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UnitedHealth Group plans to buy DaVita in $4.9b deal
January 04, 2018
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NEW YORK: UnitedHealth Group announced that it plans to buy the DaVita Medical Group in a $4.9 billion deal that would include nearly 300 primary and specialty care clinics, 35 urgent care centers and six outpatient surgery centers.Having a heart attack is one of life’s great stressors, so it’s no surprise that nearly one in five heart attack survivors qualify for a diagnosis of a major depressive disorder, doctors say.

For insurers like Minnetonka’s UnitedHealth Group, this can turn into a double-whammy of paying for a patient’s emergency heart care, only to see the person develop a much greater risk of another heart attack or dying in the future because of depression.

At UnitedHealth’s OptumHealth unit, clinicians and number crunchers have examined this costly problem and devised a strategy that they say improves the mental health of heart-disease patients and results in 35 percent lower costs.

Rather than wait for traditional hospitals and clinics to provide this care, OptumHealth does it directly through its own clinicians.

Both UnitedHealth Group and rivals CVS Health and Aetna made multibillion-dollar moves last week to ramp up efforts to provide the kind of direct patient care traditionally associated with hospitals and clinics.

Drugstore chain and pharmacy benefits manager CVS Health made a bigger splash, rolling out a proposed $69 billion acquisition of major insurer Aetna in a deal that would see CVS piloting new ways to deliver care directly to consumers.

“The lines continue to be blurred between what a health plan is and a provider is,” said Dr. Ateev Mehrotra, a Harvard associate professor and policy researcher for the RAND think tank.

Along the way, new models of coordinated health care are being assembled that resemble the “patient-centered medical home” idea enshrined in the Affordable Care Act seven years ago. Aetna Chief Executive Mark Bertolini said as much last week in response to a stock analyst’s question about how Aetna would start providing more health care services in CVS stores once their deal closes next year.

“The experience the customer gets is really about a patient-centered medical home model, where we’re supporting interaction with the medical community, preparing people for appropriate compliance, preparing them for their visits, setting up appointments, eliminating prior (authorization), doing all those other sorts of things to help navigate that system for them,” Bertolini said.

Doctors have envisioned these “medical homes” as close partnerships between traditional primary care doctors and patients, in which physicians coordinate many aspects of care in an efficient way that patients can understand.

But as Bertolini told investors, “We need to understand that almost 60 percent of Americans don’t have a regular doctor.”

Executives with CVS, Aetna and UnitedHealth told their investors that they can do much of the coordinating and direct care cheaply and efficiently, saving money in the overall health care system while pleasing investors at the same time.

OptumHealth, the slice of UnitedHealth’s vast Optum business that focuses on providing health care, is angling to be the “partner of choice for consumers, providers, employers, payers and government entities across the entire continuum of care,” according to a company spokeswoman.

At UnitedHealth Group’s annual investors conference, OptumHealth Chief Executive Andrew Hayek said internal data show that its 200 surgical centers can perform many procedures at 50 percent to 75 percent lower costs than in a hospital setting. Its MedExpress neighborhood urgent care centers provide 90 percent of the care given in hospital emergency rooms at 90 percent lower costs. (Also last week, an executive with Walgreens Boots Alliance revealed plans to collaborate with UnitedHealth to open urgent-care centers in “a handful” of Walgreens stores in four states.)

UnitedHealth’s medical groups around the country include more than 20,000 primary and specialty care physicians in risk-bearing payment arrangements, which means the physician practices can lose money when patient care doesn’t meet expectations for quality — another concept that was enshrined in the Affordable Care Act, but with health care providers in the driver’s seat.

UnitedHealth is projecting 28 percent earnings growth this year for its OptumHealth business, with operating profits of $1.8 billion, and is projecting at least 29 percent earnings growth next year. OptumHealth served 91 million this year, up 8 million from last year.

CVS and Aetna are not as far along on their path to providing direct care, but executives at both organizations last week made it clear that providing cheaper care will be a central goal in combining their businesses.

Tribune News Service

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