Insurers Push to Rein In Spending on Cancer Care

With Costs in Mind, WellPoint Guidelines Aim for ‘Best Drugs, Best Protocols’.

Insurers are changing how they pay for cancer care, aiming to blunt soaring costs and push oncologists to adhere to standardized treatment guidelines.

The largest effort yet is set to be unveiled by WellPoint Inc., WLP -0.07% which will begin offering oncologists a $350-per-month payment for each patient who is on one of the insurer’s recommended regimens. WellPoint, the No. 2 insurer in the U.S., will roll out its new program July 1 in six states and through its entire network by the middle of next year. Initially, it will focus on breast, lung and colorectal cancer, but it will expand to other forms of the disease.

Programs like WellPoint’s and others around the country are part of an effort to smooth out wide variations in how doctors treat patients, which health experts say can be wasteful and don’t always benefit patients. In cancer, insurers and health-care providers have been developing treatment protocols—sometimes known as “pathways”—that are supposed to represent the best and most efficient approaches, balancing cost, benefit and side effects. Insurers are then paying doctors according to how well they comply.

These efforts have the potential to transform the way doctors practice medicine, but they can also spark pushback if they are seen as heavy-handed. Some oncologists worry that moves to standardize treatment could cause tensions as genetics increasingly guide them toward more individualized approaches. Also, there is no widespread agreement about how such programs should work or the exact protocols they should use.

Brian J. Bolwell, chairman of Cleveland Clinic’s Taussig Cancer Institute, said the clinic will participate in the WellPoint program “where it makes sense,” and the extra $350 payment “is not something we’d ignore.” He said WellPoint’s clinical recommendations were reasonable, but the clinic is developing its own treatment pathways, and he is concerned about facing different recommendations from each insurer.

“We generally don’t like to practice by insurance company, we practice by patient,” he said.

Cancer is ground zero for such efforts. The U.S. spent more on cancer drugs last year—$37 billion, up 19% in five years—than any other category, according to the IMS Institute for Healthcare Informatics, a unit of IMS Health. Overall costs for treating cancer are well over $100 billion annually and mounting steadily, according to researchers at the National Cancer Institute. Some newer cancer drugs can cost more than $100,000 for a round of treatment.

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