As a result of health care reform emphasizing improved efficiency in delivery of medical services, Seton Healthcare Family announced in September the launch of Aetna Whole Health-Seton Health Alliance, an insurance plan managed by the hospital group with Aetna, one of the nation’s largest insurance companies.

In the past, hospitals have been paid on a fee-for-service basis, meaning they have been reimbursed by patients or patients’ insurance companies after providing medical services.

Sarah Farley, program developer with Seton, said the health care industry is moving away from the fee-for-service model, and toward value-based care that emphasizes caring for individuals in and, more importantly, outside hospital settings.

Health care reform advocates have pointed to the fee-for-service model as incentivizing excessive care with unnecessary tests and other inefficiencies that often rack up patients’ medical bills, which either get paid out of pocket by the patient, passed on to an insurance company, or covered through Medicare or Medicaid.

With Seton now helping to manage its own insurance program, Meredith Duncan, director of the hospital system’s health plan operations, acknowledged there is “tension” between the old fee-for-service model and the hospital group’s new responsibility to ultimately foot patients’ health care bills through the new insurance plan.

“In our model, we’re successful if we keep people out of the hospital,” Duncan said. “I would say that Seton is very much committed to ... better taking care of our community, and this is a better way of taking care of people.”

Since launching Aetna Whole Health-Seton Health Alliance, employees of Williamson County, Austin ISD and the Teacher Retirement System of Texas have signed on for coverage under the plan. Duncan estimated there are about 70,000-80,000 participants in the plan so far.

Stephen Bekanich, interim CEO of Seton Health Alliance, said about half the employees who had a choice between the Aetna Whole Health-Seton Health Alliance plan and other traditional insurance options have chosen Seton’s plan.

“As a consumer or patient, it would be nicer to have an insurance company or an insurance provider that says, ‘We’re going to pay our physicians not by how many [patients] they can get through on an assembly line, but by their outcomes,’” he said.