Opportunities for Innovation in Value-Based Payments in Oncology

October 2020, Vol 11, No 5

Value-based or alternative payment models have yet to deliver the cost-savings in oncology hoped for when these models were proposed, said experts at the September 2020 National Comprehensive Cancer Network Oncology Policy Summit during a panel discussion on best practices for value-based agreements.

When asked by panel moderator Clifford Goodman, PhD, Senior Vice President, Comparative Effectiveness Research, the Lewin Group, how well these models have performed on a 1-to-10 scale, neither panelist rated them better than a 2.5.

Value-Based Innovation

Payers are stuck with old paradigms, which is especially no longer adequate in cancer care, said David Rubin, Director, Health Outcomes & Quantitative Analytics, Memorial Sloan Kettering Cancer Center (MSKCC), New York City.

“Even the metrics that they’re choosing to evaluate models are stuck in yesterday’s thinking,” Mr Rubin said. One example, he said, is that payers remain focused on length of hospital stay, but they do not account for the shift to outpatient care and the amount of care required in the outpatient setting.

“Payers are more focused on cost than on the quality,” Mr Rubin said. “Once payers start to focus more on the value they get, which is quality compared to cost, I think that’s where we’ll see more improvement. The good news is that everyone has agreed that value is the way forward, at least in theory.”

A clear definition of what the payer community is ultimately trying to accomplish is lacking, said Thomas Daly, MBA, University of Michigan Health System, Ann Arbor. Collaboration is required to define value, he believes.

The greatest opportunity for value-based arrangements in cancer care, said Mr Rubin, lies in a global case rate, in which the provider accepts risk for treating a patient in a multiyear arrangement with the insurer. A global case rate would allow providers to innovate, he believes.

“We can decide today that we want to try a new treatment, and if we need to give an extra PET [positron emission tomography] scan for that treatment, we can do that without authorization for the new PET scan,” he said. “I’m getting a single dollar figure for treating the patient, so that’s one way of innovating.”

Shifting the care from the inpatient to the outpatient setting has also spurred innovation on the provider end, he said. “The beneficiary of that switch has primarily been the insurance carrier, because we are going from a more costly setting to a less costly setting, and where it used to be a 2- to 3-day stay, now it’s a 24-hour visit,” said Mr Rubin.

“They’ve gotten all that benefit, and we’ve done it, because we think it’s the right thing to do for the patient, regardless of how we’re going to get paid for it. This is a way of recouping those innovations back into your rates,” Mr Rubin suggested.

By contrast, Mr Daly said that his preferred approach would be collaboration between providers and employers, with payers acting as the facilitator to remove some of the barriers to providing evidence-based quality care in the most cost-effective manner in oncology.

“We as providers need to partner with the employer,” Mr Daly said. “They are the ultimate payer of the bill.”

Evidence-Based Care

Dr Goodman wondered whether date sources and analytical tools currently in operation are sufficient to enhance care delivery for patients with cancer in real time.

Mr Rubin replied that a retooling of systems designed for fee-for-service is needed to accomplish evidence-based processes to cancer care. Too often, he said, when employers look at claims systems, “they’re not looking at whole patients. When that cancer patient needs to be admitted for septicemia, that’s a septic problem, not a cancer patient. We show them that the 7% of claims for cancer care are really 17% of their business,” Mr Rubin said.

He pointed out that despite advances in electronic health record technology, bundles for bone marrow transplants are still being handled manually at MSKCC, which is an additional barrier to real-time decision-making in cancer care.

Although metrics are available to support value-based care at MSKCC, as valuable as metrics can be to value-based contracting, metrics “don’t lead you to value; I think value is shown in the metrics,” Mr Rubin said.

CAR T-Cell Therapy as a Model?

Citing CAR T-cell therapy as a highly innovative therapy, Dr Goodman noted that payment for this new therapy has been based on a 30-day health outcome end point. He asked if this type of model should be pursued for other innovative cancer therapies in the pipeline.

“For example, a payer might pay up front but get a rebate if it stops working after 60 or 90 days,” said Dr Goodman, “or they might pay just a little bit up front, and then pay more if the patient sustains good health and does not regress.”

Mr Daly replied: “I think that it can be, but I don’t agree with the 30-day outcome. “From what clinicians told me, there’s no basis for that. It’s just a line in the sand,” he emphasized.

According to Mr Rubin, although the system to support such an arrangement exists, it’s still a manual system. “We’ve contracted with third parties to monitor these types of bundled payments,” Mr Rubin said.

“Whether you get the payment up front or you get a rebate later, the rebate would be for the drug alone, not for the cost of care in between. The providers have accrued a cost over time, and if they’re just getting a rebate for the drug portion, it does not offset the total cost of care,” he added.

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