WIN-WIN-WIN APPROACHES TO ONCOLOGY CARE

Transcription

1 WIN-WIN-WIN APPROACHES TO ONCOLOGY CARE How Patients, Payers, Physicians, & Hospitals Can All Benefit from Improving the Way We Deliver and Pay for Cancer Treatment Harold D. Miller President and CEO Center for Healthcare Quality and Payment Reform

2 DISCLOSURE: I Have No Financial Relationships With Any Commercial Interests

3 How Do You Control Growing Healthcare Spending? $ TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TIME 3

4 Typical Strategy #1: Cut Provider Fees for Services $ TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE SAVINGS Cut Provider Fees TOTAL HEALTH CARE BY PAYERS 4

5 Typical Strategy #2: Shift Costs to Patients $ SAVINGS TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE TOTAL HEALTH CARE BY PAYERS Higher Cost-Share & Deductibles 5

6 Results of the Typical Strategies Small providers forced out of business Consolidation of providers to resist cuts in fees Shifts in care to higher-cost settings Increases in utilization to offset losses in revenue Patients avoiding necessary care due to high cost-sharing Large increases in health insurance premiums Inability to afford health insurance 6

7 Results of the Typical Strategies Small providers forced out of business Consolidation of providers to resist cuts in fees Shifts in care to higher-cost settings Increases in utilization to offset losses in revenue Patients avoiding necessary care due to high cost-sharing Large increases in health insurance premiums Inability to afford health insurance IS THERE A BETTER WAY? 7

8 The Right Focus: Spending That is Unnecessary or Avoidable $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY NECESSARY NECESSARY NECESSARY TIME 8

9 Avoidable Spending Occurs In All Aspects of Healthcare $ AVOIDABLE NECESSARY 9

10 Avoidable Spending Occurs In All Aspects of Healthcare $ CHRONIC DISEASE MANAGEMENT ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness AVOIDABLE NECESSARY 10

11 Avoidable Spending Occurs In All Aspects of Healthcare $ CHRONIC DISEASE MANAGEMENT ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness AVOIDABLE TESTING & PROCEDURES Overuse of high-tech diagnostic imaging Unnecessary surgery Use of unnecessarily-expensive implants Infections and complications of surgery Overuse of inpatient rehabilitation NECESSARY 11

12 Avoidable Spending Occurs In All Aspects of Healthcare $ CHRONIC DISEASE MANAGEMENT ER visits for exacerbations Hospital admissions and readmissions Amputations, blindness AVOIDABLE NECESSARY TESTING & PROCEDURES Overuse of high-tech diagnostic imaging Unnecessary surgery Use of unnecessarily-expensive implants Infections and complications of surgery Overuse of inpatient rehabilitation CANCER TREATMENT Use of unnecessarily-expensive drugs & radiation treatments Repeat surgeries for full resection ER visits/hospital stays for dehydration and avoidable complications Fruitless treatment at end of life Late-stage cancers due to poor screening 12

13 Institute of Medicine Estimate: 30% of Spending is Avoidable 13

14 The Right Goal: Less Avoidable $, $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY TIME 14

15 The Right Goal: Less Avoidable $, More Necessary $ $ AVOIDABLE AVOIDABLE AVOIDABLE AVOIDABLE NECESSARY NECESSARY NECESSARY NECESSARY TIME 15

16 Win-Win for Patients & Payers $ AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE Lower Spending for Payers NECESSARY NECESSARY NECESSARY NECESSARY Better Care for Patients TIME 16

17 Barriers in the Payment System Create a Win-Lose for Providers $ AVOIDABLE NECESSARY BARRIERS IN THE CURRENT PAYMENT SYSTEM SAVINGS AVOIDABLE NECESSARY 17

18 Barrier #1: No $ or Inadequate $ for High-Value Services $ AVOIDABLE NECESSARY UNPAID SERVICES No Payment or Inadequate Payment for: Services delivered outside of face-to-face visits with clinicians, e.g., phone calls, s, etc. Services delivered by non-clinicians, e.g., nurses, community health workers, etc. Communication between PCPs and specialists to manage patient needs Non-medical services, e.g., transportation Additional time for patients with higher intensity needs 18

19 Barrier #2: Avoidable Spending May Be Revenue for Providers $ AVOIDABLE MARGIN NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY 19

20 And When Avoidable Services Aren t Delivered $ AVOIDABLE MARGIN AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY 20

21 Providers Revenue May Decrease $ AVOIDABLE MARGIN AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY PROVIDER REVENUE 21

22 But Fixed Costs Don t Vanish $ AVOIDABLE MARGIN Many Fixed Costs of Services Remain When Volume Decreases Leases & staff in physician practice Costs of hospital emergency room and other standby services AVOIDABLE NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY COST PROVIDER OF REVENUE SERVICE DELIVERY 22

23 But Fixed Costs Don t Vanish and New Costs May Be Added $ AVOIDABLE MARGIN Many Fixed Costs of Services Remain When Volume Decreases And New Costs May Be Incurred, Costs of nurse care managers Costs of unpaid physician services Costs of collecting quality data AVOIDABLE COST OF NEW SVCS NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY COST PROVIDER OF REVENUE SERVICE DELIVERY 23

24 Leaving Providers With Losses (or Bigger Losses Than Today) $ Many Fixed Costs of Services Remain When Volume Decreases And New Costs May Be Incurred, Potentially Causing Financial Losses AVOIDABLE MARGIN AVOIDABLE LOSS COST OF NEW SVCS NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY NECESSARY PROVIDER REVENUE COST OF SERVICE DELIVERY 24

25 A Payment Change isn t Reform Unless It Removes the Barriers BARRIER #1 BARRIER #2 25

26 So Why Haven t We Fixed This??

27

28 Payers Are From Mars, Providers Are From Venus

29 Provider Approach: Pay Us More $ PROVIDER SOLUTION: AVOIDABLE NEWLY PAID SERVICES NECESSARY NECESSARY UNPAID SERVICES 29

30 Provider Approach: Pay Us More and Trust Us on Savings $ PROVIDER SOLUTION: AVOIDABLE SAVINGS AVOIDABLE NEWLY PAID SERVICES NECESSARY NECESSARY UNPAID SERVICES 30

31 Provider Approach: Pay Us More and Trust Us on Savings $ PROVIDER SOLUTION: AVOIDABLE NECESSARY UNPAID SERVICES SAVINGS AVOIDABLE NEWLY PAID SERVICES NECESSARY No matter how many studies have been done saying that a service saved money in demonstration projects, that s no guarantee that savings will be achieved when the service is implemented by all providers for all patients 31

32 Payer Concern: No Accountability to Reduce Avoidable Spending $ PROVIDER SOLUTION: PAYER FEAR: AVOIDABLE SAVINGS AVOIDABLE NEWLY PAID SERVICES AVOIDABLE NEWLY PAID SERVICES NECESSARY NECESSARY NECESSARY UNPAID SERVICES 32

33 Payers Are From Mars, Providers Are From Venus

34 Payer Approach: Save Us Money and $ YEAR 1 PAYER SOLUTION: AVOIDABLE SAVINGS AVOIDABLE NECESSARY NECESSARY UNPAID SERVICES UNPAID SERVICES 34

35 Payer Approach: Save Us Money and We ll Pay You More Next Year $ PAYER SOLUTION: YEAR 1 YEAR 2 AVOIDABLE SAVINGS AVOIDABLE SAVINGS AVOIDABLE P4P/ShrdSvgs NECESSARY NECESSARY NECESSARY UNPAID SERVICES UNPAID SERVICES UNPAID SERVICES 35

36 Provider Concern: Shared Savings is Too Little, Too Late $ PAYER SOLUTION: YEAR 1 YEAR 2 SAVINGS SAVINGS AVOIDABLE AVOIDABLE AVOIDABLE P4P/ShrdSvgs NECESSARY NECESSARY How does provider cover upfront costs of additional services? NECESSARY P4P or shared savings may be too little too late to cover costs UNPAID SERVICES UNPAID SERVICES UNPAID SERVICES 36

37 Problems With Shared Savings Already efficient physician practices receive little or no additional revenue and may be forced out of business Physician practices that have been practicing inefficiently or inappropriately are paid more than conservative physicians Physicians could be rewarded for denying needed care as well as by reducing overuse Physician practices are placed at risk for costs they cannot control and random variation in spending Shared savings bonuses are temporary and when there are no more savings to be generated, practices are still underpaid for the care patients need 37

38 Purchaser Strategies in Oncology: Narrow ( High Value ) Networks 38

39 Step 1: Identify High-Value Providers High-Value Providers Low-Value Providers 39

40 How Do You Define Value? 40

41 How Do You Define Value? VALUE = QUALITY COST 41

42 So Provider #1 Delivers Higher Value Care, Right? VALUE = QUALITY COST PROVIDER #1 7 Year Survival $5,000/patient > PROVIDER #2 10 Year Survival $10,000/patient 42

43 So Provider #1 Delivers Higher Value Care, Right? VALUE = QUALITY COST PROVIDER #1 7 Year Survival $5,000/patient 0.51 days of life per dollar > > PROVIDER #2 10 Year Survival $10,000/patient 0.37 days of life per dollar 43

44 Multiple Aspects of Quality VALUE = QUALITY COST PROVIDER #1 8 Year Survival 20% Grade 3+ Toxicity $11,000/patient < > > PROVIDER #2 10 Year Survival 50% Grade 3+ Toxicity $10,000/patient? 44

45 Assessing Value is a Lot Harder Than This VALUE = QUALITY COST 45

46 All Too Often, High-Value Means Willing to Accept Discounted Fee High-Value Providers (i.e., discounts) Low-Value Providers 46

47 Step 2: Reward High-Value Providers With More Patients More Patients High-Value Providers (i.e., discounts) Low-Value Providers 47

48 But Wait: Weren t We Going to Stop Rewarding Volume??? More Patients High-Value Providers (i.e., discounts) Low-Value Providers Volume Value 48

49 Narrow Networks Are Not What Volume to Value Means! More Patients High-Value Providers (i.e., discounts) Low-Value Providers Volume Value Volume Health Affairs, Sept/Oct

50 What if the Network is Already Narrow? More? Patients One Provider in the Community (Rural Area, Consolidated System, Etc.) 50

51 National Narrow Networks: Centers of Excellence More Patients High-Value Providers in Other Cities One Provider in the local Community 51

52 Will Every Cancer Patient Have to Go to Minnesota? 52

53 Will Every Cancer Patient Have to Go to Minnesota? Are purchasers in the sending regions benefiting from the high prices that the high value providers are charging employers and patients in their own region? 53

54 Provider Response: Create an Accreditation Program Oncology practices and health systems will prove to payers they are delivering high-value care by subjecting themselves to rigorous review by an accrediting agency 54

55 Does Accreditation Assure High-Value Care? Thanks to Joint Commission hospital accreditation, there are no longer any infections or patient safety problems in hospitals Thanks to the Certification Commission for Health Information Technology (CCHIT), every EHR works effectively to support good patient care Thanks to college accreditation organizations, every parent who sends their child to college knows they will get a good education and a good job after graduation NOT 55

56 Should Payers Provide Incentives to Deliver Higher Value Care? $ Bonus Penalty P4P Based on Quality and Cost Measures FFS 56

57 The Problem Isn t Incentives But Barriers in FFS Payment $ Bonus Penalty FFS P4P Based on Quality and Cost Measures A small bonus may not be enough to pay for delivering a high-value service or for the added costs of improving quality A small bonus may not be enough to offset the costs of collecting and reporting the quality data A small penalty may be less than the loss of fee-for-service revenue from healthier patients or lower utilization Unpaid Services 57

58 Value-Based Purchasing Won t Work Unless It Removes the Barriers BARRIER #1 BARRIER #2 58

59 It is unrealistic to expect providers to improve quality or reduce spending if the payment system does not provide adequate financial support for their efforts.

60 It is unrealistic to expect providers to improve quality or reduce spending if the payment system does not provide adequate financial support for their efforts. It s unrealistic to expect patients & purchasers to pay more or differently without assurances that quality will be improved, spending will be lower, or both.

61 It is unrealistic to expect providers to improve quality or reduce spending if the payment system does not provide adequate financial support for their efforts. It s unrealistic to expect patients & purchasers to pay more or differently without assurances that quality will be improved, spending will be lower, or both. Payment reforms must be designed to support delivery of higher-quality care for patients at lower costs for purchasers in ways that are financially feasible for providers.

62 How Do You Design a Good Alternative Payment Model?

63 Step #1: Identify Avoidable Spending $ AVOIDABLE PROVIDER CAN CONTROL NECESSARY PROVIDER CAN CONTROL OPPORTUNITIES TO REDUCE WITHOUT HARMING PATIENTS Use of unnecessarily expensive drugs Ordering unnecessary tests & imaging studies Performing unnecessary procedures Repeat procedures to correct avoidable problems ED visits and hospital admits for complications of treatment Use of unnecessarily expensive settings for treatment 63

64 Specialty Societies Have Already Identified Many Opportunities 64

65 Payment Systems Should Support Care Delivery not Vice Versa $ AVOIDABLE PROVIDER CAN CONTROL NECESSARY PROVIDER CAN CONTROL OPPORTUNITIES TO REDUCE WITHOUT HARMING PATIENTS Use of unnecessarily expensive drugs Ordering unnecessary tests & imaging studies Performing unnecessary procedures Repeat procedures to correct avoidable problems ED visits and hospital admits for complications of treatment Use of unnecessarily expensive settings for treatment UNPAID SERVICES 65

66 Step #2: Identify Barriers in Payment $ AVOIDABLE PROVIDER CAN CONTROL NECESSARY PROVIDER CAN CONTROL UNPAID SERVICES OPPORTUNITIES TO REDUCE WITHOUT HARMING PATIENTS Use of unnecessarily expensive drugs Ordering unnecessary tests & imaging studies Performing unnecessary procedures Repeat procedures to correct avoidable problems ED visits and hospital admits for complications of treatment Use of unnecessarily expensive settings for treatment BARRIERS IN CURRENT FFS SYSTEM Inadequate payment for accurate diagnosis Inadequate payment for time needed to avoid complications during procedures No payment for staff to educate patients and help them manage their condition No payment for time involved in coordinating care among multiple providers 66

67 $ Step #3: Remove the Barriers PROVIDER- PAYER AGREEMENT AVOIDABLE PROVIDER CAN CONTROL NEWLY PAID SERVICES Upfront payment to support improved delivery of care NECESSARY PROVIDER CAN CONTROL NECESSARY UNPAID SERVICES 67

68 Step #4: Take Accountability for Results $ PROVIDER- PAYER AGREEMENT AVOIDABLE PROVIDER CAN CONTROL SAVINGS AVOIDABLE NEWLY PAID SERVICES Commitment to reduce avoidable spending sufficiently to achieve savings Upfront payment to support improved delivery of care NECESSARY PROVIDER CAN CONTROL NECESSARY UNPAID SERVICES 68

69 Accountability is Assured As Part of the Payment Contract $ PROVIDER- PAYER AGREEMENT IF SAVINGS IS NOT ACHIEVED.. AVOIDABLE PROVIDER CAN CONTROL SAVINGS AVOIDABLE NEWLY PAID SERVICES AVOIDABLE NEWLY PAID SERVICES NECESSARY PROVIDER CAN CONTROL NECESSARY NECESSARY UNPAID SERVICES 69

70 Accountability is Assured As Part of the Payment Contract $ PROVIDER- PAYER AGREEMENT IF SAVINGS IS NOT ACHIEVED.. PROVIDER PAYMENT REDUCED AVOIDABLE PROVIDER CAN CONTROL SAVINGS AVOIDABLE NEWLY PAID SERVICES AVOIDABLE NEWLY PAID SERVICES SAVINGS AVOIDABLE PROVIDER $ NECESSARY PROVIDER CAN CONTROL NECESSARY NECESSARY NECESSARY UNPAID SERVICES 70

71 Bundled/Warrantied Payment Alternative Approach: Bundled/Warrantied Payment $ BUNDLED/ WARRANTIED PAYMENT AVOIDABLE PROVIDER CAN CONTROL SAVINGS AVOIDABLE ADDITIONAL SERVICES NECESSARY PROVIDER CAN CONTROL NECESSARY UNPAID SERVICES 71

72 Bundled/Warrantied Payment Bundled/Warrantied Payment Creates Spending Accountability $ BUNDLED/ WARRANTIED PAYMENT IF SAVINGS IS NOT ACHIEVED.. PROVIDER MARGINS REDUCED AVOIDABLE PROVIDER CAN CONTROL SAVINGS AVOIDABLE ADDITIONAL SERVICES SAVINGS AVOIDABLE MARGINS NECESSARY PROVIDER CAN CONTROL NECESSARY NECESSARY UNPAID SERVICES 72

73 How Do You Design a Good Alternative Payment Model for Oncology?

74 $45,000 $40,000 $35,000 Current Spending Per Patient Where Does Spending on Medical Oncology Go? $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 74

75 $45,000 $40,000 $35,000 Most Spending Doesn t Pay Oncology Practices for Services Current Spending Per Patient $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Infusions Fees for oncology practice services represent less than 10% of spending for cancer patients during episodes of chemotherapy treatment Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 75

76 $45,000 $40,000 $35,000 Current Spending Per Patient Half of the Spending Goes to Drugs $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Drugs Infusions Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 76

77 $45,000 $40,000 $35,000 Most Drug Spending Goes to a Small Number of Expensive Drugs Current Spending Per Patient $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Drugs Infusions Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) >2/3 of Spending Goes to 6 Drugs 77

78 $45,000 $40,000 $35,000 Spending on Laboratory Tests Current Spending Per Patient and Imaging $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Testing Drugs Infusions Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 78

79 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Other Spending (Radiation, Procedures, etc.) Current Spending Per Patient Other Services Testing Drugs Infusions Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 79

80 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 10%+ of Spending is for ER Visits & Hospital Admissions Current Spending Per Patient ER/Hospital Admissions Other Services Testing Drugs Infusions Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 80

81 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 Most $$ Go to Drugs, Tests, and Admissions, Not Oncology Practices $5,000 $0 Current Spending Per Patient ER/Hospital Admissions Other Services Testing Drugs Infusions 90%+ of spending pays for drugs, laboratory tests, imaging studies, surgical procedures, emergency room visits, and hospitalizations Fees for oncology practice services represent less than 10% of spending for cancer patients during episodes of chemotherapy treatment Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 81

82 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Most Spending is For Drugs, Tests, Current Spending Per Patient ER/Hospital Admissions Other Services Testing Drugs Infusions and Hospitalizations Where Are the Opportunities 90%+ of spending pays for drugs, laboratory tests, imaging studies, surgical procedures, emergency room visits, and hospitalizations to Reduce Spending Without Harming Patients? Fees for oncology practice services represent less than 10% of spending for cancer patients during episodes of chemotherapy treatment Analysis of total spending in 2012 for commercially insured patients during an episode of chemotherapy treatment (treatment months through the second month after treatment ends) 82

83 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Opportunities to Reduce Spending Current Spending Per Patient ER/Hospital Admissions Other Services Testing Drugs Infusions Without Harming Patients 40%+ of ED visits and hospital admissions are for chemotherapy-related complications 83

84 Large Reductions in Avoidable Hospitalizations Are Possible Source: Sprandio JD. Oncology patientcentered medical home and accountable cancer care. Community Oncology, December

85 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Opportunities to Reduce Spending Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Without Harming Patients Unnecessarily expensive tests Unnecessary testing Unnecessarily expensive drugs Unnecessary drugs Unnecessary end-of-life treatment 85

86 ASCO Choosing Wisely List Targets Areas of High Spending 86

87 20-50% Non-Adherence to Choosing Wisely Criteria 87

88 Most Cancer Drug Spending is Driven by a Few Drugs Avastin Neulasta 1/3 of Total Spending on Cancer Drugs Goes to 2 Drugs 88

89 Considerable Variation in Use of Improving Appropriate Use of Drugs Neulasta and Avastin Chemotherapy spending for Medicare patients ranged from $11,059 per patient for oncology practices in the lowest spending quartile to $18,044 per patient for practices in the highest-spending quartile, a range of $6,985. Over 1/3 of the variation ($3,600) stemmed from variation in the use of just two drugs Neulasta (pegfilgrastim) and Avastin (bevacizumab). (Clough JD et al. Wide Variation in Payments for Medicare Beneficiary Oncology Services Suggests Room for Practice-Level Improvement. Health Affairs 34(4): 601. April 2015.) 89

90 Multiple Studies Show Unnecessary Use of Neulasta Improving Appropriate Use of Drugs Chemotherapy spending for Medicare patients ranged from $11,059 per patient for oncology practices in the lowest spending quartile to $18,044 per patient for practices in the highest-spending quartile, a range of $6,985. Over 1/3 of the variation ($3,600) stemmed from variation in the use of just two drugs Neulasta (pegfilgrastim) and Avastin (bevacizumab). (Clough JD et al. Wide Variation in Payments for Medicare Beneficiary Oncology Services Suggests Room for Practice-Level Improvement. Health Affairs 34(4): 601. April 2015.) A study of the use of Neulasta (pegfilgrastim) at an outpatient oncology clinic found that approximately half of all cases using pegfilgrastim for primary prophylaxis were not consistent with published guidelines, representing an avoidable cost of $8,093 per patient. (Waters GE et al. Comparison of Pegfilgrastim Prescribing Practice to National Guidelines at a University Hospital Outpatient Oncology Clinic. Journal of Onc. Practice 9(4):203. July 2013.) A study of the use of myeloid colony-stimulating factors (CSF) such as pegfilgrastim in lung and cancer patients found that 96% of CSFs were administered in scenarios where CSF therapy is not recommended by evidence-based guidelines. (Potosky AL et al. Use of Colony-Stimulating Factors With Chemotherapy: Opportunities for Cost Savings and Improved Outcomes. J. National Cancer Inst. 103: June 22, 2011.) 90

91 More Focused Use of Neulasta Could Result in Large Savings -7% -50% 91

92 Huge Variation in Cost of Regimens With Similar Efficacy First Line Regimens for Metastatic Non-Small Cell Lung Cancer (non-squamous histology, no EGFR or ALK mutation present) Median Overall Survival (months) Median Progression- Free Survival Grade 3+ Adverse Event Regimen Carboplatin + Paclitaxel % Carboplatin + Paclitaxel + Avastin Sandler, A et al. New England Journal of Medicine 2006;355: Cisplatin + Gemcitabine Cisplatin + Gemcitabine + Avastin Cost Difference (6 cycles) % +~$30, % Reck, M et al. Journal of Clinical Oncology 2009; 27(8): Reck, M et al. Annals of Oncology % +~$30,000 92

93 More Informed Patient Choice Could Result in Large Savings -10% -50% -20% 93

94 Spending on Drugs, Imaging, and Hospitals Varies by More Than 60% $3,656 $2,700 $4,189 $10,545 Difference Between 1 st & 4 th Quartiles Source: Clough, Patel, Riley, Rajkumar, Conway, Bach. "Wide Variation in Payments for Medicare Beneficiary Oncology Services Suggests Room for Practice-Level Improvement." Health Affairs, April

95 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Big Opportunities to Reduce Spending w/o Harming Patients Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions ED visits and hospital admissions for chemotherapy-related complications Unnecessarily expensive tests Unnecessary testing Unnecessarily expensive drugs Unnecessary drugs Unnecessary end-of-life treatment 95

96 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Big Opportunities to Reduce Spending w/o Harming Patients Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions ED visits and hospital admissions for chemotherapy-related complications Unnecessarily expensive tests Unnecessary testing Unnecessarily expensive drugs Unnecessary drugs Unnecessary end-of-life treatment What are the Barriers to Reducing Avoidable Spending in Oncology? 96

97 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 No Payment For Many Services Essential to Quality Cancer Care Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- No payment for physician time outside of face-to-face visits with patients No payment for time spent with patients by non-physician staff (nurses, social workers, financial counselors, etc.) 97

98 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Inadequate Time for Effective Diagnosis & Treatment Planning Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- With inadequate time: Easier to order multiple tests than to figure out which ones are most appropriate Easier to order the usual drugs rather than determine what s exactly right for this patient Easier to order drugs that patients want than to help them understand the tradeoffs between length of life and quality of life Easier to continue treatment than to have a difficult end-of-life discussion No payment for physician time outside of face-to-face visits with patients No payment for time spent with patients by non-physician staff (nurses, social workers, financial counselors, etc.) 98

99 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Payments for Oncology Services Only Cover 2/3 of Practice Costs Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- SOURCE: Towle EL, Barr TR, Senese JL, The National Practice Benchmark for Oncology, 2014 Report on 2013 Data Journal of Oncology Practice November

100 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Practices Depend on Drug Margins to Support Unbillable Services Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Drug Margin Infusions Non- SOURCE: Towle EL, Barr TR, Senese JL, The National Practice Benchmark for Oncology, 2014 Report on 2013 Data Journal of Oncology Practice November

101 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 No Payment For Services Needed to Improve Outcomes of Care Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- Care Mgt No payment for 24/7 hotline and triage services needed by patients experiencing complications No payment for extended hours or open schedule slots for urgent care 101

102 Failure to Pay for Good Care Leads to Costly, Low-Value Services $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Current Spending Per Patient ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Drug Margin Infusions Non- Care Mgt ED visits and hospital admissions for chemotherapy-related complications Unnecessarily expensive tests Unnecessary testing Unnecessarily expensive drugs Unnecessary drugs Unnecessary end-of-life treatment No payment for physician time outside of face-to-face visits with patients No payment for time spent with patients by non-physician staff (nurses, social workers, financial counselors, etc.) No payment for 24/7 hotline and triage services needed by patients experiencing complications No payment for extended hours or open schedule slots for urgent care 102

103 ASCO Payment Reform Developed by Oncologists & Practice Managers Christian Thomas, MD, New England Cancer Specialists Dan Zuckerman, MD, Mountain States Tumor Institute Tammy Chambers, Center for Cancer and Blood Disorders James Frame, MD, CAMC Cancer Center Bruce Gould, MD, Northwest Georgia Oncology Center Ann Kaley, Mountain States Tumor Institute Justin Klamerus, MD, Karmanos Cancer Institute Lauren Lawrence, Karmanos Cancer Institute Barbara McAneny, MD, New Mexico Cancer Center Roscoe Morton, MD, Cancer Center of Iowa Julie Moran, Seidman Cancer Center Ray Page, DO, PhD, Center for Cancer and Blood Disorders Scott Parker, Northwest Georgia Oncology Center Charles Penley, MD, Tennessee Oncology Gabrielle Rocque, MD, University of Alabama at Birmingham Barry Russo, Center for Cancer and Blood Disorders Joel Saltzman, MD, Seidman Cancer Center Laura Stevens, Innovative Oncology Business Solutions Jeffery Ward, MD, Swedish Cancer Institute Kim Woofter, Michiana Hematology Oncology Robin Zon, MD, Michiana Hematology Oncology 103

104 $45,000 $40,000 $35,000 PCOP Part 1: More Payment to Practices Where It s Needed Current FFS Payment Patient- Centered Oncology Payment $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Drug Margin Infusions Non- Care Mgt Better Payment for Practices Drug Margin PCOP Pmts Infusions Oncology Practice Receives Higher Payments Than Today 104

105 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 PCOP Part 2: Implement ASCO Guidelines & Control Hospital Use Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Drug Margin Infusions Non- Care Mgt Lower Spending without Rationing Better Payment for Practices Patient- Centered Oncology Payment ER/Admissions Other Services Testing Drugs Drug Margin PCOP Pmts Infusions Oncology Practice Helps Patients Avoid Use of ED/Hospital for Complications of Treatment Oncology Practice Follows ASCO Guidelines for Use of Chemotherapy, Supportive Drugs, Testing/Imaging, and End-of-Life Care Oncology Practice Receives Higher Payments Than Today 105

106 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 PCOP Result: Better Care, Better Payment, Payer Savings Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Drug Margin Infusions Non- Care Mgt Lower Spending without Rationing Better Payment for Practices Patient- Centered Oncology Payment SAVINGS ER/Admissions Other Services Testing Drugs Drug Margin PCOP Pmts Infusions Payer Spends Less in Total Oncology Practice Helps Patients Avoid Use of ED/Hospital for Complications of Treatment Oncology Practice Follows ASCO Guidelines for Use of Chemotherapy, Supportive Drugs, Testing/Imaging, and End-of-Life Care Oncology Practice Receives Higher Payments Than Today 106

107 Not Just Payment Amount, But Matching Payments to Services 107

108 How Oncology Practices Spend Time With Patients $1000 $750 $500 $250 Diagnosis, Choosing Therapy, Counseling Therapy & Preventing Complications Monitoring & Support PHYSICIAN/STAFF TIME/COSTS FOR CANCER CARE $ Dx TREATMENT MONTHS POST-TREATMENT CARE 108

109 EM EM EM EM EM EM EM Infusion Infusion Infusion Infusion Infusion Payments Focused on Treatment, Not Planning or Aftercare $1000 $750 $500 $250 $0 Diagnosis, Choosing Therapy, Counseling Therapy & Preventing Complications Monitoring & Support PHYSICIAN/STAFF TIME/COSTS FOR CANCER CARE $1000 $750 HOW ONCOLOGY PRACTICE IS PAID $500 $250 $ Dx TREATMENT MONTHS POST-TREATMENT CARE 109

110 During Diagnosis & Tx Planning WHAT ONCOLOGY PRACTICES DO Diagnosis and Treatment Planning Review tests & pathology reports Determine type and stage of cancer Identify and evaluate treatment options Identify clinical trial options Discuss treatment options with patient Develop plan of care Educate patient about treatment Provide genetic counseling Provide psychological counseling Provide nutrition counseling Provide financial counseling Determine insurance coverage and obtain pre-authorization Document information in records Etc. 110

111 During Diagnosis & Tx Planning No Payment for Most Services WHAT ONCOLOGY PRACTICES DO Diagnosis and Treatment Planning Review tests & pathology reports Determine type and stage of cancer Identify and evaluate treatment options Identify clinical trial options Discuss treatment options with patient Develop plan of care Educate patient about treatment Provide genetic counseling Provide psychological counseling Provide nutrition counseling Provide financial counseling Determine insurance coverage and obtain pre-authorization Document information in records Etc. HOW PRACTICES ARE PAID payments for face-to-face visits with physicians (No payments for services delivered by nurses, social workers, financial counselors, etc.) (No payments for time spent by physicians on phone calls with patients and other physicians, researching treatment options, etc.) 111

112 When Oral Therapy is Used No Payment for Key Services WHAT ONCOLOGY PRACTICES DO Oral Therapy Prescribe drugs Order tests Evaluate patient progress Meet with patient to discuss progress Answer calls from patients Respond to complications Manage patients pain Document information in records Keep detailed records for clinical trials Discuss end-of-life planning with patient Etc. HOW PRACTICES ARE PAID payments for face-to-face visits with physicians (No payments for services delivered by nurses, social workers, financial counselors, etc.) (No payments for time spent by physicians on phone calls with patients and other physicians, etc.) 112

113 If Parenteral Therapy is Given More Payment, But Linked to Drugs WHAT ONCOLOGY PRACTICES DO Parenteral Therapy Administer IV therapy Order tests Evaluate patient progress Meet with patient to discuss progress Answer calls from patients Respond to complications Manage patients pain Document information in records Keep detailed records for clinical trials Bill insurance companies Discuss end-of-life planning with patient Etc. HOW PRACTICES ARE PAID payments for face-to-face visits with physicians Payment for in-office infusions ASP+x% - acquisition cost of drugs (No payments for services delivered by nurses, social workers, financial counselors, etc.) (No payments for time spent by physicians on phone calls with patients and other physicians, etc.) 113

114 No Payment to Support Oncology Medical Home Services WHAT ONCOLOGY PRACTICES DO Parenteral Therapy Administer IV therapy Order tests Evaluate patient progress Meet with patient to discuss progress Answer calls from patients Respond to complications Manage patients pain Document information in records Keep detailed records for clinical trials Bill insurance companies Discuss end-of-life planning with patient Care management services 24/7 triage and response Etc. HOW PRACTICES ARE PAID payments for face-to-face visits with physicians Payment for in-office infusions ASP+x% - acquisition cost of drugs (No payments for services delivered by nurses, social workers, financial counselors, etc.) (No payments for time spent by physicians on phone calls with patients and other physicians, etc.) 114

115 After Therapy Ends No Payment for Most Services WHAT ONCOLOGY PRACTICES DO Post-Treatment Develop a survivorship or end-of-life plan Order and review tests See patient to address needs Answer calls from patients Respond to post-treatment complications Manage patients pain Document information in records Keep detailed records for clinical trials Etc. HOW PRACTICES ARE PAID payments for face-to-face visits with physicians (No payments for services delivered by nurses, social workers, financial counselors, etc.) (No payments for time spent by physicians on phone calls with patients and other physicians, etc.) 115

116 EM EM EM EM EM EM EM Infusion Infusion Infusion Infusion Infusion Instead of Today s Mismatch Between Payment and Services $1000 $750 $500 $250 $0 Diagnosis, Choosing Therapy, Counseling Therapy & Preventing Complications Monitoring & Support PHYSICIAN/STAFF TIME/COSTS FOR CANCER CARE $1000 $750 HOW ONCOLOGY PRACTICE IS PAID $500 $250 $ Dx TREATMENT MONTHS POST-TREATMENT CARE 116

117 Goal: Align Payments With How Services Are Delivered $1000 $750 $500 PHYSICIAN/STAFF TIME/COSTS FOR CANCER CARE $250 $0 $1000 $750 $500 GOAL FOR PAYMENTS TO ONCOLOGY PRACTICE $250 $ Dx TREATMENT MONTHS POST-TREATMENT CARE 117

118 EM EM EM EM Infusion Infusion Infusion Infusion Infusion How Would PCOP Achieve This? $1,200 $1,000 $800 $600 $400 $200 $ TREATMENT MONTHS ACTIVE MONITORING 118

119 EM EM EM EM New Patient Infusion Infusion Infusion Infusion Infusion Additional $750 One-Time Payment for Each New Patient $1,200 $1,000 Step 1. Higher Payment During Crucial Diagnosis/Planning Stage PATIENT- CENTERED ONCOLOGY PAYMENT (PCOP) $800 $600 $400 $200 $ TREATMENT MONTHS ACTIVE MONITORING 119

120 EM EM EM EM New Patient Infusion Infusion Infusion Infusion Infusion Care Mgt Care Mgt Care Mgt Care Mgt Care Mgt Step 2. Flexible Care Management Payments During Treatment $1,200 $200 Monthly Care Management Payments During Treatment Months PATIENT- CENTERED ONCOLOGY PAYMENT (PCOP) $1,000 $800 $600 $400 $200 $ TREATMENT MONTHS ACTIVE MONITORING 120

121 CM EM CM EM CM EM EM CM CM CM CM New Patient Infusion Infusion Infusion Infusion Infusion Care Mgt Care Mgt Care Mgt Care Mgt Care Mgt Step 3. Smaller Care Management Payments After Treatment Ends $1,200 PATIENT- CENTERED ONCOLOGY PAYMENT (PCOP) $1,000 $800 $600 $50 Care Management Payments During Active Monitoring Months Up to 6 Months After End of Treatment $400 $200 $ TREATMENT MONTHS ACTIVE MONITORING 121

122 New Billing Codes Will Be Easy for Payers & Practices to Implement New Billing Code for New Patient Treatment Planning The oncology practice would bill the payer for a $750 payment for each new oncology patient who begins treatment or active management with the practice. New Billing Code for Care Management During Treatment The oncology practice would bill the payer for a $200 payment for each month in which an oncology patient is receiving parenteral or oral anti-cancer treatment prescribed by the practice. This payment would also be made for patients who are in hospice if the oncologist is the hospice physician. New Billing Code for Care Management During Active Monitoring The oncology practice would bill the payer for a $50 per month payment when an oncology patient was not receiving anti-cancer treatment but was being actively monitored by the practice. This would include any months in which treatment was not received before a treatment regimen was completed and up to six months after the completion of treatment. Continuation of Current Billing Codes for Services The practice would continue to bill the payer for all existing CPT and HCPCS codes (e.g., services, infusions, drugs administered in the practice, etc.) 122

123 CM EM CM EM CM EM EM CM CM CM CM New Patient Infusion Infusion Infusion Infusion Infusion Care Mgt Care Mgt Care Mgt Care Mgt Care Mgt $1,200 $1,000 ~$2,100/patient more from PCOP; Additional $750 One-Time Payment for Each New Patient 50% Increase from FFS Today $200 Monthly Care Management Payments During Treatment Months PATIENT- CENTERED ONCOLOGY PAYMENT (PCOP) $800 $600 $50 Care Management Payments During Active Monitoring Months Up to 6 Months After End of Treatment $400 $200 $ TREATMENT MONTHS ACTIVE MONITORING 123

124 CM EM CM EM CM EM EM CM CM CM CM New Patient Infusion Infusion Infusion Infusion Infusion Care Mgt Care Mgt Care Mgt Care Mgt Care Mgt $1,200 $1,000 ~$2,100/patient more from PCOP; Additional $750 One-Time Payment for Each New Patient 50% Increase from FFS Today $200 Monthly Care Management Payments During Treatment Months How Can We Afford PATIENT- CENTERED ONCOLOGY PAYMENT (PCOP) $800 $600 $400 to Increase Payments to $50 Care Management Payments During Active Monitoring Months Up to 6 Months After End of Treatment Oncology Practices by 50%? $200 $ TREATMENT MONTHS ACTIVE MONITORING 124

125 Large Increase for Practices $45,000 $40,000 $35,000 Current FFS Payment $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Infusions Non- Care Mgt PCOP Pmts Infusions 50% increase in payments to oncology practices 125

126 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Large Increase for Practices is a Small Increase in Total Spending Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- Care Mgt ER/Hospital Admissions Other Services Testing Avoidable $ Drugs PCOP Pmts Infusions < 5% increase in total spending 50% increase in payments to oncology practices 126

127 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Significant Savings from Reducing Avoidable Use of Drugs & Tests Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- Care Mgt ER/Hospital Admissions Other Services Testing Avoidable $ Drugs PCOP Pmts Infusions Patient- Centered Oncology Payment Testing Drugs PCOP Pmts Infusions 5-7% reduction in spending on drugs & tests 50% increase in payments to oncology practices 127

128 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Additional Savings from Reducing ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- Care Mgt Avoidable Hospitalizations Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs PCOP Pmts Infusions Patient- Centered Oncology Payment ER/Admissions Other Services Testing Drugs PCOP Pmts Infusions 30% reduction in ER visits & hospital admits 5-7% reduction in spending on drugs & tests 50% increase in payments to oncology practices 128

129 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Reductions in Avoidable Spending Will More Than Offset New Pmts Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Infusions Non- Care Mgt ER/Hospital Admissions Other Services Testing Avoidable $ Drugs PCOP Pmts Infusions Patient- Centered Oncology Payment SAVINGS ER/Admissions Other Services Testing Drugs PCOP Pmts Infusions > 4% reduction in total spending 30% reduction in ER visits & hospital admits 5-7% reduction in spending on drugs & tests 50% increase in payments to oncology practices 129

130 Analysis of PCOP Shows Large Net Savings from Better Payment 130

131 Potentially Large Win-Win-Win for Payers, Patients & Practices 131

132 How Do You Assure Higher Payments to Practices Would Be Used to Control Avoidable Spending?

133 Low Adherence to Appropriate Use Criteria Lower Payments 100% 80% Min% HIGH Rate of Adherence to Appropriate Use Criteria LOW Rate of Adherence to Appropriate Use Criteria $ Care Mgt Payment New Patient Payment Care Mgt New Patient Infusion Infusion 133

134 Instead of Multiple Pathways and Pre-Authorization Requirements TODAY Payer-Specific Proprietary Pathway Payer-Specific Proprietary Pathway Payer-Specific Prior Authorization Requirements Payer-Specific Prior Authorization Requirements 134

135 Eliminating Payer Need for Pathways & Prior Authorization TODAY PCOP FUTURE Payer-Specific Proprietary Pathway Payer-Specific Proprietary Pathway Payer-Specific Prior Authorization Requirements Payer-Specific Prior Authorization Requirements ASCO Choosing Wisely Guidelines and QOPI End of Life and Overuse Measures ASCO- Developed or Endorsed Pathways 135

136 Goal/Target Rate Also Established for ED Visits and Hospital Admits GOOD Target Rate Achieve Target Rate for ED Visits and Hospital Admits $ Care Mgt Payment New Patient Payment Infusion 136

137 Decreases in Payments If Admits Are Higher Than Target GOOD HIGH Target Rate Achieve Target Rate for ED Visits and Hospital Admits High Rate of ED Visits and Hospital Admissions $ Care Mgt Payment New Patient Payment Infusion Care Mgt New Patient Infusion 137

138 Bonus Payment If ED/Hospital Use Is Better Than Goal/Target GOOD HIGH LOW Target Rate Achieve Target Rate for ED Visits and Hospital Admits High Rate of ED Visits and Hospital Admissions Low Rate of ED Visits and Admits $ Care Mgt Payment Care Mgt BONUS Care Mgt Payment New Patient Payment New Patient New Patient Payment Infusion Infusion Infusion 138

139 Payment is Tied to Appropriate Use & Outcomes, Not Savings Per Se Practices that are already performing efficiently and effectively receive payments that allow them to maintain that performance and reduce their dependence on drug margins Practices that are not performing efficiently and effectively have to improve performance in order to receive the payments and they achieve savings for purchasers in the process 139

140 Example: Reducing Preventable Admits During Cancer Treatment CURRENT $/Pt # Pts Total $ Oncology Pract. /Infusions $4, $4,500,000 Patients Receiving Chemotherapy Treatment for Cancer 1,000 patients treated by oncology practice in a year Oncology practice receives $4,500 per patient in total fees for services and infusion services (excluding cost of drugs) 140

141 Example: Reducing Preventable Admits During Cancer Treatment CURRENT $/Pt # Pts Total $ Oncology Pract. /Infusions $4, $4,500,000 Hospitalizations Admissions $15, $5,250,000 Patients Receiving Chemotherapy Treatment for Cancer 1,000 patients treated by oncology practice in a year Oncology practice receives $4,500 per patient in total fees for services and infusion services (excluding cost of drugs) 35% of patients are hospitalized during the year for complications related to chemotherapy treatment ($15,000 payment to hospital per admission) 141

142 Example: Reducing Preventable Admits During Cancer Treatment CURRENT $/Pt # Pts Total $ Oncology Pract. /Infusions $4, $4,500,000 Hospitalizations Admissions $15, $5,250,000 Total Spending 1000 $9,750,000 Patients Receiving Chemotherapy Treatment for Cancer 1,000 patients treated by oncology practice in a year Oncology practice receives $4,500 per patient in total fees for services and infusion services (excluding cost of drugs) 35% of patients are hospitalized during the year for complications related to chemotherapy treatment ($15,000 payment to hospital per admission) 142

143 How Would You Improve Payment and Lower Total Spending? CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000? Hospitalizations Admissions $15, $5,250,000? Total Spending 1000 $9,750,000? 143

144 Improve Care for Patients By Paying for Triage/Response CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $ $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Admissions $15, $5,250,000 Total Spending 1000 $9,750,000 Better Payment for Cancer Treatment Management Oncology practice paid additional $200,000 ($200/patient) to set up a triage system and provide rapid treatment in the office for complications of treatment (nausea, fever, etc.) 144

145 A Reduction in Hospital Admissions Would More Than Pay for Costs CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $ $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Admissions $15, $5,250,000 $15, $3,675,000-30% Total Spending 1000 $9,750, $9,375,000-14% Better Payment for Cancer Treatment Management Oncology practice paid additional $200,000 ($200/patient) to set up a triage system and provide rapid treatment in the office for complications of treatment (nausea, fever, etc.) Result is a 30% reduction in preventable hospital admissions 145

146 Wins for Patients, Docs, & Payers CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $ $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Admissions $15, $5,250,000 $15, $3,675,000-30% Total Spending 1000 $9,750, $9,375,000-14% Oncology Practice Wins Patient Wins Payer Wins Better Payment for Cancer Treatment Management Oncology practice paid additional $200,000 ($200/patient) to set up a triage system and provide rapid treatment in the office for complications of treatment (nausea, fever, etc.) Result is a 30% reduction in preventable hospital admissions 146

147 Wins for Patients, Docs, & Payers But What About Hospitals? CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $ $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Admissions $15, $5,250,000 $15, $3,675,000-30% Total Spending 1000 $9,750, $9,375,000-14% Oncology Practice Wins Hospital Loses Payer Wins Better Payment for Cancer Treatment Management Oncology practice paid additional $200,000 ($200/patient) to set up a triage system and provide rapid treatment in the office for complications of treatment (nausea, fever, etc.) Result is a 30% reduction in preventable hospital admissions 147

148 What Should Matter to Hospitals is Margin, Not Revenues (Volume) 148

149 $000 Hospital Costs Are Not Proportional to Utilization Cost & Revenue Changes With Fewer Patients 20% reduction in volume 7% reduction in cost $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Costs. #Patients 149

150 $000 Reductions in Utilization Reduce Revenues More Than Costs Cost & Revenue Changes With Fewer Patients 20% reduction in volume 7% reduction in cost 20% reduction in revenue $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Revenues Costs #Patients 150

151 $000 Causing Negative Margins for Hospitals Cost & Revenue Changes With Fewer Patients Payers Will Be Underpaying For Care If Admissions, Readmissions, Etc. Are Reduced $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 Revenues Costs #Patients 151

152 $000 But Spending Can Be Reduced Without Bankrupting Hospitals Cost & Revenue Changes With Fewer Patients Payers Can $1,000 Still Save $ $980 Without Causing $960 Negative Margins $940 for Hospital $920 $900 $880 Revenues $860 Costs $840 $820 $800 #Patients 152

153 We Need to Understand the Hospital s Cost Structure CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $ $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Admissions $15, $5,250,000 $15, $3,675,000-30% Total Spending 1000 $9,750, $9,375,000-14% 153

154 We Need to Understand the Hospital s Cost Structure CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 Variable (30%) $4,500 $1,575,000 Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250,000 Total Spending 1000 $9,750,

155 Now, If the Number of Admissions is Reduced CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 Variable (30%) $4,500 $1,575,000 Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250, Total Spending 1000 $9,750,

156 Fixed Costs Will Remain the Same (in the Short Run) CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250, Total Spending 1000 $9,750,

157 Variable Costs Will Decrease in Proportion to Admissions CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250, Total Spending 1000 $9,750,

158 And Even With a Higher Margin CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250, Total Spending 1000 $9,750,

159 The Hospital Comes Out Ahead With Significantly Lower Revenue CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250, $4,788,000-9% Total Spending 1000 $9,750,

160 And the Payer Still Saves Money CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250, $4,788,000-9% Total Spending 1000 $9,750, $9,488,000-3% 160

161 I.e., a Win-Win-Win-Win for Patient, Practice, Hospital, & Payer CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250, $4,788,000-9% Total Spending 1000 $9,750, $9,488,000-3% Oncology Practice Wins Hospital Wins Payer Wins 161

162 What Payment Model Supports This Win-Win-Win Approach? CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250, $4,788,000-9% Total Spending 1000 $9,750, $9,488,000-3% 162

163 Trying to Renegotiate Individual Fees Is Impractical CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4, $4,500,000 Triage/Respond $ $200,000 Total Practice 1000 $4,500, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575,000 $4,500 $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250,000 $19, $4,788,000-9% Total Spending 1000 $9,750, $9,488,000-3% 163

164 Look at What is Being Spent on the Patients Condition CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 Triage/Respond Total Practice 1000 $4,500,000 Hospitalizations Fixed (65%) $9,750 $3,412,500 Variable (30%) $4,500 $1,575,000 Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250,000 Total Spending $9, $9,750,

165 Offer to Manage Care for a Lower, But More Flexible Payment CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 Triage/Respond Total Practice 1000 $4,500,000 Hospitalizations Fixed (65%) $9,750 $3,412,500 Variable (30%) $4,500 $1,575,000 Margin ( 5%) $750 $262,500 Total Hospital $15, $5,250,000 Total Spending $9, $9,750,000 $9, % 165

166 Use the Payment as a Budget to Redesign Care CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 Triage/Respond Total Practice 1000 $4,500,000 $4, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 0% Variable (30%) $4,500 $1,575,000-30% Margin ( 5%) $750 $262,500 +4% Total Hospital $15, $5,250,000 $4, $4,788,000-9% Total Spending $9, $9,750,000 $9, $9,488,000-3% 166

167 And Let Physicians and Hospitals Decide How They Should Be Paid CURRENT FUTURE $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4,500,000 Triage/Respond $200,000 Total Practice 1000 $4,500,000 $4, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575, $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250,000 $4, $4,788,000-9% Total Spending $9, $9,750,000 $9, $9,488,000-3% 167

168 Condition-Based Payment Provides Flexibility to Redesign Care & Pmt CURRENT CONDITION-BASED PMT $/Pt # Pts Total $ $/Pt # Pts Total $ Chg Oncology Pract. /Infusions $4, $4,500,000 $4,500,000 Triage/Respond $200,000 Total Practice 1000 $4,500,000 $4, $4,700,000 +4% Hospitalizations Fixed (65%) $9,750 $3,412,500 $3,412,500 0% Variable (30%) $4,500 $1,575, $1,102,500-30% Margin ( 5%) $750 $262,500 $273,000 +4% Total Hospital $15, $5,250,000 $4, $4,788,000-9% Total Spending $9, $9,750,000 $9, $9,488,000-3% 168

169 Protections For Providers Against Taking Inappropriate Risk Risk Adjustment/Stratification: The payment rates to the provider would be adjusted based on objective characteristics of the patient and treatment that would be expected to result in the need for more services or increase the risk of complications. Outlier Payment or Individual Stop Loss Insurance: The payment to the Physician from the payer would be increased if spending on an individual patient exceeds a pre-defined threshold. An alternative would be for the physician to purchase individual stop loss insurance (sometimes referred to as reinsurance) and include the cost of the insurance in the payment bundle. Risk Corridors or Aggregate Stop Loss Insurance: The payment to the physician would be increased if spending on all patients exceeds a pre-defined percentage above the payments. An alternative would be for the physician to purchase aggregate stop loss insurance and include the cost of the insurance in the payment bundle. Adjustment for External Price Changes: The payment to the physician would be adjusted for changes in the prices of drugs or services from other physicians that are beyond the control of the physician accepting the payment. Excluded Services: Services the physician does not deliver, or order, or otherwise have the ability to influence would not be included as part of accountability measures in the payment system. 169

170 Oncology Pract. Example of Risk-Stratified Condition-Based Payment LOWER RISK PATIENTS HIGHER RISK PATIENTS # Pts # Pts Total Practice Hospitalizations Total Hospital Lower-Risk (12%) of Hospital Admission Higher-Risk (37%) of Hospital Admission 170

171 Example of Risk-Stratified Condition-Based Payment LOWER RISK PATIENTS HIGHER RISK PATIENTS $/Pt # Pts Total $ $/Pt # Pts Total $ TOTAL Oncology Pract. /Infusion $4, $2,250,000 $4, $2,250,000 $4,500,000 Triage/Intervene $ $50,000 $ $150,000 $200,000 Total Practice $4, $2,300,000 $4, $2,400,000 $4,700,000 Hospitalizations Fixed $853,125 $2,559,375 $3,412,500 Variable $4,500 $279,000 $4,500 $823,500 $1,102,500 Margin $68,250 $204,750 $273,000 Total Hospital $2, $1,200,375 $7, $3,587,625 $4,788,000 Total Spending $7, $3,500,375 $11, $5,987,625 $9,488,000 Lower Payment For Lower-Risk Patients Higher Payment For Higher-Risk Patients Still Lower Total Spending 171

172 $ Current FFS Payment ER/Hospital Admissions Other Services Testing Avoidable $ Drugs Drug Margin Infusions Non- Care Mgt ASCO PCOP Option B: Bundled Monthly Budgets Improved Care Management Appropriate Use Criteria for Drugs, Tests, EOL Additional Payments to Oncology Practice Patient- Centered Oncology Payment (Basic Model) SAVINGS SAVINGS SAVINGS ER/Admissions ER/Admissions Stop Loss/ Risk Corridor Other Services Testing Drugs Drug Margin PCOP Pmts Infusions PCOP Consolidated Payments for Oncology Practice Services Other Services Testing Drugs Drug Margin Monitoring Mo. Treatment Mo. New Patient PCOP Virtual Budgets for Oncology Care Monitoring Month Payments (Bundled Pmts) Treatment Month Payments (Bundled Payments) New Patient (Bundled Payment) 172

173 Hill Physicians Group Oncology Case Rate (OCR) Model Monthly bundled payments cover oncology practice services to patients and cost of drugs administered No prior authorization for drugs included in bundled payments Risk-stratified into 9 types of cancer and 4 phases of treatment Stop-loss for unusually expensive patients Payment amount increased by up to 10% for performance on ASCO QOPI measures ED visits and hospital admissions/days Patient experience Payment amounts adjusted to accommodate new treatments, new evidence, experience in redesigning care 173

174 What About the CMMI Oncology Care Model? 174

175 EM EM EM E E E Infusion Infusion Infusion Infusion Infusion Infusion Drug Margin Drug Margin Drug Margin Drug Margin Drug Margin Drug Margin $ $ $ $ $ $ More $ Only During Treatment+ $2000 $1500 PHYSICIAN/STAFF TIME FOR CANCER CARE $1000 $500 $0 $2000 $1500 HOW ONCOLOGY PRACTICE IS PAID IN CMMI OCM PROGRAM $1000 $500 $960 in New Payment (6 x $160) $ Dx TREATMENT MONTHS POST-TREATMENT CARE 175

176 EM EM EM E E E Infusion Infusion Infusion Infusion Infusion Infusion Drug Margin Drug Margin Drug Margin Drug Margin Drug Margin Drug Margin $ $ $ $ $ $ More $ Only During Treatment + Shared Savings on Total Spending $2000 $1500 PHYSICIAN/STAFF TIME FOR CANCER CARE $1000 $500 $0 $2000 $1500 $1000 $500 Shared Savings Payment HOW ONCOLOGY PRACTICE IS PAID IN CMMI OCM PROGRAM Shared Savings on Total Cost $960 in New Payment (6 x $160) $ Dx TREATMENT MONTHS POST-TREATMENT CARE 176

177 Bottom Line on the CMMI Oncology Care Model What s Good: $160/month extra payment for practices 177

178 Bottom Line on the CMMI Oncology Care Model What s Good: $160/month extra payment for practices What s Bad: Burdensome requirements for service delivery and quality measures may create costs in excess of the additional payments Episode definition could encourage delaying treatments in order to receive more PMPM payments & shared savings Shared savings model could encourage stinting on care Program isn t upside only risk because practices are terminated from the program if they don t achieve savings Oncology practice is at risk for all spending on their patients, even for health problems unrelated to cancer Practices that are currently overutilizing will be rewarded and practices that are efficient will have difficulty succeeding Small practices will be highly at risk for random variations in spending All practices may be at risk for increases in drug prices and new evidence depending on how savings calculations are done Does nothing to improve payment for most oncology practice in U.S. 178

179 The CMS Medical Home Model Isn t Working Well in Primary Care 179

180 Payment Reforms Aren t Just Needed for Medical Oncology PATIENT Monthly Condition-Based Payments for Medical Oncology Improvements in Value Reduce ED visits and hospital admissions for toxicity-related complications of treatment Reduce unnecessary use of expensive tests and treatments Provide better support to patients in transition to survivorship or end-of-life care 180

181 Opportunities to Improve Value in Surgical Oncology PATIENT Monthly Condition-Based Payments for Medical Oncology Bundled/Warrantied Payment for Surgical Oncology Improvements in Value Reduce repeat surgeries to assure successful resections of tumors Use most efficient imaging, localization, and pathology approaches for successful resection Minimize need for reconstructive surgery and perform resection and reconstruction at same time when possible Reduce infections/complications from surgery 181

182 Opportunities to Improve Value in Radiation Oncology PATIENT Monthly Condition-Based Payments for Medical Oncology Bundled/Warrantied Payment for Surgical Oncology Bundled/Warrantied Payment for Radiation Oncology Improvements in Value Reduce overuse of expensive treatments More predictable payments for payers/patients Predictable revenues to cover practice cost 182

183 21 st Century Oncology Rad Onc Bundled Payments Payment based on type of cancer, not based on type of radiation therapy used Payment based on weighted average of available therapies, with discount over past spending Payments adjusted as technology and evidence changes Warranty for repeat treatments within 90 days Predictable spending for payers and patients Predictable revenues to oncology practice to cover fixed costs of expensive equipment without the need or incentive to overuse services with high average cost/payment 183

184 Supporting Coordinated Care from All Oncology Specialties Condition-Based Payment for Patient s Cancer PATIENT Monthly Condition-Based Payments for Medical Oncology Bundled/Warrantied Payment for Surgical Oncology Bundled/Warrantied Payment for Radiation Oncology 184

185 What About ACOs?

186 ACOs Are Supposed to Address All Needs for Patient Care PATIENTS Heart Disease Diabetes Back Pain Cancer 186

187 PATIENTS Heart Disease Diabetes Back Pain Cancer Most ACOs Today Aren t Truly Reinventing Care or Payment Fee-for-Service Payment MEDICARE, MEDICAID HEALTH PLAN ACO Primary Care Oncology Cardiology Neurosurgery 187

188 PATIENTS Heart Disease Diabetes Back Pain Cancer Most ACOs Today Aren t Truly Reinventing Care or Payment Fee-for-Service Payment MEDICARE, MEDICAID HEALTH PLAN Expensive IT Systems Shared Savings Payment Nurse Care Managers Share of Shared Savings Payment?? ACO Primary Care Oncology Cardiology Neurosurgery 188

189 Medicare ACOs Aren t Succeeding Due to Flaws in Payment Model 2013 Results for Medicare Shared Savings ACOs 46% of ACOs (102/220) increased Medicare spending Only one-fourth (52/220) received shared savings payments After making shared savings payments, Medicare spent more than it saved 2014 Results for Medicare Shared Savings ACOs 45% of ACOs (152/333) increased Medicare spending Only one-fourth (86/333) received shared savings payments After making shared savings payments, Medicare spent more than it saved 189

190 Private Shared Savings ACOs Are Also Floundering 190

191 What Would a True ACO Look Like? PATIENTS Heart Disease ACO Diabetes Back Pain Cancer 191

192 Each Patient Should Choose & Use a Primary Care Practice PATIENTS Heart Disease Diabetes Back Pain Cancer Primary Care Practice ACO 192

193 Which is Paid to Manage What PCPs Can Control/Influence MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER PATIENTS Heart Disease Diabetes Back Pain Cancer Accountable Medical Home Primary Care Practice Accountability for: Avoidable ER Visits Avoidable Hospitalizations Unnecessary Tests Unnecessary Referrals ACO 193

194 With a Medical Neighborhood to Consult With on Complex Cases MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER PATIENTS Heart Disease Diabetes Back Pain Cancer Accountable Medical Home Primary Care Practice Endocrinology, Cardiology, Oncology Accountable Medical Neighborhood ACO Accountability for: Unnecessary Tests Unnecessary Referrals Co-Managed Outcomes 194

195 PATIENTS Heart Disease Diabetes Back Pain Cancer..And Specialists Accountable for the Conditions They Manage Accountable Medical Home MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER Primary Care Practice Endocrinology, Cardiology, Oncology Accountable Medical Neighborhood Accountability for: Unnecessary Tests Unnecessary Procedures Infections, Complications Cardiology Group Neurosurg. PMR Group Oncology Group ACO Heart Episode/ Condition Pmt Back Pain Condition Pmt Cancer Condition Pmt 195

196 PATIENTS Heart Disease Diabetes Back Pain Cancer That s Building the ACO Accountable Medical Home from the Bottom Up MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER Primary Care Practice Endocrinology, Cardiology, Oncology Accountable Medical Neighborhood Alternative Payment Models Cardiology Group Neurosurg. PMR Group Oncology Group ACO Heart Episode/ Condition Pmt Back Pain Condition Pmt Cancer Condition Pmt 196

197 PATIENTS Heart Disease Diabetes Back Pain Cancer But You Need to Pay for Oncology the Right Way Inside the ACO Accountable Medical Home MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER Primary Care Practice Endocrinology, Cardiology, Oncology Accountable Medical Neighborhood Alternative Payment Models Cardiology Group Neurosurg. PMR Group Oncology Group ACO Heart Episode/ Condition Pmt Back Pain Condition Pmt Cancer Condition Pmt 197

198 Patients Shouldn t Be Forced into an ACO to Get Good Cancer Care MEDICARE, MEDICAID HEALTH PLAN, EMPLOYER Alternative Payment Models PATIENTS Cancer Oncology Group Cancer Condition Pmt 198

199 The Lowest Cost Cancer Care Comes From Community Practices Type of Cancer & Treatment Average Cost Per Patient Physician Office Hospital Outpatient Difference Metastatic Lung Cancer $82,849 $122, % Metastatic Colon Cancer $122,300 $186, % Metastatic Breast Cancer $115,308 $158, % Adjuvant Lung Cancer $44,769 $60, % Adjuvant Colon Cancer $79,058 $101, % Adjuvant Breast Cancer $57,809 $86, % Source: Fitch K, Iwasaki K, Pyenson B. Comparing Episode of Cancer Care Cost in Different Settings: An Actuarial Analysis of Patients Receiving Chemotherapy, Milliman, August 29,

200 This All Sounds Really Hard

201 This All Sounds Really Hard Can t We Just Keep Doing What We re Doing Today Until We Retire?

202 Choices for the Future VALUE-BASED PURCHASING P4P for hundreds of process measures Shared savings with no changes to FFS Transparency about procedure prices but not the total cost of care Shifting of insurance risk to small providers Government-mandated prices & budgets High deductibles and high cost-sharing Narrow networks & centers of excellence BAD OUTCOMES Small providers forced out of business High prices from consolidated providers Shifts in care to higher-cost settings Overuse of expensive procedures Loss of innovation Large increases in insurance premiums Patients unable to afford necessary care 202

203 Choices for the Future VALUE-BASED PURCHASING P4P for hundreds of process measures Shared savings with no changes to FFS Transparency about procedure prices but not the total cost of care Shifting of insurance risk to small providers Government-mandated prices & budgets High deductibles and high cost-sharing Narrow networks & centers of excellence PHYSICIAN-LED REFORMS Adequate payment for high-value services by specialists as well as PCPs Condition-based payments to support good outcomes, not just low cost procedures Accountability for costs and quality that providers can control, not shifting full risk Accessible data on the utilization and prices for all services in every community Support for community-based, multi-stakeholder solutions to create high-value delivery & payment BAD OUTCOMES Small providers forced out of business High prices from consolidated providers Shifts in care to higher-cost settings Overuse of expensive procedures Loss of innovation Large increases in insurance premiums Patients unable to afford necessary care A SUSTAINABLE FUTURE Collaboration to develop innovative solutions for higher value care Competition to achieve the most effective implementation of solutions Savings by reducing avoidable services, not denying access to needed care Rewards for physicians based on outcomes, not their size or structure Patients able to access affordable care that enables them to be healthy and productive 203

204 For More Information on Oncology Payment Reforms 204

205 Learn More About Win-Win-Win Payment and Delivery Reform 205

206 Harold D. Miller President and CEO Center for Healthcare Quality and Payment Reform (412)