Health Plans Address the Rising Costs of Cancer Care

Dawn Holcombe, MBA, FACMPE, ACHE
Editor-in-Chief
President, DGH Consulting, South Windsor, CT

Dallas, TX—We have to control oncology costs; we think it makes sense to work with physicians to do so, but we have a long way to go in a short time frame. These were the general messages from 4 leading payers at the 2012 Cancer Center Business Summit.

The panel members expressed worries about oncology costs rising to the top concern for many payers, as well as an ongoing concern about widespread variation in costs and in treatmentchoices for patients with cancer.

WellPoint Oncology Medical Home
Jennifer Malin, MD, PhD, Medical Director of On­cology, Care Management, WellPoint, Los Angeles, CA, not­ed that the WellPoint data for the use of colony-stimulating factors for breast cancer, show a variation in treatment and in cost of 10% to 80%. As in other health plans, Dr Malin is seeing in­creasing charges for patients and for the health plan for care delivered in the hospital outpatient setting versus care delivered in the community practice setting. Furthermore, some of the oncology cost-management strategies that have been implemented by WellPoint include fee schedule changes to support community oncology, adjustments to drug payment rates that are higher than the average sales price plus 6%, and raising individual rates for generic drugs.

WellPoint has implemented one of the few oncology medical home pilots in the country, with the Wilshire Oncology Medical Group serving as a test of the medical home concept in oncology. Dr Malin said that the overriding concern for a health plan that is undertaking such a pilot is the need to consider how to scale a successful pilot to the rest of the market. It will soon not be enough to have just a few good projects for a plan; a health plan will need workable tools to scale such projects to practices of every size across the region or across the country.

Aetna Addresses Variation in Cancer Care
Variation in care was also a concern of Ae­tna, said Ira M. Klein, MD, MBA, FACP, Chief of Staff, Office of the Medical Officer, Aetna Oncology Strategy, Hartford, CT. Aetna’s internal data review revealed variation of costs and of treatments not just across the country in states and cities, but also within specific zip codes. The variations appear in factors such as rates of hospitalization, hospital costs, choices of drugs, and lines of therapy for patients with similar disease.

Based on US Oncology published data on how its pathways program demonstrated reduction in costs and variability, Aetna decided to support clinical decision-making programs for oncologists, working with a number of different pathways programs and individual pilots with community practices across the country. So far, Aetna is surprised to see less of an impact on drug spending than it had anticipated, but it has seen solid savings on the downstream and the total cancer spending, including hospitalizations and emergency department costs.

Those findings make sense, because oncology drug costs constitute a relatively small part of the total cancer spending, so supporting consistent medical decision-making in the oncology practice would affect the more costly aspects of a health plan’s total cancer spending.

Aetna learned that it was most effective to work closely with the practicing oncologists, supporting tools and protocols that physicians need to reduce the financial burden of managing cancer as well as to help build care process mechanisms that can help health plans and physicians reduce the current burdens of precertification and authorization processes. Aetna is now investing in technology solutions that practices could use to develop multipayer, scalable operations, according to Dr Klein.

BlueCross BlueShield of Florida
Cancer-related costs in Florida became the major cost driver for all payers in the state years ago, reported Jonathan Gavras, MD, FCCP, Senior Vice President of Delivery System and Chief Medical Officer, BlueCross BlueShield of Florida (Florida Blue), Jacksonville.

Initially, the health plan focused on draconian drug reimbursement controls and saw small practices merge into larger practices, partly in reaction to the financial pressures those reimbursement changes caused. More recently, in response to several meetings with these larger physician groups, Florida Blue committed to collaborative programs with the oncologists.

Now Florida Blue has developed the country’s first oncology accountable care organization (ACO) in concert with Advanced Medical Specialties, a 47-physician oncology group, and Baptist Health, a leading hospital system in the area. This ACO-based program utilizes the pathways that the physician group had in place and is focused on the total cost of patient care not just oncology-specific care for each patient. Early results from the first quarter of the program are showing positive impact. In developing this program, the participants have learned that building trust and fully engaging leadership in the care process are essential.

Priority Health Oncology Programs
Leadership and trust were also themes of the oncology medical home programs that John L. Fox, MD, MHA, Senior Medical Director, Priority Health, Grand Rapids, MI., developed with Cancer & Hematology Centers of Western Michigan and several other leading oncology practices. Although they do not have all the answers yet, according to Dr Fox, they do have trust, commonality of purpose, and a shared vision that has let them move forward, even in the absence of solid numbers.

The Priority Health programs pay physicians for their professional services, plus a monthly case-management fee for every patient in active treatment. At the end of the year, the practices that have reduced Priority Health’s hospital and emergency department costs will receive shared savings from the health plan. The expectation is that the real savings will come from aspects of the medical decision-making that physicians do for these patients, not from reduced drug costs.

Common Goals, Shared Challenges
Aetna tends to outsource some of the technical solutions, whereas other plans tend to work more closely in house with their own and their physicians’ solutions. All payers agreed that close collaboration with the physicians rather than relying on external middlemen to intervene with physicians was their preference for achieving best results.

Common key elements of the diverse programs include:

  • Pathways
  • Triage of patient events
  • Care management
  • Advanced care planning.

Management of adverse events and hospitalizations tend to yield the most savings. Dr Malin noted that approximately 33% of patients receiving chemotherapy have at least 1 hospital admission, and more than 50% of those are admissions for the management of symptoms and toxicities. Supporting community physicians in better ways to manage symptoms lowers admissions and total costs of care. Those are the goals, but the challenge for a health plan becomes how to do that on a network level rather than on an individual practice-by-practice approach. Pathways are a common tool but they do not always affect costs as much as they lead to predictability of costs.

When asked about the rapid site-of-care shifts being seen in the market as hospitals acquire private practices, the panelists noted that care delivered in the community setting is less expensive than care delivered in a hospital setting. They also recognized that earlier, traditional approaches to controlling oncology costs probably achieve the opposite effect and contribute to driving the migration of private practices into the hospital settings. Developing innovative programs for oncology is more difficult for health plans to accomplish with hospitals, because oncology is merely one of many specialties at a hospital.

The panelists noted that bundling payments will be a huge challenge, given the complexity of oncology care––even their actuaries are daunted at the thought of the resources involved; however, bundled payments may be more possible in the radiation oncology environment.

One of the biggest challenges that health plans and the oncology community face relates to data collection. As we move into considering the total cost of care rather than the limited focus on drug costs, the information needed to accurately evaluate those costs is spread in different data silos, so coordination and aggregation of data become a top priority. There are still hurdles to cross in data coordination and aggregation, which is why trust is such a key element of innovative programs. Sometimes, the innovation needs to begin with trust, and the data will follow.

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