Restructuring the Medicare and Medicaid health insurance systems to provide coordinated care for patients would save taxpayers $3.5 trillion over the next 25 years, according to a new report by UnitedHealth Group's Center for Health Reform and Modernization.
The report, "U.S. Deficit Reduction: The Medicare and Medicaid Modernization Opportunity," states that the current fee-for service payment system, on which more than three-quarters of Medicare and Medicaid spending is based, leads to fragmented care and rising costs.
Under a fee-for-service payment system, health care providers are reimbursed for each service (procedures, tests and office visits) with little communication or coordination between the different health care professionals. The report advocates a system that pays providers for taking a more proactive approach to coordinate care, manage chronic diseases, provide wellness programs and respond to patients' needs quickly and efficiently.
UnitedHealth provided the report to the bipartisan National Commission on Fiscal Responsibility and Reform, known as the Deficit Commission, established in February 2010 to recommend new fiscal strategies to Congress by December. The analysis is based on UnitedHealth's experience as the largest single provider of Medicare Advantage and Medicaid health insurance programs.