Changing physician incentives for affordable, quality cancer care: results of an episode payment model.

PURPOSE

This study tested the combination of an episode payment coupled with actionable use and quality data as an incentive to improve quality and reduce costs.

METHODS

Medical oncologists were paid a single fee, in lieu of any drug margin, to treat their patients. Chemotherapy medications were reimbursed at the average sales price, a proxy for actual cost.

RESULTS

Five volunteer medical groups were compared with a large national payer registry of fee-for-service patients with cancer to examine the difference in cost before and after the initiation of the payment change. Between October 2009 and December 2012, the five groups treated 810 patients with breast, colon, and lung cancer using the episode payments. The registry-predicted fee-for-service cost of the episodes cohort was $98,121,388, but the actual cost was $64,760,116. The predicted cost of chemotherapy drugs was $7,519,504, but the actual cost was $20,979,417. There was no difference between the groups on multiple quality measures.

CONCLUSION

Modifying the current fee-for-service payment system for cancer therapy with feedback data and financial incentives that reward outcomes and cost efficiency resulted in a significant total cost reduction. Eliminating existing financial chemotherapy drug incentives paradoxically increased the use of chemotherapy.