Day: October 11, 2012

UnitedHealth Group is set to become the controlling owner of the largest healthcare company in Brazil, a country whose health market is rapidly growing, in one of the most high-priced overseas deals by a U.S. private insurance company.

The largest American insurer is spending $4.9 billion to acquire 90 percent of Brazil’s Amil Participacoes, which has about 5 million members, a provider network of 3,300 hospitals and 44,000 doctors, and also owns 22 hospitals and about 50 clinics, reported the Associated Press.

By entering the Brazilian healthcare market, UnitedHealth can better access the country’s 200 million population, only 25 percent of which has private insurance, at a time when Brazilian leaders increasingly are turning to private companies to insure its citizens, Reuters reported.

“Brazil has emerged as a consistently growing and evolving market for private sector health benefits and services. Its growing economy, emerging middle class and progressive policies toward managed care make it a high potential growth market,” UnitedHealth CEO Stephen Hemsley said Monday in a statement.

“Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years,” he said.

Amil’s founder Edson Bueno and his partner Dulce Pugliese will retain their 10 percent ownership of Amil for at least five years. Amil also will invest about $470 million in UnitedHealth Group shares, which it also will hold for five years, according to the Minneapolis Star-Tribune.

CareFirst Blue Cross Blue ­Shield has established one of the largest patient-centered medical homes (PCMH), which already yielded $40 million in cost savings in the program’s short 18-month lifespan. To better understand how CareFirst became so successful so quickly, FierceHealthPayer spoke with Chet Burrell (pictured), the insurer’s chief executive officer.

FierceHealthPayer: How does CareFirst’s PCMH differ from other payers’ similar programs? It has achieved fast results and quick growth–what are the keys to that success?

Chet Burrell: There are a few reasons for our success. The first is the way we set up accountability for primary care physicians. It’s way beyond just primary care; it’s for all care in all settings for their patients. They are accountable for the aggregate outcome, including cost and quality, for their patients.

The second difference is that the incentives in our program are very powerful and are tied to their accountability. Their accountability is for global costs and their incentives are based on global cost savings. So if you can prevent hospitalizations at least to some degree by stabilizing these patients then you share in the savings of the aggregate medical dollar, not just the primary care piece of of that.

That means there are very powerful rewards so you can get what amounts to anywhere between 0 percent or 1 percent increase in fees to 70 percent of fees. So it’s not some little tiny marginal thing. It’s not paying them $20 per member per month. If you save on the aggregate medical dollar even 5 percent or 6 percent, you get really big rewards.

“…………..due to the rising number of physicians closing their private practices for positions with hospitals, whose tendency to fold newly hired and acquired providers into their self-funded medical professional liability insurance programs has reduced loss experiences for commercial malpractice insurers……………”

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