Practices in Bundled Payment Program Credit Medical Home Structure for Success

Joseph Burns
Published: Friday, Sep 26, 2014
Barry Russo

Barry Russo, CEO

In July, UnitedHealthcare (UHC) reported that an innovative program using bundled payment for cancer care resulted in an impressive 34% reduction in medical costs when compared with costs for a control group. Moreover, the study found that patient outcomes were the same in both groups. 

The study yielded important lessons to oncologists about delivering care under bundled payment. Leaders at 2 clinics in the study, Lee S. Schwartzberg, MD, a senior partner and medical director at the West Clinic in Memphis, Tennessee, and Barry Russo, CEO of the Center for Cancer and Blood Disorders in Fort Worth, Texas, said they learned that their success with bundled payment would not have been possible without also delivering care in a patient-centered medical home.

“We would have had trouble delivering care in this way if we were not organized as a patient-centered medical home,” said Schwartzberg. His practice has 33 physicians in 9 offices and was recently designated a Patient-Centered Specialty Practice by the National Committee for Quality Assurance.

Support Staff Needed

Under the medical home model, the practice gets paid an additional fee to hire nurses or case managers to care for patients between visits to the oncologists. They ensure that patients get the care they need to prevent high-cost emergency department visits and hospital stays.

“In this program, the entire staff of the West Clinic participated and was able to steer patients away from needless emergency room (ER) visits and inpatient care,” Schwartzberg said. “One of the lessons we learned was that when you take out the costs for chemotherapy, the other highest costs are generated through ER visits and hospitalizations. That’s why we intensified our efforts to put more navigating power and resources into the medical home to keep patients out of the ER and out of the hospital.”

Another significant lesson the West Clinic physicians learned was the importance of standardizing care by identifying what each patient needed and then choosing and following the appropriate treatment pathway for each, Schwartzberg said.

The Value of Data Analysis

Identifying patients’ needs also was critical to his group’s success in improving patient outcomes. UHC shared the extensive data it had on each patient’s history and course of treatment, helping the physicians to understand all patients’ treatment needs.

“UnitedHealthcare has records on all patients’ treatment. We don’t have the hospital records on these patients or records from the ER. It makes sense that the payer would share that data with us, but they don’t normally do that,” Schwartzberg said. “They had staff working full time on this project,” he added. “It would be difficult for any practice to collect and analyze the data that UHC had on its patients.”

The bundled payment program also helped the practice develop a close working relationship with UHC, he added. Such relationships are rare because usually practices and payers argue about coverage and payment for cancer care.

Eliminating Uncertainty

“In the past, there was a great degree of uncertainty and suspicion between physicians and health plans. But since we launched this bundled payment project, the entire attitude has shifted,” Schwartzberg said. “Now, it’s clear that insurers and providers have to work together in a way that is patient-centered.”

Dr. Lee S. Schwartzberg

Lee S. Schwartzberg, MD



For Russo’s group, the infrastructure needed to support its medical home effort allowed the practice to deliver care to patients in the bundled payment successfully. The center has 19 physicians in 9 offices and is participating in the Come Home project for Medicare patients and a shared-savings program for Aetna patients.

“To make bundled payment work financially you have to do a medical home because you have to have the infrastructure, meaning the staff and the hours, to manage the costs. If you’re in a bundled payment or shared-savings arrangement, you’re getting a flat rate. That means you have do a medical home to make that work because you need a way to manage costs,” he said.


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