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Better care at a lower total cost is in sight

The annual cost of health care in the United States is $3.6 trillion — and growing. The country will face dire consequences if we don’t reverse the trend to lower the total cost of care. We must solve this problem — and we are.

Drug prices get a lot of attention, but they are only one piece of the puzzle. We need to look at lowering costs by segment as well as holistically.

This demands an increased focus on patient experience as well as quality of care. And it requires collaborating to implement quality-driven incentives and business practices that integrate data and analytics into everyday practice.

From operations to delivery, we’re defining a new era of health care on a societal scale.

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  • Health care expenditures

    The total cost of health care has tripled over 20 years. Driven by economic and demographic factors, costs are expected to reach almost $6 trillion by 2027.

    • 1998 total = $1.2 trillion
    • 2008 total = $2.3 trillion
    • 2018 total = $3.6 trillion

    Top categories of spending in order are hospitals, clinical, care outside of a clinic, prescriptions, insurance administration and medical products and equipment.

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Triple Aim

Better patient experiences and outcomes at lower costs


Proactive approaches to chronic disease can lower total cost of care

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    • Increasing preventive care saves $3.7 billion a year.
    • Lowering average sodium intake saves $18 billion a year.

A dedicated investment in prevention holds great promise to lower the costs of chronic diseases, which account for nearly 75% of U.S. health care spending.

Proactive steps like annual screenings, early interventions and lifestyle changes can significantly curb the risk, or delay the effects, of chronic disease on our society.

Americans currently use preventive services at only about half the recommended rate. Increasing the use of 20 proven clinical preventive services to 90% would result in an annual savings of $3.7 billion, according to a study published in Health Affairs.

How do we accomplish that increase? Education, encouragement and empowerment are key. Identifying at-risk individuals and providing them with the right resources at the right time helps people improve their own health.

These strategies are being employed across Optum through efforts like:

  • Integrated wellness coaching that reshapes healthy lifestyle habits
  • Care reminders that prompt people to take action
  • Employee well-being programs that provide help in detecting disease




Value-driven care ensures a smooth experience and efficient use of resources


Transforming traditional care models through intelligent uses of data and technology empowers clinicians to deliver superior quality care and ensures a smarter, more intuitive experience for patients at a lower cost overall.

Key to this approach is an uncompromising focus on optimizing quality of care and eliminating waste and inefficiency.

The Optum Optimal Care lifecycle uses advanced technology to deliver evidence-based health care recommendations at the point of care to help clinicians avoid unneeded treatments.

For example, initial results show the program driving significant reductions in unnecessary knee arthroscopies with patients who followed an evidence-based course of treatment of weight loss, the use of anti-inflammatories and physical therapy.

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Aligning Operations

Collaboration aligns operations with care priorities


Driving value is more than just changing payment models

Value-based care is centered on providing the highest quality care to patients, but it also  requires the management of costs for long-term sustainability for health care organizations. Moving to value-based care may seem straight-forward, but it is actually easier said than done. How can organizations make value-based care work for patients and for them?

It starts with collaboration. Providers need to know other providers so they can choose judiciously when referring patients and making decisions. But collaboration needs to go beyond clinical partnerships. Studies show that payers and providers must share data to succeed in value-based care endeavors, which means changing the way both operate.

The next key is getting the right data, and the platforms to analyze it, into providers’ hands. As providers enter into value-based care arrangements, they need actionable information to support decision-making that helps them provide quality care and manage their costs.




Simplifying the payment continuum — together

When providers and payers work more seamlessly to leverage data and analytics across systems, operational efficiencies and cost savings can be directed toward better patient care.

In its collaboration with John Muir Health, Optum360® streamlined the system’s revenue cycle, freeing up its clinicians to focus on care delivery. By reducing administrative complexity and friction between provider and payers, John Muir is delivering a better, more transparent patient experience, where costs are known up front and scheduling an appointment is easy.




Reducing administrative costs begins with payments

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  • Health Care Payment Nexus

    Collaborate for collective success

    The current health care payment process is unsustainable. Alone, payers and providers are unable to reduce the $200 billion in annual administrative waste.1

    The median 350‐bed hospital denial write‐offs have increased from $3.9 million in 2011 to $7 million in 2017.2

    Payer admin cost of claims work is equal to 1 percent of paid claims.3

    Shared pain points offer opportunity to reinvent the payment process. Alignment and collaboration can reduce inefficiencies and may ultimately lead to a denial‐free future.

    Source notes


    1. Institute of Medicine of the National Academies. The Best Care at Lower Cost: The Path to Continuously Learning Health Care in America. Washington, DC: National Academies Press; 2013.

    2. 2017 Advisory Board Research: 10 Findings from the 2017 Hospital Revenue Cycle Benchmarking Survey.

    3. Optum analysis.

    Pain points

    Pain point 1

    Lack of access to complete benefit data hinders the ability to accurately identify patient out‐of‐pocket costs, coordination of benefits and payer liabilities. The result is confusion over cost of care and administrative costs.

    This occurs at the pre‐service stage, as an aspect of eligibility and benefits including insurance verification.

    Pain point 2

    Confusion about which services require prior authorization and how to obtain retroactive authorization results in patients not receiving timely and appropriate care.

    This occurs pre‐service and at service in regard to prior authorization. It includes insurance verification, authorization and medical necessity, and documentation and coding.

    Pain point 3

    Exchange of incomplete and delayed clinical documentation and coding does not accurately support services rendered and can skew reimbursement and quality scores.

    This occurs at service as an aspect of coding.

    Pain point 4

    Claims submissions with inaccurate, incomplete or missing information require costly follow‐up and re‐work.

    This occurs post‐service during claims processing as part of billing and adjudication.

    Pain point 5

    Inability to determine root cause of denials leads to error re‐occurrences, appeals and costly feedback circles.

    This occurs post‐service as part of denials and denials management.


    Solution 1

    Up-front exchange of accurate insurance coverage and eligibility data allows both parties to know financial responsibility, enabling patients to make financial arrangements pre‐service.

    This occurs at the pre‐service stage, as an aspect of eligibility and benefits including insurance verification.

    Solution 2

    Coordination before and during care delivery reduces care variation, improves policy compliance and offers opportunity to influence site of service.

    This occurs pre‐service and at service in regard to prior authorization. It includes insurance verification, authorization and medical necessity, and documentation and coding.

    Solution 3

    Alignment of accessible and transparent source/reference data to support complete documentation and accurate billing.

    This occurs at service as an aspect of documentation and coding.

    Solution 4

    Mutual agreement on documentation guidelines, payer‐specific rules and contractual terms can be reached prior to claim submission.

    This occurs post‐service during claims processing as part of billing and adjudication.

    Solution 5

    Improved communication, education and shared data analysis allows for up-front root‐cause discovery and resolution.

    This occurs post‐service as part of denials and denials management.

    Payer and provider collaboration benefits everyone.

    How to start collaborating:

    • Shift payment processes from post‐service to pre‐service.
    • Transparently share rules and data.
    • Transition from transactional relationships to strategic partnerships.

    Payer benefits:

    • Reduces risk of claims overpayment.
    • Lowers costs for payment integrity.
    • Boosts provider, patient and member satisfaction.
    • Improves provider contract rates.
    • Enhances ability to influence utilization.

    Patient benefits:

    • Educates and empowers.
    • Increases awareness of financial responsibility.
    • Ensures clear and timely correspondence from payers and providers.
    • Prevents delayed access to care.
    • Provides peace of mind about coverage.

    Provider benefits:

    • Accelerates payment.
    • Reduces denials and write‐offs.
    • Cuts administrative costs.
    • Improves patient satisfaction.
    • Increases clarity on payment rules and regulations.
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Data and Analytics

Better care decisions start with data and analytics


Using health care intelligence identifies the best behavioral health interventions

Research has shown that integrating behavioral and medical health care improves outcomes and patient experience. But despite a decade of development, medical-behavioral integration models struggle to deliver on their promise and value and to optimize total cost of care.

Data and analytics can create a more sophisticated clinical approach that aligns interventions for people with comorbid medical and behavioral conditions and addresses the complexity of their care.

Algorithms identify individuals who are most likely to benefit from holistic care management. They are then matched, with greater precision, to appropriate care services, such as an integrated clinical care team, single medical-behavioral treatment care plan and coordination with medical and behavioral providers.

A portfolio of lighter-touch methods can be used to address those with moderate to low medical-behavioral integration needs.

This approach makes the most effective use of clinical resources.


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