United Health Group President and CEO, Steven Hemsley, was a guest speaker at the annual meeting of the American Telemedicine Association in Baltimore today. UHG is the largest healthcare company in the world, with annual revenue of 130 billion dollars and contracts with 6000 US hospitals and 650,000 healthcare personnel.
Mr. Hemsley acknowledged the anxiety felt by many Americans, including those within the health insurance field, that “the chances of getting it all right at first are pretty low”, but believes that the healthcare system’s problems will “sort out” as the market responds to cost, convenience issues, consumer education challenges and the use of resources”. One specific concern he discussed involved possible setbacks for insurers if insurance exchange pools experience an “adverse selection process”. “Structured benefits should be able to spread the cost of a normal profile of the population. However, if the population is older, or at higher risk, then it will be more expensive to treat, and the less ill will be discouraged and not participate”.
Noting the increasing cost of healthcare after several years of stability, Hemsley stated, “Initial savings were due to shifts to generic drugs, outpatient care services, and increased consumer participation. These savings are being offset by changing costs such as specialty pharma and “hospitals that offer more outpatient services and have a broader presence in the market.” He discussed a drug for hepatitis C that costs $150,000 for a full course of therapy, saying new, costly medication will “divert resources where we have no protocols about their appropriate use”. Hemsley suggested that protocols would be needed to distinguish patients with hepatitis C virus and symptoms, who should be the first to receive care, from those who have the virus without symptoms in an effort to “conserve and use resources most appropriately. According to Hemsley, “Outlier products will need to be aligned with that balance because of the pressure on the system”, especially for government programs that have limited budgets and may include the sickest portions of the population.”
With regard to the increasing trend for hospitals to be involved with outpatient services, Hemsley noted that United Healthcare is “watchful about outpatient care costs being captured by hospitals, and the development of services that are clearly hospital-centric, because a broader presence in that market will increase cost.”
Responding to the question, will fee-for-service die, the speaker noted, “There will be a migration. Current accountable care payments of thirty billion dollars annually will rise to sixty-five billion dollars in the next two and a half years.”
According to Hemsley, “There needs to be appropriate extension of care and an alignment of telemedicine with the broader medical community. Of United Health Group’s 85 million patients, only 20,000 are currently being monitored remotely, most of which have cardiovascular disease. “As technology advances, a fair return for the ability to monitor will need to come from telemedicine disciplines, and be measurable, recordable and consistent. We’ll develop new things to monitor, and therefore need to be careful who is being monitored, why, and what value does it translate to.” There is a recognition that, “Consumers coming into the marketplace have quickened the pace, and they will define the industry.” Hemsley believes that consumers will determine what is important, what venue works best for them, and what value satisfies them. “Consumers will be the most important force and the one that healthcare is least prepared to deal with.”
UHG is allocating capital, “to engage competition around innovation. Innovation is the only thing that will translate to sustainable value”. Hemsley invited innovators to “Come to us, we are interested in ideas.” Innovators who work with UHG, he noted, must have products with well-defined “weighted average cost of capital, meaning they must translate to sustainable value and capital.” UHG requires their innovation partners to “leave what they are doing and have skin in the game to precede with us”. According to Hemsley, “Our best return for capital is innovation.”
Dr. Hochron co-founded and is the Chief Medical Officer of Practice Unite, a mobile solution that improves healthcare communications and provides healthcare systems with a platform for their mobile strategy. His approach to coordinating care using customized, integrated mHealth tools has been featured in the Wall Street Journal, the New York Times, HIMSS Media, the Journal of the Healthcare Financial Management Association, MedCityNews, MedTechBoston, and by American College of Healthcare Executives and the New York eHealth Collaborative. Dr. Hochron’s approaches to mHealth integration are used throughout the care continuum to coordinate acute care, post-discharge care, and to monitor and manage long-term care.Hochron has more than 25 years of experience advising and working with healthcare systems and providers in his roles as a practicing physician and healthcare attorney. He received his MD degree from New York Medical College, and his JD degree from Rutgers Law School. He is a Clinical Professor in the Department of Medicine at UMDNJ-Rutgers medical school.
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