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UnitedHealthcare Report Recommends Adopting New Cancer Care Payment Model To Reward Physicians For Health Outcomes

Stocks in this article: UNH

A new report from UnitedHealthcare examines the current cancer care payment system and considers alternative strategies to reward physicians for improving clinical outcomes and reducing treatment costs, rather than paying them based on the number of drugs administered to treat cancer.

Costs for cancer therapy, which reached $104 billion in 2006, are now projected to rise to $173 billion in 2020 1.

In an article published in the April 12 edition of Health Affairs, Lee N. Newcomer, M.D., senior vice president of oncology services at UnitedHealthcare, explores why the cancer care payment system has not kept pace with the revolution in cancer treatment and chemotherapy regimens and calls on the health care community to consider new approaches.

The article, titled “Changing Physician Incentives for Cancer Care to Reward Better Patient Outcomes Instead of Use of More Costly Drugs,” notes that cancer therapy has made significant advances since the 1970s while the system for paying oncologists has not kept pace.

“It is time for us to reconsider the ‘buy and bill’ reimbursement approach prevalent today, and embrace a system that looks more holistically at patient care and rewards quality, not quantity,” Dr. Newcomer said. “This is particularly important as the nation looks for new ways to address ever increasing health care costs.”

In the past, physicians relied on fewer than a dozen chemotherapy medicines, imprecise early-generation radiation machines and disabling surgical techniques. Today, chemotherapy drugs target specific genomic abnormalities and approximately 150 effective drugs are available for cancer therapy, according to the Health Affairs article. Cancer mortality rates are also decreasing. Between 1990 and 2007, the overall death rates from cancer declined 22 percent for men and 14 percent for women 2.

Reconsidering the “Buy and Bill” Approach

The “buy and bill” treatment reimbursement approach in place today provides incentives for medical oncologists to use expensive medications when less costly alternatives that deliver similar results are available, according to the report. As more expensive drugs became available, drug profits became a greater share of oncologists’ income.

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