Ultimately, cancer care in the United States will be paid for using episode-of-care payments. Maybe. Probably. Eventually.
There is a lot of heavy lifting between now and then, but many of those who think about cancer care payment reform for a living see episode payments as the finish line.
“I do see a place in the future where we’re predominantly paying cancer on episodes of care,” says Michael Kolodziej, MD, a medical oncologist who has worked on both the provider and payer sides of oncology.
What episode-of-care—or bundled—payments for cancer care will look like is not at all clear. Lindsay Conway, managing director at the Advisory Board, thinks that the University of Texas MD Anderson Cancer Center’s pilot with UnitedHealthcare sets a good example.
In an experiment limited to patients with head and neck cancers, UnitedHealthcare made a single annual payment to MD Anderson for all inpatient and outpatient care provided to a patient.
“Best of all, the patient receives just one bill for all of the care—surgery, radiation, chemo, or anything else—that they receive across the course of a year,” Conway says. “I love this because it’s high quality, it’s efficient, and it is patient-centered in a way that we haven’t seen from other models.”
“We believe bundled pricing is the way all of health care should be paid for,” says Thomas W. Feeley, MD, head of the Institute for Cancer Care Innovation at MD Anderson.
Thomas W. Feeley, MD, head of the Institute for Cancer Care Innovation at MD Anderson and a senior fellow at the Harvard Business School, likes it too. The three-year pilot, which is wrapping up this year, enrolled 88 patients.
“We consider this a success, and we’d like to see more of it,” Feeley says. “We believe bundled pricing is the way all of health care should be paid for.”
The pilot received a lot of attention when it was announced in 2014, but no other insurers approached MD Anderson in search of their own bundled payment deal. “We have reached out to United to see what they might want to do next, and frankly, we just haven’t heard,” he says. “It’s not for a lack of willingness on our part.”
Kolodziej, national medical director for managed care strategy at Flatiron Health, thinks MD Anderson’s pilot with UnitedHealthcare is too limited for there to be any strong takeaways. For one thing, MD Anderson is a powerhouse, an exception that can’t be used to prove the rule; for another, the pilot focused on such a small subset of patients that its applicability to a broader patient population is unclear.
UnitedHealthcare has another episode-payment initiative—this one is limited to medical oncologists—that also appears to hold promise. In a pilot that ran from 2009 to 2012, five community oncology practices were paid a single fee, in lieu of any drug margin, to treat their patients with breast cancer and colon cancer. The pilot practices reduced the total cost of care for those patients by more than a third. Since then, five other oncology practices have joined UnitedHealthcare’s episode program, which now includes more than 650 oncologists, according to the insurer.
Meanwhile, Horizon Blue Cross Blue Shield of New Jersey’s episode-of-care program for breast cancer is going well enough that the insurer will expand to other cancer types in the near future, says Lili Brillstein, director of the insurer’s new models and episodes of care program.
In late 2014, Horizon contracted with Regional Cancer Care Associates, a multistate practice based in New Jersey, for the novel payment system. Horizon’s program works like many current bundled payment programs. Providers are paid using standard fee-for-service reimbursement during the patient’s treatment. Once the episode is over, a retrospective review determines whether quality metrics were met and if expenditures were less than projected, which would result in shared savings to the provider.
Horizon’s episode payment program is supported by a data platform that categorizes a patient’s cancer by molecular subtype. The information decreases the likelihood that time and money will be wasted on treatments that are not likely to work. The missing link for successful reform of cancer care payment is putting that kind of information into the hands of clinicians, Kolodziej says. His enthusiasm for CMS’s Oncology Payment Model has more to do with the data that can be assembled from the 200 participating practices submitting quality measures and patient clinical data than the payment reform model itself.
“In the U.S., those data don’t exist,” he says. “That could be paradigm shifting, really.”
Theoretically, that type of information, along with claims data, can be used to build decision-support tools that help oncologists and their patients understand upfront the best course of action—and what it is likely to cost. An episode of care would be more predictable, which is essential for oncologists and payers to sustain a way to pay for cancer care.