UnitedHealth’s $43 Billion Exit From Fee-For-Service Medicine

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UnitedHealth Group recently announced that it will increase value-based payments to hospitals and physicians to over $43 billion, a 20% increase.1 The UnitedHealth shift from fee-for-service to value-based payments that are tied to outcomes, quality of care and performance is seen as an indicator of changes to come for the health insurance industry.

An executive for a UnitedHealth subsidiary predicts a 20% increase in value-based reimbursement for 2015, in line with previous commitments to increase value-based payments to $65 billion by the end of 2018.

Value-based payments include pay-for-performance programs, medical homes and Accountable Care Organizations which emphasize physicians and hospitals working together to lower costs and improve quality.

Value-based payments are becoming the norm, with the Centers for Medicare & Medicaid Services reporting that 20% of Medicare payments are no longer “fee-for-service” based. Other insurers are expected to provide value-based contracting summaries soon.2


1Japsen, Bruce, “UnitedHealth’s $43 Billion Exit From Fee-For-Service Medicine”,  Forbes, Jan. 23, 2015,http://www.forbes.com/sites/brucejapsen/2015/01/23/unitedhealths-43-billion-exit-from-fee-for-service-medicine/?utm_campaign=Forbes&utm_source=TWITTER&utm_medium=social&utm_channel=Business&linkId=11911098 (last accessed Feb.1, 2015.)