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Medtronic's Value-Based Partnerships are Paying Off in Spades

Medtronic's Value-Based Partnerships are Paying Off in Spades
Medtronic and UnitedHealthcare shared how a unique value-based partnership demonstrated a 27% decline in the rate of preventable hospital admissions for Medtronic insulin pump users compared to patients on multiple daily insulin injections.

Dublin, Ireland-based Medtronic continues to lead the charge toward value-based care, and it's beginning to pay off in a big way. 

One of the company's value-based care partners, UnitedHealthcare, has seen a 27% decline in the rate of preventable hospital admissions for Medtronic insulin pump users compared to patients on multiple daily insulin injections, according to an analysis of more than 6,000 members with diabetes on Medtronic MiniMed 630G and previous generation insulin pumps. And that's just in the first year of the partnership.

The analysis included a mix of members using both standalone insulin pumps and pumps integrated with continuous glucose monitors (CGM).  

In 2016, UnitedHealthcare and Medtronic announced an expanded relationship that gave UnitedHealthcare members with diabetes access to advanced insulin pump technologies and comprehensive support services offered by Medtronic. These offerings currently include the company's most advanced MiniMed 670G hybrid closed-loop system featuring SmartGuard technology and Guardian Sensor 3 - the only system able to automate the delivery of a personalized amount of basal insulin every 5 minutes based on real-time sensor glucose values.

The recently reported first-year results reported today are from the measurement period of July 2016 through June 2017 and do not include use of Medtronic's newest insulin pump, the MiniMed 670G system, which was commercially launched at the end of the measurement period. A growing and compelling body of both real-world and clinical trial data on the MiniMed 670G system demonstrate significantly improved time in range (the percentage of time spent in the optimal glycemic range of 70-180 mg/dL), A1C (a marker of blood sugar control over time) and quality of life for people using the system instead of multiple daily insulin injections to manage their type 1 diabetes. SmartGuard technology is an algorithm with the ability to reduce the risk of hypoglycemia by 44%, stabilize A1C at recommended levels, and minimize blood sugar variability, Medtronic noted.

"These positive results provide further evidence of the benefits of both automated insulin delivery and of value-based healthcare models," said Hooman Hakami, executive vice president and president of Medtronic's diabetes group. "Through this unique partnership, Medtronic and UnitedHealthcare have demonstrated a commitment by both organizations to prioritize innovation that improves health outcomes and lowers healthcare costs."

Quality of care and cost will continue to be closely evaluated over the duration of the relationship, providing additional opportunities for more people enrolled in UnitedHealthcare plans to better manage their diabetes and for quality care to be delivered in a more cost-effective manner, Medtronic said.

"These results show that patients with diabetes can benefit from using insulin pumps and comprehensive support services, thereby increasing the quality of the care they receive and reducing hospital admissions as well as costs," said Peter Pronovost, MD, the chief medical officer at UnitedHealthcare. "The first-year results are encouraging, and we will monitor patients using Medtronic pump therapies to ensure we continue to see improved quality of care, fewer hospitalizations, and lower costs."

Care providers nationwide are showing strong interest in a shift to value-based care. UnitedHealthcare's total payments to physicians and hospitals that are tied to value-based arrangements have grown in the last three years to $65 billion. By the end of 2020, UnitedHealthcare expects that figure to reach $75 billion.

Agreements like this are also paying off for the company. Earlier this year, Medtronic CEO Omar Ishrak talked about how these partnerships are beginning to positively impact the company's quarterly earnings

"I know I have spoken a lot about value-based healthcare, but I'm particularly pleased to see this translate into real numbers, which have real differentiating value for Medtronic," CEO Omar Ishrak said during Medtronic's third-quarter earnings call.

Another example of Medtronic linking its products directly to an outcome is the Tyrx absorbable antibacterial envelope, a mesh device used to hold a pacemaker and ICD in a stable environment and release antimicrobial agents over a period of seven days when the chance of infection related to surgery is especially high.

Michael Coyle, president of Medtronic's cardiac and vascular group, said more than 1,000 hospitals are now participating in the Tyrx program, which is designed to tie patient outcomes to the cost.

"Tyrx is not separately reimbursed and so by doing this we have been able to create a guarantee that basically is very appealing to accounts who know that they will obviously have a patient who is significantly impacted by an infection," Coyle said. "They will lose money at the provider level, at the hospital level, because of that redo procedure that's required and of course the payer is now out two separate procedures for payments."

Coyle said the program is broadly seen as a "win, win, win," for the patient, the hospital, and the company.

"But it also allowed us, by being able to see the appeal of this approach, to then apply it to numerous other parts of our business, including reductions in heart failure re-hospitalization with the adaptive CRT, a feature of our [cardiac resynchronization therapy] devices," Coyle said.

He said another example of a value-based care program at Medtronic is the company's Smart Shot Performance Guarantee program, which basically pays when patients come back with inappropriate shots from an implantable cardioverter defibrillator. 

Coyle said the company also has a drug-coated balloon reintervention prevention program that ties the cost of care to patient outcomes. 

"And then our cryoablation business, basically we have a program that pays when patients come back with either repeat hospitalizations for [atrial fibrillation], or for repeat procedures with the ablation," he said.

Most of these programs are only a quarter or two old, Coyle said, and the company has more than $650 million of revenue, mostly in the United States, tied to these programs.

"We are increasingly partnering with additional stakeholders and the healthcare value chain including payers, providers, and other interested organizations to lead the change for FIFA service models to value-based programs," Ishrak said.

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