UnitedHealth to expand cancer care bundled payment project

Noting its pilot program's success so far, UnitedHealth Group now will expand its experiment to determine whether bundling chemotherapy payments can reduce cancer treatment costs.

UnitedHealth reported last year the results of its pilot study, in which it found that while spending on chemotherapy increased, the overall cost of cancer care dropped by about 34 percent due to the insurer's bundling of payments, according to Kaiser Health News. UnitedHealth wanted to figure out why increased spending could result in decreased costs.

In the pilot study, researchers cut the cost for cancer treatment by paying oncologists a single fee and rewarding patient outcomes, according to Forbes. Medical oncologists were paid a single fee, in place of any drug margin, to treat their patients, and chemotherapy medications were reimbursed at the average sales price. The study found that eliminating existing financial chemotherapy drug incentives increased the use of chemotherapy, and bundling payments and rewarding positive outcomes resulted in a significant total cost reduction.

In the short run, UnitedHealth says that the program will reduce the percentage of after-the-fact claim denials, which can cause frustration and extra cost for patients, according to KHN. In the long term, the insurer feels that the bundling payment program will gather data about tens of thousands of patients, as well as what prescriptions they are taking and how well they react to specific medications. The system should also provide head-to-head comparisons of chemotherapy treatments.

Many critics, however, many argue that bundling payments is inefficient from an administrative standpoint, saying that the model may not save as much money if it simply becomes being another version of a fee-for-service payment model. And while oncology has become a prime target for alternative payment models, it is still challenging for insurers to determine and encourage value for cancer treatments.

To learn more:
- here's the KHN article
- read the Forbes article