More employers are flocking to the plan, which aims to cut costs while improving care. 

Minnetonka-based UnitedHealthcare has expanded a program that is changing payment terms for certain hip, knee and spine surgeries in hopes of improving quality while lowering costs.

Launched as a pilot in 2015, the program is now saving employers about $18,000 per procedure, the insurer announced Wednesday, and has been expanded this year to nine new markets.

UnitedHealthcare, which is one of the nation’s largest health insurers, is part of a well-established trend across many private health insurers and government-run programs like Medicare to pay via “value-based care” contracts that include a degree of financial risk for doctors and hospitals when patient outcomes are poor.

“The program’s bundled payment method reimburses health care providers and facilities for a defined episode of care, such as knee or hip replacement, under a single fee or payment,” UnitedHealthcare said in a statement. “This is a shift away from the traditional fee-for-service structure in which a care provider is paid for each treatment, appointment or test, generating multiple claims within a single, broader episode of care.”

Paying as a package for all care connected to an orthopedic procedure is common among Minnesota’s nonprofit insurers, said Eileen Smith, spokeswoman for the Minnesota Council of Health Plans, a trade group for those carriers. Smith cited one example of a nonprofit health plan saving hip- and knee-replacement patients 20 to 25 percent compared to the old system.

At UnitedHealthcare, the Spine and Joint Solution program has saved money by giving health care providers incentives, the insurer said, to reduce return visits to the hospital as well as complications following surgery. It changes payment terms at certain facilities for hip- and knee-replacement surgeries, as well as fusion surgeries in the lumbar portion of the spine.

By Christopher Snowbeck | StarTribune

Image Credit: UnitedHealthcare

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