Deal Between United Healthcare and MD Anderson Sparks Interest in Bundled Payments

United Healthcare, a subsidiary of UnitedHealth Group, has agreed on a deal in which they will pay the University of Texas MD Anderson Cancer Center a fixed rate for the care of up to 150 patients for specific types of head and neck cancer. This deal could serve as a model for other payment plans, as interest in these bundled payments has increased.

“Our partnership with MD Anderson Cancer Center marks an important step toward expanded bundled-care payment models and away from the traditional fee-for-service payments for oncology care,” said Dr. Lee Newcomer, UnitedHealthcare's vice president of oncology services, in a statement.

Bundled payments have already been seen in deals between private insurers like Aetna and BlueCross Blue Shield with hospitals. What is important to consider is that these bundled payments are usually for orthopedic or cardiovascular treatments which have higher volumes and high fixed costs. Medicare has not yet set up any bundled payments for cancer care, and this deal could act as a model for that.

UnitedHealthcare officials said they want more bundled payments for cancer care because that field and its related drug costs represent 11% of its commercial health-plan spending.