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Stanford University School of Medicine

Study shows benefits of bundling breast cancer payments

I can't tell you how many times I've called my health insurance provider, asked about the cost of a procedure and then gotten a bill months later that is grossly higher than the estimate. The hours that I've wasted fighting with insurance billing departments haunt me, to the point that I make potential cost - not actual cost - one of the key factors in my choice to go through with a procedure.

So when Stanford Health Policy's Jason Wang, MD, PhD told me that about a study showing that Taiwan's breast cancer bundle payment program appears to have contained costs and improved outcomes, I thought, "Why aren't we doing this in the U.S.?!" Indeed, Wang believes that the success of the Taiwan program is applicable to cancer treatment around the world.

So what are bundled payments? Right now, many American health-care providers operate on a fee-for-service (FFS) system, which means you pay for every appointment, test and procedure individually. Bundled payments mean insurers pay one set price for ALL treatments related to a specific condition. For instance, all stage two breast cancer patients would incur the same costs for their treatment regardless of what procedures they need, unless their disease progresses to stage three.

How does that improve outcomes? Wang told me it forces health-care institutions to coordinate care.

"When you play in an orchestra, the whole group needs to play together, so it plays the right tune," said Wang. "Focusing on value for the patient and the health-care system forces people to play the same tune."

Bundled payments are already being used in the U.S. for conditions with fairly predictable costs, like appendicitis and even chemotherapy. But some health-care providers worry that bundling more complex diseases - like cancer - is too risky, financially.

Wang's study suggests otherwise. Taiwan's program not only contained breast cancer costs - eventually making costs for the bundled payment patients cheaper than their FFS counterparts - but also was associated with higher quality care and better outcomes for patients, even improved survival rates.

Wang hopes that such positive results will ease the concerns of health-care institutions in the U.S. regarding bundled payments. "If institutions take the leadership of providing the infrastructure to coordinate care, they can really deliver better care with the same or lower costs," he said.

The work appears in the Journal of the American Medical Association Oncology.

Photo by iStock

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