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October 20, 2008 - 04:10 pm Posted in Featured comments0 Comments

As the economic realities of today’s cancer care environment are forcing stakeholders to balance cost with quality care, meetings such as Onmark’s 3rd Annual National Payor/Provider Forum not only stirred emotions, but provoked such questions as: What will the cancer treatment model look like one year from now? Or even three years from now? How large of a role will private insurers and Medicare play in treatment making decisions? Will Medicare and private insurers seek out information from providers before making sweeping decisions?

At Onmark’s recently held meeting, the goal was to provide a national forum where oncology stakeholders could come together and discuss best practices, debate viable solutions, and potentially glimpse into the future model of oncology care in hopes of helping to shape that model and advance patient care.

Enter McKesson Specialty
McKesson acquired Onmark and OTN in October ’07. This gave them a full spectrum oncology business and provided them the opportunity to connect oncology stakeholders with meetings such as this one. The President of McKesson Specialty, Patrick Blake, opened the meeting by stating that all oncology stakeholders are seeking the highest quality of care with the most economically efficient model. But to accomplish such a model will require cooperation, consensus building, and increased levels of transparency between all stakeholders. As Mr. Blake pointed out, no single group working alone is going to crack the code to improve the cost, quality, and outcomes in cancer care.

Several Trends in the Healthcare Delivery Model to Watch Out For
Peter Bach, MD, Associate Attending Physician at Memorial Sloan Kettering, who was the moderator of the meeting, brought forth some provocative thoughts to consider. He claimed that we are at a very exciting and worrisome time in our healthcare system. He feels that our current system is poorly designed for efficient use of resources to deliver high quality care for the optimization of patient outcomes; and asked: How do we best ensure that whatever system we evolve toward is fiscally stable or sustainable while at the same time focused on patient care?

According to Dr. Bach, oncology in particular is in the spotlight, as it should be, regarding the high cost of cancer drugs and interventions. Anecdotal projections based on Medicare reimbursement rates show that there is an approximately 8% compounded growth rate in the price of oncology drugs (adjusted for inflation) which creates intense cost pressure and very poor prospects of maintaining the fiscal picture in oncology without some sort of change.

He continued to say that as we look forward into our healthcare struggle where the trends include inconsistent quality of care, rising incidence of cancer, a shortfall of workforce, a constrained payment environment, and rising cost of drugs, there are several things to worry about or look forward to (depending on whether you’re an optimist or pessimist):

  1. Rising drug costs will increasingly be subjected to some sort of price manipulation, either market oriented or payer oriented. For example, the buy and bill method may become the target of price manipulation by payers.
  2. The CAP program, although not successful, could become a model for the future. The problems with the program are starting to be identified and payers understand that having an intermediary and competitive bidding could create significant cost savings.
  3. Coverage restrictions for the private sector and the government are going to become more prevalent. Statutory limits in place right now are being re-evaluated. The ESA changes at Medicare and some of the private payers are a harbinger of things to come. These restrictions will also be very tough battles for all stakeholders.
  4. Episode-based payment, case-rate payment, prospective payment, whatever you want to call it, is being actively investigated and we should be ready for it. There is every expectation that cancer care doctors will get paid for a bundle of services and the discretion around those services will be on the doctor and the patient. Hopefully, the reimbursement level will be adequate to support evidence-based medicine and high quality care for all patients. If we think about oncology practice finances, the use of prospective payments will fundamentally shift the alignment of incentives and take the ability to garner profits based on the spread between purchase price and reimbursement amount of oncology drugs off the table as an issue.
  5. There are a lot of people interested to see an approval pathway for generic biologics, and we can expect to see activity directed toward finding a way to do this.
  6. Safety concerns will become greater for oncology, particularly in the adjuvant setting. New post market surveillance legislation is likely to bring to the forefront a greater incidence of safety concerns with oncology therapeutics.

Doing Well By Doing Good: Maintaining Quality While Controlling Costs
As most know, Dr. Lee Newcomer is the Senior Vice President for Oncology at United Healthcare. He presented a provocative question: Why does it matter that we maintain quality but manage costs? The answer he provided is: because for many Americans healthcare premiums outstrip mortgage payments. In the future, maybe in the next 5 years, the healthcare bubble is likely to burst much like the one we’re seeing on Wall Street today. The data doesn’t support the concept that if you want to increase quality all you have to do is throw more money at it.

So what do we have to do? The first thing is probably get consistent in our healthcare delivery because it will ultimately lead to improvements. He gave several examples of large variations in cancer care treatment decisions at UHC. The underlying theory is that if UHC is consistent in its treatment of patients:

  • error rates will fall
  • the group can improve systematically
  • they can develop evidence-based best practice guidelines
  • apply the guidelines into clinical practice
  • then measure, learn from, and eliminate variation

Improvement requires measurement, and measurement can’t happen without consistency. Dr. Newcomer shared a great quote attributed to Brent C. James, MD, Intermountain Healthcare when he said, “It is more important that you do it the same than that you do it right”.

Initially, the idea is that groups with a consistent approach to healthcare delivery will get the database of information back which could be used as a basis for discussion. The data will not be used to generate a bonus or a penalty, but down the road this data could somehow be tied to financial performance.

At UHC, the next steps to move toward consistent care, and therefore maintain quality while controlling costs, are likely to include KRAS testing for metastatic colon cancer, starting dose rules for erythropoietin, and potentially, someday, implement episode payments.

Dr. Bach, being at Memorial Sloan Kettering and having spent a considerable amount of time at CMS, and Dr. Newcomer, being an oncologist and medical director at one of the largest private insurers of cancer patients, seem to be at the forefront of the current thinking regarding a new cancer treatment model. Stay tuned as we follow their viewpoints and watch for changes in the evolving cancer care delivery model. Thank you to Onmark and McKesson Specialty for organizing and hosting this valuable meeting. The next Onmark Payor Provider Forum is scheduled for October ’09.

For more on this topic, we recently published an extensive article regarding these types of questions in the September issue of OBR titled “Tearing Down Walls”: Download a full-length PDF of this article

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