Optum's bet on virtual care, home health

Optum doubled down on its virtual and home-based care strategy in March by combining with LHC Group, an in-home healthcare provider, in a $5.4 billion transaction.

Virtual care
Optum is working on making consumer transactions more convenient and accessible to patients.

"We know members need and expect timely information at their fingertips, and I'm pleased to report they are responding well to our digital offerings for everything from understanding their coverage to completing a virtual visit," said Dirk McMahon, president and COO of UnitedHealth Group, during the second quarter conference call July 15, as transcribed by Seeking Alpha.

The company reported digital engagement is up 170 percent among Medicare patients over the last few years. UnitedHealthcare also added 80,000 people to its domestic commercial plans in the second quarter, and around 90 percent of the growth within individual and family plans included members choosing a plan with virtual visits.

Virtual visits could also play a larger role in healthcare as financial pressures and inflation drive people to low-cost options for care. Andrew Witty, CEO of UnitedHealth Group, said the current economic environment could lead to more digital engagement and choice for virtual care.

"That's why, as an organization, we have over the last two years really doubled down on our commitment to consumer strategy across the board," he said. "Core capability of this company going forward will be consumer capability, and that's an area where you will see us continue to talk about, invest in, build, innovate in, and we hope to really lead in, in terms of moving the consumer to the center of thinking in healthcare."

UnitedHealthcare backs a personalized health plan administered by Bind that doesn't require a deductible or coinsurance. The plan focuses on members choosing their site of service to optimize cost and quality of care.

Home health
Days after Optum announced plans to combine with LHC Group, CMS pitched plans to cut home health payments by $810 million next year, lowering pay rates 4.2 percent. The proposed rule put a permanent 5 percent cap on negative wage index changes for home health agencies and sought comment on telecommunications systems services. CMS has not indicated how it will treat telehealth services — both video visits and audio-only calls between patients and clinicians — after the public health emergency declarations expire.

CMS' actions have not deterred Optum's resolve to move further into the home health and virtual care space, according to Mr. Witty.

"We really believe that enhancing and building high-quality care provisions in the home is going to be a key feature of the future," said Mr. Witty. "The more that can be linked to other aspects of care, for example, physician clinics and virtual care, it's very much a central focus of our Optum Health development. The bringing together of LHC within the overall Optum organization is really important to us, and we're very committed to that transaction."

Mr. Witty said the company believes the quality of care delivered will improve when delivered in the home, and the strategy could contribute to improved value-based care delivery. He also mentioned that the incentive system for driving care to the right setting needs to be aligned with payers.

"I hope very much over time that CMS and others continue to see the value of home care and that, in fact, the support is given and the signals are given to continue to increase the development of high-quality care in the home environment," he said.

Much of the care delivered at home is essential, Mr. Witty said, rather than elective. The company has a long history of delivering house calls for assessments and prevention, and Mr. Witty hopes the LHC transaction will extend home-based services.

"We're optimistic about this," he said. "We hope very much that CMS and others will continue to send signals of support through the way in which they chose to invest in this arena, and we'll see how that plays out during the rest of the year."

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