UnitedHealthcare said Thursday it will expand its high-profile test of whether bundled payments for chemotherapy can help slow rising cancer treatment costs, part of a growing effort by insurers to find new ways to pay for care.
Results from United鈥檚 initial pilot test 鈥� reported last year 鈥� were puzzling: The overall cost of cancer care for patients in the study dropped by 34 percent, even as spending on chemotherapy drugs spiked significantly.
It鈥檚 a variation on so-called 鈥渂undled payments鈥� that are becoming more common in health care, particularly for such things as joint replacement surgeries. The idea is to bill and pay based on the overall treatment of a certain condition, rather than for each separate procedure and doctor visit. Because cancer treatment is so expensive, it is also now being targeted for bundled payments, but the complexity of treatment makes it harder to design bundles.
Meanwhile, United isn鈥檛 the only private insurer testing ways to try to slow spending on cancer care, while also improving care.
Still, results from three other efforts showed decidedly smaller savings compared with United鈥檚 stunning 34 percent drop, said Lindsay Conway, a managing director at the Advisory Board Company, a consulting firm.
Baptist Health South Florida, for example, reported savings of approximately two percent after the first year of its special oncology 鈥渁ccountable care organization,鈥� while a partnership between oncology practices and insurer Priority Health in Michigan saw first-year savings of $550 per chemotherapy patient, Conway said.
鈥淭he big question is whether United鈥檚 results are replicable,鈥� said Conway. 鈥淭hey鈥檙e working on that right now.鈥�
While general efforts to control costs vary from creating so-called medical homes, where care is coordinated, to sharing savings with doctor groups that become more efficient, the聽ones drawing the most attention now are the bundled payments, said Kathryn Fitch, principal and health care consultant at Milliman. Medicare joined the effort to test bundles for cancer care this year with聽a pilot set to begin in the spring. Among other things, the 聽will pay doctors an additional $160 a month per patient to provide extra support for chemotherapy patients, such as around-the-clock patient access to medical staff. Participating practices will have to meet specific requirements, including using electronic medical records, and they will聽 get financial incentives if they reduce their overall cost below benchmarks and聽meet quality targets.
鈥淭his is just going to get bigger 鈥� and Medicare is driving that,鈥� said Fitch. 鈥淎ll insurers are adopting the same mantra. Even the pharmaceutical companies are with providers and payers.鈥�
How United Tested Its Theory
In the UnitedHealth pilot project鈥檚 first phase, five oncology practices had their profits from chemotherapy drugs essentially frozen, said Lee Newcomer, United鈥檚 senior vice president for oncology, genetics and women鈥檚 health.
Rather than being held to any specific treatment regimen, each practice drew up its own and could add new medicines at any time. United reimbursed them the average sales price of the drugs given, plus a small amount meant to cover physician care in the hospital, hospice management and to provide case management services to patients.
That differs from how the insurer pays oncologists outside the study, where they are reimbursed the amount paid for the drug, plus about 22 percent to cover office costs. By comparison, Medicare reimburses oncologists for drugs administered in their offices average sales price plus 6 percent. Policy experts say such payment methods encourage the use of more costly drugs, even when just-as-effective 鈥� but less expensive and less profitable 鈥� drugs are available.
At the end of the three-year study, even though spending on chemotherapy drugs rose substantially, the cost of caring for the patients was $33.4 million less than costs for a control group of similar patients who were not part of the study. All patients had either breast, colon or lung cancer. United redistributed one-third of the savings with the physician practices by increasing their patient payments for a second round of the pilot, which is still ongoing.
What, exactly, led to the cost savings isn鈥檛 clear. But Newcomer said a reduced number of hospitalizations and use of radiation services clearly contributed, adding that the next round of its pilot program may offer more complete answers.
Still, the initial study wasn鈥檛 large enough to find statistical differences in quality measures, so whether patients in the study fared better or worse than those outside isn鈥檛 known.
鈥淚t鈥檚 not surprising the [payment pilot] reduced hospitalization if it provided an economic incentive for doctors to do so,鈥� said professor Jerry Avorn at Harvard Medical School. 鈥淏ut you have to ask, was the control group using too much hospital care or was the innovative system using too little?聽 In the absence of outcome data, how would we know? It鈥檚 particularly important to define and measure outcomes carefully, especially in cancer patients.鈥�
Also Thursday, United said it has launched a computer program all its cancer doctors can use 鈥� whether part of this pilot program or not 鈥� to determine if the treatments they鈥檙e prescribing fall within recommendations crafted by the (NCCN), a nonprofit alliance of 26 cancer centers.
In the short run, the insurer says, the program will reduce the percentage of after-the-fact claim denials, which are frustrating and sometimes costly for patients. Over time, the program will also gather data about tens of thousands of patients, the drugs they take and how well they fare, so the system will provide head-to-head comparisons of chemotherapy treatments.
鈥淧hysicians will have a real world look at what is working and what may not be working as well,鈥� said Newcomer. The insurer plans to make the aggregated results publicly available in about two years.