Dayton Physicians cuts costs in payment trial

Aug. 02--Dayton Physicians Network may be leading the way in lowering the cost of cancer treatment and yielding better results for health insurers and patients, based on recently published results of a three-year trial testing a new payment model for doctors.

<p>The Dayton practice was one of five oncology groups from across the country selected to participate in the trial conducted from 2009 to 2012 by UnitedHealthcare, which covers about a quarter of Dayton Physicians' patients through Medicare or commercial plans.

Instead of reimbursing cancer doctors on a fee-for-service basis, the doctors participating in the trial received a lump sum from the health insurer to cover their patients' entire course of treatment.

The cost to treat about 800 patients with lung, breast and colon cancer participating in the trial was one-third less than the total cost to treat the same number of patients with similar conditions whose doctors were reimbursed for each service or treatment they provided, according to an article published in the Journal of Oncology Practice earlier this month.

At the same time, outcomes for patients in the trial were on par or better than the health outcomes of patients in the comparison group.

"The pilot we were involved with UnitedHealthcare was a success because it really was a collaboration between UnitedHealthcare and our practice," said Robert Baird, chief executive at Dayton Physicians. "It was a chance for us to work together in tandem to improve the quality of the oncology services we provide, while at the same time lowering the overall cost of those services."

Total treatment costs for cancer patients in the trial were $65 million, compared to $98 million for patients whose doctors were compensated in the standard way.

The lump-sum, or bundled payments, allowed cancer doctors to focus on identifying the most efficient and effective treatment pathways for their patients, instead of focusing on billing for each episode of care, Baird said.

"They (UnitedHealthcare) wanted to make sure that physicians were free to use what is clinically best for the patient's treatment without having to worry about reimbursement," he said. "We were measured on the outcomes for those patients. So, as a practice, we needed to make sure we managed those patients better to keep them in the appropriate setting, which would be out of the emergency room and out of the hospital."

Much of the savings in the cost of treatment came from reducing the number of emergency room visits and hospital admissions for Dayton Physicians' patients, who are encouraged to turn first to the practice for acute care and consultation, Baird said.

"We told patients if you have any symptoms whatsoever...call us first, and we will take care of you," he said. "And that could go anywhere from bringing them into the office immediately, or bringing them in in the evening to our after-hours clinic."

The strategy not only reduced the cost of unnecessary hospital stays, which can run into the tens of thousands of dollars, it also cut down on unnecessary procedures and administrative costs, Baird said: "With us being able to manage and monitor those patients more effectively, we were able to eliminate duplicate tests, order labs more effectively and just keep patients as healthy and well as possible during the coarse of their treatment."

The trial was in large part the result of health care reform under the Affordable Care Act, which has pushed the healthcare industry to move away from the traditional fee-for-service payment method.

State and federal governments are working with Medicaid, Medicare and private payers to redesign their health plans to base compensation on value and the quality care rather than the volume of services covered.

"If you view improved health value as the end goal...and you define health value as improved health outcomes and sustainable health costs, then the results of this pilot with the oncology practices are certainly encouraging," said Amy Rohling McGee, president of the Health Policy Institute of Ohio. "We all say we want to achieve better outcomes at a lower cost, and this hit it out of the ballpark. If you had saved costs but the outcomes were the same or worse, that would be a different story. But this experiment did both."

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