The Holy Grail of Cost Savings in Oncology?

Posted in Cancer Care, Healthcare Reform by ACCCBuzz on December 7, 2011

by Don Jewler, Director of Communications, ACCC

To help cancer care providers and pharmaceutical industry representatives understand the changing landscape in oncology payment, the Association of Community Cancer Centers (ACCC) is hosting a two-day seminar at the Fox Chase Cancer Center in Philadelphia, Pa., December 7-8, 2011. Day one’s common theme: Traditional reimbursement models are changing, and collaborative programs between payers and physicians are emerging because, in brief, clinical resources do not provide enough guidance, care varies widely, and oncology drugs are expensive.

“Providers want better outcomes, autonomy, and more payment,” said presenter Kurt H. Neumann, MD, FACP, vice president of Oncology Physician Resource and medical director for quality initiatives for ION Solutions, AmerisourceBergen Specialty Group. “Payers want decreased variability and increased predictability that money is being spent well.”

Increasingly, payers are using an evidence-based approach to guidelines and pathways that decreases cost trends. “If you can incentivize physicians to pick cheaper evidence-based pathways, you can save money,” said Dr. Neumann, although he acknowledged the difficulty of determining exact numbers.

Dr. Neumann knows first-hand about cost savings through pathways. He was co-medical director of the Michigan Oncology Clinical Treatment Pathways Program, a collaborative program designed to enhance the quality of care for patients with certain types of cancer.

To increase quality and cost-effectiveness, 190 oncologists in Michigan (community and academic practices) guided by a steering committee of 13, developed standard evidence-based, oncology clinical pathways over nine months in a stepwise process that would roll out over three years. All pathways were guided by efficacy first, toxicity second, and costs third. Pharmacy had limited input; third-party payers had no input. Clinical trials and hospice were considered within the pathways. In years one and two, clinical pathway compliance was required by breast, colon, lung cancer, and supportive care. In 2011 five new diagnoses were added.

Physicians had incentives to install new technology and make changes within their practice, according to Dr. Neumann. They were rewarded up front with $5,000 per participating physician. In 2011 the fee schedule was adjusted for generic products and gain sharing for participating physicians was increased an additional 10 percent. They had no incentive to prescribe expensive drugs.

“Every practice reached its compliance level. Using evidence base guidelines with concern for the total costs, the physicians decreased the variability, eliminated outliers, maintained autonomy, and achieved increased payments. I’m absolutely certain there is decreased cost,” said Dr. Neumann.

According to Dr. Neumann, the “Holy Grail” of cost savings from treating oncology patients is not from substituting similarly effective lower cost regimens for higher cost ones nor from appropriate dosing through evidence-based dosing. On the oncology continuum of care, savings of just 4 to 7 percent of the total oncology spend are achieved by substituting effective lower cost regimens for higher cost ones, appropriate dosing through evidence-based dosing, generic substitution when appropriate, and gene testing according to guidelines.

The Holy Grail of cost savings? According to Dr. Neumann, cost savings of 15 to 22 percent can be achieved by avoiding unnecessary inpatient admissions, working with patients and families to explain the benefits of end-of-life care, improving coordination between diagnosing and treating physicians to reduce redundant labs and imaging studies, reducing ER visits through well managed avoidance of side effects, and shifting to less invasive interventions.

Standardized care offers great promise for cost savings and quality care. The payback for creating guidelines and pathways that standardize care is great, said Dr. Neumann. The timeline, however, is years.

P.S. If you’re uncomfortable talking about costs instead of quality in patient care, don’t be. “Consideration of cost is not necessarily unethical,” said presenter David B. Wilson, RPh, Oncology Pharmacy Manager, at St. Luke’s Mountain States Tumor Institute, Boise, Idaho. He was quoting healthcare economist Michael Drummond, who also wrote: “Equity in healthcare may be desirable, but reducing inequalities usually comes at a price.”

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