New Report: Modernizing Medicare and Medicaid Could Improve Patient Health - andSave the Federal Government $542 Billion Over the Next Decade

Wed Jan 9, 2013 8:00am EST

* Reuters is not responsible for the content in this press release.

* Solutions come as policymakers debate entitlement reform, including Medicare
and Medicaid, and seek deficit reduction
* "Third strategy" adopts best practices as an alternative to simply cutting
benefits or provider payments
* Savings include: comprehensive care management services in traditional
Medicare save up to $202 billion; Coordinated care for dual-eligible Medicaid
and Medicare beneficiaries saves an additional $157 billion

WASHINGTON--(Business Wire)--
The federal government, confronting an enormous fiscal challenge, could save up
to $542 billion in Medicare and Medicaid spending over the next 10 years through
a proven "third strategy" for modernizing health care and improving patient
outcomes, according to a new report by UnitedHealth Group`s (NYSE: UNH) Center
for Health Reform & Modernization. 

The current national debate about Medicare and Medicaid has largely centered on
either cutting patient benefits or cutting provider payments. This report
analyzes a third strategy: unlocking savings through applying best practices for
improved prevention, care coordination and payment reform to Medicare and
Medicaid. Around 75% of the nation`s roughly $1 trillion of Medicare and
Medicaid annual spending still relies on outdated indemnity-style benefits and
siloed fee-for-service provider reimbursement. 

"Real world evidence now shows that Medicare and Medicaid can be modernized,
helping deal with the massive fiscal threat the country faces, in a way that is
a win-win for people who depend on these critical programs, and for the
taxpayers who fund them," said Simon Stevens, chairman of the UnitedHealth
Center for Health Reform & Modernization, executive vice president of
UnitedHealth Group, and one of the paper`s authors. 

Drawing on research data, results from programs already being implemented by the
most innovative employers and states, and UnitedHealth Group`s experience as the
nation`s largest commercial, Medicare and Medicaid health plan, the report
provides a menu of individual savings options, as well as a combined estimate of
net savings from comprehensive Medicare and Medicaid modernization. 

The report, "Medicare and Medicaid: Savings Opportunities From Health Care
Modernization," includes the following policy solutions and reforms: 

Making available to seniors in traditional Medicare the health programs and
incentives similar to those used by the most innovative large self-insured
national employers.These include transparent information about high-quality and
efficient providers, with opportunities and incentives for consumers to share in
savings from making smart choices. The federal government could save $202
billion by providing care management services to seniors enrolled in traditional
fee-for-service (FFS) Medicare who are not also Medicaid-eligible. This approach
would transform the traditional FFS Medicare program by adopting administrative
support services similar to those used by many large self-insured employers. 

Expand use of coordinated care for dual-eligible Medicare and Medicaid
beneficiaries:Full integration of Medicare and Medicaid benefits for the
dual-eligible population could yield savings of $153 billion for the federal
government. Under this approach, all states would enroll their dual-eligible
beneficiaries in managed health plans. A health plan or other similar entity
(such as an accountable care organization) would receive two payment streams -
one from the federal government (Medicare) and one from the state (Medicaid) -
which would then be blended together. 

Provide coordinated care for all Medicaid enrollees: The federal government
could save $30 billion if all states adopted comprehensive managed care for
their fee-for-service Medicaid enrollees. Many states already have turned to
Medicaid managed care and realized significant savings and better outcomes. 

Accelerate programs to improve health, particularly diabetes initiatives: By
adopting innovations that already have been proven to prevent and control
pre-diabetes and type 2 diabetes, the federal government could save an
additional $53 billion. These solutions include interventions aimed at
preventing type 2 diabetes among high-risk populations and providing greater
support to help patients with type 2 diabetes control their weight and manage
their condition. 

To read the full report, go to:

About the UnitedHealth Center for Health Reform & Modernization
The Center is a substantial long-term commitment by UnitedHealth Group to
advance sophisticated and practical approaches to health care modernization and
reform. Its multi-disciplinary team of business leaders, economists, physicians
and policy analysts supports the Company`s strategy development and innovation
agenda, with a particular focus on PPACA and associated market developments. The
Center`s public work program involves assessing and developing policies and
solutions for the health care challenges facing the nation, including:
innovative approaches to expanding health care coverage; practical
cost-containment strategies to slow the growth of U.S. health care costs; and
options for modernizing Medicare and Medicaid. Its published work is available

About UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a diversified health and well-being company
dedicated to helping people live healthier lives and making health care work
better. With headquarters in Minnetonka, Minn., UnitedHealth Group offers a
broad spectrum of products and services through two business platforms:
UnitedHealthcare, which provides health care coverage and benefits services; and
Optum, which provides information and technology-enabled health services.
Through its businesses, UnitedHealth Group serves more than 80 million people
worldwide. For more information, visit UnitedHealth Group at

UnitedHealth Group
Matt Stearns, 202-383-6434

Copyright Business Wire 2013