The new hotness in health care these days is paying for quality, not quantity, and now the Obama administration wants to apply that axiom to cancer treatment.
Right now, Medicare pays doctors by what’s known as fee-for-service: They perform a service, prescribe a drug, and they’re paid for it. Volume determines the cost.
But under a pilot project being developed through the Affordable Care Act, the federal government wants to completely change that system, setting a price for doctors to meet when they treat a cancer patient and rewarding them for beating it.
The hope is that such an overhaul will do two things at once: keep costs under control and improve the quality of care. Those twin goals are the aim of many efforts to revamp the way doctors are paid in the United States, and there is reason to think it could work for chemotherapy.
But this kind of reform is also sure to draw concerns that doctors could be too thrifty and the actual care might suffer as they try to meet their cost goals. The public discourse is just a few years removed from the height of the Obamacare debate, and the rhetoric about keeping your plan if you like it, and death panels. The stakes couldn’t be higher when the diagnosis is cancer.
“That reaction of, ‘Oh, my God, they’re trying to cut cancer care?’ It is a reaction that you hear sometimes,” said Erin Smith, who worked on the project while she was at the Centers for Medicare and Medicaid Services; she is now a senior associate at Avalere Health, an independent consulting firm.
Optimism exists among some physicians and patient advocacy groups that the project, called the Oncology Care Model, will lead to a better experience for cancer patients by better preparing them for chemotherapy and making sure they don’t end up in the emergency room because of its side effects—which should in turn keep costs down.
“It’s not that they’re targeting to cut back care for oncology, but I think that what they’re seeing in the high spending that’s related to oncology care is waste rather than good care,” Smith said. “The goal here is if they put these practice requirements in place and they transform the way oncology care is provided, then they’re really going to see improvements. So it’s actually going to benefit the beneficiaries.”
The Oncology Care Model would set a target price for the total cost of care over a six-month period, which would start when the patient is prescribed chemotherapy drugs. Practices will start by receiving a $160 payment per month for the patient to help cover the cost of managing their care.
At the end of the six months, CMS will add up all the costs—that $160 care-management payment, the drugs, the tests, everything—and compare it to the target price, which will be set based on the practice’s historical costs for treating similar patients. If the practice treated the patient for less than the target price, they are paid the difference. So if the target price was $10,000 but the treatment cost only $9,000, the practice receives $1,000.
Quality of care will also be measured, though, so if the practice beat the target price but the care wasn’t as good as required, they won’t keep all of that $1,000. That would hopefully prevent doctors from skimping on care just to meet their cost goals, one of the big concerns about the project.
“Right now, our health care system has evolved to pay-for-volume. The only way revenue comes to a practice is for a physician to do something. That generates some perversities, and it’s not just in oncology, it’s throughout health care,” said John Cox, a medical oncologist at Texas Oncology in Dallas who has applied for the program. “There is a better way; I think everybody knows that.”
The project has gone through several rounds of proposed rules, feedback from interested groups, and revisions. The administration is currently accepting applications from oncology practices that want to participate while it finalizes all the details. The project is set to launch in spring 2016 and last for five years. CMS said it wants to recruit at least 100 practices that will treat 175,000 cases over the five years.
But the devil, as always, is in the details, and groups like the American Society of Clinical Oncology, of which Cox is a member, and the pharmaceutical trade group PhRMA have expressed to CMS their concerns about the project. How the target prices are set, what the quality measures will be, and what services count toward the cost are some of the issues that are still being resolved.
To answer one other obvious question: The $160 care-management fee would stop if the patient dies, but it would otherwise be treated like a normal six-month episode. The agency has pledged to oversee the participating practices with a variety of measures, from site visits to patient surveys, to make sure quality isn’t suffering.
Another issue looming over the project is how it will deal with newly discovered cancer treatments. “Establishing payment incentives based on definitions of clinical care that do not “¦ keep pace with medical advances will create significant disincentives for continued progress and may lead to some Medicare beneficiaries receiving a lower standard of care than their cohorts simply because they are a part of a model test,” wrote PhRMA, whose members are the ones often developing those medical advances, in an October letter to CMS.
CMS has signaled it will work to address those concerns, perhaps by excluding a new treatment when calculating what it cost to care for a patient. But everyone involved acknowledges it is one of the biggest outstanding questions.
“Ideally, doctors are going to do what’s best for the patients, even if it’s not best for their pocketbook,” said Shelley Fuld Nasso, who heads the National Coalition for Cancer Survivorship.
Cox, in turn, pointed to the pharmaceutical industry, which he said sometimes makes “unconscionable” pricing decision for new treatments. Whenever pricing comes up, the industry argues that it needs to recoup the cost of developing new drugs so that it can reinvest in further research.
And the fact that new medicines that improve care and save lives are debuting all the time is undeniable—which is why this is such an acute issue for the project.
“My profession is being remade right now by science,” Cox said. “It’s remarkable.”
Despite all that uncertainty, physicians, patient advocates, and the former CMS official all said that the Oncology Care Model holds real promise for cancer patients.
It would amount to little changes in the everyday experience, but they believe it could both improve a patient’s quality of life and cut down on costs—those twin goals of any change to the health care system.
Patients would receive a detailed plan of what their care is going to look like so they know what to expect. Chemotherapy comes with very predictable side effects, so if patients are warned in advance and doctors make sure to be available to their wards at all times or even to be preemptively checking in, a patient feeling nauseous or getting dehydrated could be treated by a doctor instead of going to the emergency room. That would also save money by avoiding preventable and expensive hospital stays.
“The whole model,” Fuld Nasso said, “is based on doing a better job of managing symptoms so that patients don’t end up in the hospital or emergency room.”