(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.
See also: Medicare faces historic overhaul
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.”