Going further away from fee-for-service medicine, UnitedHealth Group UNH, the nation’s largest health insurer, said it will pay the University of Texas MD Anderson Cancer Center a “bundled payment” for head and neck cancer care.
UnitedHealth Group’s UnitedHealthcare subsidiary says the pre-priced payment will give patients and their doctors a better idea upfront what the care will cost. UnitedHealth also said MD Anderson doctors will get paid more because they are eliminating various inefficiencies by taking on more risk that they can streamline the health care, improve quality and eliminate bureaucratic inefficiencies.
“They are going to know right upfront what the total cost is,” said Dr. Lee Newcomer, UnitedHealthcare’s senior vice president of oncology.
Curbing rising costs of cancer care will be a tall order. UnitedHealthcare says cancer therapy, including drug costs, account for 11% of the insurer’s commercial health plan spending.
It’s the latest push by UnitedHealth away from traditional fee-for-service medicine whereby doctors and hospitals are paid on a per-treatment or -procedure basis that generates volume and higher costs. UnitedHealth says its payments that are tied to value-based arrangements have tripled to $36 billion since 2011 and the insurer says they will jump to $65 billion by the end of 2018.
The cancer care pilot with MD Anderson is also unique in that it involves specialized care. “Most bundles have been primary care oriented,” Newcomer says.
The pilot will involve up to 150 patients with cancer of the salivary glands, throat, larnyx or “oral cavity,” which includes the mouth, lips and tongue. “The best way for us to understand and determine how episode-based pricing in cancer care works is to evaluate it,” said Dr. Thomas Feeley, head of anesthesiology and critical care at MD Anderson. “We have the right processes, accounting systems, people and collaborator in UnitedHealthcare to take this step.”