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MD Anderson, UnitedHealthcare Launch Bundled Payment Pilot Program

December 22, 2014
by Rajiv Leventhal
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The University of Texas MD Anderson Cancer Center and UnitedHealthcare have launched a pilot to explore a new bundled payment model for head and neck cancers that focuses on quality patient care and outcomes.

The collaboration is among the first in using bundled payments in a large, comprehensive cancer center, according to officials from the organizations. The program is based on MD Anderson’s “extensive mapping of the complex tests, treatments, follow-up care and supportive services required for the most common head and neck cancer diagnoses.” The pre-priced payment provides an incentive to focus on the essential elements of care and to avoid unnecessary steps, officials say.

The new three-year pilot will be conducted in MD Anderson’s Head and Neck Center for up to 150 patients newly diagnosed with cancers of the salivary glands, oral cavity (including the mouth, lips, tongue, soft palate), throat and larynx, and who are enrolled in certain employer-sponsored benefit plans insured or administered by UnitedHealthcare. Eight bundled payment models have been developed by MD Anderson and UnitedHealthcare for the program. Each bundled payment model was developed for the research-based clinical practices and protocols that have been created and refined over decades at the cancer center.

“For the last five years, MD Anderson and its Institute for Cancer Care Innovation have been looking at how to best approach a single price for treating cancers. It is a complex question because cancer is a complex disease and each patient unique,” Thomas W. Feeley, M.D., head of anesthesiology and critical care, and head of the institute, said in a statement. “Bundled pricing is something that patients and care providers want, and this is our first opportunity to better understand how we can manage costs without sacrificing quality care and patient outcomes.”  

Similar payment models have shown to help reduce overall costs while providing for continuity of care and improving outcomes for patients. UnitedHealthcare launched a similar pilot in 2010 involving 810 breast, colon and lung cancer patients who were treated at five medical oncology groups around the United States.

The July 2014 issue of Journal of Oncology Practice featured the results of that study, which showed cancer costs were cut by a third and quality was improved. Those results prompted UnitedHealthcare to expand the bundled payment model and explore more complete models like the one at MD Anderson. The report demonstrates the potential effectiveness of new approaches to the current “fee-for-service” payment model for cancer therapy, officials say.

The National Cancer Institute estimates costs for cancer therapy in 2010 reached $124.6 billion, and the figure is projected to reach as high as $207 billion in 2020. Cancer therapy, including related pharmaceutical costs, currently accounts for 11 percent of UnitedHealthcare’s commercial health plan spend.

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