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The novel plan, which began at the end of 2014, will see insurance company United Healthcare, based in Minnetonka, Minn., reimburse the hospital with a predetermined figure for a year of treatment. The payment would cover surgery, chemotherapy, radiation therapy, and all diagnostics. Through July 20, more than 30 patients have been enrolled in the program. All head and neck cancers, except for nasopharyngeal cancer, are eligible. Patients will be enrolled through the end of 2016.
“I think it’s going well,” said Randal Weber, MD, FACS, chair of head and neck surgery at MD Anderson and president of the American Board of Otolaryngology (ABOto).
Dr. Weber and Thomas Feeley, MD, head of MD Anderson’s Institute for Cancer Care Innovation, said that it’s too soon to expect data from the pilot program. But this early on, success comes simply from the effort of trying. “Whether we are achieving cost savings or not, what we’re really trying to test at this point is ‘Can we do this?’”
Dr. Feeley added, “I want to be very clear that this is more feasibility … and we will do the economic analysis. We’re hoping that in doing this all of our head and neck cancer [treatment] achieves the best outcomes at the lowest possible cost for all of the patients.”
The pilot program’s concept is simple: In today’s era of payment reform, where federal reimbursement is increasingly tied to quality and bundled payments rather than the traditional fee-for-service system, MD Anderson and United Healthcare are attempting to determine whether bundling payments up front can lower costs without impacting the quality of care delivery.
Neither MD Anderson nor United Healthcare will discuss how much the annual payments are. Some payments will be well north of $100,000, but not all, Dr. Feeley said.
United Healthcare agreed that it is too early to comment on results from the program; however, the organization appears optimistic. “While we won’t be extending this program to any other sites this year, United Healthcare does plan to develop episode payment pilot programs with other organizations this fall,” said Lee Newcomer, MD, MHA, the insurer’s senior vice president for oncology, genetics, and women’s health.
A Slow Evolution
MD Anderson is a natural choice to launch a pilot program on bundled payments, because it is “an integrated practice,” Dr. Feeley said. “Our medical practice is integrated with our hospital and with our clinic,” he said. “When we receive payments from United, we don’t have to parse out payments within our system.”
The bureaucratic hurdles of attributing cash flow and revenue would be obstacles to implementing a similar pilot program at other institutions, he said. And while, of course, there are other large “integrated medical centers that could launch their own initiatives,” Dr. Feeley doesn’t expect a raft of them anytime soon. “This is going to be a very, very slow evolution,” he said.
Launching MD Anderson’s pilot with head and neck cancer patients also makes logistical sense, Dr. Weber said. First, the number of patients is much smaller and more manageable than a program tailored to, say, breast or lung cancer. Second, the hospital has long operated using a multidisciplinary approach that makes communication easier for a program like this.
“For 30 years here, we’ve had a very integrated multidisciplinary team, so we all work very closely together,” he said. “We communicate very frequently about patients. We meet once a week at our tumor conferences. So bringing us together to engage in this project was perhaps easier.” Physician buy-in at MD Anderson was also pretty easy, Dr. Feeley said.
It’s also important to make sure that patients know that payment initiatives have zero impact on the quality and timeliness of the care delivered. To that end, physicians don’t know which patients are enrolled in the program and which ones aren’t. That allows doctors “to remain agnostic about that so that we just treat the patients the way we would normally treat them,” Dr. Weber said.
Dr. Feeley wants patients who have heard about the pilot program to understand it’s not about rationing care or trying to find cheaper alternatives. In fact, he is hopeful some of those patients might take comfort in knowing their care is being paid for in one lump sum. “Cancer patients in general get a ton of bills when they enter treatment,” he said. “I’m really hoping that, for the patient, this is one less source of anxiety while you’re being treated for head and neck cancer.”
Curbing Spending
Rena Conti, PhD, assistant professor in the departments of pediatrics and public health sciences at the University of Chicago, said that pilot programs like the one at MD Anderson are a clear response to the need for getting a handle on cancer spending. Starting small with a program that might encompass as many as 150 patients over two years is a smart approach, she added. “Here’s an opportunity to learn how to manage a complex patient population and a complex disease type without putting a lot of practice money at risk,” she said.
She anticipates that Medicare, “the dominant payer for cancer treatment in America,” will eventually move away from fee for service to alternative payment models and that pilots like the MD Anderson initiative will help prepare physicians and institutions for that transformation.
“It’s important to get a handle on what costs you can control and what aspects you can’t control as a practice, and these opportunities to work with private insurers, either for a set of cancers or for a select cancer, are first opportunities for practices to figure out … what they can and cannot negotiate for in anticipation for this becoming a reality in fee-for-service Medicare.”
Richard Quinn is a freelance medical journalist based in New Jersey.