Unitedhealth Has Acquired Dozens Of Medical Groups Over The Past Decade-And-A Half. Why?

Optum unit now employs about 10,000 physicians, its top executive has said, making it one of the nation’s largest employers of doctors. It contracts with tens of thousands more. No other national insurer has acquired and hired doctors on that scale.

Background

UnitedHealth Group's existing pharmacy and care delivery services into the single Optum brand, comprising three main businesses: OptumHealth, OptumInsight and OptumRx.

Since then, the company has been on an acquisition spree to position itself as a leader in integrated services.

For the longest time, the market assumed that they were building the Optum business [to spin it out] and what is interesting in the evolution of the industry is that that combination has now set a trend.

Optum is a company within UnitedHealth Group, a parent of UnitedHealthcare. Optum’s sister company UnitedHealthcare is perhaps more well known within the industry and with consumers.

The Cash Monster Was Insatiable

The government pays Medicare Advantage insurers a set amount for each person who enrolls, with higher rates for sicker patients. And the insurers, among the largest and most prosperous American companies, have developed elaborate systems to make their patients appear as sick as possible, often without providing additional treatment, according to the lawsuits.

As a result, a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.

Bonus Pay

A compensation plan for one UnitedHealth-owned practice offered doctors bonuses of up to $37.50 a year for each of their Medicare Advantage patients if they confirmed or ruled out more than 90% of the suggested diagnoses. That means a doctor seeing 800 Medicare Advantage patients in a year could see a bonus of as much as $30,000 a year.

One former UnitedHealth physician said it was easier to say yes than no, particularly with diagnoses that another doctor had previously confirmed and placed in the patient record.

“You didn’t have time to rule it out,” he said, given the volume of patients each day. He said he did his best to remove from patients’ charts diagnoses that he questioned such as secondary hyperaldosteronism, which UnitedHealth often suggested for heart-failure patients, “because I had no idea what the hell they were talking about.”

Like other Medicare Advantage companies, UnitedHealth also contracts with outside doctors in ways that can increase their payments when they diagnose more conditions. That includes arrangements where doctors receive a portion of the Medicare payments insurers get for their patients. Other Medicare Advantage insurers also suggest diagnoses to independent doctors examining their patients.

In some contracts with independent, UnitedHealth linked bonuses to sickness scores and quality ratings derived partly from patient surveys.

For patients with sickness scores 20% higher than average and good quality ratings, doctors could get an extra $40 per patient each month, one contract shows. Scores 50% above average and top-quality ratings could yield $65 per patient a month.

For a doctor with 100 patients covered by the contract, that would amount to a $78,000 annual bonus.

The Return Of The Private Practice

Something unexpected has happened in the last few years. The trend toward full-time employment of providers by health systems has slowed. There are three general macro trends that are fostering a consolidation counterculture.

(1) Employed provider burnout and the great escape

Providers employed by large, corporate health systems are banding together and forming or joining private practices. The reason: more ownership over care. More freedom.

(2) Consumerization and lower costs with private practice

When choosing between service A and service B, the consumer chooses whatever offers the greater weighted average of efficiency, efficacy, economy, and empathy. Private medical practices offer that deal.

(3) Technology

Technology changes everything. Technology will make healthcare cheaper and more efficient. Healthcare in the US, as we know it, cannot survive otherwise.

Infinitely scalable, remotely hosted (‘cloud’) software services are bringing infrastructure costs down. Digital marketing already gives small businesses a bigger voice. Ambulatory surgery centers now have instruments and implants that only once hospitals had. Imaging centers are popping up everywhere. Non-medical staffing and support is being delegated. Regulatory and compliance costs are still high, but they will drop once policy catches up.

Summary

Eight of the 10 biggest #MedicareAdvantage #payers, representing more than two-thirds of the #managedcare market, have submitted inflated bills, according to federal audits. And four of the five largest players, UnitedHealth, Humana, Elevance and Kaiser, have faced federal lawsuits alleging that efforts to over diagnose their customers crossed the line into fraud.

The Physician's Advocate in Payer Contracting

Negotiating different types of insurance contracts is challenging, but with preparation and the right tools and team in place, you can maximize the benefit you realize from your insurance contracts.

Gain the advantage of a team that regularly communicates with the nation’s biggest payers, leveraging our experience and partnerships to secure contracts that help you enhance your ROI.

Starting with your top 5 payers, our team partners with you to organize, manage, analyze and negotiate directly with payers to obtain better reimbursement rates and competitive terms, while you focus on patient care.

Contact Us Today (512) 787-1852 or Schedule Your Free Consultation / Demo here.