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Working Collaboratively with Payer Organizations

Innovations in Oncology Management, Part 4

As the national debate about the rising cost of healthcare continues, government projections indicate that healthcare spending will account for nearly 20% of the American economy in 2021.1,2 Cancer care is an important contributor to this trend; in fact, oncology costs are expected to increase by 38%, from $125 billion in 2010 to a projected $173 billion in 2020.3 Because of the escalating cancer-related costs, some individuals are concerned that high-quality cancer care may become too expensive for many Americans in the future.4

Rising cancer costs can be attributed in part to tremendous clinical innovations that have taken place in oncology during the past 2 decades, with breakthrough drugs and technologies that have extended patients’ lives, improved their quality of life, and, in some cases, even cured their cancer.5 Major clinical advances are the culmination of years of expensive, time-consuming research and development, and they represent only a fraction of the investigational therapies that are assessed each year in preclinical studies and in clinical trials.5

Clinical innovation notwithstanding, the United States spends 2.5 times more per capita on healthcare than do other developed countries, suggesting that there is a substantial amount of waste and inefficiency in our healthcare system.6 This can be attributed to numerous factors, including failures of care delivery, failures of care coordination, overtreatment, administrative complexity, pricing failures, and fraud and abuse.2

It has been estimated that more than 33% to nearly 50% of US healthcare spending is wasted, and medical experts believe that the majority of this total, if not all of it, could be saved without affecting patients’ quality of care.2 In recent years, health policy efforts have focused largely on ways to save costs and build efficiencies without sacrificing innovation and quality.7

The Payer Perspective

From a payer perspective, unexplained clinical variation in how physicians treat patients and utilize available healthcare resources is a major source of inefficiency. Several factors contribute to this variation in clinical care, including differences in medical specialty training programs, inconsistent payer practices, geographic differences, and a lack of specificity in treatment guidelines.8

Government and private payers are responsible for managing healthcare utilization and cost on behalf of healthcare purchasers, including public-sector and private-sector employers, employer coalitions, unions, and individuals.

In recent years, payers have been seeking to understand their spending for cancer care, and there is a growing demand for consistency and reduced treatments that deviate from evidence-based clinical guidelines.9 Other approaches to understanding value and optimizing oncology care have been proposed, including administrative simplification, decision and technology support, improved data, and better alignment and consensus building between stakeholders.

The oncology community, led by the American Society of Clinical Oncology (ASCO) Value in Cancer Care Task Force, has also joined in the value discussion.4 ASCO is embarking on a strategic initiative to define value in cancer care by developing a methodology for determining the relative value of cancer treatments and interventions. In its strategic initiative, ASCO seeks to ensure that oncologists have the skills and the tools needed to assess the relative value of interventions and to use them in discussing treatment options with their patients.4

Policy developments and economic pressures have provided fertile ground for collaboration between payers and providers of healthcare, including those in oncology. Several areas of collaboration can be identified within the oncology sector, including the development of clinical pathways or protocols, comprehensive care initiatives (eg, oncology medical homes), and other local efforts.

Clinical Pathways Programs

Collaborative efforts can be spearheaded by the payer or the practice. In order to improve the consistency of care that is provided to patients across providers, payers have been active in developing clinical pathways programs.10,11 In oncology, these programs target specific tumor types and extend to many cancers, including breast cancer, lung cancer, colon cancer, prostate cancer, and hematologic cancers, depending on the specific payer organization.11,12

A clinical pathway can be defined as a treatment road map of best care practices. Typically, pathways are developed based on an evaluation of research and medical evidence, including comparisons of efficacy, toxicity, and costs.13 Providers generally agree to a range of treatment options under certain clinical conditions. Acknowledging that the practice of medicine is not always an exact science, payers expect that participating providers will adhere to the clinical pathway approximately 80% of the time.11,14

In some cases, pathways programs have been driven by large payer organizations that work with third parties to implement clinical protocols in arrangements with participating providers and provider organizations. For example, P4 Healthcare, an oncologist-led organization, has arrangements with several different national and regional insurers to implement programs at the local level.11

In a program that was implemented in 2010, CareFirst BlueCross BlueShield—a Maryland-based regional health plan— began paying oncology practices a bonus if at least 80% of their eligible patients were treated according to the P4 Pathways program for treatment and supportive care.11 The program included patients with breast cancer, lung cancer, colon cancer, prostate cancer, ovarian cancer, and 5 hematologic malignancies.11

Aetna, a large national health insurer, has been active in the clinical pathways arena for several years, working with P4 Healthcare, Innovent Oncology, and other third-party partners.13 More recently, however, it has expanded its efforts, partnering with eviti to pilot a broader clinical decision support platform, with a complete database of treatment options that go beyond pathways.15

To support program implementation and facilitate data collection, Aetna is providing the software to its participating oncologists and will be linked to eviti in oncology offices through iNexx, Aetna’s health information exchange. That connectivity will allow practices to receive patients’ benefit information while channeling information on physician orders and treatment plans to Aetna.15

Comprehensive Care Initiatives

In contrast to clinical pathways programs, which are often initiated and implemented by payer organizations, other payer–provider collaborations have been spearheaded by oncology practices. In California, Wilshire Oncology Medical Group had focused on providing comprehensive care to its patients with cancer, including social, cognitive, and end-of-life support.16 In late 2000, patient cost-sharing began to increase rapidly, making high-quality oncology care more difficult for many patients to afford.16 In addition, Medicare reimbursement cuts and other cost-containment efforts by payers and third parties made it challenging for Wilshire to provide the comprehensive care it had championed. Seeing that its comprehensive care approach aligned with an emerging patient-centered medical home model, Wilshire launched its oncology medical home pilot in 2011.16

During that time, Wilshire started discussions with Anthem Blue Cross (formerly WellPoint), its largest local payer, demonstrating its value proposition for using more cost-effective regimens and preventing avoidable emergency department and hospital care.16 As a result of these discussions, Wilshire and Anthem agreed to initiate a pilot program to test Wilshire’s approach.

During this process, the payers brought their medical director and actuary to Wilshire’s offices to see the operation, visit with the nurses and midlevel providers, and speak with patients.16 Because of legal issues and state regulations, it took time to get all the processes in place to launch the pilot. Ultimately, however, the payer was amenable to Wilshire’s approach and launched the pilot program.16

In Michigan, a similar collaboration took place between Priority Health, a regional health plan, and 5 community oncology practices.17 One participating practice, Cancer & Hematology Centers of Western Michigan (CHCWM), created an internal implementation team to work directly with Priority Health on the medical home program. Similar to other medical home initiatives, the Priority Health pilot included standardized treatment regimens and care management protocols. CHCWM and Priority Health worked collaboratively to identify the conditions that should be managed by the practice, but CHCWM was afforded the autonomy to create its own evidence-based protocols for each symptom and new processes to standardize care.17

Novel Pharmacy-Based Initiatives

One payer–provider collaborative effort addressed a more specific aspect of oncology management. In late 2013, Hematology–Oncology Associates of Central New York (HOACNY) approached Excellus BlueCross BlueShield, a prominent local payer, in an effort to bring the practice’s physician specialty dispensary in network.18 After several meetings, HOACNY was able to convince Excellus of its value proposition: that the personalized service provided by the practice would lead to improved patient satisfaction and better medication compliance.18

Dispensary staff members were active in helping patients in need secure financial assistance to help pay for expensive cancer medications.18 When shown the data, Excellus was impressed with HOACNY’s prowess in obtaining copay assistance for its patients and invited HOACNY to join its pharmacy network. As of May 2014, HOACNY had finished 3 months of filling all of Excellus patients’ oncology specialty medications.18


The health policy and financing landscape is bringing purchasers and providers of healthcare closer together in an effort to maintain and improve the high-quality healthcare that patients are accustomed to receiving. Payers are focusing on value and strategies for containing costs without compromising care. Because the costs of different cancer therapies often differ substantially, payers are seeking to maximize quality through the implementation of evidence-based clinical pathways and comprehensive care delivery platforms, such as the oncology medical home.13,16

The patient cost burden continues to rise,19 and, increasingly, the oncology medical community is recognizing that the current system of healthcare financing will become unsustainable.4 As the economic realities of escalating cost begin to threaten equal access to cancer care, providers and payer groups have begun to work together in several different collaborative arrangements. Today’s oncology practices should evaluate the value they bring to their patients and consider engaging local payers with value-based solutions that may prove to be mutually beneficial to both parties.


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