Anthem makes nearly $40B shift from fee-for-service medicine to value-based pay

Anthem is joining other health insurers in the shift from traditional fee-for-service medicine to value-based pay, according to a Forbes report.

Anthem CEO Joe Swedish told Wall Street analysts and investors during the company's fourth-quarter earnings call Wednesday that the insurer has more than $38 billion for value-based contracts, representing 30 percent of its commercial claims and about 40,000 providers, according to the report.

For the fourth quarter of 2014, Anthem reported a net income of $506.8 million, up from $148.2 million in the same period of 2013.

A switch to more value-based care arrangements is a trend among private insurers, including Aetna. With HHS announcing its ambitious goals for the healthcare industry, stating it wants 50 percent of Medicare payments based on how well patients are cared for by 2018, value-based care arrangements are likely to become more widely used in coming years.

Mr. Swedish said in the report that Anthem's value-based contracts include "enhanced payments for performance and shared risk or bundled payment arrangements." Anthem has nearly 120 ACO arrangements, along with "other collaborative efforts such as patient-centered medical homes, hospital quality and safety programs, and other partnerships that share financial risk and gain," he added in the report.

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