ideasIdea

Pay the same for an infusion whether it is given in a hospital or a clinic

The same chemotherapy infusion costs payers and patients more in a hospital outpatient department than in a doctor's office; paying one rate would stop hospitals buying clinics to charge the higher price.

Hospital outpatient departments are paid under a separate, higher fee schedule and can add facility fees. As hospitals have acquired community oncology practices, infusions have moved to the dearer setting without any change in what is given. Site-neutral payment sets one price for the same service; Medicare applied it to clinic visits in 2019 and Congress has repeatedly considered extending it to drug administration.

Hypothesis

Site-neutral payment for chemotherapy administration and imaging will cut Medicare and patient spending for those services by at least a fifth in hospital-owned sites without measurable change in safety or access.

Rationale

The clinical service is identical; the price difference is a payment rule. Medicare's 2019 clinic-visit change reduced spending as modelled.

What would test it

Phase in site-neutral rates for infusion codes in Medicare and track spending, patient coinsurance, infusion volumes and hospital acquisitions of practices against the prior trend.

Maturity

being tested at scale

Who has to act

policy

Cost to try

Medium ($1M to $50M)

Years to first evidence

Bottlenecks it attacks

Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.
Incentives reward me-too drugs and marginal gains · The system pays the same for a drug that adds two months as for a cure, so companies race to copy rather than to cure.
Fragmented care and guideline gaps · Patients fall between specialists, wait for referrals and often do not get the treatment guidelines say they should.