• Wall Street Journal, Wednesday, October 20, 2010 10:40 AM

UnitedHealth Group today will announce a new program that reimburses oncologists at cost for whatever drugs they prescribe and will pay them separately for any services they render. The intent is to eliminate any incentive for doctors to choose a drug based on profit, Avery Johnson reports.

The insurer estimates that drugs account for 65% of an oncologist's income and believes that doctors continue giving drugs as a way to get paid even when the treatment is no longer viable for a dying patient. UnitedHealth will give doctors a set fee, instead, that includes the profit they would have made from the drugs they selected, plus costs for managing patient care.

UnitedHealth is not the only insurer experimenting with payment schemes. The new federal health law calls for Medicare pilot programs that pay doctors based on the quality -- rather than the quantity -- of their services. As a result Cigna is testing a payment scheme that shares savings with doctors if costs come in under targets.

Read the whole story at Wall Street Journal »