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Bundled Payments Come to Cancer Care

Joe Cantlupe, for HealthLeaders Media, March 11, 2013

"If a patient ends up in the hospital, we don't get charges for our services for that hospital care," Gould says. He remains adamant, however, that physicians in the practice will make profits in the shared savings, though results may be long term. "We're in the transition from fee-for-service to one in which we get paid for global care, which is taking ownership of the cost of caring for those patients."

"Ultimately," he adds, "this plays to our strength. We have always tried to be thoughtful to patients who would likely benefit from it and no more. Some doctors will give chemotherapy to the bitter end. However, most stakeholders agree substantial cost savings can be realized by more appropriate use of chemotherapy at end-of-life care. They are in the minority, but it's there. With this we are trying to solve the problem of out-of-control cancer care costs and not be part of the problem."

Indeed, the cost of cancer care continues to skyrocket, in part because of more costly advanced treatments being used, according to the National Institutes of Health. Medical costs for cancer are anticipated to reach $158 billion in 2020, an increase of 27% over 2010, the NIH states.

The Congressional Budget Office projects that bundling hospital and postacute care for Medicare patients alone would reduce federal spending by $19 billion, from 2010 to 2019,  according to the Commonwealth Fund. Bundling appeared several years ago in cardiology care and then moved to hip replacement, obesity, and other medical services. UnitedHealthcare says it was the first insurer to become involved in bundled payments for oncology care. The Centers for Medicare & Medicaid Services has begun partnering with providers through a bundled payments initiative.

In another team effort involving an insurer and providers, Florida Blue (formerly Blue Cross Blue Shield of Florida) is coordinating an accountable care organization shared savings plan with Baptist Health South Florida in Coral Gables, and Advanced Medical Specialties, a Miami-based oncology group, which consists of 17 physician practices. Florida Blue, based in Jacksonville, serves 15.5 million people in 16 states through affiliated companies. While the project is directed toward shared savings, the plan includes shared risk for a defined oncology population.

The importance lies in "establishing and solidifying relationships with medical staff and payers," says Ralph Lawson, executive vice president and CFO for Baptist Health South Florida, a 1,738-licensed-bed system that includes seven hospitals. Lawson is also national chairman for the Healthcare Financial Management Association.

Lawson describes it as a shared-savings arrangement because participating providers "are coordinating care for this defined oncology population with the goals of increasing quality and efficiency while reducing costs and unnecessary services."

"We started with oncology because we are fortunate to work with a premier oncology group in the South Florida area that has worked with Baptist Health for many years," Lawson says.

In another partnership, Blue Cross Blue Shield of Michigan and the University of Michigan are examining various funding sources, including bundling, as physicians evaluate cost efficiency in other oncology programs, such as prostate cancer, says David C. Miller, MD, MPH, assistant professor in the department of urology at the University of Michigan's Center for Healthcare Outcomes and Policy.

The project has initiated dozens of urology practices to evaluate prostaterelated cancer services to improve evaluation of data and assess outcomes, Miller says.

That's why a partnership between providers and insurers is crucial, he says.

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1 comments on "Bundled Payments Come to Cancer Care"


J. Kuriyan (3/11/2013 at 11:40 AM)
United is actually teaching a very valuable lesson to providers: Healthcare costs and reimbursements are "zero sum" transactions. For too long drug companies with the complicity of powerful provider trade organizations have perpetrated the contrary myth that drug costs are just 10% of total medical costs and urge mass usage of drugs like statins- even when benefits are minimal for most people. "Why take a chance? Insurance will pay," is their usual compelling argument. Kaiser has fought this valiantly for many years. For those providers who insist on using brand name drugs when generics are just as effective, Kaiser points out the success of outcome of the more cost conscious doctors - shaming the others into considering costs as well. Next, if United can persuade the feds to allow them to import expensive drugs from India for their Medicare enrollees, we will see a huge surge in United's Advantage and Part D programs!