Strategies to reduce cancer-care costs.

P ayment for cancer care will change radically over the next decade as the nation struggles to hold down health care costs, experts told an early October Institute of Medicine forum, Delivering Affordable Cancer Care in the 21st Century. Traditional fee-for-service medicine, in which oncology reimbursement relies disproportionately on profits from expensive chemotherapy drugs, will give way to a variety of alternative payment mechanisms that Medicare and insurance companies are now testing. These systems include bundled payments for episodes of care, value-based insurance design, and shared savings models linked with pay-for-performance programs that reward physicians who adhere to standardized treatment protocols. " If you think it's been a tough reimbursement environment up to now, just wait. It's going to be much, much tougher in a year or two, " said Mark McClellan, M.D., Ph.D., former administrator of the Centers for Medicare and Medicaid Services and now director of the Engelberg Center for Health Care Reform at the Brookings Institution. Given societal demands to hold down health care spending, " the unavoidable conclusion is that we can't keep doing things the way we've been doing things. " Many institutions and community oncology practices are already experimenting with treatment alternatives that lower costs while preserving quality. Sometimes the alternatives are part of Centers for Medicare and Medicaid Services pilot programs. Sometimes the practices are moving forward on their own. Those efforts are likely to become more widespread in the next few years, the experts said. Most of the experiments shift financial risk from payers—either the government or insurers—to providers, such as hospitals or community oncology practices. Different approaches shift the risk in different ways. Under bundled or episode-of-care payments , for instance, the provider must allocate resources, who then is at financial risk if the total cost of the episode exceeds the payment. " This is very different from fee-for-service, where the only risk is if someone doesn't pay you, " It can work only where alternative approaches to treating a condition are available , he warned. It could work well in treating metastatic non–small-cell lung cancer, for instance, because the medical literature on that illness includes eight different approved and equally effective chemother-apy protocols. With monthly costs ranging from $1,322 for paclitaxel–cisplatin to $7,092 for pemetrexed–cisplatin, payers that switch to bundled payments could set their reimbursements at about the average , about $3,500 per month. " Once oncol-ogists see that, they …