This week Medicare announced their move away from fee-for-service medicine within four years, outlining a plan to have 50 percent Medicare dollars paid to doctors and hospitals by alternative reimbursement models by 2018. This follows UnitedHealth Group’s announcement last week that they will increase value-based payments by 20 percent in 2015 to “north of $43 billion”.
These announcements signal three major shifts to the healthcare industry:
- Momentum for Healthcare Payment Restructuring: Medicare provides health insurance for 49 million Americans and UnitedHealth Group provides for 84 million Americans, respectively. By making a strong stance towards value-based payments, other private insurers are bound to follow these industry giants.
- Lower Overall Healthcare Spending: According to UnitedHealth Group, this new approach generates 1 to 6 percent in savings overall. Programs include pay-for-performance programs, patient-centered medical homes, and accountable care organizations.
- Real Financial Incentives for Care Coordination: Value-based models put pressure on providers to address care coordination gaps, as their reimbursement is tied to smarter care delivery and thorough documentation.
In order to comply with these new insurance payment standards, providers must coordinate care across the patient’s care team. As it stands today, healthcare technology barriers prevent the streamlined sharing of patient information, especially between EMR vendors. (Read more about interoperability in this recent blog post).
Medicare and UnitedHealth Group’s commitment to value-based payments gives healthcare technology the push it needs to move towards better interoperability, ensuring patients receive the best care, costs are kept low, and providers are compensated for the quality, rather than quantity, of their services.
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