UnitedHealthcare exec says gain-sharing value-based contracts work better than bundles

Minnetonka, Minn.-based UnitedHealthcare uses two types of value-based contracts, but Lee Newcomer, MD, senior vice president of oncology and genetics at the insurer, told AJMC one outperforms the other.

Dr. Newcomer said one type of value-based contract involves bundled payments, which UnitedHealthcare deployed at Houston-based MD Anderson Cancer Center and Moffitt Cancer Center in Tampa, Fla.

"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," he told AJMC. "So, right now I'd have to say that it has limited value."

In contrast, the contract creating more value for the payer is a gain-sharing program. Under the value-based payment model, UnitedHealthcare compares its medical oncology performance and providers' outcomes to a national database of fee-for-service providers. Shared savings are distributed if their performance comes in at less cost than the national database reports.

"I think that's the future for larger groups and we're excited about its potential for savings," Dr. Newcomer added. "Our first pilot showed that it reduced the cancer cost by 34 percent."

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