Many health care analysts and oncology professionals have begun to question the long-term viability of medical oncology given the rising costs associated with cancer care. 1,2 Cancer care, based on per-person costs, has been described as the most expensive area of health care, 3 constituting approximately 5% of total health care spending. 4 Thus, while the costs associated with cancer can be, and often are, quite high, the benefit of that spending is limited to only a fraction of the population.We recently published a proposal 5 that could provide a framework for a Medicare pilot program in an attempt to improve the quality of cancer care while addressing the major cost drivers in the practice of medical oncology. We described a rational way to link clinical practice to evidence-based guidelines and at the same time realign practitioner incentives such that spending on drugs could be lowered incrementally by using a market-based approach. Further, we proposed that our approach could be executed through Medicare in a manner that would not radically alter physician practice economics and would allow for adequate monitoring of best practices and outcomes.Before discussion of the specifics of our proposal, it is important to note that the practice of medical oncology has two important characteristics that are central to the development of our model. These include published standards of care for the treatment of the most common cancers, by multiple professional societies, as well as readily defined treatment periods that could serve as the "episodes" of care. Given this, it is possible to generate a list of treatment options that could be considered to be appropriate for the vast majority of patients with a specific diagnosis, as well as allow for a way to break down ongoing therapy into manageable blocks from a reimbursement standpoint.With these factors in mind, we have proposed an episodebased reimbursement approach in which Medicare would deliver a set reimbursement to providers (or provider networks) to pay for a period of care (eg, 1 month or 3 months) for a particular patient with a defined condition (such as metastatic lung or colon cancer).As an example of our model, consider the case of non-smallcell lung cancer (NSCLC). There are currently eight combinations of chemotherapeutics that are recommended as first-line treatment for this disease, according to the National Comprehensive Cancer Network (NCCN) and a number of other practice guidelines. The costs of these regimens (with administrative and supportive care fees) to Medicare vary quite substantially, however, from approximately $1,292 to $7,092 per month. If these regimens are largely interchangeable and of similar efficacy, an episode-based payment framework could result in savings without harming quality.For instance, imagine if the rate of reimbursement for a 1-month episode of treatment of NSCLC were set at $4,000 per month, and that payment was intended to support the costs of the chemotherapy, supportive care, and drug administration. This would ...