UnitedHealth still buying

Remember how patients were upset over insurers getting their medical records in order to exclude high-risk people from coverage? Now it's the doctors' turn, and they're going to be just as angry.

UPDATE: Ingenix has a response to this post below.


The key to growing insurance profits under health reform, and even without it, lies in pushing the supply side of health care toward greater efficiency.

Ever since UnitedHealth got this message, its Ingenix tech unit has been on a buying spree, aiming to give the company the kind of control over costs HMOs traditionally enjoy.

The latest to succumb to this tech roll-up is A-Life Medical, a San Diego firm specializing in health coding. Terms were not disclosed.

A-Life automates the process of turning doctors' orders into codes leading to payment. It saves doctors on salary and assures maximum payment.

The deal has actually been in process for a year, ever since Ingenix and A-Life began cooperating on the technology.

For UnitedHealth, having access to automated coding technology means it can check pay-outs at the point where they're ordered and prevent bill padding. It's like having every customer physician's Electronic Medical Record.

This is the 8th tech acquisition Ingenix has made on the last 18 months. Some credit the interest to the seriousness with which the President has pursued health reform. But another motive is the fact that United's previous plan for cost controls was tossed by states attorneys general in January, 2009.

Ingenix had been building savings with a database of "reasonable" charges that were as much as one-third less than were actually being charged, leaving doctors and hospitals scrambling after patients for the rest.

The new Ingenix will have a much deeper system, with software that can watch medical charges from the time they're initiated, through the payment process. The software also gives UnitedHealth a picture of which doctors and hospitals are efficient, so it can seek them out for its network and exclude those which don't meet its standards or won't use its tools.

None of this is controversial, yet. But controversy seems just a matter of time. Remember how patients were upset over insurers getting their medical records in order to exclude high-risk people from coverage? Now it's the doctors' turn, and they're going to be just as angry.

UPDATE: Kyle Christensen of Ingenix writes with the company's take on its strategy. I welcome discussion on both what I originally wrote and what he offers here:

Statement: "For UnitedHealth, having access to automated coding technology means it can check pay-outs at the point where they're ordered and prevent bill padding. It's like having every customer physician's Electronic Medical Record."

Reality: Ingenix provides information, technology and services to nearly 6,000 hospitals and over 250,000 physicians. The company is operated independently from UnitedHealthcare and other UnitedHealth Group subsidiaries. We place the highest priority on ensuring the security and privacy of data our clients entrust to Ingenix- this is essential to our ability to serve this broad set of stakeholders.

UnitedHealthcare and its sister companies cannot access data - medical bills, patient records or otherwise - that belongs to our hospitals or physician practice clients.

Statement: "The new Ingenix will have a much deeper system, with software that can watch medical charges from the time they're initiated, through the payment process. The software also gives UnitedHealth a picture of which doctors and hospitals are efficient, so it can seek them out for its network and exclude those which don't meet its standards or won't use its tools."

Reality: As previously stated, Ingenix serves nearly 6,000 hospitals and more than 250,000 physicians, and we protect the security and privacy of their data from improper use.

The software does not give UnitedHealth a picture of provider efficiency or performance. UnitedHealth Group and its subsidiaries do not have access to hospital and patient information through Ingenix solutions and services.

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