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Our Take: UnitedHealthcare launches new virtual primary care service; parent company records $15 billion profit for 2020

Jan 25, 2021

UnitedHealthcare has launched a new virtual primary care service designed to “make it easier for people to establish and maintain a relationship with a primary care physician,” the insurer recently announced.

The service, which is being offered in collaboration with telehealth provider Amwell, is currently available to members in certain employer-sponsored fully insured or self-funded health plans in 11 states, and UnitedHealthcare said it expects to expand the service to other states later this year.

Through the service, eligible members can access primary care appointments with a small or no copay. They can use the service for annual wellness visits and regular follow-up visits for chronic conditions, to request lab tests and review test results, and to get a prescription (for certain medications) or a referral to a specialist.

UnitedHealthcare said one-fourth of the respondents in a recent survey by the company indicated that they would “prefer a virtual relationship with a primary care physician rather than in-person visits.”

In separate news, UnitedHealth Group just reported its fourth-quarter and full-year results for 2020. The company recorded revenue of $257.1 billion and a profit of $15.4 billion for the year, up from revenue of $242.2 billion and a profit of $13.8 billion in 2019. UnitedHealthcare earned $200.9 billion and Optum (which includes UnitedHealth’s pharmacy benefit manager) brought in $136.3 billion for the year, compared with $193.8 billion and $113 billion, respectively, in 2019.

UnitedHealth Group CEO David Wichmann said on an investor call Wednesday that UnitedHealthcare has added 3.5 million Medicare Advantage members in the last five years and expects to add 900,000 members to its Medicare plans this year.

Our Take: As we’ve reported repeatedly in the past year, the pandemic has fueled a surge in telehealth visits, and the consensus is — now that people who were previously reluctant to try virtual visits have found them to be a convenient and oftentimes preferable alternative to in-person office visits, and since CMS has updated its reimbursement rates for virtual visits — that telehealth is here to stay.

At the same time, fear of exposure to COVID-19 has led to a substantial drop in primary and preventive care, a cause for concern among providers and payers alike. It’s no wonder, then, that we’re seeing more creative collaborations designed to encourage people to get back in the habit of seeking primary care services, especially for screenings and care management of chronic diseases such as diabetes. The hope, of course, is to avoid more costly care down the road.

As another example, Doctor on Demand just partnered with Community Health Choice, a nonprofit health plan based in Houston, to launch a virtual primary care-focused HMO plan called Virtual Bronze on Texas’ health insurance marketplace. The plan will focus on attracting some of the estimated 760,000 uninsured Texans who, according to an analysis by the Kaiser Family Foundation, are currently in what’s referred to as the coverage gap — those who aren’t eligible for Medicaid or Affordable Care Act premium subsidies because of their income. (Texas is among the 12 remaining states that have not expanded their Medicaid program under the ACA.)

Incidentally, this is not Doctor on Demand’s first foray into partnering with a payer to offer a virtual primary care-focused plan. The telehealth provider launched a health plan called On Hand with Humana back in April 2019. Healthcare Dive recently reported that Doctor on Demand has other virtual primary care plans in the works as well, including some that will be introduced later this year.

Citing a research letter published online Dec. 16, 2019, by JAMA Internal Medicine, UnitedHealthcare said when it announced its new virtual primary care service that an estimated 25% of Americans do not have an ongoing relationship with a primary care physician. Think about that. One in four people in this country don’t have a regular PCP.

The authors of the research letter wrote that financial barriers might prevent some people — particularly the uninsured — from accessing primary care, but insufficient availability of primary care might keep even insured individuals from accessing care. These new virtual primary care offerings could go a long way toward addressing both the affordability and availability of primary care.

Speaking as part of a virtual panel at the recent Consumer Electronics Show, Dr. Anne Docimo, UnitedHealthcare’s chief medical officer, said, “As more people and care providers move to a digital-first mindset, UnitedHealthcare will continue to modernize our approach to health benefits and invest in new ways to use technology to help make it more convenient for our members to access primary care and other types of medical services.”

We expect to see more of these types of services and partnerships being rolled out in the year(s) ahead. As far as we can tell, there doesn’t really seem to be a downside.

What else you need to know

Intermountain Healthcare, Trinity Health, and Memorial Hermann were among the health systems that made commitments to Heritage Group’s latest private equity fund, Modern Healthcare reported. Approximately 70% of the $300 million committed toward Heritage Group’s third fund came from health systems and insurers such as Horizon Blue Cross Blue Shield of New Jersey. Other investors included Advocate Aurora Health, Banner Health, Community Health Systems, Henry Ford Health System, Northwestern Memorial Healthcare, and UnityPoint Health. Paul Wallace, a partner at Heritage Group, said the average commitment was between $10 million and $20 million over five years. The Nashville-based firm said the fund will invest in health care companies that are addressing the industry’s most pressing challenges. According to Wallace, innovative Medicare Advantage models and the adoption of value-based models are among the firm’s major focuses.

Global health care funding reached an all-time high last year, according to a recently released report by CB Insights, with $80.6 billion in equity funding raised across more than 5,500 deals. The report said the 187 health care “mega-rounds” (consisting of at least $100 million) in 2020 also represented a new record, as did the $26.5 billion in equity funding in digital health companies (an increase of 45% from 2019). Much of the increase in the digital health sector was fueled by the pandemic. Equity funding in the mental health sector also set a record in 2020, at $2 billion.

The Federal Trade Commission is taking a closer look at the impact that hospitals’ acquisitions of physician groups has on competition. The FTC has requested claims data for inpatient, outpatient, and physician services in 15 states from six of the country’s largest health insurers to evaluate the effect of physician consolidation during the last five years. The requests were sent to Aetna, Anthem, Cigna, Florida Blue, Health Care Service Corp., and UnitedHealthcare.

AstraZeneca, Eli Lilly, and Sanofi are suing the Department of Health and Human Services (HHS) over an advisory opinion HHS released in late December stating that 340B discounts apply to contract pharmacies. The drug companies filed separate lawsuits seeking to have the opinion struck down, claiming that it is unlawful and that it exceeded HHS’ statutory authority, Bloomberg Law reported. Although the advisory opinion is not legally binding, the drug companies are concerned that an alternative dispute resolution board established by the Health Resources & Services Administration in early December to settle disputes between 340B hospitals and drug manufacturers will rely on the opinion to inform its decisions.

Cone Health CEO Terry Akin will step down when the merger with Sentara Healthcare has been completed, most likely in mid-2021, according to a statement posted on Cone Health’s website. Dr. Mary Jo Cagle, the chief operating officer at Cone Health, will succeed Akin and will become regional president when the merger is formally approved. Akin emphasized that his decision to leave was based on personal reasons and was not related to the merger. Jeff Jones, Cone Health’s chief operating officer, will be leaving the health system in February. He will be succeeded by Andy Barrow, who is currently the senior vice president of financial services at Cone Health.

What we’re reading
The Language of Health Care Reform. JAMA, 1.19.21
Health Care in 2021: Five Trends to Watch. Health Affairs, 1.20.21

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