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United Healthcare Who Announced 4th Quarter Profits Just Under a Billion Signs Contract with Tenet Healthcare

Posted Jan 21 2010 2:37pm

As announced profits continue to grow for a Health Insurer who is creating more profits these days from some of their technology interests than they do from policies.  The Ingenix subsidiary has been mentioned many times as being one of the profit arms of the company.  The agreement entails all of Tenet’s 59 diagnostic and imaging centers, in other words the message here is to stay in network and cut costs if you read between the lines as we missed making a billion this quarter, and as the CEO reminds us, “our shareholders will be happy”.  I can’t think of any other business that should be “non profit” and off the stock exchange just for the 2 former reasons, but yet we continue to support this, well maybe it’s Wall Street that really helps support this when you think about it.  Both organizations make big money with complicated algorithmic formulas.  Ask any broker on Wall Street, “it’s all about those algos”. 

The benefit of the contract is to allow Medicare Advantage plan members to use additional in network services.  There’s a group called “Tenet Physicians” and they come into play here too under the contract.  There’s about 400 of them and some of these could possibly be some of the hospitalists you see at their facilities. 

Tenet will be able to provide “cost effective” physicians this way and hopefully good physicians too that have under pressure succumbed to honoring a lower payment contract in order to maintain enough patients to keep their office doors open.  In addition, this puts Tenet in a position to qualify for some financial incentives when they meet their quotas and goals, such as admitting quotas that we now see and hear talked about by doctors and hospitals. 

I was talking to a doctor the other day about hospital quotas and referenced this story from last year in Texas, video from the TMA where a hospital coerced the ER doctors into admitting more patients, and then a few months later the utilization business intelligence software algorithms showed that patients were admitted that should not have been so they fired all the doctors.  This really puts doctors in a very difficult spot as they can’t win for losing here.  Here’s the video from the Texas Medical Association that tells the story.  You know as hard as it is today at times to get your healthcare issues covered is this not a strange paradigm to find out that as a patient you could be admitted when you really don’t need to be there, all because the hospitals are not making admitting number quotas?

Hospitals have to market more than ever now in order to meet the goals sometimes to keep the doors open, they know the dollar amounts they need to meet each month through the use of algorithmic centric business intelligence software so by the minute and by the day, they know where they stand, so if some area like admitting are running lean, they can focus and make what ever decisions they see fit and guide management in the desired direction.  A good example here is from a recent prior post where they discuss the joint venture with MED3000.  Back in May when I posted this, I commented to be on the look out for changes at Tenet.  MED3000 is a subsidiary of Tenet who is a 20% stakeholder here. 

Also in the news lately with Tenet was the announcement to add Cerner EHR systems at many facilities and in the last couple years has sold a few of their hospitals, many here in California.  image

There are organizations that really work to help hospitals cut every corner, like the Ingenix subsidiary of United Healthcare, they have contracts with Sutter Hospitals and the State of Washington on Medicaid (where Walgreens just pulled out) for example to help really drill down those numbers and keep the cost down, but I didn’t find any mention here.  They are vey involved in “behavioral underwriting” and want to get the data what ever way the “legally” can to determine how much cost they are going to lay out on your care.  Also in the news today is a woman writing about her “Golden Rule” policy, one more subsidiary of United Healthcare that does not cover preventive care in the first 3 months.  I thought healthcare was all about prevention, so are we talking out of both sides here? 

The hospital side of this for Medicare Advantage people sounds to be a help for those individuals, but bottom line, how much was cut to allow this to happen with the contract?  We all know today pretty much when new contracts take place it usually goes hand in hand with price reduction. 

United Healthcare just keeps right on rolling with their algorithms that make money for them and hospitals and other entities are left without much choice today.  You can read the full text of the 4th quarter profit results given here on the earnings transcript, worth listening to as it is all about the money.  Think about this when you have your policy rescinded and denied care.   You can make cost effective and necessary changes I agree, but the balance has been lost, when you read the full text of the report, you might see a bit of this with revenue of 87 billion which was up from 81 billion last year…hmmm…sounds like banks having record profits this year.  

It is utterly amazing when you research and see how entangled United Healthcare is in every aspect of healthcare and how they lobby to keep each unit in place.  They make more money from the Ingenix subsidiaries and technology than they do from the straight out insurance side of the business, known fact from their own numbers.  Ingenix is one of the big companies that cashed in big selling our medication history they get from pharmacy benefit managers who also are cutting a pretty fat hog to day, i.e. Medco making 14 billion the 3rd quarter.  This is why we all can’t afford anything with algorithmic complicated formulas that cut out a chunk of change from every transaction made.  BD 

Tenet Healthcare Corp. recently announced it has signed a new multiyear agreement with UnitedHealthcare.

The deal between Dallas-based Tenet, a publicly traded, for-profit hospital system (NYSE: THC), and UnitedHealthcare, a UnitedHealth Group company (NYSE: UNH), took effect Jan 1. Financial terms of the agreement were not disclosed.

Under the new agreement, UnitedHealthcare commercial and Medicare Advantage health plan participants have access to health care services at all hospitals owned and operated by Tenet subsidiaries as well as Tenet’s 59 freestanding diagnostic imaging centers and ambulatory surgery centers. Tenet Physicians Inc., which contracts for the more than 400 physicians employed by various Tenet subsidiaries, also is part of the new agreement.

Tenet Healthcare signs new UnitedHealthcare agreement - Dallas Business Journal:

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