Becker's Hospital Review

11 CFO / FINANCE UnitedHealth seeks 'less abrasion' with hospitals By Rylee Wilson UnitedHealth Group is seeing "unusually aggressive and high unit cost asks" from hospitals, CEO Andrew Witty said. On an Oct. 15 call with investors, Mr. Witty said UnitedHealth wants to find a "new way of working with hospitals." "We want to see less abrasion in the marketplace," Mr. Witty said. "We believe that ought to come with more competitive rates in the marketplace." UnitedHealth reported its third-quarter earnings Oct. 15. CFO John Rex said medical costs rose in the third quarter, driven by increased pharmacy costs, Medicaid rates and an increase in coding intensity by hospitals. "Certain entities have been notably and persistently aggressive, having upshied their coding intensity factors by upwards of 20%," Mr. Rex said. e executives' comments come as hospital leaders allege UnitedHealth denies payments at a higher rate than other insurers. e insurer has had several public contract disputes with hospitals and health systems this year. Craig Albanese, MD, CEO of Duke University Health System, told Becker's UnitedHealthcare denies payments 40% more oen than other insurers. e system and UnitedHealthcare face a Nov. 1 deadline to reach a new contract agreement. Huntsville (Ala.) Hospital Health System is terminating its contract with UnitedHealthcare, alleging the insurer's denial rate "is 75% higher than other like insurers." UnitedHealthcare said the health system asked for "an over 25% price hike in just one year, despite already being nearly 20% higher than the average cost of other hospitals in our network in northern Alabama." Other hospitals have split with UnitedHealthcare this year. In September, University of Florida Health's hospitals and physician groups in Gainesville, Jacksonville, and St. Johns went out-of-network with UnitedHealthcare. Bloomington, Minn.-based HealthPartners will drop UnitedHealthcare's Medicare Advantage plans at the end of 2024. UnitedHealthcare has been the most difficult payer for Livonia, Mich.- based Trinity Health to negotiate with, according to Stuart Kilpinen, senior vice president of payer strategy and product development at Trinity. "We've had difficult negotiations with UnitedHealthcare over the years and with some other payers, but now it's coming to a head due to the impact of inflation, Medicare Advantage and the pressures on that program, and the fact that we can no longer sustain and accept it," Mr. Kilpinen told Becker's in May. "We're taking a firmer stand to protect the care that our patients and communities need." Mr. Witty told investors UnitedHealth wants to collaborate with hospitals to drive better value for the healthcare system. e company's newly launched gold card program, which relaxes prior authorization requirements for some providers, is one example of this collaboration, Mr. Witty said. e company is also seeking out partnerships with drug manufacturers to bring down prescription spending, Mr. Witty said. "Whether that be with drug companies that are interested in new ways of working to bring down costs, or whether that's with hospital systems who want to work with us to reimagine what the patient experience, what the doctor experience is — [that's] all part of bringing down the unit cost. ose are areas that are super important for the long run," Mr. Witty said. n 22 statistics on hospital patient length of stays By Laura Dyrda T he average length of stay at hospitals across the U.S. is dropping slightly, while observation days have big declines year over year, according to Kaufman Hall's National Hospital Flash Report. The report includes data from 1,300 hospitals in August, which are tracked monthly for operational and financial trends. The length of stay dropped one to two percentage points on average for most hospitals, regardless of region and size. There was a wider variation in the observation days as a percentage of patient days, as patients are leaving the hospital quicker this year compared to last year. "This development indicates less severe patient acuity and efficient care transition pathways," the report authors noted. Here are 22 statistics from the report. Average length of stay 1. Total: -1% 2. West: 0% 3. Midwest: -1% 4. South: -1% 5. Northeast / Mid-Atlantic: -2% 6. Great Plains: 0% 7. 26-99 beds: -2.5% 8. 100-199 beds: 2.1% 9. 200-299 beds: -1.9% 10. 300-499 beds: -0.2% 11. 500+ beds: -0.6% Observation patient days as a percentage of patient days 12. Total: -13% 13. West: -2% 14. Midwest: -24% 15. South: -16% 16. Northeast / Mid-Atlantic: -18% 17. Great Plains: 5% 18. 26-99 beds: -20.6% 19. 100-199 beds: -5.2% 20. 200-299 beds: -6.7% 21. 300-499 beds: -12% 22. 500+ beds: -9.4% n

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