Article challenges industry to change cancer care payment systems

An article appearing in the April 12 edition of Health Affairs is challenging health care systems to reconsider the way cancer care is paid for and the model used to reward oncologists.

The article, "Changing Physician Incentives for Cancer Care to Reward Better Patient Outcomes Instead of Use of More Costly Drugs," was written by Lee N. Newcomer, M.D., senior vice president of oncology services at UnitedHealthcare.

Notably, Newcomer blasts the current "Buy and Bill" approach to cancer care, in which oncologists are encouraged to use expensive drugs for patients despite the existence of cheaper drugs with similar outcomes, because of the increasing profits made by doctors administering these drugs in their practices. They buy them wholesale from the manufacturer and then charge insurance companies for the drugs plus an added charge, known colloquially as the 'chemotherapy concession.' This is such a blatant conflict of interest it should scandalize the industry, yet it has barely made a ripple.

Newcomer's suggested payment strategies include:

--Clinical Pathways approach: This strategy would require oncologists to treat patients with predefined chemotherapy regimens. While there is some room to accommodate individualized care, oncologists would find incentives in complying with the predefined standards of care.

-- Bundled payment approach. This approach bucks the fee-for-service model that rewards volume and ignores outcomes. Instead, an entire cancer treatment program would be determined prior to dispensing therapy, and regardless of whether or not treatment plans needed altering, the cost would be the same. This way, oncologists would receive the same fee no matter what drugs are dispensed, which eliminates the conflict of interest.

Medicare will be launching a bundled payment pilot program in 2014.

Newcomer conlcudes, "A doctor's income needs to be independent of drug selection. This is better for doctors, better for patients and better for the entire health care system."

Source: MarketWatch