Plan Sponsors Buy Into UnitedHealthcare’s Surest Concept

UnitedHealth Group’s Surest brand has become a hot product in recent months, with sales of the alternative benefit design accounting for one third of the health care giant’s new commercial business, according to some accounts. UnitedHealthcare, the firm’s managed care arm, pitches commercial clients on Surest by promising lower costs and higher quality — without sacrificing a broad network.

Alternatives to conventional PPO plans are more appealing than ever for commercial insurance plan sponsors, who have struggled with sharp medical cost and premium increases in recent years. But restrictive narrow network plans are often unpopular with plan members, and payer stakeholders have begun to shy away from models that shift costs to members.

Todor Penev, commercial analytics leader at Aon plc, tells AIS Health that the benefits consulting firm is “seeing increased interest from employer plan sponsors in moving away from high deductibles and incentivizing high-quality provider care and primary care through multiple mechanisms: lower cost-shares and copays, improved access and digital tools and navigation, network design. Generally, these strategies aim to improve utilization of high-value providers such as primary care.”

Conventional PPO plans often have flat out-of-pocket rates for all in-network services in a given category regardless of quality metrics. The breadth of a conventional PPO’s network is often a key selling point in an insurer’s bid with a plan sponsor. Alternatives to conventional PPOs, by contrast, typically have a narrower network undergirded by some type of quality assessment, direct contracting or value-based purchasing. Those alternative plans can have downsides for members. They may force members to leave a provider with whom they have a strong relationship, or members may forgo care altogether if they can’t afford out-of-pocket costs.

Given those dynamics, insurers’ commercial books have a lot to gain by taking a middle road that steers members toward high-value providers for routine care while leaving networks fairly broad. That’s the premise behind the Surest vertical, which according to UnitedHealthcare had notable success in controlling costs using such a model.

Surest White Paper Claims Big Savings

A white paper paid for by UnitedHealthcare and prepared by Aon found that, compared to a control group of Aon clients’ plans, studied Surest plan members had an aggregate $365 lower spend per member per year in 2021 and $412 lower spend PMPY in 2022. (Penev was the lead author of the white paper.)

The white paper attributed savings primarily to “both medical and drug allowed claims being lower than control groups,” with medical claim spending at 96.7% of the market rate and drug allowed claims at 78.8% of the market rate. Specifically, spending on professional services and specialty pharmacy were the reasons for the savings: “Lower professional spend” amounted to 93.1% of the market rate, while “lower specialty spend in pharmacy” amounted to 71.5% of the market level in 2022. Both figures could be evidence of successful network design and site-of-care management. Directing patients to specialists with favorable contracts would generate savings, as would directing specialty drug patients to infusion centers that do not charge facility fees.

Allison Richards, CEO of Surest, tells AIS Health, a division of MMIT, that “because all Surest members have first-dollar coverage for covered health services without having to first meet a deductible, they are incentivized to seek out high-value care through our member app and provider search function.”

Richards adds that the Surest plan and a control group “had identical demographics and health conditions.” Indeed, Richards says, “while numerous differences in use of specific services were identified, Surest members are more likely to receive appropriate care for their needs in a setting that is right for their needs.”

Plan Sponsors Applaud Goals, Question Means

Plan sponsor stakeholders seem to be taking notice of the results, although they want to see more information on Surest from third parties.

“I’m impressed” by the results in the Aon-Surest white paper, says Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions. That said, “any time you have a white paper that is funded by or written by the organization that is selling it [the studied product], you should take it with a grain of salt.”

Dan Mendelson, CEO of Morgan Health, has a similar view, although he tells AIS Health he hasn’t had the opportunity to “evaluate” Surest in depth, “and we don’t use it.”

Like Gremminger, Mendelson says that there are good reasons to be skeptical of the figures presented in the Aon-Surest white paper.

“I look forward to seeing some of the more careful evaluations of this product relative to peers,” Mendelson says. The Aon-Surest methodology compares Surest to a set of proprietary Aon claims data. Mendelson says that it seems “they’re comparing, generally, a raw fee-for-service type approach that does not have any concept of value” to the Surest plan.

“The comparison to the broad Aon-Hewitt client frame may not be exactly the comparison that any given employer might want to use,” Mendelson says.

Penev says that Aon in the white paper “found lower total cost of care for the Surest book of business compared to typical employer self-insured plans in 2021 and 2022, even though Surest benefits offered richer plan designs (88% actuarial value for Surest) relative to the comparison group (83% actuarial value for typical employer plans).”

Despite his critique of the white paper, Mendelson says Surest has “a good dashboard of information so that [members] can make good choices. We like that — we like the way they articulate that,” especially through a mobile app.

Indeed, the Surest mobile app is one of the main selling points of the plan. According to a Surest video, the app displays the copay a member can expect to pay on a map of their region, allowing members to weigh cost and transportation simultaneously in one interface.

Gremminger, citing his own conversations about Surest products with UnitedHealthcare staff, says that the copay amounts displayed in the Surest app are weighted to favor UnitedHealthcare’s proprietary quality evaluations and value-based contracts. In other words, members will pay a lower copay at a care site that, according to Surest and Optum, will deliver more bang for their buck, encouraging the member to go to a provider that will save the plan money.

“As I understand from talking to them [UnitedHealthcare],” Gremminger says, the app will direct members toward “for instance, primary care physicians that don’t automatically and systematically drive people towards higher-cost sites of care. That’s taken into account. You can have two primary care docs that both have overall high quality, but if one tends to refer a lot of patients to specialists and another doesn’t, that second one will be on the happier end of the Surest see-saw.”

Gremminger says the variable copay may succeed where other steering methods have failed.

“The differential copay is the big difference. You could do the same exact model — it’s still web-based, or it’s still app-based. You have all the quality information out there, you give people all the choices. If you don’t have differential copays, I think you probably have a very different experience [as a health plan, because] people would still end up defaulting to what they know, or whoever’s closest,” he says. In addition, Gremminger says, Surest’s differential copay steering is more appealing than a narrow network because the Surest model is less “paternalistic” and “heavy handed” to members.

Of course, Gremminger says, “a lot of this relies on some trust. We have to sort of trust UnitedHealth Group, that they are doing this the right way, and that there aren’t things within the [copay pricing] algorithm that are unknown.”

United Pushes for Surest Signups

The number of UnitedHealthcare members enrolled in Surest plans is difficult to track, but there is evidence the segment is growing. In its first quarter 2024 earnings press release, UnitedHealthcare reported membership growth of 2 million across all books. According to a March 31 10-Q filing, UnitedHealthcare had over 29.4 million commercial members. The 10-Q also states that “risk-based” membership was over 8.5 million, while “fee-based” commercial membership was over 20.8 million. It is not clear which category Surest enrollment falls into. In April 24 notes to investors, Wells Fargo analyst Stephen Baxter and Barclays analyst Andrew Mok both noted that UnitedHealthcare executives said Surest enrollment accounted for one third of new commercial membership.

UnitedHealthcare, meanwhile, did not provide AIS Health with specific Surest enrollment figures when asked. However, a spokesperson tells AIS Health that “UnitedHealthcare offers the Surest health plan to employers with 51 or more employees nationwide with self-funded health plans and 51 or more employees in 37 states with fully insured health plans.”

In addition, the spokesperson said, “by 2023, the number of UnitedHealthcare’s largest employer customers offering Surest grew to one in nine,” and as of January 1, “one in five do so.” The spokesperson added that “nine out of 10 [enrolled] members stay with Surest year-over-year.”

Aon senior vice president Erik Bagin told UBS analyst A.J. Rice on May 24 that UnitedHealthcare is selling Surest aggressively.

“When you go to open enrollment, employees see an HDHP with an HSA, a PPO, and then an alternative plan with Surest. Surest caught on the most because [UnitedHealthcare] [was] touting it to everyone last year and this year and [UnitedHealthcare] has a large sales force. That’s the difference between Surest and other alternative plans,” Bagin told Rice.

Gremminger says Surest’s momentum makes sense from a purchaser perspective.

“Every employer I know would rather give employees choice over no choice,” he says. “Some employers index more on choice than others — some employers are much more comfortable with a highly directive, narrow-network kind of plan. But generally, most employers would rather give employees choice than no choice, because that’s what employees want.”

“It’s unbelievable how resistant the employer markets have been to any kind of meaningful value-based product,” Mendelson says. “Directionally, this [Surest] is exactly where the system needs to go, where you have a value-based approach [and] you’re communicating clearly with employees and dependents about cost and the implications of their actions.”

“I sound like I’m a big fan of this,” Gremminger says. “And I think I am — not necessarily because of this specific product, but because of what it’s trying to accomplish.”

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