1. No category

The Affordable Care Act in 2014
and
Oncology
November 2013
Kavita K. Patel MD, MS
Fellow and Managing DIrector
Brookings Institution
@kavitapmd
© The Brookings Institution. All rights reserved. No part of this presentation may be reproduced or transmitted in any
form or by any means without permission in writing from the Brookings Institution, 1775 Massachusetts Avenue,
N.W., Washington, D.C. 20036 (Email: magnuson@brookings.edu).
Spending on health care driving US federal deficits
Source: 2011 CBO Long-Term Budget Outlook
2
Cancer System
• 1.5 million newly diagnosed patients annually and 13
million cancer survivors
• Over 500,000 annual deaths-leading cause of lost life
years
• 11,000 medical oncologists, 1,500 radiation oncologists
– PCPs, surgeons, other specialists with significant role
• Care is complex and fragmented
– In 2000, Medicare patients with lung cancer saw
median of 11 physicians in 6 different practices
3
Cancer health care system needs coordinated
leadership of stakeholders
IOM 1999 Report: Ensuring Quality Cancer Care
“Like other chronic illnesses, efforts to diagnose and treat cancer are centered on
individual physicians, health plans, and cancer centers. The ad hoc and fragmented
cancer system does not ensure access to care, lacks coordination, and is inefficient
in its use of resources. The authority to organize, coordinate, and improve cancer
care services rests largely with service providers and insurers.”
Over a decade later, a general lack of coordination and
communication remains. Through interviews of 23 peer-nominated
experts, a National Cancer Institute commissioned report identified the major barrier
to high quality cancer care to be wide variations in care due to a lack of
standardization for diagnosis, treatment, and surveillance. Other recommendations
included the use of navigators to coordinate care among multiple caregivers and
electronic records to reach all points of care.
-Aiello Bowles. Cancer 2008
4
Gaps in quality of care driven partially by lack of
patient-centered approach
• Extensive documentation of variation and gaps in quality
of care in peer-reviewed literature and multiple IOM
reports
• Adherence to guidelines typically around 65-85%, worse
for palliative and supportive care
• Very poor information sharing and care consistent with
patient preferences
– 60-80% of patients receiving palliative treatments
believe cure is possible (NEJM 2012;367:1616-1625)
– Overwhelming majority of studies indicate more
patient-centered care leads to substantially less
aggressive care and lower costs
5
Cancer care costs are significant and growing
• Reportedly 10% of spending across payers
– Difficult to define cancer specific costs
– Using 2011 20% CCW- 15% of beneficiaries have a
cancer claim and represent 23% annual spend
($15,839 PBPY) and 1.6% of beneficiaries also had
>$500 chemotherapy costs representing 5.1% of
annual spend ($32,225 PBPY)
• Growth reported at approximately 10-15% in commercial
population
– Analysis of 2008 and 2011 20% CCW files indicates
growth similar to overall Medicare population among
chemotherapy utilizers (per capita growth ~11% from
2008-2011) with high growth in hospital outpatient
and Part D (32% and 30%)
6
Chemotherapy utilizers costly subpopulation
of cancer patients
Part B
Patient
Populatio Chemo
Use
n
2011
Benes
All Medicare Combined
<$500
All Cancer
Payment
Growth
2008-2011
>$500
32,553,065
100.0%
31,918,170
98.0%
2.8%
$342,752,730,8
79
$322,293,513,9
95
5,031,130
15.5%
Payment
Growth
2008-2011
4,507,065
13.8%
12.1%
$79,690,467,18
100.0%
5
$62,344,254,68
89.6%
1
Payment
Growth
2008-2011
524,065
1.6%
9.9%
$17,346,212,50
10.4%
4
Combined
<$500
Sum 2011
Total annual
Pct
Pct
Pct Mcare Cancer
Pct Mcare Cancer cost
2.1%
-1.5%
Mean
Total Cost
of Care
100.0%
$10,529
94.0%
$10,097
9.1%
23.3%
100.0%
$15,839
18.2%
78.2%
$13,833
7.7%
5.1%
9.4%
21.8%
$33,099
11.1%
7
7
Chemotherapy and inpatient use drivers of
spending in chemotherapy utilizers, hospital
outpatient and Part D high growth
Mean
Total
Mean
Mean
Cost of Inpatien Mean Outpatie Mean
Care
t
Carrier
nt
Part D
Patient
Populatio
n
All
Medicare
Nonchemo
users
Payment
Pct Total
Growth
2008-2011
All Cancer
Nonchemo
users
2011
Benes
32,553,06
5 $10,529
31,918,17
0 $10,097
$3,956
$1,979
$1,110
$715
$363
$555
$335
$1,084
$19
100%
39%
20%
11%
7%
4%
5%
3%
11%
0%
9.1%
3.1%
7.4%
24.5%
18.2%
-6.4%
7.0%
22.5%
20.3%
44.6%
4,507,065 $13,833
$5,495
$3,288
$1,661
$768
$410
$619
$405
$1,187
$108
100%
40%
24%
12%
6%
3%
4%
3%
9%
1%
7.7%
1.0%
7.1%
22.3%
25.6%
-1.5%
6.9%
9.2%
18.5%
65.7%
524,065 $33,099 $11,910
$9,478
$6,090
$1,272
$885
$1,110
$768
$1,587
$6,637
36%
29%
18%
4%
3%
3%
2%
5%
20%
3.3%
8.4%
32.4%
29.7%
5.6%
3.0%
8.4%
20.0%
22.2%
2.8%
Mean
DME
Mean
Mean
Mean
HHA Hospice SNF
Mean
Total
Chemo
5,031,130 $15,839
Payment
Pct Total
Growth
2008-2011
Payment
Chemousers
Pct Total
(>$500/yr)
Growth
2008-2011
2.1%
100%
-1.5%
11.1%
Source: Analysis
of CCW
This information
has
not 20%
been files
publicly disclosed
8
8
Current payment system problematic
Current payment system
•
•
•
Majority of revenue and margin from buy-and-sell chemotherapy
Poorly reimbursed for discussions, complication management,
coordination
Higher payment for equivalent services in hospital outpatient setting
exacerbated by 340B discounts to hospitals
9
9
Medical oncology practices rely on drug margins to
cover poorly reimbursed services
• Oncologists have high overhead practices, with high cost
and margin in chemotherapy (Average revenue/physician = $5
million)
– Creates incentive to select most expensive therapy
Drug
margin
= total
E&M
revenue
=
Chemo
admin
revenue
Cost of
drugs
64% of
practice
expens
e
Towle E. Journal of Oncology Practice. Nov 2012 8(6)
10
10
Changes in payment policy contribute to providers’
desire for new payment model
• In 2005, Medicare transitioned from reimbursing AWP to
ASP+6%, substantially reducing margins
• Community oncologists have argued reduced drug margin
and competition from hospitals straining practices
– Hospital outpatient reimbursement increasing from
ASP+4% to ASP+6% in FY2013
– Hospitals and affiliate sites receiving discounts through
HRSA 340B program tripled from 2005-2011
– Studies by Avalere and Milliman suggest total cost of
care higher for patients treated in hospital outpatient
setting
• Impact of sequestration high concern
11
11
Incentives driving selection of higher cost
therapies?
• Evidence that financial incentives result in costlier drug
selection mixed
• Impact may be greater for later line therapies
• Difficult to assess pathways through claims-based analyses
• Systematic reporting/capture important for both
understanding and managing issue
• Rapid development of novel treatments/diagnostics and
lack of clear recommendations or comparative evidence
impossible for physicians to assimilate
12
12
Variation in Drug Costs For Guideline Adherent
Regimens: Metastatic Non-Small Cell Lung
Cancer
Name
Pemetrexed/Cisplatin1-4,6
Total
Monthly
Total Cost Monthly
Chemotherapy Chemotherapy (12 Weeks) Cost
Drug Cost
Drug Cost
$16,913.37
$6,105.91 $19,594.13 $7,073.69
Gemcitabine/Cisplatin1-6
$9,745.83
$3,518.35
$13,303.24 $4,802.61
Docetaxel/Cisplatin1-6
$8,916.64
$3,219.00
$11,647.20 $4,204.77
Irinotecan/Cisplatin1-5
$934.60
$337.40
$7,984.63 $2,882.54
Vinorelbine/Cisplatin1-6
$519.45
$187.53
$4,929.03 $1,779.43
Etoposide/Cisplatin1-5
$217.06
$78.36
$4,453.86 $1,607.89
Vinblastine/Cisplatin1-5
$183.97
$66.41
$3,741.38 $1,350.68
Paclitaxel/Cisplatin1-6
$518.45
$187.17
$3,578.70 $1,291.95
1
National Comprehensive Cancer Center (NCCN), 2 American College of Chest Physicians, 3 Cancer Care Ontario
(CCO), 4 Alberta Health Services, 5 Australian National Health and Medical Research Council, 6 National Institute for
Health and Clinical Excellence (NICE)
13
Source: Bach P. Presentation to Cancer Center Business Summitt: Will ACOs bundle 13
off
oncology?
Present State of Cancer Care Delivery
Fragmented Cancer
Care Delivery
Coordinated,
High-Quality
Cancer Care
Misaligned
Payment Incentives
Newly Aligned
Payment Incentives
14
Various Payment Reform Options
Bundling/
Aggregation
Across Providers
Comprehensive
Capitated Payment
Episode Payment for
Physician and Hospital
Services
Episode Payment for
Physician Services (Oncology,
Radiology, Surgery)
Value-based
Pathways
Traditional
FFS
Chemotherapy
Management Fee
Patient-Centered Medical
Oncology Homes
Case-Based
Physician Payment
15
Alternative 2: Oncology Patient-Centered Medical
Home
-Substantial structural change required
for accredited distinction
Care
Delivery
Oncology
PatientCentered
Medical
Home
-Additional oncology-specific
modifications
-Case-management fee
Payment
Potential
Unintended
Consequences
-Additional infrastructure
development payment
-Minimal provider savings achieved
16
Patient-Centered Medical Home
Care Delivery Structure
• Goal
– Improve the quality, coordination and patient-centeredness
of care
– Reduce emergency department visits and hospitalizations
• Changes to structure of care delivery:
– See NCQA criteria for Level III Patient-Centered Medical
Home and oncology-specific goals in handout
– In action, above criteria are met in the following ways:
• Adherence to clinical pathways
• Patient navigators/care coordinators in place
• Enhanced hours and augmented access to clinicians ,
telephone triage
• Patient engagement and empowerment
• Practice assumes primary responsibility for
coordination of all cancer-related services
17
Patient-Centered Medical Home
Payment Structure
• Goal
– Cost savings from better coordinated, more patient-centered
care
– Minimize unnecessary utilization of services
• Payment structure
– Case management fee
• Currently non-standard among pilots
• Overlaid on fee-for-service
• Intended to reimburse new delivery features of the
model: extended hours, medication management, patient
education, telephone triages service, etc.
– Infrastructure development payment
• Defray cost of practice transformations
• Conditions unclear
• Payment conditions
– Initiation on diagnosis, extends into survivorship phase of
care
– Must meet performance and outcomes benchmarks
– Minimal risk, substantial increase in provider accountability18
Patient-Centered Medical Home
Advantages and Disadvantages
-Patient-centered, coordinated care
-Includes use of pathways
-Incorporates quality targets
-Positive incremental shift from feefor-service
-Shifts some current fee-for-service
payments
-Payment tied to quality and
performance
-Case-based payment
-Payment for practice transformations
-Moderate structural changes
necessary
-Higher implementation costs
-Potential administrative burden
-Payment overlays on fee-for-service
-Minimal change in provider incentives
19
Illustrative Clinical Example
•
•
•
•
Patient presents for a new visit upon initial diagnosis of cancer
– Standard flat payment level with no adjustment for type of cancer
or other associated factors (one time payment) with practice
required to demonstrate minimum competencies at initial visit
Patient with cancer has an estimated six month duration of
treatment (six treatment months)
– PMPM established based on length of treatment which is
predetermined by type of cancer/stage
– PMPM fixed no matter what length of treatment is
Patient experiences complications which extend usual treatment
length; complications arise which change course of treatment
– PMPM could terminate OR continue with risk adjusted payment
levels
Potential payment for:
– Transitions from oncology to primary care
– Non-treatment month payments (pt still under care of clinic
primarily but not receiveing treatment)
20
Moving forward: alignment across payment reforms
•
•
•
Common core performance
measures across reforms
and a rapid but feasible
pathway for improving
measures and the underlying
outcomes of care
Timely and consistent
methods for sharing
underlying data with
providers to improve
performance
Evolve and integrate rapid
evaluation methods based on
common measures
Medical Homes for
Specialites
• Supports care coord,
prevention, disease
management
• Rewards reductions
in oncology carerelated cost trends
Bundled Payments for
Specialty/Intensive
Care or PAC
• Combine payments
across providers/
settings for specific
episodes to promote
coord & efficiency
• Linked to quality
measures to support
accountability
Accountable Care (System-wide)
• Reimburses population-level improvements in
quality and overall per-capita costs
• Encourages coordination across the continuum of
care
• Can reinforce/ support “piecewise” accountablecare reforms
21
Appendix: Current Pilots
UPMC/Highmark
• Pathways for breast and non-small cell lung
cancer-now expanded 500 providers in 8 states
• Results (Presentation to CMS):
– Breast (Total cost growth rate: 7% UPMC, 16%
Control; Hospitalization rate -15% UPMC, 2%
Control);
– Lung (Total cost growth rate: 1% UPMC, 6%
Control; Hospitalization rate -12% UPMC, 4%
Control)
• UPMC has proposed similar model to Medicare
22
Appendix: Current Pilots
Priority Health/ION/Physician Resource
Management
• Pays drugs at cost and provides case management fee.
Includes pathways for 4 high volume conditions and care
management/navigation services. Shared savings for
reduced ED/inpatient use
• Start: 2011
• Results: ?
• ION proposed similar model to CMS
23
Appendix: Current Pilots
CareFirst/Cardinal Health
• Generation 1: Fees for pathway adherence;
Generation 2: shift reimbursement from drugs to
cognitive, “align incentives”, CQI, end-of-life initiative
• Start: 2008; Gen 1-230 providers; Gen 2-31 providers
• Pathway adherence Gen 1 improved from 77% to
92%, estimated $8.5 million savings net of fees (J Clin
Oncol 28:15s, 2010 (suppl; abstr 6013))
• Gen 2 – preliminary results show some savings but
too early to tell (Feinberg AJMC 2012 18(6))
• Cardinal Health has proposed a similar model to
CMMI
24
Appendix: Current Pilots
Aetna-US Oncology-Innovent
• Pathways program with nurse call-center, advanced
care planning initiative
• Start: 2010
• Preliminary results reduction ER (40%), IP admits
(17%), IP days (36%) (Hoverman J Clin Oncol 30,
2012 (suppl 34; abstr 227))
• US Oncology has proposed a similar model to
CMMI
25
Appendix: Current Pilots
UnitedHealthCare Bundle
• Bundled payment for professional services, drugs are
paid at cost
• 5 oncology groups
• 19 clinical episodes in breast, colon, and lung cancer
• Start: 2010
• Results: ?
26
Appendix: Current Pilots
Wilshire Clinic/WellPoint
• Pathways, data sharing, care management, end-of-life
program
• Start: August 2011
• Results: “Substantial savings” though not quantified
http://www.valuebasedcancer.com/article/wilshire-oncology-medical-homepilot-reengineering-cancer-care
27
Appendix: Current Pilots
Consultants in Medical Oncology and Hematology
• NCQA Level III Accredited Medical Home
• Start: ~2006
• Results: Reported 65% reduction ED visits and 43%
hospitalizations (Eagle Oncology 2011 25:7)
28
Appendix: Current Pilots
NCQA-COA
• 10-15 practices in Pennsylvania to pilot CMOH model
sponsored by NCQA and Community Oncology Alliance
• Start: January 2013
• Results: ?
• NCQA has PCORI grant to test model
29
Appendix: Current Pilots
Florida Blue-Baptist and Moffitt
• ACO arrangement for total cost of cancer
care-shared savings if quality thresholds met
• Intervention: Predominantly data sharing and
pathway development
• Start: Baptist May, 2012; Moffitt January,
2013
• Results: ?
30
Appendix: Current Pilots
Florida Blue/Mobile Surgery International
• Bundled payment for prostatectomy
• Start: 2011
• Results: ?
31
Appendix: Current Pilots
Humana/21st Century Oncology
• Bundled payment for courses of radiation
therapy for 13 specific diseases
• Start: August 2012
• 21st Century has proposed similar model to
CMMI
32
Appendix: Current Pilots
Michigan BCBS/Quality Oncology Practice
Initiative
• Statewide consortium of oncologists to measure
and improve oncology care-Michigan BCBS pays
for data collection
• Start: 2009
• No measurable effect at 2 year assessment
(Health Affairs, April 2012 31:4)
33
Thank You!
© The Brookings Institution. All rights reserved. No part of this presentation may be reproduced or transmitted in any
form or by any means without permission in writing from the Brookings Institution, 1775 Massachusetts Avenue,
N.W., Washington, D.C. 20036 (Email: magnuson@brookings.edu).