Physician-Payment Model Reduced Costs By Over One-Third
By Christine Kern, contributing writer
An experimental payment model saved oncology groups $33 million according to a recent study.
An experimental physician-payment method reduced the total cost of caring for patients with three types of cancers by more than a third according to a study detailing an alternative to the widely used fee-for-service model. Oncology and health policy leaders are encouraged by the results, and leaders agree that further 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.
Begun in October 2009, the pilot study linked saw five medical oncology groups with the insurer UnitedHealthcare in an episode payment model, which reimbursed physicians on a fixed-price, based on episodes of best-practices and patient outcomes. This collaboration was an alternative to the fee-for-service method, which ties financial incentives to billing for chemotherapy drugs.
According to the study – published by the Journal of Oncology Practice – 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 compared to the anticipated costs.
According to Modern Healthcare, Dr. Lee Newcomer – lead author of the report and senior vice president of oncology at UnitedHealthcare – said, “This was a pretty dramatic change,” and other pilot projects have seen reductions in the 5 percent range. The reduction in costs experienced by the oncology groups in the trial can be translated into lower premiums for the employees served by the insurer, he said.
The pilot also found the oncology groups performed comparably well to the national average on more than 60 measures of quality and costs, including, admissions for treatment-related symptoms, patient relapse time periods, survival rates, radiology use, and drug costs per episode.
ASCO, which in May announced a consolidated payment method for oncology, said it supports payment reform, and that new approaches should aim not only to improve efficiency, but cover the full range of patient services that constitute high-quality cancer care. That's something, according to Dr. Richard Schilsky, ASCO's chief medical officer, current payment systems do not reimburse for the full range of care. “By shifting the focus from the volume of services provided to the quality of care delivered, we can improve the value of cancer care while better accounting for patients' individual needs.”
In the meantime, annual costs of cancer care are projected to rise to more than $173 billion in 2020, up from $104 billion in 2006, according to a 2014 report on the state of cancer care in America. Access to high-quality cancer care will be sustained and expanded only if these rising costs are addressed, the report said.
Other oncology groups have expressed interest in the episode payment model and Newcomer plans to triple the size of the program next year and the five original oncology practices all intend to continue.
Newcomer explained that the current fee-for-service model is problematic because it does not incentivize sitting down and talking to a patient or investing the extra time needed to carefully map out a treatment plan. “None of those things are paid for,” he said. “By its very nature, it (fee-for-service) encourages people to do more and more and more. Most groups see this as a failing way to pay physicians.”