Managed Care is Changing Before Our Eyes

By Mike Segal

Insurers continue to react to health care reform by embracing the aims of better care at lower cost. Within the past few weeks, Aetna (also mentioned elsewhere in this publication) has launched new programs in Connecticut, Virginia and New Jersey that will offer incentives to primary care doctors to oversee a patient’s overall health; Anthem Blue Cross and Blue Shield in Connecticut has announced an innovative, primary care program that will allegedly dump an extra $1 billion or more into primary care; and UnitedHealth Group has announced that it intends to replace its current fee-for-service payment model. UnitedHealth Group, the nation’s largest health insurer, intends to compensate hospitals and physicians for reaching certain quality goals. Currently, only 1%-2% of UnitedHealth Group’s 26 million commercially insured members are covered by its value-based payment contracts. UnitedHealth Group plans to change this statistic at a staggering rate.

By the year 2015, UnitedHealth Group intends to apply value-based payment contracts to up to 50%-70% of its commercially insured members. If physicians meet certain quality metrics, they will receive value-based compensation. If they do not meet those metrics, pay increases could be withheld, according to the proposed plans. Eventually, this contract model will include most high-volume hospitals and medical groups. Other insurers are using similar techniques. By making these changes in payment methodologies, the private health insurers are fundamentally changing their relationship with healthcare providers. They will be increasing their financial support for those providers who help manage their patients’ overall health, eliminate duplicative services, and boost preventative efforts.

While these changes sound great in theory, meaningful improvement in the quality of care provided continues to remain on the shoulders of patients, who need to be active agents in their own healthcare. Patients will need to be rewarded for healthy behavior (or penalized for unhealthy behavior). The truth remains that quality healthcare is limited by the choices patients make when they walk out of a physician’s office.

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