One-Stop Fixed Pricing for Cancer Care: A Model of Transparency and Certainty

Stephen Bonner

With a streamlined approach toward cancer evaluation set to debut this month, Cancer Treatment Centers of America (CTCA) is betting that patients and insurers will pay a set price for a package of services, including testing, diagnosis, and treatment recommendations, provided at a single location and within a specified time frame.

What CTCA calls its “comprehensive diagnostic program” will include consultations with oncologists and other doctors, imaging, lab work, psychological counseling, and lodging, among other services, performed as needed and requested. As part of the package, CTCA guarantees its staff will complete comprehensive, evidence-based diagnoses and treatment plans within 3 to 5 days.

The program will first be made available to patients with breast, colorectal, lung, and prostate cancers. The cost for these programs runs from $10,000 to $14,500. After receiving their treatment plans, patients are free to seek care at another facility if they choose.

Stephen Bonner, president and CEO of the privately held healthcare system, said the new model is intended to provide transparency and certainty on costs and services, while streamlining what can be a drawn-out process from a patient’s first tests to the development of a sometimes complex treatment plan.

“A high-quality evaluation phase is very important to late-stage patients in particular, as is a condensed time frame. Testing and feedback, including blood tests, scanning and biopsies, can take weeks and even months, as many places do this serially,” Bonner said.

While the cost of treatment, including new drugs and biologics, is often cited as the prime driver of escalating cancer care expenses, Bonner noted that administrative costs—across the spectrum of care—can comprise as much as 20% to 25% of the cost of services in some cases. CTCA will reduce that overhead, he said, by delivering all services under one roof and by sending a single bill with a predictable price tag.

"If you provide more reliable information on quality of care and more information on the cost of care, consumers will shop more carefully."

—Stephen Bonner

“This is a one-line bill and an agreed-upon price, adjudicated for a fraction of the price of multiple billings,” he noted.

Both public and private payers are mulling adoption of similar models for treatment, known as “episode-based payments,” that cover agreed-upon costs for a clinically-defined period of care. Payers and physicians say such an arrangement encourages the coordination of services, among other efficiencies.

Bonner said he views the new program as an elaboration of CTCA’s core brand, which he described as providing patients with choices based on clearly defined criteria.

“We think the big opportunity for healthcare is to re-engage the healthcare consumer over what to buy and whom to buy it from. If you provide more reliable information on quality of care and more information on the cost of care, consumers will shop more carefully,” he said. “We’ve made a push on quality by publishing data on outcomes—on length of life, quality of life, and patient experience. The next step was price.”

Bonner said CTCA “believes we’re offering this at a competitive price,” although he said comparison shopping was difficult. “This is not wellvetted. We hired a consultant to ‘secret shop,’ but those answers were hard to find. They are not always readily provided.”

In their initial response to the new program, employers and insurers were both “interested and intrigued,” he said.

“They’re very interested in the idea. Employers are most interested in simplicity and clarity. As with wellness programs, they look more and more at supporting employees and letting them take accountability for their own care,” he said, adding, “Payer participation is an important factor, and we’re actively working with insurers and employers to enroll patients for the pilot program.”

Bonner said that while CTCA is finalizing agreements with a “handful of partners,” the healthcare company is planning to begin advertising the program and “let it be patients’ decisions to go ahead and work it out on their end.” It will be available at all CTCA hospitals in Chicago, Philadelphia, Tulsa, and suburban Phoenix.

“This is a pilot. We want to see if people find this appealing. We’ll learn and we’ll adjust,” he said, adding that traditional billing methods will continue to be available well into the future.

But it’s a model he believes has promise. CTCA has already begun developing a similar model for cancer treatment that it plans to roll out over the next couple of years. Bonner said the company was guided and encouraged by the ever-greater management role that patients are taking in their own healthcare, as witnessed by the emergence of health savings accounts and self-pay services like Lasik surgery.

“There is not enough clarity on quality of care and price. And value is next,” he said. “The healthcare market is looking more and more like the conventional consumer market.”