Baltimore, MD—Changes are constant in cancer care—new technologies, new targets, and new treatments. But the associated spiraling costs are also constant. Not surprisingly, payers are pushing back, with an attempt to change the way business is being done in oncology.
“Cancer is now more than 10% of payers’ spending,” said Kathleen G. Lokay, President and Chief Executive Officer of D3 Oncology Solutions, Pittsburgh, PA, at the 2012 Association of Community Cancer Centers (ACCC) meeting, and the drivers of cost are coming from all sides. “It’s drugs, radiation, imaging, and specialty [pharmacy].” Payers use formularies, prior authorization, and treatment guidelines in the attempt to control costs. Can pathways help payers in addressing cost issues related to providers?
“When you think about pathways, there’s a tendency to just think about drugs,” said Ms Lokay, “but we’re talking about addressing all of the different aspects of care, with the goal of driving down variability and improving quality.” Meeting these goals will inevitably impact cost.
Overall cost-savings are realized through lower drug spending, fewer emergency department visits, fewer hospital stays, and the elimination of redundant imaging.
“In a perfect world, once you’ve made these adjustments, the payers should step up and share the savings,” said Ms Lokay, but that is largely not yet the case, and is a deterrent to pathway introduction. The reasons for payer hesitance include wanting proof of savings (difficult to show with a de novo program), a failure to understand how pathways can be scaled, a failure to comprehend what comprehensive cancer care means, and, according to Ms Lokay, “a general sense that oncologists already make too much money anyway.”
What about a negotiated gain-sharing? “This makes sense on the surface, but what are we going to measure? Total costs, just drugs?” Ms Lokay questioned. There is also the matter of what to measure against. “In oncology, costs continue to rise due to technology,” Ms Lokay pointed out. “So you could have costs go up 3% last year and have it look like you failed, when in reality everyone else’s costs shot up 13%.” Any gain-sharing agreement would have to include a benchmark to measure against that reflects the overall market over time.
“Even if you can bring the payer to the contracting table, the challenges are enormous.” Do you include all cancer types, or only the most common? Do you include only patients receiving active treatment? How long do you measure? How many patients/procedures do you need for statistical validity?
The implementation and integration of a pathway creates relationships and reputations. “I look at it as having offensive and defensive benefits,” Ms Lokay maintained. Collaborating with the payer may lead to the extension of current favorable reimbursement rates or the elimination of prior authorizations. By contrast, you may avoid impending rate cuts, new prior authorization programs, or action by the payer to shift drugs from your practice to a specialty pharmacy or infusion center.
Reputations will also likely extend beyond the payer/provider universe. “As other providers are coming on board with medical homes, or ACOs [accountable care organizations],” said Ms Lokay, “suddenly they are going to start thinking about where their patients are going for cancer care.” Referral patterns that have existed for years are going to be challenged. “If you can demonstrate tangibly what you do when patients come to your program, referrals will come your way.”
Perhaps the best argument for the use of pathways is inevitability. “Payers are starting to move forward with contracting with third-party vendors for cancer management services,” Ms Lokay reported. So, changes in workflow are coming; it is just a matter of whether changes are proposed from within or imposed from without.
“A lot of times when we think about clinical pathways, we think about the diagnosis and treatment of cancer,” said Cheryl Corizzo, Cancer Center Director, St Tammany Parish Hospital, Covington, LA, commenting on Ms Lokay’s presentation. “But this got me thinking more about the bigger picture,” for example, an emphasis on research.
“Why do we need to provide better access to clinical trials? It really fits in with being able to offer comprehensive quality care,” said Ms Corizzo. “Why is survivorship so important? Obviously, we have nearly 14 million survivors in the country.”
Ms Corizzo noted that pathways are not exactly new, but that in her region of the country, the uptake of such broad-ranging initiatives has been slow. “I do think that private-physician oncology practices have worked with pathways as a method to be able to reduce variation within their own practices,” Ms Corizzo said, adding that now may be the time for her center to create a pathway of its own. “To me, this brought together the whole realm of looking at clinical pathways, relative to the new Commission on Cancer standards, and how to look at and meet those new standards.”
