UnitedHealth Group Identifies More Than $500 Billion in Specific Health Care Costs Savings to the Federal Government Over the Next 10 Years

“Real World” Analysis from the UnitedHealth Center for Health Reform and Modernization Outlines 15 Options to Create Savings by Applying Lessons Learned from the Private Sector

WASHINGTON, DC .– The federal government could save $540 billion in health care costs over the next 10 years if existing, proven programs and techniques that have improved health care quality and slowed the growth of medical spending are applied more broadly, according to a report from UnitedHealth Group’s new Center for Health Reform and Modernization.

The issue of cost containment is at center stage in the national discussion on modernizing health care, with a focus on attempting to find the necessary savings to fund coverage expansions.

The new research paper provides policymakers and health care leaders with a range of “real world” savings options, based on empirical data and actual results from a selection of UnitedHealth Group programs. The report is being shared with Members of Congress and senior Administration officials. It is intended as a constructive contribution to the national health reform debate, and is not a complete inventory of the ideas UnitedHealth Group has for how costs could be saved and quality improved.

“Our data and experience show that – working in partnership with physicians, hospitals and other care providers – in practice it is possible to get more value out of health care spending so as to fund increased access to high quality care,” said UnitedHealth Group Executive Vice President Simon Stevens, who directs the new Center. “This report provides concrete examples of how we can modernize our health care system in a thoughtful and sustainable way, partly through proven programs that are already working.”

The report focuses on possible savings in future federal spending that could help fund health care reform legislation. Most of the savings estimates derive from applying more broadly the approaches UnitedHealth Group has found to work either in its commercially-insured or Medicare programs.

The 15 cost-containment options are in four categories: incentivizing beneficiaries to use high-quality care providers; reducing avoidable and inappropriate care; supporting and incentivizing physicians to deliver high-quality appropriate care; and, applying evidence-based standards to reimbursement policies.

For example, the report projects that over the next 10 years approximately $55 billion could be saved by reducing seniors’ avoidable readmissions to hospitals partly by providing ‘transitional care’ support. Also, $37 billion could be saved through voluntary programs that help seniors choose to receive care from high quality and efficient care providers. And, $166 billion could be saved by reducing the need for people living in nursing homes to be admitted to a hospital. How the cost containment options are employed could range along a spectrum from voluntary uptake to the use of financial or non-financial incentives for beneficiaries and care providers.

Center for Health Reform and Modernization
The cost containment working paper is the first publicly-available product of UnitedHealth Group’s new Center for Health Reform and Modernization, a long-term commitment by the company to support those actively engaged in the modernization of the U.S. health care system.

The Center will study and analyze leading health reform issues and develop innovative new solutions to the health care challenges facing the nation. In addition, it will serve as a vehicle for UnitedHealth Group’s collaboration with external organizations, including the funding of relevant research.

“As an organization that funds and arranges care for over 70 million people, we have unrivaled data and experience on innovative approaches to improving health care - and we are committed to sharing those insights to help tackle the toughest health challenges facing the nation,” said Stevens.

The Center’s initial work program falls into six priority areas:
1. Practical cost containment strategies to slow the growth of U.S. health care costs.
2. Payment reform strategies that better support physicians, hospitals and other providers deliver high quality patient-centered care.
3. Reducing health disparities, particularly in underserved communities.
4. Innovative approaches to universal coverage and health benefits, grounded in evidence-based care and consumer engagement.
5. Modernizing the care delivery system, including strengthening primary care.
6. Modernizing Medicare, including chronic disease management and end-of-life care.

Prior to his current role, Stevens served as chief executive officer of UnitedHealth Group’s seniors’ business, Ovations, the nation’s largest and most diversified Medicare health plan serving one-in-five Medicare beneficiaries nationwide. Stevens’ executive experience in health care spans twenty years of service, in hospitals, primary care and as a payer, in the private and public sectors, both in the U.S. and internationally where he served as British Prime Minister Tony Blair’s health policy director at 10 Downing Street.