A High-Profile Bundled Payment Experiment at MD Anderson

In 2010, UnitedHealthcare launched a pilot project to move away from fee-for-service payments in cancer care, involving 810 patients with lung, breast and colorectal cancer who were treated in 5 groups of medical oncology throughout the United States.

Based on those results, which were reported in this summer in the Practical Oncology Journal, and found that cancer costs were reduced by a third while quality improved, UnitedHealthcare is ready to try again, this time at the University of Texas’ MD Anderson Cancer Center, and with a different type of disease: head and neck cancer.

The so-called “bundled” payment model program will last 3 years, and will capture payments for surgery, radiation and chemotherapy in a single fee rather than multiple payments, which research shows can cost more and be less efficient.

United Healthcare believes that prepricing the payment will give both patients and doctors a better idea of costs from the start, and that doctors will end up being paid more because they will work to eliminate unnecessary tests and steps.

To launch the pilot, 8 different payment models were developed based on years of experience between MD Anderson and UnitedHealthcare. “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 Lee N. Newcomer, M.D., United Healthcare’s vice president, oncology.

“Our recently completed pilot shows that these creative new cancer care payment models can reduce health care costs while improving patient outcomes. MD Anderson’s work with value-based workflows makes them a natural partner for bundled payments.”

In an interview with Forbes, Dr Newcomer said doctors will have more certainty, because “they are going to know right upfront what the total cost is.”

The concept of the bundled payment has received mixed reviews in recent years, but more providers appear willing to give it a try. In a 2013 report to Evidence-Based Oncology, a publication of The American Journal of Managed Care, commentator Kurt Ullman wrote that only strong, efficient practices would be able to function under this type of reimbursement system, and less efficient practices would fail.

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