Mixed results for UnitedHealth bundled payment pilot

UnitedHealth Group (NYSE:UNH) said a pilot test of a bundled payment model for oncologist services and chemotherapy drugs from 2009-12 led to a 34% reduction in total medical costs compared to predicted costs with a traditional fee-for-service model. However, the cost of chemotherapy was 179% higher in the bundled payment group compared with the predicted cost.

The predicted costs were calculated using a control cohort of treated patients from the insurer's fee-for-service database over the same period. UnitedHealth said the reason for the higher chemotherapy cost with the bundled payment model is unclear; the insurer expected the bundled payment model to reduce chemotherapy costs because it removes the incentive for doctors to prescribe higher-priced drugs. ...