UnitedHealth: Bundled payments led to $18M savings, major drops in readmissions

UnitedHealth's value-based payments for spinal surgeries, as well as hip and knee replacements, have shown both major growth and major savings.

The Minnesota-based insurer announced on May 9 that it expanded its bundled payment program to 37 markets from 28 and netted $18 million in savings from 115 employers in the program since 2016.

Under the program, the insurer pays providers for a defined episode of care under a single fee instead of per procedure, giving providers more incentive to focus on outcomes and costs. UnitedHealth said participating employers saved an average of $18,000 per surgery, while individuals saved more than $3,000. 

"The initial results and nationwide expansion demonstrate the value of this program to healthcare providers, employers, and their employees, helping to improve health outcomes and make care more affordable for more people," Sam Ho, M.D., chief medical officer of UnitedHealthcare, said in a statement. 

The insurer said its bundled payments also led to improved patient outcomes. The program reduced hospitals readmissions by 22% and complications by 17% for joint replacement surgeries, while hospital readmissions for spine surgeries fell by 10% and complications dropped by 3.4%.

RELATED: Humana adds 7 new states to bundled payment portfolio

Insurers have lately been boosting their bundled payment portfolio as the healthcare sector continues to shift more toward value. Last month, Humana said it was expanding its Medicare Advantage bundled payment model for hip and knee replacements to seven additional states. 

At the same time, the Centers for Medicare & Medicaid Services has received some flak for not issuing enough aggressive value-payment models. The agency rolled back mandatory bundled payment models last year before replacing them with a voluntary program months later.