Federal and state legislators continue to turn their attention to healthcare prices, passing laws that aim to provide more price transparency and create a more open insurance market. These laws are beginning to change how the average person shops for healthcare and how employers build plans to subsidize that care.
With new anti-tiering and anti-steering legislation on the books in Texas, employers can change how they build plans to guide their employees to hospitals with quality outcomes and prices. With unsustainable rising healthcare costs not resulting in higher quality, employers, payers, and providers are waking up to the reality of a more engaged healthcare shopper.
UnitedHealth Group is the largest health insurance company in the country by total membership, and United’s Optum group also cares for 1.3 million patients throughout the country. Scott Flannery was named the CEO of United Healthcare of Texas in November, leading the company’s health insurance arm in Texas. Below, he discusses increased value-based care, price transparency, and how insurers and employers incentivize employees to choose high-quality, low-cost providers.
D CEO: What is top of mind for you as you move into the fall leading United Healthcare in Texas?
Flannery: “Whether it’s home care or telemedicine, it’s about creating better value for our customers right now. Because as we know, the current trends in healthcare can’t just continue and expect employers and employees to continue to pay more. So it’s about taking and looking at what we’re doing differently. What’s going to happen over time is that you’re going to have a change in the way that care is provided and that providers and payers will think differently about what we put out in the marketplace. That’s a big transition because there’s a lot of folks, quite frankly, that are that do pretty well the way the system works today. It may seem like forcing change when things don’t seem to need change to some, but there certainly needs to be changes for any employer or employee using health care.”
D CEO: How has United dealt with resistance to the move to value-based care?
Flannery: “The product we rolled out this year called SUREST gets rid of deductibles and creates co-pays around services provided. For the providers that aren’t as focused on cost and quality as they should be, SUREST begins to create co-pay advantages for those that are versus those that aren’t. The most efficient and cost-effective provider with the highest quality will have a lower-cost co-pay in the marketplace. Consumers can see the difference in cost, which affects their pocketbook when choosing quality and cost efficiency. But you can’t do things one way for 20 years and then flip a switch, so I think our job is to help them along that continuum. How do we get them from the old fee-for-service world to the pay-for-value model and potentially even a risk model down the road? It’s an evolution.”
D CEO: “How is the company equipping employers to help communicate the need to seek value to their employees when choosing a provider?”
Flannery: “Well, the great news is that SUREST has been set up like an Amazon Prime. It’s real-time shopping through a portal. That is the avenue that if your doctor says you need an MRI, you can do a search, and it will say at facility A, your co-pay is going to be $500, and facility B will be $800. The beauty of the product is that it creates an online experience very similar to any other online experience that folks have in a retail space. Now, what we don’t have the luxury of as an organization is a one-trick pony. We have consumers all the way from the cradle to the grave, so we have telephonic capabilities so that they can call and talk to a care counselor and walk through what their options are.”
D CEO: “What is the balance between United and employers pushing to move into the value-based care space in the commercial market?”
Flannery: “A little over two-thirds of our business is self-funded employers. Initially, the self-funded employers were the early adopters. When you have a premium level that you can show your employees that’s 15 to 25 percent lower, it encourages engaged consumer behavior. Employers created a premium financial incentive for their employees to do that, and we see enrollment going up, and they get a little buzz amongst their employees or their peers in their workplace. The fully insured version was just approved in April of 2023, so we are relatively new in marketing that, but we’re seeing the same kind of pickup. It creates an accountability for a consumer of health care that has not existed in the past. This creates the ability for people to think about what they’re consuming and how they’re consuming it in a way that’s not limiting service. It’s creating engagement and a way to understand costs, choices, and options.”
D CEO: “How is United helping improve price transparency in healthcare?”
Flannery: “For years, we’ve had what we call treatment cost estimator, where you can put in the procedure and find the price, and use has increased every year, but adoption has been sporadic. If utilization were in the teens, I would be surprised because that’s not how people are used to consuming healthcare. But what’s notable about some of the federal transparency is that you would have to know what you’re doing to understand what a provider’s cost estimator gives you. If the surgery center is charging $2,500, what about the physician? How much for the anesthesiologist? Our treatment cost estimator takes the standard procedure and says, “All these things are part of it.”
D CEO: “What impact do you see the anti-tiering and steering laws having on United’s plans or what employers are asking for?”
Flannery: “In its purest form, it allows an employer to drive volume to the higher performers. There are four things that we focus on, called the quadruple aim: patient satisfaction, patient outcomes, overall cost, and the value to the provider. The tiering and steering language allows you to align those four objectives with the providers that are providing care at a high level with high quality and great patient satisfaction. You can create a provider value compensation model that works for that and try to steer to those providers. Studies have found double-digit savings in overall costs for a particular employer by driving to the highest quality. Providers operate on a bell curve, and if you can gravitate folks to the middle with a fair cost equation at the highest quality level, you can get rid of the other two sides of the bell curve. The cynical folks would say you’re going to have a provider shortage. That may be true, but that will push patients to rely on the technology that’s available. Sending things to a doctor’s office that can be handled via telemedicine doesn’t make a ton of sense. Some things should be going to the emergency room, but maybe urgent care or even telemedicine is a solution for that. The use of available technology helps to circumvent some of that. This all boils down to data and analytics. If you’re a provider on the left or right side of the bell curve, we can provide the information that helps you get to the center of the bell curve. We share with providers the things preventing them from getting to the center of the bell curve.”
D CEO: “With the upcoming open enrollment period, is United working on implementing changes in preparation for the fall?”
Flannery: “We’re uniquely qualified to do that because our Optum partners can provide that data to providers and say, ‘If you were referring to this surgery center, which is the highest quality, lowest cost, you would move into the top tier. It’s moving the whole system forward a little bit. The big hospital systems are doing the same thing. They’re sharing data with their physician and saying, “If you did this, you’d be the highest quality, and then we go to like compensation. What’s the what’s the incentive for a doctor’s improved quality other than compensation? We should pay them for being better.”
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