Innovation Helps Improve Health Outcomes and Reduce Costs

By Robert Falkenberg

He is CEO of UnitedHealthcare of California.

A growing number of health plans are searching for and creating innovative solutions to help slow rising health care costs for employers while improving health outcomes for employees.

The health insurance industry is moving in this direction because, simply stated, improved cost controls lead to a more positive care experience. This ultimately creates better health for people and communities.

Innovation is now a trending topic for the industry, as unique methods to manage costs and care are being developed and implemented. For example, a new effort seeking to provide value to all parties – commonly referred to as value based care – centers on paying for patients’ actual health outcomes rather than on the number of tests or procedures they receive. Placing patients at the center of the health care experience can improve both the quality and cost of care.

One approach to managing costs is through an arrangement known as “bundled payments” that reimburse care providers under a single, set payment that is dispersed among everyone involved in that patient’s care.

An example of bundling is the payment program for knee, hip and spine procedures UnitedHealthcare launched with health care facilities around the country, including UC San Diego Medical Center and Keck Medicine of USC.

So far, the program has helped reduce hospital readmissions nationwide by 22 percent and led to 17 percent fewer complications for joint replacement surgeries, as compared to nonparticipating facilities. In addition, hospital readmissions for spine surgeries were reduced by 10 percent, and there were 3.4 percent fewer complications as compared to nonparticipating facilities. In short, this means that patients had healthier recoveries, and spent fewer days in the hospital and more time at home.

Under bundling arrangements, participating employers can realize savings on operations. In this case, the program saved an average of $18,000 per operation when compared with median costs in the same metropolitan area. Also, eligible employees saved more than $3,000 in out-of-pocket costs per procedure when seeking care from a participating facility rather than another in-network medical facility.

It’s clear that bundling and other cost-related methods to support value-based care lead to a more positive health care experience for patients.

Another value-based approach is collaborative.

The idea is relatively simple: entities team to create an accountable care organization (ACO) relationship.  An ACO can promote a more holistic and connected view of a patient’s health care needs through better sharing of data and identifying needed health care services.

This type of collaboration also improves the ability to identify patients at high risk. In turn, that helps these patients reduce emergency room visits and readmissions to the hospital, manage their chronic health conditions and take their needed medications.

In addition, ACOs can move care provider reimbursement away from the traditional fee-for-service delivery model to the value-based approach. Doctors will be eligible to receive payment incentives based on patient satisfaction and achieving certain clinical measures by placing patients at the center of the health care experience.

These new approaches, incorporating practicality and convenience, can provide the answer employers, patients and care providers are seeking.

Making health care simpler and more accessible for everyone helps all of us live healthier lives.

Robert Falkenberg is CEO of UnitedHealthcare of California.