UnitedHealth sees growing interest in ACOs

Les Masterson

July 23, 2018

Dive Brief:

• UnitedHealth Group expects to double the size of its national accountable care organization NexusACO at least once and maybe twice through the end of 2019.
• UnitedHealthcare President and COO Dan Schumacher said during a recent earnings call that the payer covers about 75,000 members through NexusACO, which it launched last year for self-funded companies with 100 or more employees. 
• NexusACO has spread to 33 ACOs in 26 markets in 15 states.

Dive Insight:

UnitedHealth Group announced its second quarter earnings Tuesday. The company, which includes UnitedHealthcare and Optum, reported its Q2 revenue increased by 12.1% year-over-year to $56.1 billion.

During the earnings call, Schumacher spoke positively about the company’s national ACO. It puts “together our best solutions locally onto a national solution,” he said.

UnitedHealth CEO David Wichmann said Nexus ACO is an example of a “pillar of growth around consumer-centric benefits.” Wichmann added that UnitedHealth is increasingly optimistic about the ACO.

Payers and employers are increasingly turning to ACOs and value-based care to improve quality and lower healthcare costs. There is a concurrent move away from fee-for-service.

CMS also views ACOs with potential, though the Trump administration doesn't promote the programs as loudly as the Obama administration. According to the National Association of ACOs, there were 561 Medicare ACOs that served more than 12.3 million beneficiaries in January.

ACO results, however, show a mixed bag for Medicare. CMS reported that 11 of 18 Next Generation Accountable Care Organizations earned savings in 2016. ACOs generated a combined $836 million in gross savings in 2016, which was nearly double the savings in 2015.

However, an Avalere analysis this year found that the Medicare Shared Savings Program has missed federal cost-saving projections made in 2010. At the time, the Congressional Budget Office estimated MSSP would net $1.7 billion in savings to Medicare from 2013 to 2016. In fact, Avalere found the program increased federal spending by $384 million and missed CBO’s mark by more than $2 billion. One possible problem with MSSP is that providers don’t have to take on risk, so they don’t take a financial hit if their spending exceeds the target.

A recent NAACOS survey concerning risk and future participation in MSSP Track 1 ACOs found that more than two-thirds of the 82 ACOs who took part in the survey said they plan to leave the ACO because the program is requiring them to take on more risk.

This survey result shows potential barriers for any more providers signing up for ACOs. When there’s not a risk of losing money, providers are more apt to join ACOs. However, there’s no program incentive to stay within budgets or hit quality measures. A risk-based ACO may get providers to lower costs and improve quality, but it’s much harder to get provider interest.

https://www.healthcaredive.com/news/unitedhealth-sees-growing-interest-in-acos/528308/