The Lynx Group

Oncologists Face Economic Challenges while Improving Patient Care

July 2011, Vol 2, No 4

Philadelphia, PA—The estimated cost for physician practices to interact with health insurance plans is $23 billion to $31 billion annually, according to a 2009 national survey conducted by Casalino and colleagues (Health Aff. 2009;28:w533-w543).

In the survey, physicians reported spending 3 hours weekly interacting with health plans; nursing and clerical staff spent much larger amounts of time. “This describes the cost to practices over and above the costs of care for the uninsured and the cost to manage preauthorization and prior ap - proval,” said Craig Deligdish, MD, Chief Medical Officer, Florida Compre - hensive Care Network, Melbourne.

“This is something that patients don’t see. It is something in an oncologist’s office that requires a great deal of time and effort. And it is one of the major reasons I suspect that certain practices do not buy and bill anymore, because administering treatments that, in 1 session, can cost $30,000 is potentially challenging when your reimbursement is only 2% greater than the cost of that treatment in a given day.”

Today, an average encounter in an oncologist’s office could result in a $10,000 or $20,000 bill, which is problematic when a denial comes, because the practice did not obtain proper preauthorization.

A recent survey conducted by the American Medical Association (www. reveals that policies requiring physicians to ask permission from a patient’s insurance company before performing a treatment have a negative impact on patient care. The survey results suggest that:

  • 37% of physicians face a 20% rejection rate from insurers on first-time preauthorization requests for tests and procedures.
  • 57% of physicians face a 20% rejection rate from insurers on first-time preauthorization requests for drugs.
  • 46% of physicians have difficulty obtaining approval from insurers on ≥25% of preauthorization requests for tests and procedures •
  • 63% of physicians typically wait several days to receive preauthorization from an insurer for tests and procedures; 13% wait >1 week
  • 64% of physicians have difficulty determining which tests and procedures require preauthorization by insurers.

Assisting the Uninsured
“To my recollection, one of the reasons for healthcare reform initially was to cover the uninsured,” Dr Deligdish said. “Today, I don’t think that has occurred.”

According to the US government, 50.3 million Americans are uninsured this year; by 2020, as many as 61.1 million will be uninsured.

“And as oncologists in practice, whether in a hospital or a private setting, we are faced with taking care of these people. I do not know too many practices anywhere in the country that turn away patients who have cancer. It takes a great deal of time and effort to provide care to these patients,” Dr Deligdish said.

In response to these challenges, some practices have stopped buying and billing chemotherapy, some have merged with hospitals, and some have closed their doors. The remaining practices that seek to remain independent have hired financial counselors to control costs. There is a true need to reduce the administrative burden.

“Your 2 largest expenses in an oncology practice are the drugs and your payroll, and you have to manage both of them well in order to survive,” said Leonard H. Natelson, Chief Exec - utive Officer, Hematology/Oncology Associates of Rockland, NY. “Keeping your doors open is good for the patient, and you may have to reinvent your business model.

“I don’t have to do the patient assistance, because I use a specialty pharmacy,” Mr Natelson continued. “Every drug company has a patient assistance program. Most therapies are multi - drug, multicompany therapies. It costs you money to have somebody sit on the phone and go back and forth with companies to get all this money. You take it out of your practice, so you don’t have to cover the payroll for the person doing it.”

Specialty pharmacies also reach out to private foundations, which community oncology practices generally do not have. This is another avenue to help patients with significant copays. If there is considerable financial hardship, a patient can go through an assistance program instead of the physician’s office.

“Generally, patients do not like to discuss blockades to getting patient care, and they certainly do not want to discuss it with their physician or anyone in the practice. The program gives them someone completely separate, and it’s just a telephone call, unrelated to our practice. I have a number of patients on those programs....It keeps them on their treatment schedule, which is very important,” Mr Natelson said.Leonard H. Natelson

Mr Natelson added that specialty pharmacies have an advantage over oncology practice offices, because they get immediate adjudication. “They know that the claim blew up right then and there,” he said. “On the other hand, an oncology office will give a drug, file a claim, and 2 weeks later, it blows up. Now what do I do? I didn’t have a chance to change the therapy or say, ‘Is there another therapy that’s clinically close that I can get approved for the patient?’”

Working with Payers, Patients
One of Dr Deligdish’s solutions to economic hardships is his collaboration with physicians in Florida. As a member of the Florida Comprehensive Care Network, he is in a partnership of physicians through a clinically integrated network working with technology solutions, advanced care, palliative care programs, and oncology benefit management programs working with payers who also face challenges from their self-insured clients to try to reduce the cost of cancer treatment.

“It provides physicians and health plans with the tools to manage pathway and guideline adherence, create physician guidelines, and realign in - centives around buy and bill,” Dr Deligdish said. “But more important, it provides patients with the tools they need to determine appropriate care, the appropriate time to stop treatment, and the appropriate time to enter hospice.” Although many people have been critical of some components of their care delivery system, Dr Deligdish said they have put together what they believe to be an integrated comprehensive approach to managing the cost and the care that patients receive. The goals of the network include sustaining community oncology.

“We believe the community setting is one of the best places to receive cancer treatment, so we are working with practices and health plans to hopefully provide the most cost-effective treatment in the most cost-effective setting,” Dr Deligdish said.

The network also aims to provide technology for consistent delivery of quality care that allow both practices and health plans to measure outcomes and monitor adherence to pathways, and decrease the administrative burden by simplifying and obviating the prior authorization process and using technology.

“We focus to a large degree as a clinically integrated network,” Dr Deligdish added. “What does that mean? Clinical integration is necessary for accountable care organizations to be a reality. It’s an active and ongoing program to evaluate and modify practice patterns by the network’s physician participants to create a high degree of interdependence and cooperation to control costs and ensure quality.

“The Federal Trade Commission needs to formulate additional rules such that physicians and hospitals will be able to deliver care in a clinically integrated setting,” he continued. “But it requires a tremendous amount of effort, both financial capital and human capital, by physicians to come together and put together guidelines and pathways that work, and to work with health plans to achieve those goals,” he said.

Value-Based Personalized MedicineYu-Ning Wong, MD, MSCE
The concept of personalized medicine should result in the greatest value for patients and payers by providing best clinical outcomes and most effective use of resources, according to Yu- Ning Wong, MD, MSCE, a medical oncologist and health services researcher at Fox Chase Cancer Center, Philadelphia, PA. As a physician in academic practice, Dr Wong is working toward increasing the value of new treatments in development.

“I think of this as an attempt to help physicians like me identify the best, most effective, and least toxic treatment for the individual patient,” she said. Personalized medicine “should result in the best clinical outcomes for patients, and it should result in the most effective use of resources for payers, because we won’t be treating patients with expensive therapies that have a low likelihood of helping them.”

Breast cancer may be the furthest along in terms of personalized medicine, according to Dr Wong. The vast majority of patients with estrogenreceptive– positive breast cancer undergo surgery and receive hormonal therapy alone, but until very recently, identifying the patients who were most likely to have a recurrence was difficult, and physicians were overtreating with chemotherapy.

Clinical trials and the introduction of the Oncotype DX assay are helping physicians in clinical practice to identify patients who are likely to benefit from chemotherapy and those who could be spared the toxicity because they are unlikely to benefit.

“We need payers to eliminate the barriers to coverage for clinical trials,” Dr Wong said. “Only about 5% of American patients enter clinical trials, and it is very difficult to get them on. The irony of this is that, in most cases, the standard of care we’re asking payers to cover is very similar, if not identical, to what we would be treating these patients with off study. But when we treat them off study, the data do not help to benefit future patients. It’s important for practices to discuss and support clinical trials early on.”

In her practice, Dr Wong focuses mainly on kidney cancer, and treatment has changed dramatically in the past 5 to 6 years, with the approval of 6 new agents that have more than doubled overall survival.

“Because there have been so many trials in recent years, this is actually a disease site that has the most National Comprehensive Care Network category 1 evidence. And one would assume that it’s now easy to treat kidney cancer because we have a lot of guidelines. But unfortunately it’s really not,” she noted. There are 3 regimens for kidney cancer often used in the frontline setting, Dr Wong said, but at this point, there are no published data to demonstrate the most effective drug. Ongoing clinical trials will help with sequencing patients in the first, second, and subsequent lines of therapy.

“Personalized medicine for kidney cancer comes down to some seemingly simple, but actually complicated, discussions that we have at the bedside,” she explained. “We don’t know what the best treatment is for the individual patient. We need to decide if a treatment is working, or if oral or intravenous treatment is better. Will side effects keep a patient from working, and what will the treatment cost be to the practice and to the patient?”

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