UnitedHealth Group is stepping up its move to pay doctors and hospitals based on measurements of quality and value, rather than the traditional fee-for-service model.
As the Business Journal reports, the insurance company plans to more than double its "accountable care" contracts over the next five years.
UnitedHealth says currently $20 billion of reimbursements to doctors and hospitals are paid through contracts that link payments to measures of quality and cost-efficiency. The company expects that by 2017 that will reach $50 billion.
UnitedHealth has three different types of accountable care programs it's offering providers. Clearly, the industry has not settled on exactly what payment systems of the future will look like. But there's a growing consensus that the old system -- paying doctors a fee for each test and treatment they provide -- is going away.
In UnitedHealth's announcement the CEO of one doctor's group, Ruth Benton of Denver-based New West Physicians, says “Physicians have increasingly decided that the current fee-for-service model is not sustainable in the long term."
Reuters reports Twin Cities-based UnitedHealth has seen its earnings suffer from lower government payments for Medicare services. It plans to expand its accountable care contracts across both employer-sponsored and Medicare or Medicaid benefit plans.