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UnitedHealth's (UNH) Unit to Upgrade Care Bundles Program

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UnitedHealth Group Incorporated’s (UNH - Free Report) arm UnitedHealthcare is expanding its partnership with care providers and the government to offer top-quality medical care through its UnitedHealthcare Care Bundles Program. By virtue of this alliance, care providers across more than 30 states will be able to take part in the bundled payment models under certain UnitedHealthcare Medicare Advantage plans, such as hip and knee replacements, coronary bypasses and spinal fusions.

This program is part of the company’s commitment to provide its members with an enriched, value-based care. UnitedHealth projects that by the end of 2020, it will have $75 billion in care provider reimbursements attached to value-based arrangements on a yearly basis. In the current scenario, more than 3 million people under the UnitedHealthcare Medicare Advantage plans have access to avail of treatment per value-based models.

Bundled payments are mainly focused on providing high-quality, coordinated medical care at lower costs by setting some standards for price, quality and further check-ups plus treatments along with recognizing the participating care providers for transcending these standards.

This is yet another addition to the company’s current scope of work with the Centers for Medicare & Medicaid Services’ Bundled Payments for Care Improvement Advanced (BPCI Advanced) program for fee-for-service Medicare. Moreover, it is extending the company’s bundled payment services to care providers that exist within its Medicare Advantage plan networks.

With the aid of its extensive data and technology, the company is able to team up with care providers for delivering better medical care at a nominal fee. Partnering care providers will gain from the company’s scalable services and support, which consist of care management solutions that patients can receive from pre-operative education to post-acute care. The program also includes patient engagement tools, performance analytics and consulting plus payment administration services.

Last May, the company enhanced its bundled payment program to 37 markets with primary focus on spinal surgeries and knee and hip replacements.

This might be a good step at UnitedHealthcare’s end, given the growth rate of privately-run Medicare plans. Moreover, its membership in the public and senior business has been rising consistently over many years and the trend continued in 2018 as well. In 2019, both Medicare and Medicaid business will further likely fuel membership growth. In Medicare business, a combination of premium and benefit stability, a rising star rating performance and an improved service and clinical conduct would lead to record retention rates, driving membership growth in the process.

Shares of this Zacks Rank #3 (Hold) company have rallied 11.2% in a year’s time, underperforming its industry’s increase of 11.5%.



Stocks to Consider

Investors interested in the medical sector can take a look at some better-ranked stocks like Anthem Inc (ANTM - Free Report) , WellCare Health Plans, Inc. (WCG - Free Report) and Molina Healthcare, Inc (MOH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Anthem and subsidiaries operate as a health benefits company in the United States.  In the last four quarters, the company came up with average positive surprise of 7.1%.

WellCare Health offers managed care services to government-sponsored health care programs. The company pulled off average earnings surprise of 15.43% in the preceding four quarters.

Molina offers Medicaid-related solutions to meet the health care needs of low-income families and individuals. In the trailing four quarters, the company delivered average beat of 109.41%.

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