A new breed of health insurers is taking a page out of UnitedHealth’s book and providing care directly to patients, and it could reshape the US healthcare industry

Telemedicine online doctor appointment
A doctor sees a patient online.

  • Health insurer upstarts have made care delivery a core part of their business strategies.
  • Alignment, Bright, Clover, and Devoted all employ doctors and care for their directly.
  • They’re betting that doing so will help them lower costs and compete against industry giants.
  • This article is part of a series called “Future of Healthcare,” which explores how technology is driving innovation in the development of healthcare.

A new breed of health insurers is betting that providing care directly to patients will help them compete against industry giants and grow their footprints across the country.

These young insurers, like Alignment Healthcare, Bright Health, Clover Health, and Devoted Health have made employing doctors and delivering healthcare a core part of their strategies.

In some ways, they’re following a playbook etched out years before them by incumbents like UnitedHealth Group, which has worked for more than a decade to assemble a fleet of 56,000 doctors and counting by acquiring medical groups.

Humana, which deals in health plans for elderly people, has been buying and building out primary-care clinics for years. And Blue Cross Blue Shield insurers in Florida, Tennessee, and Texas have stood up dozens of retail clinics.

But while the big players have waded into providing care over time, the new-age insurers, which bank on using sophisticated technology to improve care and lower costs, have it in their DNA. Unlike the dominant insurers, they’ve largely steered clear of physical clinics, focusing instead on providing care virtually or in people’s homes.

It’s an approach that requires less capital, but still arms the upstarts with the tools needed give their members more ways to get care, and better control how much they spend on care.

“It gives us the reliability of making sure we can bend that cost curve everywhere we go without having to go into each market with a bunch of bricks and mortar,” Alignment CEO John Kao said. Alignment employs about 150 clinicians that care for the sickest plan members virtually and at their homes.

Alignment and Devoted are seeing patients online and at home

Alignment, the California-based Medicare Advantage insurer with 83,000 members, uses its technology to find the sickest, most expensive plan members who have chronic illnesses and frequent the hospital.

Alignment’s group of employed doctors, nurses, case managers, social workers, and behavioral health coaches care for 4,000 of these members, in partnership with their regular primary-care doctors. Being able to provide care itself is just more efficient, Kao said, and it helps save Alignment some money, which it can put back into better health benefits and attract more customers.

Waltham, Massachusetts-based Devoted, which had a little more than 20,000 Medicare Advantage members at the end of 2020, has its own medical group of employed doctors and other clinicians who provide virtual care to plan members at home.

Its services “wrap around and complement” the health care providers that Devoted partners with, so members get the best care at the right place and time, a spokesman for the company said in an email.

Clover is expanding its in-house home healthcare program

Meanwhile, insurer Clover Health also built up a home-healthcare program mostly run by employed healthcare providers.

The insurer, which had 66,300 Medicare Advantage members in March, uses claims data and medical records to look for people with multiple chronic illnesses, who are frail or home-bound, or visit the emergency department often. Its technology will then tell an eligible patient’s primary-care doctor that they might benefit from home visits, which are conducted by Clover’s internal care teams, Dr. Kumar Dharmarajan, head of Clover Home Care, told Insider.

Dharmarajan said the program increases access to care for older adults who don’t leave the house. It also allows Clover to get a picture of non-medical factors that could lead to worse health, like disorganized medications or fall hazards like electrical cords on the floor. An office visit wouldn’t reveal that kind of information.

In New Jersey alone, Clover expects to have between 3,000 and 3,500 Medicare Advantage members in its home care program by the end of this year, compared with just 200 patients in 2017, Dharmarajan said. It’s set to expand further as Clover starts offering home care to traditional Medicare enrollees that it’s managing through a federal program.

Bright is buying up medical practices

Most young insurers aren’t building clinics, but Bright Health is the exception.

Its CEO Mike Mikan, a former UnitedHealth Group executive, is following his former employer’s blueprint and buying up medical practices.

Bright, which provides health coverage to 623,000 individuals, families, and seniors, is tucking these acquisitions into its new care delivery business called NeueHealth. The business owns or manages care for 61 clinics, but it also works closely with outside provider groups and arms them with analytics and other tools to they can provide better care.

In both cases, the goal is for the insurer and provider to get on the same page and partner to improve patients’ health and lower costs under a payment model where each side wins when it works.

That’s different the old insurance strategy of restricting care, Mikan said.

“What we really want to promote is the healthcare system to move to a value-based model where you’re really rewarding performance based on the quality of the care they provide, not just the quantity of care,” he said. “Every consumer is better served when they’re part of an aligned model.”

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UnitedHealth’s big bet on the business of going to the doctor

Hello,

Welcome to Insider Healthcare. I’m Lydia Ramsey Pflanzer, and this week in healthcare news:

If you’re new to this newsletter, sign up here. Tips, comments? Email me at lramsey@insider.com or tweet @lydiaramsey125. Let’s get to it…


Coming up today, a group of CDC advisors will discuss their recommendations for what comes next for Johnson & Johnson’s COVID-19 vaccine.

Insider’s Hilary Brueck spoke to five of the experts voting on the fate of the vaccine.

They said they’re eager to end the pause and may ask that a warning be added for women.


Wyatt Decker, CEO of OptumHeath
OptumHealth CEO Wyatt Decker

Building a $100 billion business

UnitedHealth is on its way to building a $100 billion business around going to the doctor.

Shelby Livingston spoke with Dr. Wyatt Decker, the CEO of OptumHealth, who’s in charge of building that unit, about how virtual care will play a role, and what comes next.

Growing the business would cement UnitedHealth even further as a massive player in delivering medical care.

Here’s how>>

The CEO of UnitedHealth’s sprawling health-clinic business shared how transforming the way doctors get paid will help it notch $100 billion in revenue


Walmart Health
A Walmart Health clinic with counseling, labs, optometry, primary care, dental, and hearing services.

Key healthcare departures at Walmart

Blake Dodge and Shelby have been keeping tabs on Walmart’s healthcare strategy after reporting in February that the retail giant’s clinic strategy was in flux.

This week, they took a look at all the leaders leaders involved in the original plans for the clinics who have departed, including the upcoming departure of Walmart’s chief medical officer.

We mapped out who left>>

Walmart’s healthcare leaders are exiting the company as it taps the brakes on an ambitious clinic rollout


Moderna vaccine
Biotechnology company Moderna protocol files for COVID-19 vaccinations are kept at the Research Centers of America in Hollywood, Florida, on August 13, 2020.

New science could help solve biotech’s thorniest challenges

This week, our reporters also spent some time looking at the potential future of biotech.

Andrew Dunn pinpointed 5 takeaways from Walter Isaacson’s best-selling book on Jennifer Doudna, the pioneering scientist who won a Nobel Prize for discovering CRISPR – including what ethical questions now face the cutting-edge gene-editing tool.

Meanwhile, Patricia Kelly Yeo took a closer look at the plans Moderna’s laid out to develop an HIV vaccine.

After the success of Moderna’s COVID-19 vaccine, it’s possible the biotech could chart a new path toward a vaccine that’s eluded researches for decades.

There’s a long road ahead>>

Moderna’s mRNA technology could help in the decades-long search for an HIV vaccine


Finally, here’s what’s happening with healthcare startups this week:


– Lydia

Read the original article on Business Insider

Change Healthcare surges 32% after news of $8 billion acquisition by UnitedHealth

FILE PHOTO: The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020.      REUTERS/Mike Blake
The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California


Shares of Change Healthcare gained as much as 32% to $24 a share on Wednesday after news that UnitedHealth Group is acquiring the health tech firm for roughly $7.8 billion.

After the acquisition, Change Healthcare will merge with UnitedHealth Group’s health services subsidiary, OptumInsight. Together the companies will connect and simplify core clinical, administrative, and payment processes for the healthcare industry, according to a UnitedHealth statement

UnitedHealth will pay $25.75 per share in cash, which is a 41% premium over Change Healthcare’s Tuesday closing price of $18.24.  Including debt owed by Change Healthcare, the deal is worth around $13 billion. The companies said the transaction is expected to close in the second half of 2021. 

Shares of UnitedHealth group fell as much as 2.8% after the Wednesday opening bell but pared back the losses. The stock is now hovering around $347 a share. As of noon on Wednesday, Change Healthcare has gained 51% over the last 12 months. 

Read more:Fundstrat’s Tom Lee says to buy these 10 transportation stocks that were the hardest hit by the pandemic and are most leveraged for the economy’s reopening in 2021

“Together we will help streamline and inform the vital clinical, administrative and payment processes on which health care providers and payers depend to serve patients,” said Andrew Witty, President of UnitedHealth Group and CEO of Optum.

In other healthcare merger news, Walgreens Boots Alliance agreed to sell the majority of its pharmacy wholesale unit to AmerisourceBergen Corp for about $6.5 billion. 

Shares of Walgreens Boots Alliance rose as much as 4.39%, while Amerisource Bergen gained as much as 8.7% on Wednesday. 

Read the original article on Business Insider