January 2016 Edition Vol.11, Issue 1

Discussing Value in Hematology: An On-Conversation with ZS Associates

Discussing Value in Hematology:
A Roundtable With ZS Associates (continued)

OBR: How do you think value frameworks will affect payer decisions?

HD: Cost is becoming more prominent in the ASCO and NCCN concepts of value, but it’s still not clear how the cost/value translation will take place. It’s unlikely that a payer will decline a treatment due to ASCO value scores alone, but what mechanisms might payers use to push utilization of “higher value” treatments? Perhaps it will be differential reimbursement, like with Anthem’s Pathways program. Overall, the jury is still out on how to translate value frameworks into treatment practice, with lots of experimentation going on about how this will work.

MW: Some of the frameworks are more directive about an assessment of value while others are left more to physician interpretation. But how to interpret them and bring them into a clinical treatment decision has many layers to be worked out. Questions come down to acute disease vs chronic disease or crowded therapy options vs unmet need. These answers will have an impact on value, which may lead to variation in how payers impose cost management.

On Physician Awareness and Consideration of Value & Costs as Decision Drivers

OBR: Overall, how is provider awareness of value and cost evolving? How are physicians’ decisions being driven by awareness and consideration of value and costs?

MW: Some providers have adopted a mindset of financial responsibility in particular due to the financial burden on patients. Others are beginning to think more broadly about long-term, system-level sustainability as the focus continues to shift to quality of care and value. But, clinicians don’t have an informative method to assess value, when cost is not something that is right in front of them at the point of service. We still have a long way to go to provide physicians with the necessary tools to discuss cost options with patients, and in a way that also incorporates value.

CC: We have evolved from 2 primary dimensions of decision – efficacy and safety – to three – efficacy, safety, and cost. Increasing transparency on cost is one objective of initiatives like the new value frameworks. However those who are looking at full system costs recognize that the cost of healthcare includes more than just the price of drugs, but all of the elements are creating ramifications on many elements of healthcare, including population management, CMS, and the healthcare system as a whole.  

HD: The value frameworks have the potential to enable a deeper conversation with a patient if that patient is concerned about cost. The frameworks allow for a more informed treatment discussion about value and cost tradeoffs. However, these frameworks present a risk of being used by payers to push physicians in certain directions, which may or may not be in the best interest of the physician-patient dynamic. Both the industry and manufacturers need to track and pay attention to how frameworks get adopted so they can be sure that information is being used appropriately.

OBR: How are practice economics shifting, if at all?

HD: One longstanding trend in economics for hematologists and oncologists is that buy and bill has declined. The spread of buy versus bill for drugs, meaning the cost to buy versus the reimbursement through billing, is being reduced over time due both to the federal budget sequester and to lowered reimbursement among payers. Another trend is the shift in the site of care as independent community practices affiliate with hospitals eligible for 340B discounts. These two longstanding trends will continue, at least for a bit.

MW: Many of the top concerns raised by our survey respondents were related to economic and organizational factors, such as migration from fee-for-service to bundled payments, electronic medical records (EMRs), and implementation challenges due to continued consolidation. The typical oncologist is now part of a consolidated practice. This has led to a shift in conversation around value, and not just for the physician but very much at the account level. Because of consolidation, entities such as hospitals, rather than individual physicians, are making economic and organizational decisions. These concerns will continue to impact overall practice management.

CC: Being well-versed in the business of oncology is becoming an absolute requirement for a practice to be successful; this knowledge has to either be built into a practice by hiring consultants or practice managers or a practice may decide to consolidate.

On Specific Measures to Manage Spend

OBR: What specific measures are hematologists taking to manage drug spending?

MW: Practice economics are very much in mind when hematologists (and oncologists) talk about managing drug spending. Hematologists/Oncologists look to make the best treatment choices for their patients regarding product. If a generic is available and believed a good therapeutic choice for the patient, it can be a good first option. 

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