Impact of Alternative Payment Models on Personalized Medicine

Personalized medicine is changing the landscape in the battle against cancer. In the midst of this progress, is the trend toward value-based payment through alternative payment models (APMs), according to a recent article published in Evidence-Based Oncology that discussed a white paper from the Personalized Medicine Coalition.

To understand how APMs might impact personalized medicine, Amy M. Miller, PhD, and Andrew J. Shin, JD, MPH, highlighted three of the most prominent APMs and explored how clinical pathways and transparency trends are affecting them. 

Accountable Care Organizations (ACOs). ACOs allow for shared savings from a variety of stakeholders who collaborate to manage and coordinate care for a specified group of people. Although policy-makers have lauded the potential to reduce Medicare spending, the authors contended that there is still an open question as to whether the ACO model improves quality. They believe that, as the ACO program continues to evolve, it will be important to emphasize that delivery system reforms factor in quality as the main focus of patient-centered reforms.

Evidence-Based Payments. Evidence-based or “bundled payments” have been designed as a way to encourage coordination across different providers and to promote better, more efficient care. Yet, they have historically failed to recognize the importance of personalized medicine. Programs might achieve cost savings, as demonstrated by a 2009 pilot program from a large commercial insurer that reduced the overall cost of cancer care by 34%. Despite spending 179% more on chemotherapy medicine, the pilot participants achieved those cost savings through other savings, for example, in case management services. Based on the commercial insurance experience, the authors argued that bundled payments may be more useful in targeting waste and improving care coordination for treating conditions for which there are few innovative therapeutic strategies. Otherwise, bundled payments might hamper advances in personalized medicine that could dramatically change the treatment paradigm.

Patient-Centered Medical Homes (PCMHs).The PCMH model is designed around an individual patient’s needs and aims to improve access to care, increase care coordination, and enhance over quality while also reducing costs. While PCMHs are focused more on case management and access to primary care, the authors said the model is also likely to impact personalized medicine in managing the role of diagnostics and primary care in patient’s treatment care plan. 

Clinical pathways and transparency influence APMs, according to the authors. For example, transparency without recognizing key data gaps could be damaging in a personalized medicine context. Personalized medicine has the potential to improve care coordination and outcomes while controlling costs. However, if structured inappropriately and without appropriate safeguards to ensure high-quality healthcare services, APMs could limit patient access to vital services and medications and potentially interfere with the many advances in personalized medicine for cancer care, they explained.—Eileen Koutnik-Fotopoulos


Miller AM, Shin AJ. Alternative payment models: Paving the way or building a wall for personalized medicine. Evidence-Based Oncology. 2015;21(12):SP430.