Bundled Payments Save $33M in Cancer Care: How Can Other Specialties Do the Same?

Written by Carrie Pallardy | July 09, 2014 | Print  |

In October 2009, researchers launched a study of bundled payments in five medical oncology groups. Through the alternative to fee-for-service payment model, the total cost of care for patients with three different types of cancer was reduced by $33 million.

Here are four things to know about the study and movements towards bundled payments across the healthcare field.

1. UnitedHealth Group and five medical oncology groups partnered to conduct the study, published in the Journal of Oncology Practice. The study included medical costs for 810 patients with lung, breast and colon cancer between 2009 and 2012. Physicians were received a bundled episode of care payment, rather than being reimbursed for individual services.

2. The medical costs for the 810 patients included in the study totaled $65 million. On the other hand, similar patients receiving care under standard fee-for-service demonstrated a total cost of $98 million. Unexpectedly, the costs of chemotherapy increased in study group in comparison to the standard payment group.

3. Bundled payments are not a new concept, but the alternative model is fairly new in practice. A recent Health Care Incentives Improvement Institute study examined six payers working with bundled payments. One began a bundled program in 2006, while the remaining five began within the past three years. Hip and knee replacement were the two most commonly reported procedures for a bundled payment model.

4. Bundled payments hold the promise of cost savings, as indicated in Journal of Oncology Practice study, have yet to become widespread in the ambulatory surgery center industry. But, progress has been made in areas such as colonoscopy. The American Gastroenterological Association released a potential bundled model for colonoscopy. Bedford (N.H.) Ambulatory Surgical Center and Harvard-Pilgrim Healthcare launched a pilot program for bundled payments in colonoscopy.

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