UnitedHealthcare launches bundled payment model for cancer care

December 19, 2014

In a shift from fee-for-service to value-based care, UnitedHealthcare has launched a pilot bundled payment model with the University of Texas MD Anderson Cancer Center for head and neck cancers.

In a shift from fee-for-service to value-based care, UnitedHealthcare has launched a pilot bundled payment model with the University of Texas MD Anderson Cancer Center for head and neck cancers.

Bundled payments tie financial and performance accountability to episodes of care, allowing hospitals, post-acute care providers, physicians, and other practitioners to work closely across specialties and settings. 

 “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,” said Thomas W. Feeley, M.D., head of Anesthesiology and Critical Care, and head of the institute. “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.”

“Our partnership with MD Anderson Cancer Center marks an important step toward expanded bundled care payment models and away from the traditional fee-for-service payments for oncology care,” said Lee N. Newcomer, M.D., United Healthcare’s vice president, oncology. “Our recently completed pilot shows that these creative new cancer care payment models can reduce health care costs while improving patient outcomes. MD Anderson’s work with value-based workflows makes them a natural partner for bundled payments.”

UnitedHealthcare launched a similar pilot in 2010 for breast, colon and lung cancers that resulted in a 34% reduction in medical costs.

Cancer therapy costs are estimated to reach $207 billion by 2020, according to the National Cancer Institute.  UnitedHealthcare spends 11% on cancer therapy, and the company said it expects that amount to grow.

“Patients enrolled in the pilot will not have any change or adjustment in their care as a result of the payment structure,” said Randal S. Weber, M.D., professor and chair of the Department of Head and Neck Surgery. 

UnitedHealthcare and MD Anderson say that patients in the pilot program will receive the same care as those not in the program. Patients in the program will receive just one bill for their cancer treatment at MD Anderson, and they’ll know the cost of tests, treatment and other services up front.