Tag Archives: Aetna

Aetna, UnitedHealth show increasing appetite for value-based care contracts

The biggest health insurers are moving quickly towards value-based care arrangements, their recent earnings reports show.

While Aetna has long-held a goal to reach 75 to 80 percent of its medical spend in value-based relationships by 2020, Aetna’s medical spend is now 45 percent tied to value, CEO Mark Bertolini said during last week’s fourth quarter earnings call.

“One way we measure our success is by how well we are able to keep our members out of the hospital and in their homes and communities,” Bertolini said. “For example, in 2016, we reduced total acute admissions by approximately 4 percent, and we deployed predictive modeling to target members at the greatest risk of readmission.”

Aetna has achieved a 27 percent reduction in readmission rates using multidisciplinary care teams that engage facilities to develop effective discharge plans, he said.

“Collectively, these clinical programs have driven a best-in-class Stars readmission rate among national competitors,” he said.

Aetna sees more opportunities for reducing utilization over the long-term in readmission rates, and in a reduction in inpatient days. Unit price is still the driver in value-based purchasing, Bertolini said.

“I think value-based contracting is going to continue to be encouraged by even the current administration as a way of getting a handle on healthcare costs,” he said. “We have a healthy pipeline of opportunities. They will not all be joint ventures. I think there are other models emerging.”

UnitedHealthcare is increasingly helping states manage care for their complex, vulnerable and most costly populations, as well as assisting employers with programs to support the needs of retirees and employees with chronic conditions, according to CEO Stephen Hemsley in the insurer’s earnings report.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Judge, Citing Harm to Customers, Blocks $48 Billion Anthem-Cigna Merger

A federal judge on Wednesday blocked a proposed $48 billion merger of Anthem and Cigna, derailing another effort by top health insurers to reshape the industry by combining.

The ruling, by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia, came two weeks after another federal judge blocked a proposed $37 billion merger between Aetna and Humana on antitrust grounds.

Judge Jackson wrote in her order that she found the Justice Department’s arguments against the deal persuasive, and that putting Anthem and Cigna together would harm customers.

“The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects,” the judge wrote. “It will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market.”

Under the merger agreement’s terms, Anthem is obligated to pay Cigna a $1.85 billion breakup fee.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Aetna CEO Has `Serious Concerns’ About Obamacare Sustainability

The head of the third-biggest U.S. health insurer said he has “serious concerns” about whether or not Obamacare’s new markets are sustainable, echoing criticism from other top for-profit insurers.

“We continue to have serious concerns about the sustainability of the public exchanges,” Aetna Inc. Chief Executive Officer Mark Bertolini said on a call Monday while discussing the company’s fourth-quarter results. “We remain concerned about the overall stability of the risk pool.”

Large U.S. health insurers have faced a rocky start in the Patient Protection and Affordable Care Act, which in 2014 opened up new markets where millions of Americans buy coverage, often with tax subsidies to help them afford it. Aetna is one of the biggest insurers in Obamacare and, like its rivals UnitedHealth Group Inc. and Anthem Inc., has struggled to make a profit in the business.

Aetna’s 1 million individual commercial members make up 4.3 percent of its total membership, as of Dec. 31. Of those, 750,000 are people who signed up through the exchanges. The insurer expects total membership to remain roughly flat this year. Pretax operating losses from the individual business were about 3 percent to 4 percent last year, though should improve this year, Aetna Chief Financial Officer Shawn Guertin said Monday.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Insurance Giants Join Forces to Create Healthcare Transparency

The public has been demanding healthcare transparency. Finally, three of the largest health plans have joined forces to finally shed light on claims payment data.

UnitedHealthcare, Aetna, and Humana announced they will be working together with the Health Care Cost Institute to focus on healthcare transparency. They will create a payment database that will be available to the public for free.

Experts expect the database to be up and ready to go by 2015 in hopes for open enrollment.

The healthcare cost transparency is being spurred by a number of developments in the healthcare sector. The trends towards high-deductible plans is giving consumers a greater incentive to understand how much healthcare costs and to utilize it more efficiently.

Healthcare transparency has been a large debate in the past year, due to the level of difficulty to get a simple price for a basic health-care procedure.

In 2012, Steven Brill wrote a 26,000-word opus on medical bills for the Time. Not surprisingly, consumers have been picking up more of the tab for their healthcare.

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Jeffrey R. Ungvary

President

Jeffrey R. Ungvary