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Anthem, Cigna to help Obama add value to U.S. medical billing

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(Bloomberg) — President Barack Obama is enlisting private companies into his drive to change the way the U.S. pays its medical bills, including insurers Anthem Inc. (NYSE:ANTM) and Cigna Inc. (NYSE:CI) and casino chain Caesars Entertainment Corp.

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Obama and Sylvia Mathews Burwell, the secretary of the U.S. Department of Health and Human Services (HHS), announced a partnership with private companies and medical trade associations to develop replacements for the fee-for-service method of paying for health care. Today, doctors and hospitals are paid largely based on the volume of services they provide, without regard to their quality or whether patients get better, a system that is blamed for waste and overspending on health care.

Burwell and Obama have said they want half of Medicare’s $362 billion in payments for health care services to be linked to measurements of how well patients are cared for by 2018. In some cases doctors and hospitals would be at risk of lower payments if their care is substandard.

“It is in our common interest to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” Burwell said in a statement. “When government and business work together we can all benefit. Patients can get the right care at the right time, doctors can achieve the best ideals of their profession, and health care can be more affordable for individuals and companies.”

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The private companies, and groups including the American Cancer Society, will be members of an advisory group the Obama administration calls the Health care Payment Learning and Action Network. No money will change hands between the government and the organizations, and the government won’t ask for a commitment from the outside groups beyond support for the Obama administration’s goals for Medicare.

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Members of the network are expected to share their techniques for paying health care provider in ways that emphasize value over the quantity of services delivered. Anthem, for example, said in a statement that 38 percent of its patients receive care from doctors and hospitals participating in arrangements that require them to show value, such as oncologists who agree to use “the most clinically effective and efficient care pathways” in their practices.

Anthem “is fully supportive of the Department of Health and Human Services’ goal to transform the nation’s health system to emphasize value over volume,” the company said in its statement.

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