Value-based care in cancer treatment

We’ve talked a lot about value-based care and how beneficial it can be for payers and patients, but we haven’t yet explored why it’s so critical in cancer care, specifically.

To put it simply, value-based cancer care can be life-changing (and sometimes life-saving) for patients—both in terms of health outcomes and financial burden. 

As Pia Bhatia, Carrum’s general manager of Cancer Care, puts it, “The stakes are life and death when it comes to getting real quality cancer care.”

This year, for example, the American Medical Association reported that patients of a major medical group that focuses on prevention, quality, and long-term outcomes (rather than treatment volume) are diagnosed with Stage 1 cancer at rates 50% to 70% higher than the national average. This doesn’t mean more of them are getting cancer; it means this value-based approach is catching cancer diagnoses earlier, which can drastically improve a patient’s treatment options and prognosis.

Another 2025 study on Medicare Advantage (MA), a value-based care model, found that at-risk MA patients experienced higher quality outcomes and lower health resource utilization (e.g., acute inpatient admissions, 30-day readmissions, emergency room visits) when compared with traditional Medicare patients.

Below, we explore why value-based care should be the default in cancer care, and how it looks in practice.

What is value-based care?

In short, value-based care is a healthcare delivery model that prioritizes and incentivizes the highest quality and most appropriate care rather than more care or more expensive care.

Delivering high-quality healthcare encompasses performing evidence-based care, in addition to how well the patient is treated by their doctors, how timely their care is, how comprehensive, efficient, personalized, and effective their treatment plan is, and how equitable their experience is compared to others in similar situations.

It’s about making sure “you get the best quality care the first time around, and that your money is well spent and you’re getting value at the end of the equation,” Bhatia explains. “It’s no different from how you would go buy anything that’s high cost at the market—you would want to make sure that your high-cost purchase actually works and provides you the utility you were expecting.” A brand new air conditioning unit, for example, is useless if it barely keeps you cool. Why would you approach healthcare—especially cancer care—any differently?

Value-based care models don’t just reward positive results; they also factor in penalties for unnecessary, overly expensive, and burdensome approaches. In turn, healthcare providers are incentivized to collaborate and coordinate treatment across specialties and be thoughtful and strategic in their recommendations.

What value-based care looks like in cancer care

For cancer treatment specifically, value-based care tends to incorporate several components:

Evidence-based medicine

To prioritize quality and ensure optimal health outcomes, cancer providers under a value-based care model must practice evidence-based medicine.

“The pace of innovation in cancer care is dizzying,” Bhatia says. “And there are so many nuances to how a specific patient type should be treated that not every oncology practice actually has access to the latest research and latest evidence at their fingertips.”

A fundamentally different payment model

The fee-for-service system incentivizes more treatment across conditions.

In cancer, fee-for-service is a double-whammy because it also incentivizes the more expensive treatment. Oncology practices are paid a percentage markup on the therapies administered in their clinic, which drives rational providers to prescribe the more expensive therapy.

“For example, in the fee-for-service system, you will always be prescribed a brand name targeted therapy drug called Herceptin,” Bhatia says, even if “there’s a clinically equivalent, cheaper biosimilar available…because that’s how the incentives are wired.”

One solution, she explains, is a bundled payments approach. “It’s all-inclusive, regardless of what therapeutic you prescribe. It corrects the perverse incentive that exists in the fee-for-service system.” Providers benefit from this type of model as well because they can take home the cost savings of selecting an equivalent biosimilar option. Another solution possibility: incentivizing the use of clinical pathways that take quality and cost into account to inform treatment decisions.

Ultimately, the bottom line is this: Value-based payment models (e.g., bundled payments, pay-for-performance) are a win for everyone involved.

Proactive symptom management

Value-based care creates incentives to avoid unnecessary resource utilization. In cancer, a key metric that’s tracked is avoidable emergency department (ED) visits.

As Bhatia explains, “Many patients end up in the ED due to pain or chemotherapy-related side effects. When a provider is incentivized appropriately to avoid complications, they invest in mechanisms to actively monitor patients, and you see fewer avoidable ED visits, improved outcomes, and lower cost.”

A patient-centered decision framework

Whereas in a traditional fee-for-service system, providers are incentivized to conduct more treatments, providers in a value-based system are incentivized to achieve the right treatment. Bhatia calls this a “patient-centered decision framework” because it’s focused on what each individual wants and needs.

For instance, when it comes to end-of-life discussions (which, unfortunately, is unavoidable for some patients who have cancer), “some people want the extra one month, two months of survival, and they don’t care what the toxicity profile looks like,” she says. “But others just want the quality of life…value-based care will allow you to prioritize quality of life in that conversation—and, most importantly, talk to the patient and have a shared decision-making framework about what their goals for treatment are and how they would like to live for the remaining months and years of their life.”

Why value-based care is essential in cancer care

Like healthcare spend as a whole, the cost of cancer care is rising at an unsustainable rate, with many employers projecting an increase of 9% per year for the next few years. In the Business Group on Health’s (BGH) 2025 Employer Survey, 80% of employers listed cancer as within their top three drivers of healthcare spend, with musculoskeletal following at 74% and cardiovascular in third at 40%.

It’s doubtful this cost issue will go away under the fee-for-service system. To make a real impact on spend (and outcomes), a value-based treatment approach is essential. Because, while navigation is incredibly helpful in connecting patients with care, navigation alone is unlikely to be able to significantly impact the cost trend. To do that, you need a value-based care model, one that pre-negotiates lower rates and ties reimbursement to outcomes.

With medical costs continuing to rise, especially in cancer care, Bhatia emphasizes that there’s no other option but to get behind value-based models.

“If you do nothing, cancer costs will continue to rise because more people are getting diagnosed with cancer. They’re living longer, more expensive therapies are being launched, and existing therapies continue to take price increases,” she notes. In addition, the dysfunctional (and often harmful) fee-for-service systems that incentivize more expensive prescribing are also not going away. “All of those drivers make the trend arrows go up.”

Perhaps most importantly, a value-based approach can completely change the member’s treatment experience (and thus their life).

Consider the story of Carrum member Abbie, who was diagnosed with breast cancer: After a confusing and frustrating initial diagnosis, Abbie turned to Carrum’s specialists for a second opinion. In no time, Carrum had partnered her with a new provider at one of our cancer COEs and ensured she paid nothing for treatment.

“I was blown away by the standard of care there and by the campus and the whole experience of being there,” Abbie says. “And I just knew this was the right move for me. I felt like I had someone who actually cared about me as a human being.”

Bhatia says these individual benefits, like the ones Abbie felt, can have a ripple effect for employers. “You have now supported this person through their most vulnerable time in their life,” she says of employers that partner with value-based cancer care providers, and that creates a sense of loyalty that keeps staff happy, engaged, and invested in their careers long-term.

How Carrum Health brings value-based care to cancer treatment

Carrum Health’s Centers of Excellence network embodies value-based care first and foremost through the providers it negotiates and contracts with.

On top of being required to pass Carrum’s rigorous quality evaluation to even join our network, “all of our providers are contractually obligated to perform evidence-based, quality care, and in many of those cases they are also contractually and financially on the hook for any treatment-related complications,” Bhatia says.

“So not only are 100% of our oncologists going to prescribe based on clinical pathways and National Comprehensive Cancer Network (NCCN) guidelines, they will also invest in proactive symptom management to avoid any unnecessary complications and ED visits.” This means, she explains, that doctors are regularly checking in with members and adjusting course if the regimen is not manageable or tolerable for patients.

Carrum’s cancer treatment bundles incentivize providers to choose quality over quantity. Beyond that, however, we also have pay-for-performance contracts that offer bonuses for providers who adhere to clinical pathways while penalizing those who do not. “Equally important is that reimbursement is tied to making sure patients are satisfied and care is delivered in a timely manner,” Bhatia adds.

For the patient, cancer treatment is inevitably and unavoidably pricey, but unlike other models, value-based care (especially Carrum’s approach) aims to drive down the costs as much as possible.

“70% of all cancer costs are drug and radiation related,” Bhatia says, adding that this can be a huge stressor for patients. “There are lots of surveys that have been done that show that a patient diagnosed with cancer is more concerned about their ability to pay for it than they are about the prognosis of their condition. And anyone with cancer is 2.7 times as likely to declare medical bankruptcy as any other condition.”

But with Carrum, members pay little to nothing* for their cancer treatment. And that’s because Carrum’s unique value-based approach creates such meaningful savings for employers that they choose to pass on some of those savings to members by waiving their cost share.

Moving forward

Cancer care is too important (and costly) to be left to outdated models that reward volume over value. Value-based care shifts the focus to what truly matters: delivering evidence-based, coordinated, patient-centered care that improves outcomes while controlling for costs. For employers, it’s a powerful way to reduce spend and support their people during one of the most challenging periods of their lives. For patients, it can mean earlier diagnoses, fewer complications, and the chance to feel seen, heard, and cared for—not just as a case, but as a human being.

Learn more about Carrum Cancer Care here.

*HDHP enrolled members must pay federal minimum deductible before additional costs can be waived.