Bundling payments for cancer care that modify payment from current fee-for-service payments to one that rewards outcomes and cost efficiency can provide significant total cost-of-care reductions, results from a recent UnitedHealthcare pilot suggest.
"This study challenges the assumption that any reduction of resources results in worse outcomes for cancer," a report on the pilot states.
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Predicted FFS total cost for the episode cohort was $98.1 million, but the actual total medical cost was $64.8 million.
But while the total cost of care in this pilot showed reductions, looking just at the cost of chemotherapy drugs revealed an unexpected increase, reported Dr. Lee Newcomer, senior vice president of oncology at UnitedHealthcare, and his associates online in the Journal of Oncology Practice (2014 July 8 [doi: 10.1200/JOP.2014.001488]).
UnitedHealthcare built the pilot around five volunteer medical groups, including Northwest Georgia Oncology of Atlanta, Ga.; Center for Cancer and Blood Disorders of Fort Worth, Tex.; Kansas University in Kansas City, Kansas; Dayton Physicians of Dayton, Ohio; West Clinic of Memphis, Tenn.; and Advanced Medical Specialties of Miami, Fla. One group dropped out after it was acquired by an academic medical center and was replaced, but the article did not identify which one dropped out.
The pilot looked at breast, colon, and lung cancer treatments. UnitedHealthcare modified the standard fee-for-service (FFS) payment in four areas. First, chemotherapy drugs were reimbursed at the average sales price with no modifier (FFS has a contracted percentage modifier). Physician hospital care, hospice management, and case management all received an episode of care payment (the standard model offers FFS for physician hospital care, FFS or nothing for hospice management, and nothing for case management). The study sites also collected clinical and outcomes data. Medical groups were free to change their preferred drug regimen at any time, and new drugs added were paid at their respective rates, but a change did not cause a change with the episodic payments.
Predicted FFS total cost for the episode cohort was $98.1 million, but the actual total medical cost was $64.8 million. The predicted FFS chemotherapy drug cost was $7.5 million, but the actual cost was $21.0 million. The study was not designed to determine the expenses that drove the differences in cost, although a subset analysis showed a statistically valid decrease in hospitalization and therapeutic radiology usage in the episode arm.
Dr. Lee Newcomer
Most quality outcomes had "insufficient numbers for statistical analysis," the report notes, though lung cancer survivors "were the only evaluable subgroup, and there was no significant survival difference between the episode and registry patients. ... Overall, multiple quality measures were monitored, and none of them provided an early signal that quality of care was different than controls."
Regarding the chemotherapy drug costs, the report’s authors noted that the increased costs were "not expected," considering the fact that the episodic payment scheme included several incentives to keep drug costs down, with no payment benefit for using more expensive drugs.
The authors suggested that the study be replicated to determine its generalization, which they say is possible with the automation of many of the claims-adjudication functions that were done manually for the study. They added that the work "proves the essential concept that the cost of care for future generations can be reduced without sacrificing quality."
Three of the article’s authors, including lead author Dr. Newcomer, are employed by UnitedHealthcare and have stock ownership in the company.