New Reimbursement Policies Needed to Align Payment with Cancer Care Outcomes

June 2012, Vol 3, No 4

Current reimbursement policies for cancer chemotherapies do not ensure that the value and cost of therapies are commensurate with outcomes. These policies also reward the use of the most expensive drugs, in that providers’ markups are larger for these drugs than for lower-cost therapies. Lee Newcomer, MD, senior vice president of oncology services, UnitedHealth-care, proposes new reimbursement strategies to align payments with outcomes as a way of achieving best possible outcomes at the lowest cost (Newcomer LN. Health Aff [Millwood]. 2012;31:780-785).

Dr Newcomer describes how the “buy-and-bill” reimbursement approach encourages oncologists to use expensive medications, which may explain why the projected total US cost for cancer drugs in 2020 is $173 billion (up from $104 billion in 2006). Implementing clinical pathways and bundled payments can cut drug costs without compromising quality of care. The use of pathways requires oncologists to follow predefined chemotherapy regimens and, when 2 or more regimens are considered clinically equivalent, to select the lowest-cost option. In addition, incentives are used to encourage adherence to the predefined regimens. Several oncology groups have successfully used this approach to lower drug costs in cancer therapy.

This approach requires coordinated care and efficient resource management to enhance profits. Providers can also increase their payments by improving patient outcomes. United-Healthcare launched its episode payment program in November 2010; results for the first year are expected this summer.

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