance-Based Bundled Payments Accountable Care Programs Level of Financial Risk Degree of Clinical Integration Pay for volume Performance-based contracts Primary Care incentives Episode-based payments Accountable Care Organizations Capitation Sharing savings and/or risk 4
5 The Move to Value-Based Care How do we advance health care through a new kind of relationship with providers? $36.8B $45.6B $64.5B $12.1 $16.5 $22.2 $23.2 $27.3 $31.9 $2.5 $5.9 $5.3 Performance-based Condition-specific/Bundled payments Accountable care 5
6 Our value-based status today Impacting over 16 million members 1 110,000 physicians 1 >1,100 hospitals 1 >1,000 Accountable Care Agreements 2 Performance-based % Improvement in Early Elective Deliveries (EED) 6.0% decrease in both ER Escalations to Inpatient A:E ratio and in Potentially Avoidable Admissions Bundles & Episodes 34% reduction in medical cost savings for cancer therapy pilot 4 >25% Orthopedics COE Savings per Bundle 5 (Hip and knee replacements, lumbar, spine and disc procedures) Accountable Care 8-12% Medical cost advantage vs. market % increase in preventative cancer screenings 14% lower ER visits 6 1 Estimated counts across all lines of business as of December 2017; 2 Includes shared savings, shared risk, full risk, capitation, and medical home contracts across all lines of business as of Dec. 2017; 3 Commercial Hospital PBC programs as of Dec. 2017; 4 Savings provided by UHC Oncology team Dec. 2014; 5 Orthopedics OCE performance, ; 6 Savings provided by UHC Health Care Economics as of Q4 2016
7 Initial results of value-based initiatives BETTER COST CONTROLS 18% savings UnitedHealth Premium Program 1 BETTER HEALTH 11% fewer Hospital admissions for commercial ACO clients 2 BETTER EXPERIENCE 9% reduction In inpatient length of stay for ACOs 2 1. Incremental savings between UnitedHealth Premium Tier 1 physicians and non-unitedhealth Premium Tier 1 Providers, 2013 UnitedHealthcare Network (Par) Commercial Claims analysis for 159 markets ACO results across all UnitedHealthcare lines of business. Rates are based on historical information and are not a guarantee of future outcomes 7
8 Expanding our flexible product portfolio 8 UnitedHealthcare networks are configured for the needs of specific populations and cost strategies BROAD ACCESS 843,006 health care professionals Largest single health plan network National TIERED PLANS 2-8% Savings Members are incented to use physicians who will deliver the best value: a broad virtual narrow network CENTERS OF EXCELLENCE 10-20% in episode savings Episode of care payment with clinical support for both pre and post event (transplant, kidney, maternity, orthopedics, cancer) NEXUSACO TM TIERED Up to 15% projected savings Members choose primary care physician and are incented to use ACO physicians and hospitals who have set goals for quality and outcomes PRIMARY CARE CENTERED 3-5% Savings Primary care physician helps to navigate referrals and care needs PRIMARY CARE CENTERED AND NARROW 3-8% Savings Combining primary care centered with narrow, highvalue network NARROW 2-5% Savings Choices within defined, narrow, highvalue network driven by local market dynamics Plan designs that provide incentives or reduced deductibles/cost sharing for seeking care from identified health and service providers are referred to as High Value Networks. Customer level potential savings of High Value Networks will be a function of plan design, geographic mix, service mix, the proportion of total spend currently associated with non-tier 1 providers, and the extent to which that current spend is redirected to Tier 1 providers. Savings estimates relate to UnitedHealthcare s book-of-business results. All figures and estimated savings represent historical performance and are not a guarantee of future savings. Meaningful benefit design differentials needed to achieve the upper bound of savings. Quality and cost-efficiency based on national standards and local benchmarks. (As of May, 2016) Local
9 Distinctive Market Value Value = Clinical Quality + Consumer Experience (NPS) Total Medical Costs + Operating Costs Quality Gate Index Appropriate Use Measures Patient Safety Measures Selected HEDIS Measures Evidence-Based Volume Consumer NPS X Total Cost of Care Unit price market-based average Unit price market-based 10%ile, each LOB Annual medical cost trend < market-based trend Unit price in facility and prof ED, radiology, lab, anesthesiology market average Utilization inpatient admissions market-based average, each LOB Utilization ED services market-based average, each LOB 9
10 Quality Gate Index Appropriate Use measures ACC/NCDR measure of Percutaneous Coronary Intervention appropriateness ACS measure of Enhanced Recovery after Surgery ACR measure of appropriate use of CT/MRI, other Early Elective Deliveries (Joint Commission measure) Patient Safety measures Hospital-Acquired Infections, 0.5% SIR for CLABSI, CAUTI, C. Diff, post op CABG, hip/knee replacement Sepsis POA process and outcome Sepsis non-poa process and outcome PSI-4, inpatient mortality after surgery Selected HEDIS 30-day all cause readmissions, to all facilities Geometric LOS for CHF, COPD, Pneumonia Evidence-based Volume Elective operations where volume is correlated with improved outcomes E.g. hip / knee replacement, cancer resection lung, esophagus, pancreas, colorectal, carotid endarterectomy, abdominal aorta aneurysm, bariatric Consumer NPS 10
11 Commensurate and Reciprocal VBC Incentives Aligned with Increased Value Documentation Physicians/ACOs Bundled services and payment Pharmacy manufacturers discount based on both Quality Gate Index measures and TCOC Durable Medical Equipment Diagnostic laboratory services Urgent care clinic Ambulatory surgery center Quality Gate Index Appropriate Use Patient Safety ACSH/HPC Formal QA program w/ alerts Accreditation FHIR/HL7 real-time info exchange LOINC/HL7 EMR integration/interoperability Consumer NPS Total Costs of Care TCOC includes cost of device/rx Cost trend < current or market average or Cost trend < control group In-network Utilization FWA and reports 11
12 Thank you and Questions, please? 12
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