Episode-based payment for cancer care: a proposed pilot for Medicare

The steady introduction of more and more expensive cancer treatments has prompted policy makers to explore alternative payment approaches that might rein in costs. We propose a framework for "episode-based" payment during chemotherapy treatment, which would cover the costs of drugs and their administration for a predefined period of treatment and would have the potential to reduce costs and improve patient outcomes. Using the example of metastatic lung cancer treatment, we describe an approach that Medicare could pursue in order to test our proposal as a pilot program. If successful, the concept could be expanded to encompass longer time periods, other cancer diagnoses, and additional care components.