Hospitals

MD Anderson, UnitedHealth devise bundled payments pilot for cancer care

A pilot program by University of Texas MD Anderson Cancer Center and health insurance giant […]

A pilot program by University of Texas MD Anderson Cancer Center and health insurance giant UnitedHealthcare is underway that will seek a new payment model for head and neck cancers, marking one of the first bundled payment initiatives specifically focused on cancer.

The shift away from the fee-for-service model has largely been applied to primary care and other less intensives specialty areas of medicine, although Minneapolis-based United in 2010 similarly piloted bundled payments with some 800 breast, colon and lung cancer patients at five medical oncology centers.

The new three-year pilot is based on MD Anderson’s mapping of complex tests, treatments, follow-up care and supportive services required for the most common head and neck cancer diagnoses. The pre-priced payment, officials said, “provides an incentive to focus on the essential elements of care and to avoid unnecessary steps,” with the goal of lowering costs and increasing quality of life for patients for otherwise costly and high-maintenance care.

UnitedHealth’s 2010 pilot on breast, lung and colon cancer patients prompted the new effort with MD Anderson. Results of the previous pilot, published in the 2014 Journal of Oncology Practice, showed the cost of cancer care was cut by one-third, the insurer said.

The National Cancer Institute estimates costs for cancer therapy in 2010 reached $124.6 billion, and the figure is projected to reach as high as $207 billion in 2020. Cancer therapy, including related pharmaceutical costs, currently accounts for 11 percent of UnitedHealthcare’s commercial health plan spend, officials said.

The new three-year pilot will be conducted in MD Anderson’s Head and Neck Center for up to 150 patients newly diagnosed with cancers of the salivary glands, oral cavity, including mouth, lips, tongue, soft palate, throat and larynx, and who are enrolled in certain employer-sponsored plans insured or administered by UnitedHealthcare.

Eight bundled payment models have been developed by MD Anderson and UnitedHealthcare for the program. Each bundled payment model was developed for the research-based clinical practices and protocols that have been created at the cancer center.

UnitedHealth said providers are showing increased interest in bundled payments — the insurer’s total provider reimbursements tied to a variety of value-based arrangements have nearly tripled since 2011 to $36 billion, and are expected to reach $65 billion by the end of 2018.

Patients will not have any change in their care as a result of the new payment pilot, according to Dr. Randal S. Weber, professor and chair of the Department of Head and Neck Surgery for MD Anderson. The new payment model is designed to bill patients just once for their cancer treatment at MD Anderson, and because the cost of the tests, treatment and other services are priced upfront, they will know the cost of care early in their treatment program, officials said.

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