A national consensus is emerging that the rate of growth in healthcare spending is no longer sustainable. Employers and patients are chaffing at rising healthcare costs, which are crowding out other important federal and state budgetary priorities, and are causing an increasing number of medical bankruptcies. Oncology is responsible for its fair share of these costs, accounting for up to 10% of all healthcare expenditures by some estimates. Moreover, oncology costs are growing faster than many other healthcare components because of expensive new drugs, expensive new molecular diagnostics, and expensive new robotic and therapeutic technologies. It has gotten to the point that some patients are more afraid of their out-of-pocket costs of cancer care than they are of their disease.
Perhaps not surprisingly, in this era of renewed cost consciousness, some of those oncology expenses are being called into question. A serious re-examination is underway of the variability of prescribed cancer treatments, and of potential overutilization of oncologic imaging, chemotherapy, radiation therapy and surgery—particularly where evidence-based medicine results are lacking, and different approaches result in widely different costs.
In addition, there is always the third rail issue of the cost of end of life care—which, as a nation, we need to be able to address in a less politically charged manner. A recent study titled, “Benchmarks for Value in Cancer Care” identifies significant opportunities to reduce costs for cancer patients, particularly for those receiving chemotherapy. The authors suggest that there are substantial cost savings to be attained by using cost-effective treatment guidelines to reduce avoidable hospital admissions and ER visits, and decrease the cost of futile care during the last 30 days of life (JOP. 2011;7:301-6).
Against this backdrop, payers have been experimenting with new payment methodologies that are designed to reduce the trend in healthcare spending. The Affordable Care Act (ACA), which envisions a sea change in the way that healthcare services will be rendered, including oncology services, has provisions for transforming Medicare and Medicaid payments from fee for service to “value-based” purchasing. ACA also authorizes the new Medicare Shared Savings and Pioneer ACO programs, as well as demonstration programs and pilot projects to test shared savings, bundled payments, episodes of care, pay for performance, partial or full capitation, and other provider risk-sharing arrangements.
Instead of paying for volume, Medicare and other payers are moving toward basing payments on compliance with clinical pathways, quality and cost-effectiveness protocols, use of electronic health information technology, quality reporting, transparency, and the results of outcomes and comparative effectiveness research. In addition, healthcare providers are being asked to assume an increasing amount of financial risk for the cost of care they provide. ACA calls for patient centered, population health management. In doing this, it encourages future patient care to be delivered by multi-disciplinary teams of providers, and coordinates care across a continuum of facilities, through new organizational structures such as Accountable Care Organizations (ACOs), Patient-Centered Medical Homes, and other integrated care organizations.
Some of the critical questions that need to be answered about the role community oncology will play within these new organizations include: Will oncology stakeholders be the owners and drivers of these organizations, or will they become vendors to someone else’s delivery system? Will oncology providers come under added pressure from their own colleagues to reduce utilization as the cost of oncology care becomes a shared financial risk with other providers? How will they assure themselves that they will receive their fair share of the healthcare dollar? And, what are the implications of these new payment methodologies for the economics of oncology service delivery, and most importantly, for quality patient care?