In the latest sign that insurers are rejecting the traditional fee-for-service payment model, UnitedHealth said it would start tying doctors' fees to quality outcomes. WellPoint and Aetna both have announced similar payment overhauls.
UnitedHealth is launching new "value-based" provider contracts that offer financial rewards for doctors who deliver high-quality and efficient care, including meeting such goals as avoiding hospital readmissions and ensuring patients get recommended screenings, reported The Wall Street Journal.
The nation's largest insurer already began adjusting its provider payment system on a limited scale, affecting less than 2 percent, but it intends to cover 50 percent to 70 percent of its commercially insured members by 2015, the WSJ noted.
"This is not just an exercise or a pilot," UnitedHealth's Chief Clinical Officer Sam Ho told the WSJ. "It represents a significant change in the architecture of our compensation models for doctors and hospitals."
The program also will realize significant savings for UnitedHealth, as much as twice as much as it would spend on incentive payments for doctors because patients will be healthier, according to Bloomberg. The company projected per member, per month savings from anywhere between $1.35 and $7.80, reported the WSJ.
To help implement changes to its payment system, UnitedHealth's services business Optum will sell providers software, data and consulting services. "This changes the business model, changes the reward and payment system for better care and better health at lower cost," Ho told Bloomberg. "There is coordination between our programs and strategies so that Optum knows how to provide services."