The projections are a significant step up over the company's $242 billion in projected revenues for the current year.
Coupled with a series of presentations about the company's business strategy, UnitedHealth Group said this week that it expects its revenues to top $260 billion next year, continuing a pattern of year-over-year growth that has made it a healthcare industry trendsetter.
That's a significant increase over the company's $242 billion in projected revenues for 2019, including income from both its provider and insurer operations: Optum and UnitedHealthcare.
The projections for 2020 include revenues of $260–$262 billion, net earnings of $15.45–$15.75 per share, and adjusted net earnings of $16.25–$16.55 per share.
Long-term, the company expects its earnings per share to keep growing at an average 13%–16% per year, with about two-thirds of that growth driven by operations and one-third coming from capital deployment, according to presentation materials released Tuesday. Those earnings could, of course, be affected by a wide range of market forces, including the condition of the broader economy, regulatory changes, health policy funding, and more, the company's investor materials note.
"Specifically in 2020, as it has in years prior, the return of the Health Insurance Tax creates noticeable earnings variability," the documents state.
The new brand identity aims to highlight the system's two prestigious academic medical centers.
Boston-based Partners HealthCare announced a major rebranding campaign last week, with plans to shed the name the nonprofit health system has used since its formation 25 years ago.
President and CEO Anne Klibanski, MD, said the rebranding is part of an effort to "better articulate what we offer patients and more closely reflect the vision for our system."
"As we build both our system strategy and our new identity, we will focus on how we leverage the full range of capabilities of our world-class clinicians and staff at our academic medical centers, renowned specialty hospitals, our community hospitals and our community sites," Klibanski said in a statement. "Our goal is to have an even greater impact on our patients and the health of the communities we serve locally, nationally and globally."
Some people familiar with the name-change deliberations questioned whether the decision could resolve the system's historical tensions, as Priyanka Dayal McCluskey reported for The Boston Globe.
"It's hard to say how we, the public, or Massachusetts residents are truly better off from the rebranding," Tufts University School of Medicine professor Paul Hattis, MD, JD, MPH, told the Globe.
With the rebranding announcement, Klibanski also outlined five key themes for the system's five-year strategy:
To reinforce in the system's status in the minds of patients as "the 'go to' place for care" and "develop cross-academic medical centers of excellence."
To consolidate and expand the system's impact on health, both nationally and internationally.
To build on the system's innovations in diagnostics, therapeutics, devices, and data analytics.
To focus on a value-based model that delivers affordable primary, secondary, and behavioral health care in the community.
To further serve communities by working to address a leading community health issue.
"Introducing our new name and implementing our strategy will require careful planning and collaboration," Klibanski said. "Our next step is to actively engage in a thoughtful process for how we best invest our dollars, always keeping patients and clinical care our top priority."
The agency published an RFA that outlines how the global and professional options will work.
Seven months after announcing a package of new value-based payment models to transform primary care, the Centers for Medicare & Medicaid Services released a request for applications (RFA) on Monday that details how organizations can apply to participate in two of the three Direct Contracting (DC) model options.
There were three types of DC arrangements in the agency's announcement last spring: Professional, Global, and Geographic. But the RFA pertains only to the Professional and Global options.
The DC options, slated to begin in 2021, are voluntary payment models that aim to lower costs and maintain or improve quality for Medicare fee-for-service beneficiaries through risk-based contracts. They build on the lessons learned from Accountable Care Organizations (ACOs) and "also leverage innovative approaches from Medicare Advantage (MA) and other private sector risk-sharing arrangements," CMS said.
Premier Senior Vice President of Public Affairs Blair Childs said his organization is pleased to see a model with features Premier has been pushing CMS to adopt.
"This includes allowing primary care capitation using Medicare Advantage rates in the regional benchmark and global budgets for providers who are ready for greater risk," Childs said. "We're also encouraged that the models will provide a quality bonus, coordinate with PACE and Medicaid and focus on care for complex patients."
"We look forward to working with our members to implement this model, which could offer providers an offramp from the fee-for-service treadmill," Childs added.
"Given the robust attention ACOs and the broader health community have given Direct Contracting, NAACOS looks forward to better understanding important details of the program released today," Gaus said, adding that the association is pleased with some of the details it has seen thus far.
The RFA, which was released by the Center for Medicare & Medicaid Innovation (CMMI), also drew applause also from America's Physician Groups (APG) President and CEO Don Crane, JD.
"This is yet another step by CMMI in affirming its commitment to ensuring that patients have access to the high-quality, accountable, and coordinated care physician groups have been providing for decades," Crane said.
"Risk-sharing arrangements properly incentivize physicians to provide high-value, high-quality healthcare to the patients and communities they serve," Crane added. "We look forward to continuing to work with CMMI to put more tools in the toolbox to help physicians who are moving from volume to value."
The agency reopened the submission window for those that didn't turn in a nonbinding letter of intent last August. The new deadline is December 10.
The application period will be open until February 25 for those that wish to take part in the implementation period, according to the agency. The application for those that wish to start in the first performance period will be available in spring 2020, the agency said.
The announcement comes a month after CMS released a separate RFA for both of the Primary Care First (PCF) model options, which are now also set to begin in 2021.
If the administration is successful in its efforts to topple the ACA through litigation, it would undercut this and other parts of the administration's own healthcare policymaking agenda. (A spokesperson for CMS told HealthLeaders last spring that the agency would continue to champion value-based transformation efforts "in the context of any health reform effort.")
The plaintiffs claim Trump administration overstepped its legal authority in approving work requirements for Medicaid expansion beneficiaries.
Some of the same people who have successfully challenged Medicaid work requirements in other states are helping beneficiaries in Michigan challenge that state's requirements as well.
Four beneficiaries filed suit Friday, with help from the National Health Law Program (NHeLP), the Michigan Center for Civil Justice, and the Michigan Poverty Law Program in the U.S. District Court for the District of Columbia.
The suit challenges the federal government's 2018 approval of a waiver for the Healthy Michigan Plan, which authorized the imposition of work requirements on beneficiaries who gained coverage through the state's Medicaid expansion under the Affordable Care Act. The plaintiffs claim the Trump administration overstepped its legal authority.
"This case challenges the ongoing efforts of the Executive Branch to bypass the legislative process and act unilaterally to fundamentally transform Medicaid, a cornerstone of the social safety net," the complaint states. "Purporting to invoke a narrow statutory waiver authority that allows experimental projects 'likely to assist in promoting the objectives' of the Medicaid Act, the Executive Branch has instead effectively rewritten the statute, ignoring congressional restrictions, overturning a half-century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country."
Proponents of work requirements, including Centers for Medicare & Medicaid Services Administrator Seema Verma, have argued that work requirements promote self-sufficiency and help beneficiaries rise out of poverty.
U.S. District Judge James Boasberg, however, has rejected the government's argument in lawsuits challenging the approvals of Medicaid work requirements in Kentucky, Arkansas, and New Hampshire. Three appellate judges who heard oral arguments last month as they review Boasberg's decisions sounded similarly skeptical of the Trump administration's position.
Boasberg is also overseeing a challenge to Medicaid work requirements in Indiana, so this Michigan case is the fifth of its kind. Online court records indiciate that the latest case has yet to be assigned to a judge.
All five of these lawsuits have involved NHeLP, which works with local groups and beneficiaries in each state to challenge the new rules.
The reduction has cost each hospital that participates in the Medicare program an average of $200,000 per year, the suit alleges.
A lawsuit filed Tuesday against Health and Human Services Secretary Alex Azar claims the Trump administration has been under-reimbursing hospitals for inpatient services by about $840 million per year.
The complaint, filed by 622 hospitals, claims Congress gave HHS the authority to reduce Inpatient Prospective Payment System (IPPS) reimbursement rates to recoup prior overpayments, up to about $11 billion, in fiscal years 2014-2017. The law explicitly prohibits the Centers for Medicare & Medicaid Services from carrying those reductions beyond fiscal year 2017, but the Trump administration did so anyway, continuing an unauthorized 0.7% rate reduction in fiscal years 2018 and 2019, the lawsuit alleges.
The reduction has cost each hospital that participates in the Medicare program an average of $200,000 per year, which totals about $124.4 million per year for the plaintiff hospitals and about $840 million per year for all hospitals that participate in Medicare, according to the suit.
The hospitals accuse CMS of conflating three different laws "to justify its unlawful conduct, which resulted in massive savings for CMS and significant financial detriment to the Plaintiffs."
The legal wrangling over IPPS comes as hospitals press the administration on its approach to the Outpatient Prospective Payment System (OPPS) as well. Even after a federal judge vacated the site-neutral payment provisions of OPPS for 2019, the administration moved forward with its site-neutral policy for 2020—so hospitals asked the court to toss the 2020 rule as well.
A spokesperson for CMS told HealthLeaders Friday that the agency does not comment on matters of pending litigation.
Editor's note: This story was updated Friday afternoon to note the fact that CMS declined to comment.
The transaction closed after the parties agreed to sell off a major psoriasis drug.
Bristol-Myers Squibb has finalized its $74 billion acquisition of Celgene Corp., forming an even larger biopharmaceuticals giant, the company announced Wednesday.
Regulators signed off on the transaction, which was first announced in January, after Celgene agreed in August to sell its psoriasis drug Otezla to Amgen for $13.4 billion. Amgen announced Thursday that the divestiture is complete.
Bristol-Myers Squibb struck the Otezla deal to alleviate federal regulators' concerns over a competing treatment the company is already developing, as Reuters reported.
"This is an exciting day for Bristol-Myers Squibb as we bring together the leading science, innovative medicines and incredible talent of Bristol-Myers Squibb and Celgene to create a leading biopharma company," said Bristol-Myers Squibb Chairman and CEO Giovanni Caforio, MD, in a statement Wednesday.
"With our leading franchises in oncology, hematology, immunology and cardiovascular disease, and one of the most diverse and promising pipelines in the industry, I know we will deliver on our vision of transforming patients' lives through science," Caforio added. "I am excited about the opportunities for our current employees and the new colleagues that we welcome to the Company as we work together to deliver innovative medicines to patients."
Related: Celgene Sells Otezla to Amgen for $13.4B, Bristol-Myers Squibb Announces
The administration lacked legal authority to impose the rule, the judges wrote.
San Francisco has prevailed in the lawsuit it filed last spring against the Trump administration over a so-called "conscience rule" that sought to bolster healthcare providers' right to abstain from assisting in the performance of services they find objectionable for religious or other reasons.
U.S. District Judge William Alsup in the Northern District of California set the rule aside Tuesday, saying Health and Human Services didn't have the legal authority to impose it. He's the second federal judge to come down against the rule.
"Under the new rule, to preview just one example, an ambulance driver would be free, on religious or moral grounds, to eject a patient en route to a hospital upon learning that the patient needed an emergency abortion," Alsup wrote. "Such harsh treatment would be blessed by the new rule."
Earlier this month, U.S. District Judge Paul Engelmayer in the Southern District of New York vacated the rule in a decision on consolidated lawsuits. The rule, he wrote, contradicts both Title VII and the Emergency Medical Treatment and Active Labor Act (EMTALA), and the way HHS finalized it violated the Administrative Procedure Act in "numerous, fundamental, and far-reaching" ways.
U.S. Sen. Ben Sasse, R–Nebraska, called Engelmayer's decision "absurd mush" and encouraged the Trump administration to defend its rule all the way to the Supreme Court.
The two decisions are ripe for appeal. Engelmayer's decision would be appealed to the Second Circuit, and Alsup's opinion would be appealed to the Ninth Circuit. If the appellate courts were to reach differing conclusions, that could increase the likelihood of this dispute making its way to the Supreme Court.
The prominent leader's commitment to social determinants of health 'will be woven into medical education at the new school.'
Oakland, California–based Kaiser Permanente will name its new medical school after late Chairman and CEO Bernard J. Tyson, who died unexpectedly in his sleep earlier this month.
The decision was announced Monday during a memorial service in San Francisco. The school, which is slated to welcome its first cohort of medical students next summer, will be in Pasadena.
"Bernard spent his entire career focused on ensuring greater access to affordable, high-quality health care for all, and I know the school that now bears his name will help carry this legacy into the future," said interim Chairman and CEO Gregory A. Adams in a statement.
Holly J. Humphrey, MD, board chair for the Kaiser Permanente Bernard J. Tyson School of Medicine and president of the Josiah Macy Jr. Foundation, said the board decided to honor Tyson's backing for the school, his courageous leadership, and his commitment to equity and diversity.
"These same values are at the core of the mission and vision of this school and will serve to inspire current and future generations," Humphrey said.
Plans for the med school were announced in 2016, with the stated goal of reorienting physician education around five pillars: patient-centered care, population health, quality improvement, team-based care, and health equity. The school began accepting applications earlier this year and announced that it will waive all tuition for the full four years of schooling for its first five classes.
Tyson worked for Kaiser Permanente more than three decades. He was named CEO in 2013 and chairman in 2014. During his tenure, he earned a reputation as a proponent of health systems investing in social determinants of health, through housing, transportation, and food initiatives, said Ed Pei, chair of the board executive committee of Kaiser Foundation Health Plans and Hospitals.
"Bernard drove us as an organization to take a stake in housing and food security, clean air, safe recreational space, and reducing gun violence, among other concerns," Pei said. "These and other topics will be woven into medical education at the new school, and that consciousness among generations of newly minted physicians will be a lasting part of Bernard's legacy as a national health care leader."
The health system has already shed 14 of the 38 hospitals it had when it formed less than four years ago.
Quorum Health, based in Brentwood, Tennessee, had 38 hospitals when it a spun off from Community Health Systems (CHS) in spring 2016, but the for-profit chain could have as few as 20 hospitals left by the time it turns four years old.
President and CEO Bob Fish told analysts and investors this month that Quorum, which has already closed two of its hospitals and sold 12 others, is working on up to four more hospital divestitures that could close by the end of 2020's first quarter, as the Nashville Post's Geert De Lombaerde reported.
Once it became clear that the Quorum spin-off was severely underperforming expectations, investors began asking pointed questions. Quorum's leaders formally responded to those investors with a letter in 2017 that acknowledged several reasons to question the "operational competence" of CHS leaders who backed the spin-off.
Quorum shares had been trading for more than $3 apiece at the beginning of 2019, but that price has fallen by about 80% this year, to $0.76 when markets closed Monday.
Moody's Investors Service downgraded Quorum's ratings Tuesday, with a negative outlook. The downgrade "reflects growing uncertainty as to whether Quorum's divestiture plan will be completed in the months ahead and when
the company's earnings will rebound," Moody's said.
Any earnings improvement will depend heavily on both the divestitures and Quorum's efforts to improve its revenue cycle management, the ratings agency said.
The settlement follows a separate criminal conviction, for which the ex-exec has already been sentenced to prison.
Sandra Haar, the founder and former CEO of Horisons Unlimited, a nonprofit chain of rural health clinics in California's Central Valley, has agreed to sell 13 pieces of real estate to settle allegations that she submitted millions of dollars in false claims to the state's Medicaid program, Medi-Cal.
The civil settlement follows Haar's criminal conviction for fraud, which resulted in a five-year prison sentence earlier this month, according to the U.S. Department of Justice.
The properties to be sold include some of the former clinics that Horisons Unlimited had operated, plus several residences, the DOJ said.
"The purpose of public insurance programs like Medi-Cal is to provide essential services to those who need them, not to enrich bad actors who submit false and fraudulent claims," said U.S. Attorney Scott McGregor W. Scott in a statement. "We will continue to safeguard the integrity of these programs and the public fisc by recovering public dollars obtained through fraud."
Under the settlement with the Health and Human Services Office of Inspector General, Sandra Haar and a for-profit company she controlled won't be allowed to participate in federal healthcare programs for 20 years, and Horisons Unlimited Chief Financial Officer Normal Haar will be barred from the programs for 15 years.
