Two major private-sector players have launched a bundled-payment model for cancer care that could be a harbinger of more value-based payment arrangements in a wide range of clinical areas.
UnitedHealthcare, a subsidiary of UnitedHealth Group, and the University of Texas MD Anderson Cancer Center in Houston last week announced a three-year deal in which the insurer will pay MD Anderson a fixed annual amount for the care of up to 150 patients with certain types of head and neck cancer.
The program will cover eight different bundles of care, which will differ based on the types of care patients need. MD Anderson will not receive increased payments for patients who experience complications and need additional treatments.
“There's so much interest in this,” said Kimberly Crow Hartsfield, a senior manager at the Camden Group, a consulting firm. “There's so much spend in oncology and so much variation in the care delivery that takes place.”
The pilot program, which is being closely watched by other insurers and providers, is part of UnitedHealthcare's concerted push toward more value-based payment mechanisms. The insurer has about $36 billion in annual provider payments tied to some kind of risk-based arrangement.
UnitedHealthcare officials said they want more bundled payments for cancer care because oncology and related drug costs represent 11% of the insurer's commercial health-plan spending. Only patients with employer-sponsored health plans will be enrolled in the MD Anderson program.
“Our partnership with MD Anderson Cancer Center marks an important step toward expanded bundled-care payment models and away from the traditional fee-for-service payments for oncology care,” said Dr. Lee Newcomer, UnitedHealthcare's vice president of oncology services, in a written statement.
MD Anderson officials were quoted in the Wall Street Journal as saying they want to test the feasibility of bundled payments and may use them for other types of cancer.