Dr Lee Newcomer on UnitedHealthcare's Value-Based Contracts

UnitedHealth is currently involved in 2 types of value-based contracts with its provider partners, but it has seen more success with one compared with the other, explained Lee N. Newcomer, MD, MHA, senior vice president of oncology and genetics at UnitedHealthcare.

Transcript (slightly modified)

Can you describe some of the value-based contracts that UnitedHealth has created with its provider partners?

We’ve done 2 types of contracts. The first is a bundle where it’s a single payment for every service the patient gets for a defined period of time, and we’ve done one at MD Anderson Cancer Center and another one at Moffitt Cancer Center. The problem with those is that you have to put in very narrow definitions in order to make the bundle fair for both the provider and for us and so it’s hard to get enough volume. So, right now I’d have to say that it has limited value.

But, what has more value for us is the episode program that we’re putting place, and that’s probably better described as a gain-sharing program. We compare our medical oncology’s performance, and those groups’ performance to a national database of fee-for-service, and if they come in at less cost, we share the savings with them. I think that’s the future for larger groups and we’re excited about its potential for savings. Our first pilot showed that it reduced the cancer cost by 34%.