At more than $88B in annual spending (2011) cancer is the second most costly condition in the US. It lags only heart disease at $116B. Cancer is more expensive than trauma-related disorders ($82B), mental disorders ($78B), osteoarthritis and joint disease ($78B), COPD/asthma ($75B), diabetes ($55B), and hypertension ($42B). Further, cancer’s prevalence is a staggering 13M Americans, or 4% of the US population. Despite these numbers, oncology seems to be a second-tier consideration among accountable care organizations, risk bearing providers, and managed care organizations. It does not have to be, nor given the dollars and volumes involved, should it be.
It is not surprising cancer has received less attention than other conditions among clinician executives already struggling with PPACA. Organizationally, cancer is hard to get one’s hands around. Its management is specialist-led and shared among various clinicians and settings. Tactically, it hard to put in place metrics that track cancer care effectiveness on a week-to-week basis. Cardiovascular disease has blood pressure, blood lipids, and medication compliance metrics. Diabetes has Hemoglobin A1C and blood sugar. COPD/Asthma has peak flow. Obesity has BMI, etc. Cancers do not have many easy-to-measure metrics, save for perhaps screening compliance. For longer-term process management, cancer outcomes are just as hard to measure as any other condition. Often they are harder-- needing to factor in quality-of-life, fertility, and complications caused by cancer and cancer treatment themselves, as well as survivability. In part because cancer care is hard to measure, it is also hard to standardize. While cancer treatment has many guidelines, there is overall much less certainty in optimal management / best-practices than in other disease states. Finally, the financial savings associated with improved oncology management are less obvious. Improving CHF can immediately impact hospital admissions. Tighter COPD management can lead to reduced ER use, and better diabetes management may result in less downstream complications. While there are some cost-saving opportunities from better process standardization, the return-on-investment of improved cancer management is less clear, and may require a longer time horizons to assess than in other diseases.
Does this mean there is no low-hanging fruit in cancer, or is there fruit but it is not worth the effort to harvest? Hardly. First, let us start with the obvious. According to the CDC, Cancer is the second leading cause of death in the US (2010), only surpassed by Heart Disease. Nearly 1 out of every 2 men, and one in every 3 women, will develop some form of cancer in their lives. From a purely mission perspective, cancer is simply too big to be marginalized despite its complexities. Fortunately, cancer’s high-cost, complexity, and fragmentation suggest there are immediate financial opportunities for risk-bearing providers.
In evaluating cancer care cost savings opportunities, it is worth noting how the money is spent today. Roughly 58% of cancer spending is outpatient & office visit- based. 29% is inpatient- based. This is very different from heart disease, with 22% of its spending outpatient & office visit- based, and 57% on inpatient care. Cancer care improvement thus requires engaging a broad set of clinicians rather than just the hospitals. Further, this provider engagement around cancer care improvement is not simply addressing point-problems or closing simple gaps-in-care. There are few if any easily measured cancer-related ambulatory care sensitive admissions. Also, non-urgent ER use is not an epidemic in cancer as opposed to other disease states. According to a University of North Carolina study, over 63 percent of cancer patients who went to the ER were admitted versus 15 percent for the other patients. Thus, improving cancer care must be done over a long time horizon at many locations. Finally, according the National Cancer Institute, cancer care spending overall is split evenly between Initial Phase (the first year post diagnosis), the last year of life, and the period in between. (This last-referred to time frame is called the Continuing Phase.) This even spread of cancer spending over the years again suggest that structural improvements to oncology care delivery is required to effectuate meaningful change, rather than point-in-time, single-site programs.
While outlining a comprehensive oncology program is something the industry as a whole must continually research, there are at least six initial ideas to consider in the interim.
Tighter management of oncology drugs. Susan Weber in The American Journal of Managed Care suggests that payers’ successes in containing costs in other complex drug categories will generate renewed interest in oncology medication management. These include higher patient cost sharing arrangements for new oral oncolytics, narrower prior authorization approval criteria that restrict use of high-cost agents that lack survival improvements, and adopting “lines of therapy” approaches. Overall, while not easy, reducing the drug spend is an important first step in oncology cost management.
Enforce guidelines and push for expanded use of clinical pathways. According the to the National Oncology Practice Benchmark 2012 Report, the vast majority of oncologists today regularly use practice guidelines to drive patient care decisions. More than half regularly use clinical pathways. Over time, more and more providers, either on their own or as required to by payers, will roll out more clinical pathways to cover more tumor types, further standardizing care delivery. In doing so, they will generate even more usable comparative effectiveness data to further refine the pathways.
Better site-of-care management for both drugs and imaging. Numerous studies, including Milliman’s August 2013 report Comparing Episode of Cancer Care Costs in Different Settings, have identified the large cost difference between hospital- and physician-office- administered chemotherapy. Similar price discrepancies can be seen between hospital-based imaging studies and those performed by freestanding diagnostic facilities. Over time, risk-bearing providers will need to steer patients to the most effective and cost-effective setting possible. For medications, this may include specialty pharmacies versus physician offices. Already nationwide there is some meaningful movement away from “physician buy & bill” for oncology medications towards specialty pharmacy provided model. This trend can be further encouraged by risk-bearing entities.
Treat the whole patient, not just the cancer, especially after the initial phase. A May 2013 review article published in the American Cancer Society’s journal CA found “… 1 in 4 cancer survivors report poor physical health and 1 in 10 cancer survivors report poor mental health. In one study of 163 women with advanced breast cancer, 92% had one or more physical impairment, but fewer than 30% received rehabilitation care. Another study found that 63% of survivors of the 10 most common cancers reported the need for at least 1 rehabilitation service.” Per the same study, such impairments are often undetected and hence untreated, decreasing survivor’s quality of live and creating permanent disability. Better screening and post-treatment management, including encouragement of survivor programs, may prove effective in both health maintenance and long-term cost stabilization.
Expanded use of Case Managers, including for end-of-life planning. Case management is a well-established tool to improve the care coordination of high-cost patients. Many cancer patients fall into this category. Case management can have a particularly important role to play in oncology. For example, a Carnegie Mellon and Blue Shield of California study found oncologic patients enrolled in a high-touch medical management program had 38% fewer hospitalizations, a 22% increase in home care, and less treatment complications than a matched control. These aggressively managed patients also opted-out for treatment more often, including 42% less chemotherapy than the control patients, and 62% more hospice days. All of this had no impact on lifespan, suggesting no adverse effect on survival. The complexity of cancer, the decisions to treat or not, and coordinating end-of-life care requires additional attention and expertise that a treating oncologist on her own simply cannot provide.
Align and rationalize the provider networks. Finally, in oncology as elsewhere, aligning the incentives within provider networks, identifying best- and worst- performer networks, and driving patients to the most effective clinicians is possible. Already, pioneers like United Healthcare are piloting bundled payments for select tumor types. At the same time, United has pruned oncology providers from their networks, including Moffitt Cancer Centers in Tampa, Florida. While the long-duration of therapy and complex treatment options make payment and network innovations challenging, they are doable.
Oncology is ripe for care-process and cost-compression innovation. In addition to the areas listed above, there are hundreds of other natural experiments occurring in the market. Further supporting this innovation trend is the consolidation taking place around cancer care. According the Community Oncology Alliance, in the past year there has been a 20% increase in practices that have either been purchased or entered into a hospital agreement. Such consolidation creates even more opportunity to standardize oncology treatment, as existing referral patterns are being broken, payment reform is explored, and oncology is further integrated into the broader delivery system. With an incidence rate of 350 per 100,000 people for the top 10 cancer types alone, or over 1M new diagnoses annually, this innovation is surely needed now.
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