Monday, July 22, 2013

One way to modernize our health care system…change how we pay

Paying a fee for a service is typically how we pay.  Many of us pay to have our hair cut and colored, our cars washed or repaired, and even when our time is crunched, we pay for our bi-weekly “mani-pedi.”  And it makes sense to pay a fee for each of these services.

But it doesn’t make sense in health care.

Most medical care is currently paid for using the fee-for-service model: each time someone visits a physician or undergoes a test, the insurance company or individual is billed.  But the flaw in fee-for-service payments for health care is that medical professionals are not paid for the best outcome – a healthy patient – but for individual services performed. 

“Physicians have increasingly decided that the current fee-for-service model is not sustainable in the long term, but they want payment models that are more customized to meet their specific needs,” said Ruth Benton, CEO of Denver-based New West Physicians. “One size certainly doesn’t fit all, and UnitedHealthcare has worked with us closely to create a model that provides financial incentives and infrastructure support for delivering evidence-based high-quality care.”

Yes, UnitedHealthcare is moving away from contracts that reward the volume of care and replacing them with contracts that reward the value of care.

Currently, more than $20 billion of our reimbursements to hospitals, physicians and ancillary care providers are paid through contracts that link a portion of the reimbursement to quality and cost-efficiency measures.  But as you may have heard in the news recently, we are planning to more than double that number to $50 billion by 2017 as more care providers join the transition to accountable care contracts that reward quality and value-based health care.

UnitedHealthcare’s accountable care strategy, which includes three categories of programs, focuses on achieving the triple aim to improve population health outcomes, patient experience, and reduce medical costs. Early results show promising trends in improving evidence-based care and quality outcomes while reducing costs.  All programs are showing promising results:

Performance-based Programs have demonstrated improved quality and cost-efficiency outcomes such as a 14% reduction in the use of non-Tier 1 prescriptions and a 25% reduction in the use of out-of-network laboratory services.

The transplant Centers of Excellence program has demonstrated a 25% reduction in average length of hospital stays for transplant patients, a 16% reduction in transplants due to applying evidence-based care approaches and improved transplant survival rates at Centers of Excellence.

Accountable Care Programs have proven results that demonstrate improved health outcomes, such as a 4 to 4.5% reduction in medical cost trend, a 16% reduction in emergency room visits and a 17% reduction in inpatient days, in addition to clinical quality results trending above program targets on 95 percent of all measures

Changing the way we pay our physicians and health centers doesn’t mean we value them any less,  it just means we want to pay them more for the value of care they provide.

For more information about how UnitedHealthcare is modernizing our health care system by helping to transform the way health care is delivered, paid for and rewarded, visit

1 comment:

  1. We haven't had a fee-for-service model for decades. Most health care is paid for by a subscription model (insurance).

    People pay a monthly premium. Those with political connections who know how to use the system overload it. Those without political connections are intimated from receiving basic care.

    I've been involved in various methods to cut costs. Since insurance companies can't decrease the service received by people with political clout. Most accountability schemes end up simply putting more barriers between low income people and health care.

    If we wanted to improve care, we could give lower income people greater direct control over their health resources and revive the fee-for-service model.

    Currently, there is only one hospital in the US that has returned to the fee-for-service model and they providing lower cost care than all the health care plans on the subscription model.