Value-based reimbursement for cancer care soon will move beyond the experimentation phase and into the realm of accepted and preferred health care payment practices. To get ahead of this change, oncology practices must adapt to payment systems that reimburse them for the value of care they provide to cancer patients, not for the volume of services.

What's driving the shift is cost. Cancer care is expensive. The combination of high cost per case and the high volume of cases makes cancer care unaffordable to payers, including Medicare.

The question needs to be asked: Is the higher cost of care producing superior outcomes? If an expensive treatment clearly produces a better result, that would be one thing. But in the opinion of payers and many oncologists, including myself, that often isn't the case. Often new cancer therapies with a high price tag result in only modest gains. Sometimes they just duplicate results seen with less-expensive, existing agents. Adhering to evidence-based medicine and choosing equally effective but less expensive treatments will lower cancer costs and preserve or even enhance outcomes.

Experimenting With Performance-Based Oncology Care

That belief – that you can lower utilization and costs without sacrificing quality – is at the core of the experimentation taking place with value-based reimbursement for cancer care. Among the oncology care experimenters are:

  • Aetna and The US Oncology Network's cancer-care management program, Innovent Oncology, which reported reduced hospitalizations and treatment costs for lung, breast and colorectal cancers. The same program is now being evaluated for Aetna Medicare Advantage patients.
  • UnitedHealthcare and the University of Texas MD Anderson Cancer Center, which launched a bundled-payment pilot program in December 2014 for the treatment of head and neck cancers.
  • And most recently, Medicare, which announced its voluntary Oncology Care Model program in February that incentivizes oncology practices to provide more cost-effective care.
These programs address three major cost drivers of oncology care:
  • Hospitalizations related to treatment
  • Expensive chemotherapy agents
  • Variable use of resources

Oncology practices who are interested in talking with payers about value-based agreements must be willing to address these three cost drivers.

Avoiding Costly Hospital Admissions

There have been a number of suggested strategies to reduce avoidable hospitalizations. In the Innovent program, we have an established nurse call center. Innovent nurses have access to the patient's electronic medical record. They call enrolled patients to try to keep them well during chemotherapy treatment. For patients with advanced cancer, the Innovent nurse conducts an Advance Care Planning counseling session to review the patient's values (“what's important to them”) and encourage completion of an advanced directive. Another strategy is for a practice to have extended clinic hours, giving cancer patients access to outpatient care rather than directing them to the emergency room.

Reducing the Costs of Chemotherapy Without Affecting Quality

Adhering to clinical pathways has been shown to reduce cancer care costs. The US Oncology Network has had a clinical pathways program in place for 10 years. Our general approach is to look at different drugs or drug regimens and determine if they are equally effective. If so, we compare toxicity and, next, drug cost. Our goal is to support the lowest cost treatment that offers the least toxicity yet produces the same clinical benefits.

5 strategies to reduce cost and maintain quality:
  1. Offer disease management programs such as Innovent
  2. Extend clinic hours
  3. Conduct advance care planning conversations
  4. Follow accepted clinical pathways
  5. Standardize care delivery and business operations

Standardize, Standardize, Standardize

Increased variability is usually associated with increased costs and reduced efficiencies. Pathways are a practice strategy to reduce unnecessary treatment variability. Pathways also help improve physician workflow for operational efficiency. An additional benefit is an enhanced patient experience due to reduced wait times.

Oncology practices should be cautious but prepared for value-based reimbursement. In the box to the right, I have provided strategies that have been tried and have worked. See what you think and let us know if you have other strategies to recommend.

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About the author

Marcus Neubauer, M.D., is VP and Medical Director, Payer and Clinical Services for McKesson Specialty Health and The US Oncology Network. In his role, Dr. Neubauer leads the collaboration with the National Comprehensive Cancer Network® (NCCN) to build a premium set of guidelines and pathways that will assist the oncology community in driving value-based, high-quality cancer care. He is also a founding member and current Chair of The US Oncology Network Pathways Task Force, the committee responsible for developing and updating the industry-leading evidenced-based Level I Pathways.

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