Cancer-care pay­ment pi­lot cut costs by a third

Modern Healthcare - - NEWS - By Sabriya Rice

The to­tal cost of car­ing for pa­tients with three types of can­cers was low­ered by 34%, ac­cord­ing to a study de­tail­ing an ex­per­i­men­tal physi­cian-pay­ment method, an al­ter­na­tive to the tra­di­tional fee-for-ser­vice model.

The re­sults are en­cour­ag­ing, on­col­ogy and health pol­icy lead­ers say. More ini­tia­tives that pro­vide op­ti­mal care in a cost-ef­fi­cient man­ner are needed to help cur­tail the sky­rock­et­ing and un­sus­tain­able cost of cancer care in the U.S., lead­ers agree.

In a pi­lot launched in Oc­to­ber 2009, five med­i­cal on­col­ogy groups col­lab­o­rated with in­surer United-Health­care to use an episode pay­ment model, which re­im­bursed physi­cians at a fixed price, based on best prac­tices and pa­tient out­comes. The col­lab­o­ra­tion ex­plored an al­ter­na­tive to fee-for-ser­vice, which ties fi­nan­cial in­cen­tives to billing for chemo­ther­apy drugs.

By De­cem­ber 2012, use of the episode-pay­ment model for treat­ment of breast, lung and colon can­cers in 810 pa­tients had led to a net sav­ings of more than $33 mil­lion when com­pared with the an­tic­i­pated costs, ac­cord­ing to the study pub­lished last week in the Jour­nal of On­col­ogy Prac­tice, an Amer­i­can So­ci­ety of Clin­i­cal On­col­ogy pub­li­ca­tion.

“This was a pretty dra­matic change,” said Dr. Lee New­comer, lead au­thor of

“Drug us­age ac­tu­ally went up. This didn’t hurt pharma at all in terms of uti­liza­tion.”


the re­port and se­nior vice pres­i­dent of on­col­ogy at United-Health­care. He said other pi­lot projects have seen re­duc­tions av­er­ag­ing 5%. The sav­ings re­al­ized by the pi­lot on­col­ogy groups can be turned into lower pre­mi­ums for em­ploy­ees served by the in­surer, he said.

But there was a “para­dox­i­cal in­crease” in the use of chemo­ther­apy drugs over­all, with ac­tual costs more than $13 mil­lion greater than pre­dicted. Be­fore start­ing the pi­lot, New­comer said each on­col­ogy group chose a drug reg­i­men it thought best to treat a spe­cific cancer. That prompted ini­tial con­cerns from the phar­ma­ceu­ti­cal in­dus­try and oth­ers that some treat­ments might be ex­cluded.

“But, as you can see, drug us­age ac­tu­ally went up,” New­comer said. “This didn’t hurt pharma at all in terms of uti- liza­tion.” The pi­lot also found the on­col­ogy groups per­formed com­pa­ra­bly well to the na­tional aver­age on more than 60 mea­sures of qual­ity and cost, in­clud­ing ad­mis­sions for treat­ment-re­lated symp­toms, lengths of pa­tient re­lapse, sur­vival rates, ra­di­ol­ogy use and drug costs per episode.

The ASCO, which an­nounced in May a con­sol­i­dated pay­ment method for on­col­ogy, said that it sup­ports pay­ment re­form and that new pay­ment ap­proaches should aim not only to im­prove ef­fi­ciency, but to cover the full range of ser­vices that pro­vide high­qual­ity cancer care. That’s some­thing Dr. Richard Schilsky, ASCO’s chief med­i­cal of­fi­cer, says is not re­im­bursed by cur­rent pay­ment sys­tems.

The Na­tional Com­pre­hen­sive Cancer Net­work agreed that new pay­ment schemes that pro­vide op­ti­mal pa­tient care and con­trol health­care costs are needed and ap­plauded United Health­care for per­form­ing the study. How­ever, CEO Dr. Robert Carl­son said the study was small and more re­search is needed to un­der­stand what drove down costs.

“It is pos­si­ble that merely the knowl­edge that par­tic­i­pa­tion in the study or that the costs of care were be­ing mon­i­tored changed physi­cian be­hav­ior and not the method of pay­ment,” Carl­son said. “Whether the use of bun­dled pay­ments will help to achieve both goals re­mains to be seen.”

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