Doctors catalysts for pay-for-performance program

A Washington state oncology group hopes its "clinical pathways" project can improve care, reduce insurer costs and boost the bottom line.

By Kevin B. O’Reilly — Posted Dec. 25, 2006

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If the physicians at a Washington state oncology group adhere to strict quality and efficiency guidelines, they could get a boost in pay from a local health insurer. It sounds like one of the hundreds of pay-for-performance programs sprouting up around the country, but here's the twist: It was the doctors' idea.

Bruce Cutter, MD, is an oncologist and president of Cancer Care Northwest in Spokane, Wash. In 2003, he approached a Premera Blue Cross regional medical director and said, "Can we have a different conversation about how things are done and what we are trying to accomplish?"

That conversation with Dave Johnson, MD, gave birth to a physician-led quality and cost measures program known as clinical pathways. The program is part of a larger Cancer Care Northwest quality effort for which Premera kicked in start-up money to help institute an electronic medical records system and expand the group's patient-support initiative.

"This was all done internally," Dr. Cutter said. "Premera had no right, nor did they ask for the right, to dictate anything. It's very much a physician-driven, clinically driven program."

For a year and a half, the 20-physician group worked to tweak guidelines from the American Society of Clinical Oncology and the National Comprehensive Cancer Network to help cut practice variation and insurer costs.

So far, Cancer Care Northwest has developed clinical pathways for lung, breast, colon and ovarian cancer, giving them "teeth," in Dr. Cutter's words, by measuring compliance and requiring doctors who want to deviate from the plan to get approval from a quality committee.

"We do explicitly take economics into account," Dr. Cutter said, but only after clinical effectiveness and side effects are evaluated do costs come into play in devising the pathways. About 900 patients have been treated under the new guidelines.

Premera's Dr. Johnson said the savings could be big. For a 12-month lung cancer treatment course, there was an $8,000 difference for equally effective therapies. With a "tidal wave of demand" for oncology treatments coming as the baby boomer generation moves into its 60s and with expensive drug treatments in the pipeline, "the hope we have is that physicians can come together and have a dialogue about what's effective."

Neither Cancer Care nor Premera would divulge how much the insurer invested in the group's quality improvement program or how much extra money the group could make by implementing its pathways project.

Dr. Cutter said he is not yet sure whether his group is making money on the deal because only Premera, which covers about a third of Cancer Care Northwest patients, is offering a pay boost, while Medicare and other payers stick with a fee-for-service model.

The clinical pathways changes, however, are applied to all patients regardless of their carrier. Still, Dr. Cutter is enthusiastic enough about the pathways concept that he's pushing the idea at US Oncology, a network of more than 900 physicians that cares for cancer patients in 460 locations in 32 states.

A spokeswoman for the Washington State Medical Assn. said that although it is not involved in the clinical pathways project, Cancer Care Northwest and Premera should be lauded for working together to improve the quality and efficiency of care.

The AMA has adopted principles and guidelines on pay-for-performance, saying that they should be fair and voluntary and should focus on improving quality rather than reducing utilization, and should use new funds to reward doctors. Also, AMA policy says pay-for-performance programs should not undermine the patient-physician relationship.

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