More employers are decreasing what they pay health plans and other vendors if they are not achieving high quality health performance, a new study by Aon Hewitt shows. Rubberball/Mike Kemp/Getty Images
One in three large employers are decreasing what they pay health plans and wellness companies if they are not achieving desired health care quality performance, according to a new study.
With the nation’s employers being either unwilling or unable to pay for higher health care costs, they are being more demanding when it comes to what they pay their vendors. That means 31 percent of employers said they now “decrease or increase health care vendor compensation based on specific performance targets,” according to a new study of nearly 800 large to mid-sized U.S. employers that provide benefits to more than seven million people, according to a new study by Aon Aon Hewitt (AON).
Another 44 percent of these employers are considering in the next three to five years decreasing or increasing pay to health plans, wellness companies and other vendors if they don’t meet specific performance targets, the Aon Hewitt study said.
“As health care costs continue to rise, a growing number of employers want to ensure that the health care services they are paying for are actually leading to improved patient outcomes,” said Aon Hewitt’s chief innovation officer for health, Jim Winkler. “Just as employers are being more requiring of their employees to take control of their health, employers are seeking to hold providers more accountable.”
The moves by employers track along key aspects of the Affordable Care Act, which has already had scores of hospitals, doctor groups and others sign up for its Medicare Shared Saving Plan. Through contracts with the Medicare health insurance program for the elderly, accountable care organizations (ACOs) reward doctors and hospitals for working together to improve quality and to control costs and better manage the medical-care of populations of patients under the Medicare Shared Savings program.
ACOs link medical care providers together to improve quality. If the providers in the ACO achieve better outcomes, they divvy up money saved with the health plans.
The Aon Hewitt study indicates more than half, or 53 percent, of employers are also integrating “provider payment models that promote cost effective, health quality health care results (that) will be a part of their future health care strategy.”
Already most private health insurance companies such as those operated by Aetna Aetna (AET), Cigna Cigna (CI), Humana Humana (HUM), UnitedHealthGroup (UNH), Wellpoint (WLP) and Blue Cross and Blue Shield plans across the country are linking with ACOS to care for more patients.
“Vendor accountability models are moving beyond process-based metrics, such as customer service call answering speed, and shifting to ones that focus on fees at risk for clinical health risk improvement and overall medical spending increases,” said Tim Nimmer, chief health actuary for Aon Hewitt.
Article source: http://www.forbes.com/sites/brucejapsen/2013/06/06/more-employers-demand-quality-or-lower-health-plan-pay/