Chicago, IL—A survey conducted by the Cancer Center Business Summit of 36 health - care organizations on account able care initiatives involved in oncology- specific, nontraditional payment methodology showed a low priority for achieving cost-savings through oncology care services, according to Ronald Barkley, MS, JD, Managing Director, Cancer Center Business Devel opment Group, and the survey’s principal investigator.
Overall, survey responders indicated that the concept of accountable care organizations (ACOs) has focused on chronic diseases, because their costs are more predictable compared with oncology-related costs.
The comments gathered from direct phone interviews of these or - ganizations, conducted during June- August 2011, were identified as either responding to ACO initiatives or participating in nontraditional and innovative payment reimbursement (payment other than fee-for-service format).
The interviews revealed that 10 of the organizations surveyed were ACO proactive, 13 were ACO exploratory, 8 took a “wait-and-see” approach, and 2 were ignoring ACOs altogether.
One pattern that emerged from the market profiles of these organizations is that proactive ACO responders tended to vary from somewhat to highly consolidated and highly competitive markets, according to Mr Barkley.
Emerging Patterns
Key comments about ACO readiness showed that:
- The proposed rules were too onerous.
- Uncertainty over Medicare ACO reporting data requirements with respect to cancer (immature data) is too great.
- Determining the true cost of cancer care is difficult, given the lack of a consistent definition of cancer care.
- There is a need to “spend a lot of political capital” with physicians to get ready for ACOs.
- Too much time and effort is spent determining which physicians are fully aligned with the ACO concept.
Of the organizations participating in oncology-specific nontraditional payment methodologies, United- Healthcare instituted what it called an episode-of-care payment system, in which a historic drug margin, plus a per-patient administrative fee, is paid for practices complying with selected pathways for select cancer sites (breast, colon, lung, ovarian). All other services are on a fee-forservice basis. As such, it is not a true episode-of-care payment but rather “locks in” the historic drug margin, said Barkley.
Many state Blue Cross plans and P4 Healthcare have models in which practices are paid premiums on drug reimbursement for 80% pathways compliance.
Within the ACO responder orga - nizations, there was essentially no variation from traditional payment methods in oncology.
Oncology as a health condition seems to be of lesser priority in the context of ACO planning than is chronic diseases, such as heart disease and chronic obstructive pulmonary disease. The ACO responder organizations tend to agree that these chronic conditions have been cited as better candidates for costsavings, noting that ACO concepts have been developed around primary care, and not as much thought has been given to subspecialty care, which tends to be fragmented.
In general, the sheer volume of chronic disease patients offers more opportunity for cost-savings compared with cancer patients, said ACO responder organizations, and oncology is too complex to tackle in ACO planning, with greater cost variability and unpredictability.
“Cancer is too broad to get disease focus. Whereas hip, knee, and cardiac surgery are more predictable,” replied a health system oncology service executive in the mid-Atlantic region.
Too much money is spent on futile care in the last 6 months of life, and conversations need to revolve around end-of-life care much earlier than they do now, said executives and medical directors in the ACO responder organizations.
Trends to Watch in 2012
According to Mr Barkley, some trends to watch for include:
- Expanding beyond pathways to include programs that emphasize cost reductions by reducing redundant hospitalizations and emergency department visits.
- Oncology practices organizing to be specialist “neighbors” of primary care medical homes.
- Oncology “bundled” pricing as a new oncologist–hospital alignment strategy.