UnitedHealth’s Latest Blow To Fee-For-Service Medicine: 6 Percent Off Doctor Costs

As the Affordable Care Act, government and private insurers push doctors and hospitals away from fee-for-service medicine, the nation’s largest insurer, UnitedHealth Group (UNH) says it’s seeing more results.

The health insurance giant, which is shifting tens of billions of dollars toward linking doctor pay to efficiency and quality, said in a new report that its medical home programs in four states saved 6.2 percent of medical costs “on average, including the cost of the intervention.”

UnitedHealth has been among the most aggressive health insurance companies moving doctors and other providers away from the traditional fee-for-service model, which pays providers on a per treatment or procedure basis that generates volume and often higher costs. Patients can also be subject to unnecessary or excessive treatment.

Report Highlights

• The report looked at medical homes the insurer contracted within Arizona, Colorado, Ohio and Rhode Island between 2009 and 2012
• Total of 40,000 health plan enrollees
• An average third year net savings of 6.2 percent of medical costs
• Every dollar invested in care coordination activities produced $6 in savings (ROI of 6 to 1)

UnitedHealth earlier this year said it expects its “accountable care” contracts to total $65 billion by the end of 2018 from $30 billion today. In addition, Blue Cross and Blue Shield plans said they are spending more than $65 billion annually, or about 20 percent of the medical claim dollars they pay on “value-based” care.

“These approaches, if embraced and adopted at scale can meaningfully increase primary care capacity, improve quality, and reduce health care costs,” said Cory Alexander, executive vice president for external affairs at UnitedHealth Group.

The report is the latest signal to doctors and hospitals that insurers aren’t about to abandon accountable arrangements that pay providers to keep patients healthy and out of more expensive inpatient settings. Read the full 44-page report.

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Source: Patriot Labs | Read the original Forbes article Article

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