One of the many questions that remain to be answered about the pilot project, however, is the problem of outliers (patients whose care doesn’t fit neatly within the prescribed protocol, such as those with significant comorbidities or adverse drug reactions that require a change in the treatment regimen).
"When one starts to deal with individual practices who have just a couple of these patients, one outlier can make it financially very difficult, so the question is, how often is that going to happen?" Dr. Silver said.
Dr. Hoadley said that the system needs to have flexibility to account for differences in the patient population. "Obviously, you’ve got to get that bundled amount right and appropriately adjusted for the average, across the kind of patients the practice is going to see, with some particular adjustments for patient severity," and other factors, he commented.
Where there are outliers, there are also inliers (patients who, for medical or other reasons, don’t undergo a full course of prescribed therapy), and in these cases, bundled payments would result in additional income for a practice, Dr. Lichter said. Over time, the outliers and inliers tend to balance out, and in the case of the extraordinary outlier – the patient who is admitted for a planned 2-day stay but ends up being hospitalized for 6 months – some sort of contingency payment would be made, he added.
"In talking to United Healthcare, while they didn’t sit down and write rules for every possible situation, I know that if a case is so far beyond the norm, they will sit down and look at it and agree to some type of remedial payment for it," he said.
Rare Cancers and Cherry Picking
A related issue of concern is how bundled payment systems would handle rare cancers, or clinical situations for which there is little or no consensus on optimal therapies, such as the use of chemotherapy for some soft-tissue sarcomas.
As vice-chair of the board of the National Comprehensive Cancer Network, Dr. Silver is an advocate of evidence-based guidelines, but said he’s aware that many patients have variations that don’t fit neatly into the standard chemotherapy guidelines that are acceptable under a bundled-payment system.
"Which brings us to another issue: Would there be cherry picking?" he asked. "Because it would be the patients who are young and healthy and can go through those therapies, and [who] don't have comorbidities and variations on their disease that would best fit into these bundled programs. So what happens to the others?"
In such cases, the burden of care for the more severely ill patients would fall on teaching hospitals, and it’s unclear whether they would be adequately compensated under a bundled-payment system, he said.
Stifle Drug Development?
Matt Farber, director of provider economics and public policy for the Association of Community Cancer Centers, said that bundled-payment systems could have a dampening effect on drug development. He points to sipuleucel-T (Provenge), the recently approved autologous immunotherapy vaccine for advanced prostate cancer that uses antigen-presenting cells unique to each patient.
"Would payment systems like this stop those drugs from being developed? Because if it’s a personalized treatment, would it therefore not be included in whatever benchmark is deemed the most appropriate or most effective care for most people?" Mr. Farber asked.
And what happens when novel drugs or new versions of conventional chemotherapeutic agents (such as palifosfamide, an active metabolite of ifosfamide) come on the market?
"They’re working right now with these five practices to determine what are the best courses of treatment currently for the disease states that they’re looking at. So when a new drug comes down the line, what’s the process and how quickly do they update?" Mr. Farber said.
Similarly, said Dr. Silver, if patients are being treated and oncologists are being paid according to best medical practice, there would be fewer incentives for patients to enroll in clinical trials, which are the principal means whereby the science of medicine advances.
Define 'Costs'
It’s also unclear just how drug costs would be defined under the proposed system, Georgetown’s, Dr. Hoadley said.
"The company says, 'Chemotherapy drugs will be reimbursed at manufacturer’s cost.' But as Medicare has learned, that’s an ambiguous term. Medicare has gone from reimbursing based on average wholesale price to now the average sales price, and has come up with new mechanisms to define fairly what the price is for the practices that are paying to get those drugs. So the details need to be filled in about how they’re going to go about doing that," he said.