Oncology practices currently buy cancer treatment medications up front, and are reimbursed by Medicare and other insurers. Insurance companies claim this can create an incentive to purchase more expensive drugs.
Insurers are now trying to create an alternative system that would curb costs and still provide the best treatments to patients. The effort is led by the country's No. 2 insurer, WellPoint.
Beginning July 1 in six of the 14 states it's located, WellPoint will offer providers $350 per month per patient following one of the insurer's recommended treatment plans. WellPoint says these "pathways" or treatment regimens would be the most efficient approaches, tailored to balance costs and ensure side effects don't outweigh benefits.
Upon full implementation, WellPoint expects the program will cut cancer treatment costs around three to four percent, totaling some $5.4 billion annually.
Spending on cancer drugs in the U.S. has jumped 19 percent in the last 5 years with $37 billion spent last year. According to the National Cancer Institute, total costs for cancer treatment is well over $100 billion annually and continuing to rise.
"Oncologist reimbursement at the moment is a broken system," said Richard Schilsky, chief medical officer of the American Society of Clinical Oncology, adding the proposed program has "many of the important elements you'd like to see."
Sam Nussbaum, WellPoint's chief medical officer, said the program works to guarantee that the "best drugs and best protocols will be compensated."
"We're creating revenue neutrality so better care can be given," he added.
Doctors and specialists are open to the idea but some do express concerns about how it will affect treatment. While Roy Herbst, a professor at Yale School of Medicine, admitted that the recommended treatment plans for lung cancer were "reasonable," he said there was some concern over whether this narrow selection will hinder new approaches to treatment that customize plans based on the patient's genetic factors.
Professor Sharon Giordano of MD Anderson Cancer Center in Houston, Texas also said the treatment regimens for breast cancer were "reasonable" but added they weren't comprehensive. Giordano said the WellPoint regimens did not list some of the drugs she uses "fairly regularly," including drugs she uses to treat patients with metastatic disease.
Aetna, UnitedHealth, Cigna, and Highmark are also experimenting with their reimbursement programs.