Building on their pledge to reduce health care spending by $2 trillion and responding to President Obama’s request for specific cost-containment proposals, UnitedHealth’s new Center for Health Reform and Modernization released a report demonstrating that the federal government could save $540 billion over the next decade if it adopted (through Medicare Fee For Service) existing United Health Care cost-saving measures:
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…. 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.
Their argument is this: plug United’s existing initiatives into Medicare and save billions over a decade. Some of the savings:
- Member Incentives to Use Highest Quality Providers ~$37 billion
- Cancer Support Programs: Voluntary guidance on cancer treatment best practices and patient options, including hospice care ~$5 billion
- Institutional Preadmission Program: Provision of onsite nurse practitioners at skilled nursing facilities to manage illnesses and prevent avoidable hospitalizations ~$166 billion
Fair enough, but if United is so certain of the savings then why hasn’t it implemented the measures across its entire network, lowered its rates, and attracted millions of new customers? Efficiency, after all, is a competitive advantage. And, as Robert Laszewski asks, “If United Health knows how to save $500 billion in Medicare costs why has it been lobbying for years to maintain the hundreds of billions of dollars in extra payments private Medicare plans–of which United is the biggest player–get from the government? It would seem to me that if they know how to save all of this money in Medicare they wouldn’t need the extra 14% the government pays United and all the other private Medicare plans above what it pays itself under the traditional Medicare plan.”
United cost-containment measures are voluntary and they’re being presented as an alternative to a new public option. But why why can’t both coexist? A new public plan could lead the way in greater cost containment innovation, implementing some of United’s so-called “real-world” solutions with other innovations. It can take what United is calling a voluntary effort and transform it into standard practice across all public programs, muscling private health care insurers to follow suit and reduce spending across the board.
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