Putting its money where its mouth is, UnitedHealth is promising to more than double its provider payments--to $50 billion--tied to quality and cost efficiency measures within the next five years, the company announced Wednesday.
UnitedHealth currently spends $20 billion on such accountable care provider contracts, which already have slowed the increase of medical costs and dropped emergency room visits by 17 percent.
With this decision, the country's largest health insurer will likely be accelerating efforts among insurers to move away from fee-for-service payments toward a value-based model, particularly because of its size and existing accountable care contracts, Forbes reported.
United Healthcare already has accountable care contracts with more than 575 hospitals, 1,100 medical groups and 75,000 physicians across the country, according to the announcement.
"This represents a fundamental architecture shift and a new normal for us," Sam Ho, UnitedHealth's chief clinical officer, told the Minneapolis Star Tribune. "Payments and incentives and compensation to care providers will need to be earned going forward … and not just automatically assumed."
He added that the move is part of a bigger permanent shift toward quality care, not only a temporary solution. "This is not a passing fancy for us. The UnitedHealthcare strategy basically has expanded the accountable care concept to an accountable care platform," Ho told Forbes. "The American healthcare system cannot afford to go back."
UnitedHealth offers three types of accountable care contracts for providers. In the most basic level (performance-based program), it pays fees for individual services with some reimbursement tied to quality and cost reductions. The second level (centers of excellence program) bundles payments for specific treatments and/or procedures, while the third level (accountable care program) involves risk sharing and between both UnitedHealth and the provider.