Insurer: U.S. could save $500B in Medicare costs

WASHINGTON (AP) — A major health insurer says the government can save more than $500 billion in Medicare spending by sending patients to less expensive, more efficient doctors, reducing hospital visits by the elderly and cutting down on unnecessary care.

Those are among 15 suggestions made Wednesday by UnitedHealth Group Inc., a Minnesota-based health management company that is the biggest participant in the government’s Medicare insurance program for the elderly. United said the proposals added up to $540 billion in savings over 10 years.

The proposals come as Congress and the Obama administration are working on a major health-care overhaul aimed at reducing costs and extending coverage to 50 million uninsured Americans.

The company’s ideas could give Congress a roadmap toward reshaping and squeezing dollars out of the nation’s $2.5 trillion health system, which costs more and delivers more care than in many other countries, yet without producing a notably healthier population.

Like other groups with an interest in the outcome, UnitedHealth is trying to position itself as a constructive voice in the debate — and avoid becoming a target itself.

“The political debate, in part, is about how do you produce savings that can be used to fund other aspects of health reform legislation, and it’s that part of the political debate that this is a contribution to,” said Simon Stevens, United executive vice president and head of its center for health reform.

But some of United’s proposals could be cast as attempts to ration health care — one of the attack lines some conservatives have been using against emerging proposals from the Democratic-controlled Congress.

Among the cost-savers United identified are:

U$166 billion by providing skilled nurse practitioners at nursing homes to manage illnesses and prevent avoidable hospitalizations;

U$37 billion by steering patients to physicians rated best on quality, efficiency and cost;

U$13 billion by reducing unnecessary use of advanced imaging technologies such as MRIs; physicians would have to receive prior authorization from a radiology benefit manager.

Stevens and Dr. Lew Sandy, United’s senior vice president for clinical advancement, said the company had successfully used those techniques to drive down costs and promote quality care.

“All of this is really a far cry from the ‘R’ word that’s often bandied about,” Sandy said, referring to rationing.

The proposals drew some praise but also skepticism from outside experts who questioned United’s forecast for savings. They noted that many of the ideas involve voluntary actions by patients, without fully reforming the underlying payment system that tends to reward quantity over quality.

“I think this comes under the category of wishful thinking,” said Robert Laszewski, a former health insurance executive turned policy consultant.

Dr. Elliott Fisher of Dartmouth University, an authority on medical costs, praised United for putting forth the ideas, but questioned: “Will the reforms actually save money in the absence of more fundamental payment and delivery system reform?”

United released the proposals even as the health-insurance industry, doctors, hospitals and other groups are working to make good on a promise to President Barack Obama to reduce their own costs by $2 trillion over 10 years. The groups are supposed to report back to the White House in early June.

United said its proposals were complementary to that effort. The company said its proposed savings would accrue directly to the federal treasury — meaning they could help pay for Obama’s health overhaul plans — whereas the wider industry’s $2 trillion pledge would include savings in the private sector that wouldn’t directly help the government pay for new programs.