UnitedHealth Argues For $500 Billion In Medicare Savings

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The U.S. could save more than $500 billion in Medicare and Medicaid spending over the next ten years, by more aggressively coordinating medical care for seniors and the poor, according to new research from health insurer UnitedHealth Group.

The report is aimed squarely at Washington, as leaders on Capital Hill wrangle over debt reduction options ahead of automatic budget cuts due to take effect in two months.

"It's either going to be a debate that's purely focused on cutting people's benefits, or it's going to be a debate that's focused on further cuts to doctors and hospitals," said Simon Stevens, UnitedHealth executive vice president, who chairs the insurer's Center for Health Reform & Modernization.

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But in the report, which Simon co-authored, he argues there should be third strategy: to focus on cutting costs, while improving care.

Under the Affordable Care Act, known as Obamacare, the government has begun to align reimbursement rates more on the quality of care for seniors in Medicare, rather than simply paying fees for each procedure.

The UnitedHealth report contends Medicare could save another $200 billion over the next ten years by more aggressively adopting cost-saving managed care initiatives.

Similarly, the report contends the federal government could save an additional $150 billion by integrating managed care for the 9 million low-income seniors and disabled who are enrolled in both Medicare and need-based Medicaid, and who account for a large share of spending in both programs.

Under Obamacare, roughly 2 million of this so-called dual-eligible population will be enrolled in coordinated care programs this year. But Stevens argues the government should expand the program faster, in order to save more.

"All of these options have got a very strong empirical, practical track record behind them," Stevens said. "We've got a sense of what works and what doesn't work."

—By Bertha Coombs; Follow her on Twitter: @coombscnbc