The Burrill Report


UnitedHealthcare, one of America’s largest insurers, is testing a new payment model that will pay cancer doctors upfront for an entire course of cancer treatment in an effort to eliminate incentives for doctors to pick expensive and administration-intensive cancer drugs, encouraging them instead to focus solely on the outcomes those drugs achieve.

The marked break from the fee-for-service model is designed “to identify and reduce unnecessary drug administration that does not improve the patient’s health outcomes,” the insurer says.

Since most cancer drugs are injectables rather than pills, patients generally visit their doctors’ offices for treatments. The cost of those visits and of the drugs dispensed are billed to insurers at retail rates. Many doctors buy the drugs at wholesale prices, allowing them to pocket the difference.

Medicare reimbursed doctors at least $532 million more for cancer drugs in 2000 than they had paid for the medicines, according to a recent report from the Government Accountability Office.

Instead, UnitedHealthcare will pay oncology offices in the pilot the amount of money they would have made on chemotherapy drug profits plus a case-management fee to reflect the time and resources they spend in managing patient relationships.

The system is meant to allow doctors to remain confident in securing their current incomes without fear of shifting to new, less expensive, courses of treatment if such a course has the potential to be more effective.

The insurer hopes to use the program to help identify which treatment regimens are most effective, evaluating the approaches doctors choose based on the number of emergency-room visits, the incidence of complications, side effects and outcomes they achieve.

Five medical oncology groups nationwide will test the new program, which is aimed at improving the quality of care for patients with breast, colon and lung cancers.


October 21, 2010
http://www.burrillreport.com/article-bundling_cancer_care_costs.html