August 2012 Vol 5, No 5, Special Issue ASCO 2012 Payers' Perspective - Payers' Perspectives
Rhonda Greenapple, MSPH

Over the past year, the volume and intensity of concern about the unsustainable growth of cancer care costs have mounted steadily. Oncology clinical pathways, once widely disdained as “cookbook medicine,” are being adopted through successful payer–provider collaboration and pro­vider compliance with pathways that generally has exceeded early expectations.1,2  Emerging in parallel to clinical pathways are new cancer care delivery models—notably accountable care organizations (ACOs)—that are striving for sustainable cost and quality balance through better coordination of care and more effective integration of palliative care.

A recent survey of medical and pharmacy directors was conducted in July 2012 by Reimbursement Intelli­gence, a market access consulting firm. The survey included 52 leading managed care plans, representing more than 100 million covered lives. The goal of the survey was to understand how payers are initiating or collaborating with providers to implement cost-management and delivery models.

Anticipated Expansion of Oncology Pathways
The responses to the survey showed that oncology clinical pathways have been adopted (40%) or will be adopted within 2 years (35.5%) by a total of more than 75% of these payer groups. For plans that have already adopted pathways, the top 5 goals were to:

  • Improve quality
  • Reduce clinical variation across providers
  • Reduce oncology drug costs
  • Reduce overall cost
  • Reduce costs associated with end-of-life care.
Figure 1
Payer prioritization of tumor types for pathway implementation

Payers have targeted specific tumor types for pathway implementation, identifying breast, lung, and colorectal cancers as their initial priorities, followed by multiple myeloma (Figure 1). If payer predictions are accurate, by 2014 pathway penetration will be close to 100% in colorectal cancer, more than 90% in breast and lung cancers, and approaching 80% in prostate cancer.

Payers rating specific criteria for selection of tumor types for the development of clinical pathways identified the cost burden associated with tumor treatment and the need to improve quality of care as the 2 most important criteria (71.5% and 71.4% of respondents, respectively). Other influential considerations are the degree of clinical variation for a particular tumor type (66.6%) and prevalence of the tumor type (61.9%).

Payers report that their organizations have been flexible with adjustments to pathways, with most adjustments (84.2%) made to allow provider flexibility regarding therapeutic options, such as allowing off-pathway drugs to be used to avoid drug–drug interactions. Pathways generally have integrated traditional cost-management measures, including prior authorization (85.7%), step edits (71.4%), and formulary placement or tiering (52.3%).

In light of ongoing discussions about the cost-saving potential of earlier implementation of palliative care and end-of-life discussions,3 our survey specifically probed payers about how palliative care is being addressed in oncology clinical pathways. A minority of respondents (14.3%) indicated that palliative care will not be referenced in pathways; nearly 3 times as many respondents (42.9%) stated that palliative care will be recommended as a course of action when appropriate (eg, “palliative care should strongly be considered”).

Figure 2
Payer estimates of provider adherence with oncology pathways generally exceeds targets

Consistent with reported findings from payers who have already implemented pathways, payers participating in this survey reported that provider compliance with pathways generally exceeded expectations, especially when anticipated adherence was in the more modest range, between 60% and 70% (Figure 2).

Overall, although approximately one fourth (27.2%) of respondents anticipated pathways adherence in the 60% to 70% range, nearly two thirds of plans (63.6%) estimated actual pathways within those ranges. Conversely, although 41% of plans estimated adherence at 80%, only 18.2% estimate this level of actual compliance. Adherence at the 90% level was substantially overestimated; although 31.8% of plans reported this target level of adherence, less than 5% estimated it had been achieved.

Payer Formation of ACOs

Figure 3
Payer estimates of oncology cost-savings 1 and 3 years after ACO formation

This survey of leading payers confirmed that interest in ACOs as a cost-management mechanism for oncology is high. A minority of payers (20.8%) currently have an ACO, but 53% of respondents plan to have an ACO within 2 years. Payers anticipate modest first-year cost-savings after forming an ACO, but they expect savings to increase substantially 3 years later (Figure 3).

The 3 primary potential contributors to ACO-related cost reductions were better coordination of care (85.7% of respondents), reducing inappropriate uses of therapies (81.0%), and earlier initiation of palliative care when appropriate (71.4%).

When probed on ways in which an ACO potentially could influence oncologic drug costs, 2 prominent areas were identified by a majority of respondents—more conservative use of supportive care therapies (71.2%) and earlier initiation of palliative care (69.2%).

Overall, payers were realistic and pragmatic in identifying challenges to implementing new oncology care delivery models, with provider alignment and infrastructure/data acquisition identified as the 2 most significant challenges (86.5% and 71.2%, respectively), followed by care coordination, pro­vider incentives, and organizational structure (each 65.4% of respondents).

Rapid Payer Adaptation to Change
The rate at which payers are adapting to substantial changes in oncology care delivery models is encouraging. Although precise calculations of cost-savings associated with clinical pathway adoption and ACOs are difficult to quantify,1 our survey confirmed that providers and payers are collaborating at the community level to implement sweeping changes to the oncology care model.

References

  1. Feinberg BA, Lang J, Grzegorczyk J, et al. Implementation of cancer clinical care pathways: a successful model of collaboration between payers and providers. Am J Manag Care. 2012;18:e194-e199.
  2. Sullivan WJ. Demystifying pathways in oncology. Manag Care. 2012;21:34-38.
  3. Smith TJ, Hillner BE. Bending the cost curve in cancer care. N Engl J Med. 2011;364:2060-2065.
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