Changing physician incentives for cancer care to reward better patient outcomes instead of use of more costly drugs.

More-sophisticated chemotherapy regimens have improved the outlook for cancer patients since the 1970s, but the payment system for cancer chemotherapy has not changed during that time span. The "buy and bill" approach for reimbursement provides incentives for medical oncologists to use expensive medications when less costly alternatives that deliver similar results are available. Furthermore, the system does nothing to assess how much value society derives from high-price drugs. This paper reviews the historical context of "buy and bill" reimbursement and considers the use of clinical pathways and bundled payments, two alternative strategies that are being tried to reward physicians for improving outcomes and reducing the total cost of cancer care.