Innovent Oncology, a division of US Oncology, has engaged the actuarial and consulting firm Milliman to help develop risk contracting methodologies – including episode rates, bundled payments and capitation – to help identify potential areas where oncologists can improve quality of care while lowering health costs.
Innovent intends to help physician-led oncology practices develop new methodologies for contracting around risk, with the intent of using this information in negotiating with payers in the first half of 2011. In conjunction with this effort, US Oncology is also investing in the technology infrastructure to support ongoing data analysis and administration of risk-based contracts.
"This investment will prepare US Oncology and physicians in the united network of US Oncology for the future of healthcare as payers consider the alternatives to the fee-for-service model," said Roy Beveridge, MD, executive vice president and medical director of US Oncology. "The better understanding of cancer care costs and outcomes gained through this investment will build on our strong foundation of deep clinical insight and rich data capabilities."
The new initiatives comes just a couple of months after the two companies released data from a study where Innovent commissioned Milliman to evaluate the 10 most common types of cancers where chemotherapy is a key treatment modality. That study found over the course of a year, a cancer patient receiving chemotherapy incurs, on average, approximately $111,000 in costs, almost four times the cost of a cancer patient not receiving chemotherapy, three times the cost of a typical coronary artery disease patient and six times the cost of a typical diabetes patient.
"Physician-led organizations are ideally positioned to assess and balance the clinical, quality and cost demands of today's healthcare environment," said Bruce Pyenson, principal and consulting actuary of New York-based Milliman. Through Milliman’s work with US Oncology, Pyenson said they can “help oncologists create the healthcare delivery and reimbursement models of the future.”
Officials said the data generated from this study supported the rationale for Innovent to continue working with Milliman to create oncology risk-contracting models.
While Milliman is actively crunching data from US Oncology’s 900 oncologists and its electronic health records that represent more than 1.6 million patient charts, Innovent is also actively partnering with payers using evidence-based treatment guidelines.
In May, the company announced a program with Aetna for its members in Texas that would expand the use of evidence-based oncology treatment, after the two companies discovered that evidence-based care for patients with non-small cell lung cancer resulted in equivalent health outcomes and a 35 percent cost savings.
“We know cancer treatment is often a long, emotional and confusing process.” said Lonny Reisman, MD, Aetna chief medical officer, earlier this year. “By relying on the best medical evidence and working closely with the medical community, Aetna will expand access to programs that improve the quality of cancer care for members and link this higher quality care with appropriate reimbursement for physicians.”
