How could nationwide  value-based payment for cancer care become a reality in the next 5 to 10 years? Looking to today’s market for clues, our team has envisioned three scenarios of how stakeholders could make this happen.

In each scenario, we describe what the future would look like, how it would unfold, and what it would mean for major stakeholders in healthcare — and what to do if this future doesn’t look rosy for your organization.

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One or more vendors would develop a scalable oncology value-based payment model and market it to payers interested in promoting high-value cancer care. Over time, the model or models would be implemented by cancer providers across the country, creating a standardized path to value-based payment.

The models could include a variety of components, such as bundled payments for specific episodes of care, standardized clinical pathways, and quality measures.

Vendors are in a unique position to offer this type of solution because of their strong funding sources and willingness to innovate. Many private equity firms are eyeing value-based cancer care and would potentially be interested in funding the vendors bringing these solutions to market.

As a result, more cancer payments would be funneled through vendor-driven value-based payment models, disrupting local market dynamics between cancer providers, health plans, and employers.

1. Market dynamics will be disrupted.
   As vendor-developed value-based payment models gain scale, payers will begin steering patients toward providers who adopt them. Health plans (and potentially at-risk primary care groups) will use the models as a basis for oncology network curation, and employers will form centers of excellence partnerships with providers who implement the model. This will disrupt referral streams and change the competitive landscape for cancer care.
2. Cancer payment will grow increasingly fragmented.
   Payment for care delivered under vendor-developed value-based payment models will flow through the vendors rather than from the health plan to the provider. At the same time, cancer care delivered outside of the scope of these models will continue to be reimbursed through traditional payment channels. Consequently, cancer payment will become more fragmented, making it more difficult for health plans to have oversight into the payment chain. This could increase administrative burden for health plans, employers, and providers.
3. Cancer care will become more standardized.
   The vendor-developed models will likely include clinical pathways and specific quality metrics that providers must meet. Widespread implementation of the models across provider organizations will result in more consistency in care pathways and certain care practices, leading to greater standardization of cancer care nationwide.

After over a decade of experimenting with oncology value-based payment pilots, payers have made progress toward designing models that can be implemented at scale. Some payers have developed payment bundles that, once operationalized, can be easily scaled to many providers and even other payers. Others are trialing models that have a standardized payment framework but adjustable cost targets and quality measures, allowing them to best fit the needs and considerations of individual participants.

Technological advancements are also making it easier to scale value-based payment. Recently, some payers have leveraged technology to streamline and automate key administrative processes in their payment models, enabling more providers to participate without significant additional investment.

As scaling value-based payment models proves feasible, third-party vendors have started creating their own models and expanding them across providers and markets. The most recognizable example is Carrum Health, a value-based payment platform for employers, which developed bundles for metastatic breast and thyroid cancer treatment in partnership with Memorial Sloan Kettering. Carrum is now expanding the bundles to other oncology centers of excellence, forming the beginnings of what could become a nationwide provider network.

Other vendors are designing different types of scalable models; for example, Outcomes Matter Innovations is partnering with oncologists to facilitate value-based payment centered on clinical treatment pathway adherence. Most recently, the American Society for Clinical Oncology launched an Oncology Medical Home certification, which it hopes will become a universal standard for oncology value-based payment.

Employers, concerned about rising cancer costs, are turning their focus to value-based payment solutions, supported by rising employee interest in high-value cancer care. Employees are now aware of the debilitating costs of cancer care and are open to participating in programs that can help lower those costs. Early evidence shows patients who have been treated through existing models have had positive experiences and high-quality outcomes. As more employees are becoming receptive to soft steerage, employer interest in vendor-driven value-based payment models is growing.

With more vendors entering the oncology value-based payment space and growing interest from payers and providers in implementing these models, it’s likely that one or several models will scale across the country, bringing standardized value-based payment to the industry.

• Though recent pilots are demonstrating scalability, it would be difficult for any one payment model to be appropriate for all cancer providers, patient populations, and cancer types.
  • Providers: Market- and practice-specific considerations (e.g., practice size, case mix, payer mix, experience with value-based payment) mean different models work best for different practices. Some practices will find it harder to succeed than in a given model than others, especially depending on the level of risk involved, and providers often prefer models that can flexibly fit their needs.
  • Patients: Though some pieces of cancer care can be standardized, populations in different geographical areas differ genetically, socioeconomically, and culturally. It could be challenging to design a model that could meet the needs of all patients simultaneously.
  • Cancer types: Even standardizing cancer care for one sub-tumor site can be difficult. It’s possible that vendors would launch models that address care for certain cancer types (such as Carrum’s metastatic breast cancer bundles) rather than models that bring value-based payment holistically to all cancer types, limiting their scale.
• Many vendors are backed by private equity firms looking for short-term (3-7 year) returns, raising questions about the sustainability of their models. However, some funders are prepared to be involved much longer.
• Not all employers or health plans will be interested in entering to these models or steering patients toward providers who have implemented them. Even a model that gains some scale could end up being adopted in only small pockets of the country.

Not every stakeholder would be a winner in this future scenario. Here’s how key stakeholders would be affected and how they should respond.