US Oncology Invests in the Development of Physician-Payer Risk Contracting Model With Milliman Assistance

Innovent Oncology, a subsidiary of US Oncology, has engaged Milliman, a premier global, actuarial and consulting firm, to help develop models in which physician-led oncology organizations can contract around risk, with the intent of negotiating with payers in the first half of 2011. Over the next several months, US Oncology and a Milliman team will explore various risk contracting methodologies including episode rates, bundled payments, and capitation to identify promising areas where oncologists can effectively improve and maintain care quality while lowering overall health system costs. US Oncology is also investing in the infrastructure necessary to support ongoing data analysis for the successful implementation and administration of risk-based contracts.

“This investment will prepare US Oncology and physicians in the United Network of US Oncology for the future of health care as payers consider the alternatives to the fee-for-service model,” said Roy Beveridge, MD, Executive Vice President & Medical Director of US Oncology. “The better understanding of cancer care costs and outcomes gained through this investment will build on our strong foundation of deep clinical insight and rich data capabilities.”

The Centers for Medicare and Medicaid Services (CMS) is also championing alternatives to the fee-for-service model with planned demonstrations and pilots around episode of care payments, bundled rates, and partial capitation, in addition to supporting new payment models through the Medicare Innovation Center, beginning in 2011, and the Medicare Shared Savings Program through which Medicare will implement Accountable Care Organizations (ACOs) beginning in 2012. US Oncology is working closely with CMS and the Congress to develop new payment strategies to align the interests of oncologists, cancer patients and the Medicare program.

US Oncology has a long history of uniting physicians to create innovative solutions for oncology care. Physicians affiliated with Innovent Oncology apply evidence-based medicine, proactive patient management and support, and advance care planning to patient care. This increases the quality and consistency of care received by patients, and aligns incentives to produce better patient outcomes while reducing the overall cost of care.

While capitation models have not been successful in the past, US Oncology is uniquely positioned to understand and administer risk-based contracts in oncology. Uniting the nation’s largest community-based cancer research and treatment network, US Oncology touches the lives of more cancer patients than any other cancer-fighting organization; supports over 900 oncologists on a single, unified electronic health record (EHR) with over 1.6 million patient charts distributed throughout the nation; and has developed Level I Pathways proven to provide the best care, most cost-effectively.

“Physician-led organizations are ideally positioned to assess and balance the clinical, quality, and cost demands of today’s healthcare environment,” said Bruce Pyenson, Principal and Consulting Actuary, Milliman, New York. “We look forward to working with US Oncology to help oncologists create the health care delivery and reimbursement models of the future.”

“This is one more step along our journey to align reimbursement to recognize and reward high-quality, evidence-based care,” said Bruce Broussard, Chairman and CEO of US Oncology. “Our work with Milliman will help us arm oncologists with the tools they need to effectively collaborate with payers to align the interests of the patient, payer and physician. This is an example of the type of investment we have made and will continue to make to enhance the sustainability of community oncology.”

Earlier this year, US Oncology engaged Milliman to produce the first comprehensive view of chemotherapy treatment costs. The study found that over the course of a year, a cancer patient receiving chemotherapy incurs, on average, approximately $111,000 in costs, which is almost four times the cost of a cancer patient not receiving chemotherapy, three times the cost of a typical coronary artery disease patient, and six times the cost of a typical diabetes patient. The data generated from this study support the rationale for the Innovent Oncology program and, now, for exploring other ways to align incentives to deliver high value cancer care. US Oncology remains committed to supporting these activities with continuing support of Innovent Oncology and the Pathways program with additional support for IT infrastructure to model alternative delivery systems.

For more information, contact Innovent Oncology at 866-214-2194 or

About US Oncology

US Oncology, Inc. is the nation’s leading integrated oncology company. By uniting the largest community-based cancer treatment and research network in America, US Oncology expands patient access to high-quality, advanced care and advances the science of cancer care. Headquartered in The Woodlands, Texas, US Oncology is affiliated with more than 1,300 community-based oncologists, and works with patients, payers, and the medical industry across all phases of the cancer research and delivery system. Through the use of innovative technology, clinical research, evidence-based medicine and shared best practices, US Oncology improves patient outcomes and offers a better patient experience. For more information, visit

US Oncology expands patient access to high-quality, advanced cancer care through its comprehensive evidence-based medicine and patient care program, Innovent Oncology. Building upon physician and clinician expertise to create value in cancer care, Innovent Oncology uses a powerful reporting and analytic platform to increase efficiencies and reduce treatment variability across the entire patient care continuum. By applying US Oncology’s well-defined Level I Pathways treatment guidelines, proactive patient care management and support, and advance care planning, physicians can enhance the quality and consistency of patient care delivered in communities throughout the nation. The program also strives to align incentives between providers and payers to produce better patient outcomes and an improved patient experience. For more information, call (866) 214-2194 or visit

About Milliman

Milliman is among the world’s largest independent actuarial and consulting firms. Founded in 1947, the company currently has 52 offices worldwide. Milliman employs over 2,400 people with a professional staff of more than 1,100 qualified consultants and actuaries. The firm has consulting practices in healthcare, employee benefits, property & casualty insurance, life insurance and financial services. Milliman serves the full spectrum of business, financial, government, union, education and nonprofit organizations. For further information, visit