Anthem’s top executive says the health insurer is paying out 58% of its reimbursements via value-based care models that are quickly dominating the U.S. medical system.

Anthem, which operates Blue Cross and Blue Shield plans in 14 states, this week opened a window into the health insurance industry’s shift away from the traditional fee-for-service approach that is based on volume of care delivered and can lead to overtreatment and unnecessary medical tests and procedures. Rival insurers, including Aetna and UnitedHealth Group, are also moving aggressively away from fee-for-service medicine.

But of the health insurers reporting first-quarter earnings so far, Anthem offered perhaps the most detailed insight into its value-based contracts with doctors and hospitals.

“Aggregate spend regarding value-based contracts tally up to about 58% of our total medical spend across all lines of business, and over 75% is represented by shared savings agreements, shared risk arrangements [and] population-based payment models,” Anthem CEO Joe Swedish told analysts on the company’s first-quarter earnings call earlier this week.

Value-based pay is tied to health outcomes, performance and quality of care of medical care providers who contract with insurers via alternative payment vehicles like accountable care organizations (ACOs), a delivery system that rewards doctors and hospitals for working together to improve quality and rein in costs. In these models, doctors and hospitals take on more risk that they can streamline the care, improve quality and eliminate bureaucratic inefficiencies.

Swedish said Anthem now 159 ACO agreements. “We’ve got over 64,000 providers now engaged in ACOs and patient-centered medical homes who are accountable for cost and quality of care for over 5.5 million commercial members, which is a huge uptick compared to prior years,” Swedish said.

Original article can be accessed here.