Study shows benefits of new cancer care payment model

As part of its commitment to help modernize the health care system, UnitedHealthcare is consistently looking for ways to develop new methods of care delivery and payment models.

The results from UnitedHealthcare’s newest study about changing the way we pay for cancer care demonstrates that a new payment system that rewards quality of care instead of quantity of care can lower costs by 34 percent while maintaining excellent patient care.

Cancer is among the most difficult diseases to treat, and the most costly.   Costs for cancer therapy, which were estimated by the National Cancer Institute at $124.6 billion in 2010, are projected to reach as high as $207 billion in 2020, suggesting there is an urgent need to rein in costs while finding the most effective treatments. 

Under the traditional “fee-for-service” payment model, oncologists are paid for each service they perform and drug they prescribe.  Instead of rewarding quality care, the fee-for-service model tends to reward volume of care and the use of more expensive drugs.

Under the new payment system, UnitedHealthcare paid oncologists upfront for an entire cancer treatment program, based on the expected cost of a standard treatment regimen for the specific condition as predetermined by the doctor.  The oncologists were paid the same fee regardless of the drugs administered to the patient – in effect, separating the oncologist’s income from drug sales while preserving the ability to maintain a regular visit schedule with the patient. Patient visits were reimbursed as usual using the fee-for-service contract rates, and chemotherapy medications were reimbursed based on the average sales price.

The study compared the cost and quality of care among 810 cancer patients at medical oncology centers across the country.  Researchers evaluated the treatment regimens based on more than 60 measures, including the number of emergency-room visits, incidence of complications, side effects and, most importantly, health outcomes to determine which treatment regimens do the best job of helping to fight cancer.

The new cancer care payment model resulted in a 34 percent reduction in overall medical costs but delivered the same outcomes in terms of overall patient health.  The results of the study show that higher cost care does not necessarily translate to higher quality care for the patient.

The details of the study were recently published in the report “Changing Physician Incentives for Affordable, Quality Cancer Care: Results of an Episode Payment Model” in the Journal of Oncology Practice.  For the full article, click here.