UnitedHealth will tie doctors’ payments to quality of care

NEW YORK - UnitedHealth Group, the largest US health insurer by sales, will pay doctors based on the quality of their care in a cost-cutting effort that also benefits the company’s consulting business.

UnitedHealth expects to save twice as much as it would spend on incentive payments for doctors because patients will be healthier, according to company documents forwarded by spokeswoman Cheryl Randolph.


The program may cover as much as 70 percent of the insurer’s commercial members by 2015, from less than 2 percent now, the company said.

The nationwide expansion of the program follows similar efforts by the US government and rival insurers to trim medical costs by shifting away from paying based on the amount of services provided.

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Optum, UnitedHealth’s services business, will be able to sell software, data, and consulting to providers making the changes, Sam Ho, chief clinical officer of the insurer’s UnitedHealthcare unit, said.

“This changes the business model, changes the reward, and payment system for better care and better health at lower cost,’’ Ho said.

“There is coordination between our programs and strategies so that Optum knows how to provide services.’’


Hospitals and doctors will see their costs fall through the program, UnitedHealth said.

Optum’s revenue increased 21 percent to $28.7 billion in 2011.

The unit’s services “will become even more valuable’’ as providers increasingly share responsibility for managing costs, chief executuve Stephen Hemsley said on a Jan. 19 conference call.

The Optum arm is supporting the growth of the insurance business, said Sheryl Skolnick, an analyst with CRT Capital Group in Stamford, Conn.

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