Specialist
Former executive at UnitedHealth Group Inc
Agenda
- Recent trends and developments within the US managed care market, focusing on UnitedHealth Group (NYSE: UNH)
- UnitedHealth’s Medicare and commercial business lines, including further movement into a value-based care model
- Commercial business model shifts from fee-based services toward risk-based arrangements
- Payer reimbursement mix overview across Medicare and commercial payers
- Q2 2023 growth outlook
Questions
1.
What recent trends and developments have you been following within the managed care industry over the past year or so?
2.
You mentioned the RAF [risk adjustment factor] scoring. What is your assessment of UnitedHealth’s positioning against the MA [Medicare Advantage] CMS [Centers for Medicare and Medicaid] risk adjustment audits that will commence in spring 2023?
3.
How do you think CMS’s monthly payments and capitation per member per month to MA organisations will trend once the audits are completed, appreciating the audits will take a long stretch of time?
4.
Another key trend you mentioned was the increase in weighting of CAHPS [Consumer Assessment of Healthcare Providers & Systems] scores. CMS did previously double the weight of that member experience metric to the star score formula, which caused many insurers to exhibit a drop in star ratings for the 2023 plan year. What are your thoughts on United’s ability to improve its Medicare star ratings in the future, tying in any necessary alterations its MRA [Medicare Risk Adjustment] department must implement going forward?
5.
How does United stand relative to competitors with its ancillary service offerings? What has its positioning been historically vs competitors such as Aetna and Elevance?
6.
What are your thoughts on United’s approach to transition commercial members to more full risk-bearing arrangements? The company noted roughly 70% of its domestic commercial members are in fee-based contracts. What are the challenges that United is going to experience during this transition?
7.
What’s the pushback that United may experience from provider groups, more specifically, when trying to transition commercial members towards value-based care contracts?
8.
Roughly 70% of United’s domestic commercial members are in fee-based contracts. What is a realistic goal for the company moving commercial members to value-based care contracts in the next 1-4 years? How do you anticipate that 70% of commercial members sitting in fee-based contracts to trickle down over the next couple of years?
9.
United has noted that it expects to serve an additional one million people in 2023 through its commercial plans. Of that one million people, how often do we see new members going straight into risk-based arrangements or is this not the case? You said it’s traditionally a slow-moving iceberg to move from fee-based into risk-bearing.
10.
What are the common metrics that United utilises to measure the value of care within risk-bearing contracts, noting how these metrics – if they vary at all between a fee-for-service to MA – shift vs just a fee-for-service to commercial insurance shift into value-based care?
11.
How do you expect United’s MCR [medical cost ratio] utilisation to trend when we’re looking at commercial vs Medicare segments? We did see a slightly elevated MCR for Q4 2022 just due to flu and respiratory-related costs but the company’s MCR for full-year 2022 was sitting right at 82%.
12.
As United creates a more narrow network product with Optum care providers, what ripple effect do you see that having with contracting with other providers in its markets?
13.
United had a rough patch in national accounts and collaboration within employer markets right before the pandemic, but the company has been able to turn momentum around and appears to be growing it very well. What was driving those earlier challenges and what has United done to improve its positioning within its national accounts?
14.
United has a very large financial chequebook to grow in ancillary markets. Do you view any financial challenges for United to fill out its value-based care provider network or is it more so strategy and less reliant on capital?
15.
Could you compare the different selling points United markets to third-party brokers for MA plans, compared to players such as Humana, Aetna or Elevance? How strong of a pulse does the company have on its various sales channels here?
16.
Do you think United conducts an educated sell for both the patient and the broker, or is it merely just that the company is really good at incentivising the broker?
17.
What are your thoughts on the Walmart-UnitedHealth collaboration? They’re going to serve Medicare beneficiaries and value-based care arrangements for Florida and Georgia locations, which started at the beginning of 2023.
18.
How do you think United’s care delivery platforms or respective strategies might unfold following the 10-year agreement with Walmart?
19.
United’s management had noted in-home services for value-based care, patients reduce hospital visits by about 15% when comparing them to the fee-for-service population. Following the company’s recent acquisition of the LHC Group, how far ahead is United within its home services compared to other MA players?
20.
Another key trend you mentioned was the reimbursement for virtual care and telehealth and what that reimbursement will look like. United did launch a virtual-first health plan in October 2021. How are you assessing this plan from a growth standpoint? Have we seen any growth decline now that the pandemic is over, either in terms of pure telehealth volume standpoint?
21.
Cigna previously spun off Evernorth, its mental health and behavioural healthcare offerings. How beneficial would it be for United, just from an ROI perspective, to combine the virtual-first health plan with the company’s mental health and behavioural offerings into a separate entity?
22.
How are you assessing United’s M&A strategy as we move throughout 2023? What areas among the company’s segments might have a bigger growth opportunity for capital deployment or are weaker and would require additional investments to improve?
23.
United’s Optum Care conversion to global capitation was around 700,000 patients per year, and profitability of said members was relative to the company’s guidance of about an 8-10% margin. How realistic is this guidance for Optum Care?
24.
What do you view as any upside or downside risks to Optum Care’s ability to drive the global capitation guidance, at about 700,000 patients per year, as well as relative profitability margins of that 8-10% range?
25.
United is projecting full-year 2023 revenues of nearly USD 250bn, which grew about 12% YoY in 2022. Which business segments do you anticipate will realise the largest incremental growth for the company over the course of 2023?
26.
Are there any business segments of United that might see either flat or relatively stagnant growth rates YoY?
27.
Do you think it’s a viable option that United sells off part of its managed Medicaid business, given all the headwinds we’re seeing within the Medicaid space and the fact that it would be more an opportunistic approach to fill out existing markets where it has Medicare and commercial segments?
28.
Are there any core risks associated with United that we haven’t touched on that are important to highlight?
29.
Do you think it’s within United’s best interests to slow down its M&A activity to iron out any issues that may arise with prior acquisitions, rather than just banking on the fact that these issues will resolve once the acquisitions come into the United fold?
30.
What is your 12-18-month strategic outlook for UnitedHealth Group, noting any key factors that you think we should monitor over this time frame?
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