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United Health spends $64 Billion for better healthcare

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UnitedHealth Group, the nation’s largest health insurance company, says it’s paying nearly 60% of its reimbursements – or $64 billion – via value-based care models that are rapidly replacing fee-for-service medicine in the U.S.,according to the company.

Value-based pay is tied to health outcomes, performance and quality of care of medical-care providers who contract with insurers via alternative payment vehicles like accountable care organizations (ACOs), a delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs. In these models, doctors and hospitals take on more risk that they can streamline the care, improve quality and eliminate bureaucratic inefficiencies.

In UnitedHealth Group’s case, nearly 60% of the insurer’s $130 billion in annual medical spending is via value-based models , according to a new annual report released Monday. One in three UnitedHealth plan enrollees now receive medical care from medical care providers who are paid via these alternative models.

“We estimate that by the end of 2020, we will have $75 billion of our payments to care providers tied to value based care relationships,” UnitedHealth Group said. The insurer’s 15-page “value-based care” report includes data from 110,000 doctors and 1,100 hospitals who provided care to 15 million UnitedHealth members from value-based arrangements.

Across the country, value-based models are only expected to escalate, particularly as insurance companies become more integrated with providers of medical care. UnitedHealth Group owns Optum, which has a fast-growing healthcare services unit that is buying up doctor practices, urgent care centers and surgery centers across the country.

Meanwhile, a key part of the merger between CVS Health and Aetna, the nation’s third-largest health insurance company, was a desire to better coordinate medical care in hopes of providing lower cost and higher quality healthcare to consumers. CVS is paying $69 billion for Aetna, which has a goal to shift 75% of its medical spend to value-based models by 2020.

“Value-based care is creating a platform for positive change throughout the health care system,” Dr. Sam Ho, chief medical officer of UnitedHealthcare said in a statement accompanying the report. “Patients get more consistent, quality care that is better coordinated and easier to navigate.”

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