Should Doctors Get Paid More If Their Cancer Patients Live?

The Oncology Care Model will help test how far the Obama administration can go in prioritizing quality over quantity in health care.

A patient undergoes a scan as radiology technicians look at the exam on a screen, on February 6, 2013, at the Oscar Lambret Center in Lille, northern France, a regional medical unit specialised in cancer treatment.
National Journal
May 17, 2015, 4 p.m.

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.”

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