THE 2017 GENENTECH ONCOLOGY TREND REPORT

Transcription

1 THE 2017 GEETECH OCOLOGY TRED REPORT Perspectives From: Mnged Cre Orgniztions, Specilty Phrmcies, Oncologists, Prctice Mngers, nd Employers 9 th Edition

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3 THE 2017 GEETECH OCOLOGY TRED REPORT Editoril Bord Al B. Benson III, MD, FACP, FASCO Professor of Medicine, Associte Director for Coopertive Groups Robert H. Lurie Comprehensive Cncer Center orthwestern University Chicgo, IL icky Dozier, PhrmD Director of Clinicl Progrms Virgini Oncology Assocites, n Affilite of US Oncology orfolk, VA Den H. Gesme, MD, FACP, FACPE, FASCO President Minnesot Oncology St. Pul, M iesh Griffith, MS, RPh, FASHP Vice President, Cncer Services WVU Cncer Institute Morgntown, WV Kevin D. Host, PhrmD President nd Chief Operting Officer Phrmceuticl Strtegies Group (PSG) Plno, TX Ptrici Ellen Krueger, RPh Prctice Administrtor Oncology nd Hemtology Specilists, PA Mountin Lkes, J Scott McClellnd, PhrmD Vice President, Commercil nd Specilty Phrmcy Progrms Florid Blue Jcksonville, FL Bruce Shermn, MD, FCCP, FACOEM Medicl Director Popultion Helth Mngement, Privte Exchnges, Conduent HR Services Medicl Director Employers Helth Colition, Inc. Cnton, OH Burton VnderLn, MD, FACP Consulting Medicl Director Grnd Rpids, MI Gry J. Weyhmuller, MBA, SPHR Executive Vice President/Chief Operting Officer tionl Comprehensive Cncer etwork (CC ) Fort Wshington, PA Tble of Contents Introduction... 2 Key Findings... 3 Mnged Cre Orgniztions Specilty Phrmcies Oncologists Oncology Prctice Mngers Employers Methodology Glossry References The 2017 Genentech Oncology Trend Report An informtionl report provided by Genentech, South Sn Frncisco, CA Produced by Emron, Wyne, J Mnging Editor & Director of Stkeholder Reserch Robin C. Emigh, RPh, MBA Editor Mrgie Reith, R, MS, ELS Emron Cretive Director Emily Stetser Editoril & Reserch Lis Rosen Dn Wong Mission Sttement The mission of The 2017 Genentech Oncology Trend Report: Perspectives From Mnged Cre Orgniztions, Specilty Phrmcies, Oncologists, Prctice Mngers, nd Employers is to provide timely nd useful informtion on the ltest cncer cre trends nd developments. Updted nnully, the publiction is designed to serve s unique resource for those seeking n understnding of the issues surrounding cncer mngement nd prctice. The content of this report ws prepred by Emron on Genentech s request with the guidnce of n editoril bord nd is bsed on primry reserch of key stkeholders, s well s published literture. Sttements nd opinions contined in the report do not necessrily reflect those of Genentech or the editoril bord. Suggested Cittion Project Mngement Jimie Green Din Lovis Dniel Vitelli The 2017 Genentech Oncology Trend Report: Perspectives From Mnged Cre Orgniztions, Specilty Phrmcies, Oncologists, Prctice Mngers, nd Employers. 9th ed. South Sn Frncisco, CA: Genentech; 2017.

4 Introduction This yer s edition The 2017 Genentech Oncology Trend Report continues its trdition of in-depth reporting on mny notble developments in cncer tretment nd their implictions to helth cre from the vntge points of executives from five key stkeholders mnged cre orgniztions, specilty phrmcies, oncologists, oncology prctice mngers, nd employers who provided their insights by responding to the nnul Oncology Trend Report survey. Ech of these stkeholder groups re tsked with the funding, mngement, nd cost of cncer cre tretment, while providing high-vlue, qulity cre designed to improve the helth nd well-being of Americns dignosed with cncer. As lwys, the stte of helth cre is fluid the Oncology Trend Report surveys were fielded nd stkeholder responses collected prior to the 2016 presidentil election, the results of which will undoubtedly hve implictions for the helth cre industry in the coming yers. otble developments in cncer cre in 2016 In December 2016, there were severl notble developments ffecting cncer cre. The 21st Century Cures Act ws pssed The 21st Century Cures Act ws pssed by Congress nd signed into lw by then-president Brck Obm. The lw ims to ccelerte the discovery, development, nd delivery of novel cures nd therpies. It provides the Food nd Drug Administrtion with $500 million nd the tionl Institutes of Helth with $4.8 billion, the ltter to fund the Precision Medicine Inititive, the BRAI Inititive, the tionl Cncer Moonshot Inititive, nd dditionl clinicl reserch in regenertive medicine. 1,2 tionl Cncer Moonshot Tsk Force relesed its first report In his finl Stte of the Union ddress, then-president Obm estblished the tionl Cncer Moonshot Inititive with the gol of ccelerting efforts to prevent, dignose, nd tret cncer in order to chieve decde s worth of progress in only 5 yers. By presidentil memorndum, he estblished the tionl Cncer Moonshot Tsk Force, bringing together the full force of the federl government s investments to support the gols of the inititive. The tskforce report outlines four strtegic gols for the inititive: to ctlyze new scientific brekthroughs, unlesh the power of dt, ccelerte bringing new therpies to ptients, nd strengthen prevention nd dignosis. 3 Prognosis for the Affordble Cre Act There is uncertinty surrounding the timeline for repel nd replcement of the Affordble Cre Act (ACA), originlly encted in In prticulr, there re questions bout the future of the uninsured rte (now below 29 million), 4,5 opertion of helth insurnce mrketplces (ie, exchnges), funding for premium subsidies to mke insurnce ffordble for lower income Americns, federl nd stte decisions on Medicid expnsion, nd the fte of specific ptient protection provisions tht receive populr support (eg, gurnteed issue nd no lifetime limits). Also in question re the ftes of vrious ACA txes, including the Cdillc tx, nd the future uthority of the CMS Innovtion Center. 6,7 Multiple proposls for repeling nd replcing the ACA hve been introduced, with vrying levels of specificity, nd little consensus mong policymkers. These disprte proposls, combined with legisltive procedurl constrints, crete chllenging lndscpe for policymkers to nvigte. 7 For the first time since 1993, the helth cre gend will be influenced by physicin steering the Deprtment of Helth nd Humn Services. 8 An improved lyout This yer s Oncology Trend Report presents new formt, while mintining dt integrity nd robust reporting. This yer s edition displys the findings from ech stkeholder group in more concise blocks of text, exemplified by figures, tbles, nd illustrtions to fcilitte quick reding nd interprettion. As in previous yers, glossry is vilble (pge 113) to define terms, nd ech term is green the first time it ppers in ech stkeholder section. Additionlly, cronyms re defined on the bottom of ech pge where mentioned. Lstly, to get pulse on mjor developments in the cncer cre ren, number of new questions on these emerging trends hve been explored. These re noted with new this survey or with n. 2

5 KEY FIDIGS Key Findings Ech of the five stkeholder groups reported informtion through surveys designed to gther their unique perspectives on number of cncer cre topics. Given tht these stkeholders interct with one nother to provide cncer cre to ptients, there re common themes rised tht re relted to cre issues. Accordingly, the Key Findings describe procedures nd policies orgnized by topic hedings. Wht Are the Top 5 Most Pressing Chllenges Fcing Cncer Cre in 2016? The five stkeholder groups were presented with 14 cncer cre issues nd were sked to select the five tht represent the most pressing chllenges to cncer cre in All surveyed stkeholders greed tht control of overll cncer cre costs nd cncer specilty drug costs rnk mong the top five of the 14 issues presented to them. All stkeholders except MCOs rnked escltion in ptient OOP costs s one of the top five issues. MCOs ( = 103) SPs ( = 28) Oncologists ( = 202) OPMs ( = 201) Employers ( = 200) Control of cncer specilty drug costs: 90% Control of overll cncer cre costs: 67% Blncing tretment stndrdiztion b with personliztion c : 65% Effective cncer therpies: 46% Advnce cre plnning: 46% Control of cncer specilty drug costs: 82% Blncing tretment stndrdiztion b with personliztion c : 57% Control of overll cncer cre costs: 57% Escltion in ptient OOP costs: 57% Effective cre coordintion nd ptient nvigtion: 46% Control of overll cncer cre costs: 63% Control of cncer specilty drug costs: 57% Effective cncer therpies: 57% Escltion in ptient OOP costs: 48% Access to cncer cre: 37% Control of overll cncer cre costs: 54% Control of cncer specilty drug costs: 52% Escltion in ptient OOP costs: 47% Effective cncer therpies: 41% Blncing tretment stndrdiztion b with personliztion c : 40% Control of overll cncer cre costs: 60% Effective cncer therpies: 53% Control of cncer specilty drug costs: 50% Escltion in ptient OOP costs: 46% Developing better cncer dignostics: 42% List of 14 cncer cre issues: Access to cncer cre, dvnce cre plnning, blncing tretment stndrdiztion with personliztion, control of cncer specilty drug costs, control of overll cncer cre costs, developing n equitble provider lterntive pyment model, developing better cncer dignostics, effective cncer therpies, effective cre coordintion nd ptient nvigtion, escltion in ptient OOP costs, improving provider complince with evidence-bsed tretment, incresing the vilbility of enhnced cncer clinicl trils, ptient enggement, nd widespred doption of interoperble helth informtion technology to support qulity improvements nd outcomes mesurement. b Refers to tretment guidelines nd pthwys. c Refers to moleculr/biomrker testing. MCOs, mnged cre orgniztions; OOP, out-of-pocket; OPMs, oncology prctice mngers; SPs, specilty phrmcies. 3

6 Cncer Drug Spending & Revenue The lrgest shres of both totl cncer cre costs nd cncer drug costs re pid for under the medicl benefit, s reported by MCO respondents. They nticipte higher growth rtes for cncer drug spending under the phrmcy benefit compred with the medicl benefit Oncology Prctice Cncer Drug Purchsing & Revenue Two-thirds of OPMs expect revenue growth by yer-end 2016 compred with 2015; Medicre remins mjor pyer for most prctices, nd 56% of OPMs re seeing growing numbers of ptients with high-deductible commercil insurnce In-prctice orl drug dispensing continues to grow mong surveyed OPMs (58%; n = 116) in light of the ptient convenience, control of ptient eduction, nd dditionl revenue it offers; 44% of these OPMs believe it eses the bility to meet the Oncology Cre Model s requirements for ptient follow-up nd sideeffects mngement, nd 53% reported tht their ptients prefer it Overll, most in-prctice dministered drugs continue to be purchsed vi buy nd bill under the medicl benefit, lthough 141 OPMs (70%) obtin drugs from externl SPs due to pyer requirements nd internl finncil pressures; one-third forecst incresed use of externl SPs in % of OPMs (n = 148) mnge prctices with infusion chirs/beds; ownership, volume of prescribed infusions dministered in-prctice, nd reports of declining drug mrgins re highest mong community-bsed, privte prctices compred with other settings One-hlf of the 148 OPMs with infusion services tret noncncer ptients; mngers forecst growth in cncer ptients (53%) nd noncncer ptients (45%) treted with infusions/services by yer-end 2016 compred with 2015 Situtions most often driving drug infusions out of the in-prctice fcilities into hospitl infusion services re relted to ptient ffordbility, insufficient pyer reimbursement, nd the need for ptient monitoring Cncer Drug Mngement Efforts The two tctics used by most MCOs to mnge the cost of drugs re drug quntity or dys supply limittions (92%) nd PA/precertifiction (91%) One-hlf of the 103 MCOs hve dded Zrxio (filgrstim-sndz), the first biosimilr mediction to be mrketed in the United Sttes, to n existing formulry tier; 46% re mnging it under the phrmcy benefit Generic drug price infltion is the top reson tht 57 MCOs hve implemented or will likely implement tiering for preferred nd nonpreferred generics used in cncer cre 62% of MCOs reported tht reference pricing could be modertely to very effective in driving the most cost-effective drug selection Considered one of the more effective cost-control strtegies, 58 MCOs hve integrted oncology drug mngement cross the medicl nd phrmcy benefits; three-fourths of these MCOs hve integrted the PA process cross both benefits 49% of MCOs hve integrted cse mngement cross medicl nd phrmcy benefits to help with mnging costly cncer drugs 20% of MCOs hve implemented site-of-cre/ service steerge tctics or pln to implement such tctics over the next 12 to 18 months to ensure tht members use the most cost-effective site Split-fill services to reduce wste nd retil pickup of specilty drugs were the most frequently provided ptient support services by SPs in 2016, beyond their core competencies 86% of SPs offer cncer clinicl mngement progrms for ptients; 75% uto-enroll ptients who cn then opt out 4 MCO, mnged cre orgniztion; OPMs, oncology prctice mngers; PA, prior uthoriztion; SPs, specilty phrmcies.

7 KEY FIDIGS Cncer Drug Mngement Efforts (cont.) All of the 12 SPs tht collect outcomes dt regrding the oncology drugs tht re dispensed nd mnged by their orgniztions routinely monitor mediction discontinution rtes nd/or resons One-third of employers required oncology nurse nvigtion to steer site of cncer cre in 2016 or re likely to require it in employers (29%) work with their vendors on tctics to specificlly ddress the trend in higher specilty drug costs; two-thirds of these employers included medicl drug mngement to integrte cncer tretment UM cross benefits in 2016 or re likely to include it in 2017 Integrted Pyer/Provider & Qulity Inititives Other thn PCMHs orgnized round PCPs, the doption of most new cncer cre delivery models is either under discussion or ws not being pursued t the time the MCO executives were surveyed 28 MCOs hve implemented qulity performnce incentives or hve pilot progrm or demonstrtion under wy; 21 shre only finncil rewrds nd 11 shre risk with prticipting oncologists 58 MCOs re pursuing APMs or other pyment options, some of which include pying mngement fees for specific clinicl services; ptient cre mngement during tretment is reimbursed by bout one-hlf of the 58 MCOs 43% of oncologists received only FFS pyments from pyers in 2016, while 30% ttributed smll shre of prctice revenue collected in 2015 to APMs, such s bundled pyments or globl pyments 55% of OPMs representing ll prctice settings ttributed smll shre of prctice revenue collected in 2015 to APMs, such s bundled pyments or globl pyments Few prctices (n = 43) mnged by the surveyed OPMs receive mngement fees in ddition to E&M fees for specific services, such s oncology cre coordintion (40%) nd end-of-tretment summry genertion (40%); 38 prctices receive qulity performnce incentives for gol chievement, most often bsed on shred risk with pyers Guidelines & Pthwys 83% of MCOs follow cncer tretment guidelines; 34% of MCOs follow cncer tretment pthwys. The top reson 64 MCOs do not currently incorporte cncer tretment pthwys is objections to use by network oncologists 42% of oncologists use both tretment guidelines nd pthwys, 6% use only guidelines, nd 3% use only pthwys. Following them continues to be lrgely voluntry nd is encourged by prctices nd pyers Oncologists nd MCO respondents re most evenly divided with their peers regrding the possibility of creting single or ntionl pthwy for ech cncer/stge tht ll pyers cn dopt nd the possibility for comprehensive pthwy to ddress the full rnge of circumstnces encountered mong ptients with cncer About one-third of the 85 MCOs tht follow cncer tretment guidelines nd bout one-hlf of the 35 MCOs tht follow pthwys incentivize oncologists to use them, primrily through reduced PA or precertifiction requirements nd shre of cost svings Of the 85 MCOs following guidelines, 15% rted their impct on qulity of cre s modertely effective, nd 20% rted their impct on cost of cre s slightly effective The highest percentges of the 35 MCOs following pthwys rted their impct on qulity of cre (23%) nd cost of cre (17%) s slightly effective 75% of SPs monitor key revisions to drug compendiums/ntionl guidelines for their pln/ pyer customers 29% of employers or their pln dministrtors tied provider contrcts to complince with tretment guidelines or pthwys in 2016 or re likely to in 2017; 42% will consider doing so over the next 2 to 3 yers APMs, lterntive pyment models; E&M, evlution nd mngement; FFS, fee-for-service; MCO, mnged cre orgniztion; PA, prior uthoriztion; PCMHs, ptient-centered medicl homes; PCPs, primry cre providers; SPs, specilty phrmcies; UM, utiliztion mngement. 5

8 Coverge & Access to Cncer Cre Second Opinions Of the 58 MCOs tht re pursuing APMs or other pyment options, 38% re pying mngement fees for second-opinion consulttions/coordintion 37% of employers developed forml secondopinion coverge progrm for cncer in 2016 or re likely to develop one in 2017, nd nerly s mny will consider doing so over the next 2 to 3 yers. About 30% of employers required second opinions for preference-sensitive tretment options or genomic tumor testing in 2016 or re likely to require them in 2017, nd nerly s mny employers will consider dding these requirements over the next 2 to 3 yers Impct of Cost Shring on Ptients & Prctices 61% of MCOs offer plns with combined deductible for their members, mening their medicl nd phrmcy oncology drug spending ccrues to single deductible per benefit yer 62 MCOs offered commercil or mnged Medicre plns tht set member OOP spending mximum tht is pplied to drugs, including oncology drugs, in 2016, nd 42% of them forecst lrger shre of membership ffected nd higher spending limit in ntionl nd seven regionl SPs (79% overll) hve inititives in plce to help them identify ptients who re t risk for finncil hrdship Distress screening of ll/some ptients routinely nd/or when distress is suspected is performed by 87% of oncologists, most often t the time of the cncer dignosis Some OPMs trget ptients with high-deductible helth plns (17%), qulity-of-life issues (14%), nondherence to medictions (11%), nd/or dvnced disese (10%) for finncil hrdship discussions 61% of oncologists rted finncil hrdship s very to extremely significnt negtive influence on drug dherence; 48% of oncologists, 47% of OPMs, 46% of employers, nd 57% of SPs reported escltion in ptient OOP costs s mong the top five most pressing chllenges fcing cncer cre in 2016 One-hlf of OPMs hve either modified or re discussing policy chnges in OOP drug pyment collection, in light of the trend in high-deductible commercil coverge; ll drug copyments re successfully collected from n verge of only 25% of ptients SPs & Cncer Drug Access 82% of SPs reported tht requirements by helth plns for use of n SP by ptients to cquire orl cncer drugs hve incresed over the pst 12 months, nd they predict there will be more increses over the next 12 months SPs send 62% of cncer prescriptions directly to ptients or their cregivers for self- or in-home dministrtion 79% of oncologists rted the lck of coordintion of orl nd infused drug regimens, due to different ccess chnnels, s modertely to extremely significnt negtive influence on ptient dherence One-third of employers implemented risk- or outcomes-bsed contrcts with SPs in 2016 or re likely to implement them in 2017, nd n dditionl 39% will consider doing so over the next 2 to 3 yers 77% of MCOs employ nrrow SP network, though only 25% hve nrrow oncology provider network 54% of the 24 SPs tht chnged their contrcting strtegy with drug mnufcturers employed more ggressive discounting on drug products, nd 50% expnded contrcts to include dditionl services 71% of the 17 SPs pursuing contrctul reltionships with hospitls identified limited ccess to orl oncology drugs vi exclusive/limiteddistribution rrngements s the primry fctor driving the trend 6 APMs, lterntive pyment models; MCOs, mnged cre orgniztions; OOP, out-of-pocket; OPMs, oncology prctice mngers; SPs, specilty phrmcies.

9 KEY FIDIGS Oncology Prctice Reorgniztion, Worklod & Stffing Prctice Reorgniztion & Trends Towrd Hospitl-Bsed Oncology Cre 128 oncologists reported previous or future prctice reorgniztion combining with nother prctice, selling to/joint venturing with hospitl, or restructuring s n oncology home or ACO Improving their competitive position in locl mrket is the leding driver for 74% of oncologists; 60% consider bility to ttrct/ recruit tlent nd 57% consider the nrrowing of provider networks s modertely to very importnt fctors for doing so The competitive dvntge of covered entity under the 340B Drug Pricing Progrm is considered modertely to very importnt fctor by 59% of the 63 surveyed oncologists who hve sold or will consider selling their prctice to hospitl over the next 2 to 3 yers Most oncologists work in prctices with in-prctice infusion services; 36% will refer ptients in 2017 to hospitl outptient infusion centers for their prescribed infusions due to ptient ffordbility nd/ or insufficient pyer reimbursement 72% of OPMs expect to dd/reduce services nd 79% of OPMs identified reorgniztionl strtegies tht their prctices nticipte over the next 2 to 3 yers to improve finncil performnce. Modertely to very importnt fctors driving reorgniztion include cre coordintion improvement (71%), bility to ttrct/recruit tlent (58%), nd nrrowing of provider networks (50%) Oncologist Worklod One-hlf of surveyed oncologists experienced personl worklod growth over the lst yer; higher service intensity for more ptients remins the leding worklod driver cross prctice settings 37% of oncologists sw more ptients per week in 2016 compred with On verge, oncologists worked 54 hours weekly, sw ptients during 4 clinic dys per week, nd plnned to work totl of 47 weeks in 2016 Oncology Prctice Opertions & Stffing A growing number, lbeit minority, of surveyed OPMs (21%) offer weekdy hours pst 6 pm nd re open 6 or 7 dys weekly (19%) for in-prctice visits with oncologists nd/or APPs; 39% of OPMs expect to expnd weekly hours by yer-end 2016 compred with % of oncologists employ APPs; 37% reported higher level of independent functioning by APPs under their supervision over the lst yer. At lest 40% of oncologists reported improvements in the qulity of ptient encounters, their job stisfction, nd ptient stisfction with the prctice over the lst yer s result of tsks delegted to APPs 127 OPMs (63% overll) employ APPs, nd onethird hve encountered difficulty recruiting or retining them; 67% reported n increse in ptients seen by APPs during clinic dys over the lst yer, nd 62% delegte on-cll nd hospitlrounding responsibilities to them 43% of OPMs (n = 86) employed APPs s hospitlists in 2016 nd 39% expect to hire more, while nine OPMs expect to dd the stff position in % of OPMs employed medicl scribes nd/ or subcontrcted with medicl scribe service in 2016, nd more thn one-hlf ttributed slight to significnt improvement in their oncologists job stisfction nd overll productivity during clinic dys to the medicl scribe service 152 OPMs (76%) expect to djust stffing levels to hndle nticipted worklod in 2017; nd nurses, APPs, nd stff to process precertifictions nd PAs re top of mind for one-hlf of them 33% of OPMs trck clinicl cll volume nd hve hired nurses dedicted to triging ptient clinicl inbound clls; 72 OPMs (36%) hve hired or ssigned stff to mke proctive ptient contct t predetermined points of cre to void complictions, ED visits, nd/or hospitliztions ACO, ccountble cre orgniztion; APPs, dvnced prctice providers; ED, emergency deprtment; OPMs, oncology prctice mngers; PAs, prior uthoriztions. 7

10 Popultion Helth Mngement, Including Cncer 61% of compnies (n = 121) use helth or wellbeing ssessments in their benefits strtegy, nd most incentivize completion with monetry rewrds Cncer screening nd erly detection remin the leding cncer-relted issues considered by employers when formulting their helth benefit strtegy. A few employers (n = 34) sponsor cncer condition mngement progrms, nd 27% of them include eduction on cncer screening nd prevention 89% of employers sponsor forml smokingcesstion progrms s prt of their wellness nd well-being inititives. Few of the surveyed employers (19%) offer eduction bout nd promotion of lung cncer screening About 60% of employers trck cncer cre s shre of totl helth cre or high-dollr cse spending 34% of employers receiving vendor reports need better dt detils bout cncer cre cost, use, nd qulity; 28% need better understnding of qulity/cost improvements from high-performnce networks 63% of employers provide ccommodtions to employees who wnt to work while undergoing cncer tretment, but only 11% offer resources nd trining to supervisors nd coworkers on how to support employees with cncer Prehbilittion, Pllitive Cre & Advnce Cre Plnning Prehbilittion ssessments re conducted in-prctice nd/or vi referrl by 53% of oncologists, nd most often result in nutrition counseling nd physicl therpy MCOs plce high priority on pllitive cre s prt of their overll helth benefit strtegy for cncer 79 MCOs hve undertken inititives in the re of pllitive cre nd dvnce cre plnning; most often, this involves cse mnger or nurse communiction nd telephonic support 89% of oncologists (n = 179) discuss pllitive cre with ll or some of their ptients s prt of tretment plnning nd gol setting; mong these oncologists, 27% will conduct consults with dvnced cncer ptients who re closer to the end of life A number of OPMs currently employ pllitive cre specilist physicin (25%), APP (16%), nd/or oncology specilist phrmcist (11%) nd 12% of OPMs pln to hire specilist in SPs provide services to ptients nd/or their fmily cregivers regrding pllitive cre nd dvnce cre plnning; 55% provide counseling by SP oncology stff nurse specilists Hospice cre is vitl nd often underutilized service for those with dvnced disese. erly one-hlf of employers (46%) covered hospice cre for ptients with life expectncy of 6 months or less in 2016 or re likely to cover it in 2017, nd 39% reimburse providers for their dvnce cre plnning consulttions 8 APP, dvnced prctice provider; MCOs, mnged cre orgniztions; OPMs, oncology prctice mngers; SPs, specilty phrmcies.

11 KEY FIDIGS Cncer Survivorship Cre 32 of the 103 surveyed MCOs (up from 22 MCOs in 2015) hve forml progrm to support the provision of high-qulity, cost-effective survivorship cre 25% of MCOs sought oncologist input into coverge policies round survivorship progrm cre in 2016, up from 18% in 2015 Trnsition from ctive tretment to survivorship cre is considered trigger point for distress screening by 26% of 175 oncologists who screen for distress 40% of oncologists in 2016 (compred with 34% in 2015) reported n increse in ptients undergoing survivorship progrm cre over the lst yer Only 45% of oncologists provide some level of survivorship progrm cre to ll ptients; 12% strtify ptients by criteri to focus on subsets of survivors. 55% of surveyed oncologists identified their prctice s primrily responsible for providing survivorship progrm cre 57% of OPMs mnge prctices tht provide some level of survivorship progrm cre to ll ptients, while one-third strtify ptients by criteri to focus on subsets of survivors; 62% of prctices provided some or ll ptients with written or printed survivorship cre pln in 2016 Both surveyed oncologists nd OPMs identified survivorship cre pln genertion s n unmet need in EHR functionlity Two-thirds of employers support workers undergoing survivorship progrm cre nd living with cncer by providing them with resources from their Employee Assistnce Progrm (18%), helth pln (20%), or both (31%) Precision Medicine Two-thirds of MCOs nd 57% of SPs identified blncing tretment stndrdiztion (ie, tretment guidelines nd pthwys) with personliztion (ie, moleculr/biomrker testing) s one of the most pressing chllenges in cncer cre in 2016 Most MCO respondents (81%) nd oncologists (81%) strongly gree or gree tht n improved understnding of cncer requires new tools nd types of evidence in oncology drug reserch, such s biomrkers nd surrogte endpoints 72% of MCOs noted tht rel-world dt re essentil for sound coverge nd reimbursement decisions bout cncer tretments 36% of oncologists re undecided nd 21% strongly disgree or disgree tht drug developers understnd the evidence tht pyers need for cncer drug reimbursement decisions 42% of MCOs noted the involvement of pthologists in coverge policies round moleculr/biomrker testing nd 38% noted their involvement round GS. One-hlf of MCOs hve forml coverge policy regrding genetic testing for members t heightened risk for certin cncers According to 55% of MCOs, the introduction of new moleculr/biomrker test sometimes or lwys triggers P&T committee nd/or coverge policy review of cncer gent(s) Differences in lbortory testing pltforms cn led to inconsistencies in moleculr/biomrker testing results. 39% of the 103 MCOs do not mnge these pltforms nd lbortories/vendors, similr to the previous study period, though 21% re in the erly stges of discussing mngement strtegy Regrding MCO coverge policy for moleculr/ biomrker testing, 33% of MCOs require compnion dignostic testing using only FDA-pproved tests nd 25% require testing using either FDA-pproved or lbortory-developed tests for pprovl of the ssocited drug therpy EHR, electronic helth record; FDA, Food nd Drug Administrtion; MCOs, mnged cre orgniztions; GS, next-genertion sequencing; OPMs, oncology prctice mngers; P&T, Phrmcy nd Therpeutics; SPs, specilty phrmcies. 9

12 Precision Medicine (cont.) 30% of MCOs restrict drug coverge to fvorble moleculr/biomrker test results, 28% require PA/ precertifiction for moleculr/biomrker tests, nd 24% restrict moleculr/biomrker test coverge bsed on evidence supporting the vlidity nd costeffectiveness of the test Seven SPs (six ntionl nd one regionl) provide or pln to provide in 2017 phrmcogenomic support to mnged cre clients s prt of their oncology specilty support services Most oncologists frequently (58%) or lwys (24%) discuss moleculr testing with their ptients 76% of oncologists rted the impct of moleculr/ biomrker testing nd GS on ptient outcomes s moderte to significnt when used to identify muttions for prognosis nd tretment plnning One-third of oncologists noted frequent pyer restrictions regrding reimbursement of whole genome sequencing studies 55% of oncologists order severl moleculr dignostic tests t the sme time, which is driven by order logistics nd pyer coverge. Reflex testing is most often ordered for specific cncer types (48%) or on cse-by-cse bsis (32%) A number of oncologists noted incresed peer-topeer tretment pln reviews with pyers regrding second- nd third-line dvnced cncer tretments (36%) nd off-pthwy regimens bsed on moleculr testing results (38%) Helth Informtion Technology & Mobile Helth (mhelth) 173 oncologists (86%) work with EHRs; one-hlf re oncology-specific nd 62% offer ccess vi ptient portl. Leding unmet EHR needs include customiztion, oncology specificity, nd integrted tretment guidelines nd pthwys 85% of MCOs nd 61% of oncologists strongly gree or gree tht cncer tretment pthwys should be integrted into the EHR for individul ptient cre 168 OPMs (84%) mnge prctices with EHRs; 58% re oncology-specific nd most (82%) offer ptient portl ccess. Leding unmet needs include customiztion, utomted precertifiction/pa, nd orl drug regimen trcking OPMs integrted HIPAA-complint secure e-mil (76%) nd text messging (45%), tblet devices (56%), nd smrtphones (53%) into their opertions in 2016 or pln to integrte them in 2017; 68 OPMs mnged prctices offering telemedicine visits in 2016, nd n dditionl 22 prctices pln to offer them in % of MCOs provided mobile technology services to their members in 2016; 15% offered cncer-specific mhelth services Few MCOs reimburse network oncologists for lternte visit types, though 26% of MCOs reimburse for telemedicine visits nd 11% for visits using e-communiction without video; more thn one-fourth of MCOs re developing mhelth reimbursement strtegies for lternte visit types Top ptient services offered by SPs in 2016 included mobile technology ptient-support pps (39%) nd ptient Web-bsed trining nd support regrding drug dministrtion (39%) Of the 17 SPs tht described physicin services they offered in 2016 or re likely to offer in 2017, 53% identified mobile technology pps 10 Apps, pplictions; EHRs, electronic helth records; HIPAA, Helth Insurnce Portbility nd Accountbility Act; MCOs, mnged cre orgniztions; GS, next-genertion sequencing; OPMs, oncology prctice mngers; PA, prior uthoriztion; SPs, specilty phrmcies.

13 =103 Mnged Cre Orgniztions 12 Demogrphics & opertions 13 Cncer cre expenditures 14 Policy development for cncer coverge 15 Moleculr/biomrker testing in oncology 16 Use of surrogte endpoints 18 Cncer tretment pthwys 20 Cncer tretment guidelines 21 Drug mngement strtegies 22 Cse study of biosimilr mngement 23 Site-of-cre & network mngement 24 Controlling drug cost 26 Specilty oncology drug chnnels & SP services 28 Cncer cre issues 29 Physicin reimbursement for oncology drugs 30 Integrted pyer/provider & qulity inititives 32 Member drug cost shring 34 mhelth & telemedicine strtegies HIGHLIGHTS 64 MCOs (62%) prticipted in the federl nd/or stte helth insurnce exchnges or mrketplces in 2016; 72% of them pln to mintin the business in 2017 (p. 12) The top 5 most pressing chllenges fcing cncer cre in 2016, s indicted by MCOs, re control of cncer specilty drug costs, control of overll cncer cre costs, blncing tretment stndrdiztion with personliztion, effective cncer therpies, nd dvnce cre plnning (p. 13) 84% of MCOs hd in plce, or pln to institute in 2017, coverge policies for oncology drugs under the medicl benefit nd 91% under the phrmcy benefit (p. 14) 42% of MCOs noted the involvement of pthologists in coverge policy round moleculr/biomrker testing, nd 38% of MCOs round next-genertion sequencing (p. 14) According to 55% of MCOs, the introduction of new moleculr/biomrker test lwys or sometimes triggers P&T committee nd/or clinicl/medicl coverge policy review of cncer gent(s) (p. 15) One-hlf of MCOs hve forml coverge policy regrding genetic testing for members t heightened risk for certin cncers (p. 15) 81% of MCOs strongly gree or gree tht n improved understnding of cncer requires new tools nd types of evidence in oncology drug reserch, such s biomrkers nd surrogte endpoints (p. 16) 72% of MCOs noted tht rel-world dt re essentil for sound coverge nd reimbursement decisions bout cncer tretments (p. 17) 83% of MCOs follow cncer tretment guidelines; 34% of MCOs follow cncer tretment pthwys (pp. 18, 20) The top reson 64 of the MCOs do not currently incorporte cncer tretment pthwys in their progrms is objections to use by network oncologists (p. 18) The two tctics used by most MCOs to mnge the cost of drugs re drug quntity or dys supply limittions (92%) nd PA/precertifiction (91%) (p. 21) Considered one of the more effective cost-control strtegies, 56% of MCOs hve integrted oncology drug mngement cross the medicl nd phrmcy benefits; three-fourths of these MCOs hve integrted the PA process cross both benefits (p. 21) One-hlf of the 103 MCOs hve dded Zrxio (filgrstimsndz), the first biosimilr mediction to be mrketed in the United Sttes, to n existing formulry tier, nd 46% re mnging it under the phrmcy benefit (p. 22) 20% of MCOs hve implemented site-of-cre/service steerge tctics or pln to implement such tctics over the next 12 to 18 months to ensure tht the most cost-effective site is being used by members (p. 23) 77% of MCOs employ nrrow SP network, though only 25% hve nrrow oncology provider network (p. 23) Generic drug price infltion is the top reson tht 57 of the MCOs hve implemented or will likely implement tiering for preferred nd nonpreferred generics used in cncer cre (p. 25) 62% of MCOs reported tht reference pricing could be modertely to very effective in driving the most costeffective drug selection (p. 29) 61% of MCOs offer plns with combined deductible for their members, mening their medicl nd phrmcy oncology drug spending ccrues to single deductible per benefit yer (p. 33) Zrxio is registered trdemrk of ovrtis AG. PA, prior uthoriztion; P&T, Phrmcy nd Therpeutics; SP, specilty phrmcy. 11

14 Demogrphics & opertions Representtives of 103 MCOs completed n online survey fielded from mid-july through October 2016 tht collected informtion bout their orgniztions, with focus towrd cncer cre coverge nd services cross medicl nd phrmcy benefits. Most respondents serve s phrmcy directors (61%) or medicl directors (18%) within their MCOs. Some questions ddressed MCOs overll informtion, while others collected informtion by mjor lines of business commercil, mnged Medicid, nd mnged Medicre. MCO smple enrollment distribution by line of business nd type of benefit (=103) Medicl benefit enrollment Commercil: Fully insured Commercil: Employer-sponsored/self-insured Exchnge (ie, stte nd federl helth insurnce exchnges) Mnged Medicid Mnged Medicre Other: Indemnity, TRICARE, Veterns Affirs, etc Men enrollment percentge 1% 1% 6% 6% Phrmcy benefit enrollment 15% 16% 20% 22% 23% 23% 33% 34% Overll, MCOs in this study represent n verge enrollment of 3 million members with medicl benefits MCOs serve members in the following regions West 23% & 2 million members with phrmcy benefits. Midwest 16% South 21% orthest 20% In the third full yer of open enrollment in helth insurnce exchnges under the ACA, 64 MCO respondents (62%) with exchnge lives noted the sttus of their exchnge business for the 2017 benefit yer. A smll regionl helth pln with 45,000 lives will exit the exchnges in Three lrge ntionl plns, five regionl plns, nd one sttewide pln will scle bck prticiption in the exchnges in Sttus of MCOs exchnge business for 2017 Will exit the exchnges 1% Currently under nlysis nd discussion 8% Will scle bck prticiption in specific sttes/service res 14% (n=64) Will expnd the business into new sttes/service res 5% Will mintin the business 72% (=103) Multiregionl/ntionl 20% Wht does the presidentil election men for helth insurnce coverge under the ACA nd ccess to helth cre? 1 Congress likely will pss legisltion in 2017 to repel prts of the ACA, nd it is ssumed tht, s of the writing of this publiction, President Trump will sign it into lw. However, ny legisltion would likely hve phsed implementtion nd not be effective immeditely, s Congress nd the dministrtion seek to stbilize the insurnce mrket. 12 ACA, Affordble Cre Act.

15 MAAGED CARE ORGAIZATIOS Cncer cre expenditures MCO respondents hve experienced nd nticipte double-digit growth in totl cncer cre spending nd cncer drug spending, which is reflected in the top chllenges they identified fcing cncer cre in Similr to previous study periods, the lrgest shre of totl cncer cre spending nd cncer drug spending ws pid for under the medicl benefit in Cncer spending by benefit type ( = 103) Medicl benefit Phrmcy benefit Totl cncer cre expenditures 70% Cncer drug expenditures 30% MCO respondents estimted n 11% yer-over-yer growth rte for totl cncer spending under the medicl benefit in 2015 compred with They lso nticipte 13% growth rte for 2016 compred with Similr increses re noted in cncer drug expenditures cross medicl nd phrmcy benefits. Cncer drug spending growth rtes by benefit: 2015 nd 2016 (nticipted) ( = 103) 14% 14% 12% 17% Phrmcy benefit Medicl benefit 59% 41% (nticipted) MCOs totl cncer expenditures in full-yer 2015 cross vrious service ctegories were similr to full-yer Drug nd drug dministrtion (29%) nd hospitl cre (24%) composed most of the MCOs cncer cre expenditures, on verge, similr to ew this survey, cncer screenings composed 5% of cncer cre expenditures. Percentge of totl cncer cre expenditures cross service ctegories in 2015 ( = 103) Cncer survivorship progrm cre 2% Cncer cre mngement progrms (ie, disese mngement) 3% Genetic testing nd counseling 3% Moleculr/biomrker testing 4% Cncer screenings 5% Pllitive cre nd hospice 6% All other services 2% Drug nd drug dministrtion 29% Hospitl cre 24% Physicins nd clinicl services (nondrug) 22% From list of 14 cncer cre issues presented to them, the 103 MCOs identified the top 5 most pressing chllenges from list of issues fcing cncer cre in Control of cncer specilty drug costs Control of overll cncer cre costs Blncing tretment stndrdiztion with personliztion b Effective cncer therpies Advnce cre plnning 90% 67% 65% 46% 46% The top four chllenges reflect those identified in the previous study period. Though not in their top five issues, other concerns tht number of MCOs hve include improving provider complince with evidence-bsed tretment (41%), developing n equitble provider lterntive pyment model (31%), nd n escltion in ptient out-of-pocket costs (25%). Refers to tretment guidelines nd pthwys. b Refers to moleculr/biomrker testing. Words in green typefce indicte glossry item. 13

16 Policy development for cncer coverge MCOs develop coverge policies for oncology drugs under both the medicl nd phrmcy benefits nd often seek oncology specilist input in their P&T committees, clinicl policy units, nd/or other deprtments responsible for developing these policies. In 2016, 91% of MCOs hd in plce, or pln to institute in 2017, coverge policies for oncology drugs under the phrmcy benefit nd 84% under the medicl benefit. Policies governing orl nd self-injectble gents re more common under the phrmcy benefit, nd policies for in-prctice infused/ injected gents re more common under the medicl benefit. Percentge of MCOs tht pply coverge policies to ll or some types of oncology drugs by type of benefit Orl gents Self-injectbles In-prctice infused/ injected gents 61% 79% 99% 86% 97% 95% Adjunctive/ supportive gents 60% 93% Medicl benefit (n=86) Phrmcy benefit (n=94) Trend in specilist input into MCO coverge policy development ( = 103) Oncologist input study yer study yer Oncology drugs 73% 75% Moleculr/biomrker testing in oncology 55% 59% Genetic testing nd counseling in oncology 49% 53% Advnce cre plnning nd pllitive cre 32% 40% Survivorship progrm cre 18% 25% Pthologist input Moleculr/biomrker testing in oncology 31% 42% ext-genertion sequencing in oncology 23% 38% Geneticist/genetic counselor input Genetic testing for inherited risk of cncer 23% 41% Three-fourths of MCOs (75%) hve direct oncologist input in their P&T committees, clinicl policy units, nd/or other deprtments responsible for developing coverge policy regrding oncology drugs. Specilist input into MCO coverge policy development hs incresed cross most ctegories since the previous study period. An increse of more thn 10% of MCOs re seeking pthologist nd geneticist input into relted coverge policies. A review of coverge policies by US privte pyers between ovember 2011 nd Februry 2012 concluded tht pyers must be prepred to dedicte resources nd prtner with genomic experts to ensure tht their coverge policies re current nd consistent with stndrds of cre dt from The 2016 Genentech Oncology Trend Report. Similr to the previous study period, few MCO respondents (13%) reported tht their orgniztion supports n expnded role for moleculr pthologists regrding collbortion with surgeons nd oncologists for decision support (eg, to guide the proper selection of biomrker tests, brnded commercil kits, lbortory-developed tests, nd specimen preprtion), though 32% re discussing the possibility. 14 Words in green typefce indicte glossry item. P&T, Phrmcy nd Therpeutics.

17 MAAGED CARE ORGAIZATIOS Moleculr/biomrker testing in oncology Moleculr nd biomrker tests hve vriety of clinicl uses nd re criticl tools in the prctice of oncology. MCOs reported on their coverge policies relted to moleculr/biomrker testing, s well s genetic testing for members t heightened risk for certin cncers. Differences in lbortory testing pltforms cn led to inconsistencies in moleculr/biomrker testing results. Similr to the previous study period, 39% of the 103 MCOs do not mnge these testing pltforms nd lbortories/ vendors, though 21% re in the erly stges of discussing mngement strtegy nd 16% re evluting vendors. MCO mngement of lbortory testing pltforms nd vendors othing t this time 39% In the erly stges of discussing mngement strtegy 21% Limiting coverge of specific moleculr/biomrker tests to specified (preferred/pproved) pltforms/vendors 18% Evluting moleculr/biomrker testing vendors 16% Limiting coverge to lbortory(s) owned/operted by MCO 3% 3% ( = 103) Awrding cpitted lbortory contrct to single vendor to ensure testing consistency Moleculr/biomrker testing coverge policy ( = 103) Requires compnion dignostic testing for pprovl of the ssocited drug therpy Only for FDA-pproved tests 33% With either FDA-pproved tests or lbortory-developed tests 25% Determined on cse-by-cse bsis 21% o policy currently, but under review 13% Unsure/do not know 8% Includes coverge for complementry dignostic testing Yes 27% Determined on cse-by-cse bsis 29% o policy currently, but under review 21% Unsure/do not know 23% For 55% of MCOs, new moleculr/biomrker test lwys or sometimes triggers P&T committee nd/or clinicl/medicl coverge policy review of cncer gent(s), similr to the previous study period. Another 25% re considering such policy. ew this survey, one-third of MCOs reported tht their moleculr/biomrker testing coverge policy requires compnion dignostic testing using FDA-pproved tests for pprovl of the ssocited drug therpy. Another 25% require moleculr/biomrker testing using either FDA-pproved tests or lbortory-developed tests. ew this survey, 27% of MCOs lso reported tht their moleculr/biomrker testing coverge policy includes coverge for complementry dignostic testing. 50 MCOs (49%) hve forml coverge policy regrding genetic testing for members t heightened risk for certin cncers (eg, brest, colorectl), with 23% reporting tht coverge is determined on cse-by-cse bsis. Two-thirds of the 50 MCOs with forml policies lwys or sometimes require members to undergo genetic counseling prior to genetic testing. MCOs with forml coverge policy for genetic testing of members t risk for certin cncers o, coverge is determined on cse-by-cse bsis 23% ot currently, but coverge policy is under review 16% Unsure/do not know 12% (=103) Yes 49% Are members required to undergo genetic counseling prior to genetic testing? 36% 30% 16% 8% 10% (n=50) Yes, lwys Yes, sometimes o Under review Unsure/do not know Words in green typefce indicte glossry item. FDA, Food nd Drug Administrtion; P&T, Phrmcy nd Therpeutics. indictes responses to new survey questions. 15

18 Use of surrogte endpoints Surrogte endpoints for overll survivl (OS) long considered the gold stndrd re incresingly used in oncology drug clinicl trils, leding to FDA pprovls vi regulr nd ccelerted pthwys. Most MCOs (81%) strongly gree or gree tht n improved understnding of cncer requires new tools nd types of evidence in oncology drug reserch, such s biomrkers nd surrogte endpoints. Also, 81% strongly gree or gree tht vlue-bsed system of drug reimbursement tht recognizes tht cncer drug my give different levels of benefit depending on the cncer, stge, nd line of tretment is needed. However, 62% strongly disgree or disgree tht drug developers understnd the evidence pyers need for reimbursement decisions regrding new cncer drugs. Do you gree with the following sttements regrding evidence in cncer clinicl trils nd the use of surrogte endpoints? Strongly gree/gree Undecided Strongly disgree/disgree Improved understnding of cncer requires new tools nd evidence in drug reserch, (eg, biomrkers, surrogte endpoints) A vlue-bsed system of drug reimbursement is needed tht recognizes tht cncer drug my give different levels of benefit depending on cncer, stge, nd line of tretment Emerging endpoints, such s irrc nd MRD, require further testing/vlidtion before they cn ct s true surrogtes for survivl ew metrics beyond RECIST re needed for clinicl, regultory, nd reimbursement decision mking regrding new trgeted drugs, ntingiogenics, nd immunotherpy in light of their unique progression kinetics Cncer is too complex for one-size-fits-ll, gold stndrd endpoint. Together, pyers & phrm should design studies to meet evidentiry needs for mrket pprovl nd reimbursement OS is incresingly difficult to show, s therpies grow in number/complexity, ptients live longer, nd trils excluding crossover from control to experimentl rms re difficult to justify/recruit Stndrd surrogte endpoints like PFS re pproprite for pyer decisions if vlidted s n OS substitute, prticulrly for novel drug studies in smller, moleculrly trgeted popultions Potentilly beneficil cncer drugs should be brought to mrket quickly, nd this often requires surrogte endpoints (eg, PFS, TTP, ORR) in regultory nd pyer decisions Drug developers understnd the evidence pyers need for reimbursement decisions regrding new cncer drugs Emerging endpoints, such s irrc nd MRD, re pproprite surrogtes for OS in relevnt cncer types 81% 13% 6% 81% 10% 9% 77% 20% 3% 66% 30% 4% 64% 12% 24% 62% 24% 14% 58% 29% 13% 53% 27% 20% 22% 16% 62% 17% 61% 22% MCO respondents noted tht their stff nd P&T committee members who re responsible for developing coverge policies for oncology drugs re redy or somewht redy to evlute progression-free survivl (76%), time to progression (73%), nd objective response rte (72%). Redy Somewht redy ot redy Will need to solicit outside expertise Unsure How do you describe your rediness to evlute these trditionl nd emerging surrogte endpoints? Progression-free survivl Time to progression Objective response rte Immune-relted response criteri 52% 24% 5% 13% 6% 44% 29% 11% 10% 6% 36% 36% 10% 10% 8% 8% 28% 30% 23% 11% Miniml residul disese 7% 34% 25% 21% 13% 16 Words in green typefce indicte glossry item. indictes responses to new survey questions. FDA, Food nd Drug Administrtion; irrc, immune-relted response criteri; MRD, miniml residul disese; ORR, objective response rte; PFS, progression-free survivl; P&T, Phrmcy nd Therpeutics; RECIST, Response Evlution Criteri in Solid Tumors; TTP, time to progression.

19 MAAGED CARE ORGAIZATIOS ew this survey, the 103 MCO respondents indicted their level of greement with the vlue of rel-world dt in coverge determintions concerning cncer tretments. Most MCOs (72%) noted tht such dt re essentil for sound coverge nd reimbursement decisions bout cncer tretments. More thn one-hlf of MCOs (60%) see the inclusion of stndrdized ptient-reported outcomes (PROs) s necessry for clinicl, regultory, nd reimbursement decision mking. Do you gree with the following sttements regrding the vlue of rel-world dt in coverge determintions concerning cncer tretments? Strongly gree/gree Undecided Strongly disgree/disgree Rel-world dt re essentil for sound coverge nd reimbursement decisions bout cncer tretments All publicly nd privtely funded cncer clinicl trils should include the collection nd nlysis of PROs in stndrdized wy to mesure ptient benefit for clinicl, regultory, nd reimbursement decision mking Rel-world dt lck the methodologicl rigor of rndomized, controlled trils, nd this limits their usefulness in coverge determintions 72% 19% 9% 60% 28% 12% 37% 28% 35% Currently, the resources nd costs to collect rel-world dt outweigh the benefits to guiding coverge decisions 18% 32% 50% Promises nd chllenges of rel-world evidence 3 Rel-world evidence is the term used to describe reserch findings tht use rel-world dt tht re gthered outside of stndrd clinicl trils, such s dt obtined from helth insurnce clims, ptient registries, or electronic helth records. Promises Adds dt-driven insights into how diverse sets of ptients re likely to respond to tretment in rel life Helps shpe helth cre decisions in wys tht customizes cre to individul ptients nd improves their helth cre outcomes Improves the odds tht unnecessry cre cn be voided nd helth cre spending reduced Helps pyers nd providers to fine-tune their decisions on cre nd coverge Helps expedite innovtions tht improve outcomes nd control helth cre costs Chllenges Clims dt re not designed to fcilitte reserch nd nlysis nd they my not reflect ptient s ctul clinicl experience Choices mde by the orgniztions tht collect dt cn introduce incomplete or incorrect dt, s well s both implicit nd explicit bises, into nlysis ot ll stkeholder groups re eqully equipped to collect rel-world dt or to generte rel-world evidence ot ll stkeholder groups re eqully ble to brodly communicte rel-world evidence FDA-regulted entities re inhibited in their bility to respond to clims bout their products tht re mde by nonregulted groups nd from proctively offering relworld dt derived from ptients who re different from the originl clinicl tril prticipnts Words in green typefce indicte glossry item. FDA, Food nd Drug Administrtion. indictes responses to new survey questions. 17

20 Cncer tretment pthwys Cncer tretment pthwys re nrrowed selections of the universe of tretment options outlined in broder guidelines. They offer oncologists ctionble guidnce to consult when creting ptient cre plns. These selections seek to include the most cost-effective tretments, while minimizing toxicity nd side effects. Similr to the previous study period, 34% of MCOs follow cncer tretment pthwys. Of the 35 surveyed MCOs tht hve initited cncer tretment pthwys progrm s prt of their oncology mngement progrms, 12 use Vlue Pthwys powered by CC nd, new this survey, six MCOs use the AIM Specilty Helth Pthwys. Eight MCOs hve developed their own pthwys in collbortion with network oncologists, nd eight use pthwys developed by network oncologists independent of the MCO. Seven MCOs use pthwys developed by MCO-employed oncologists. 64 MCOs (50 regionl, 10 sttewide, nd 4 ntionl) identified the top resons their orgniztion does not currently incorporte cncer tretment pthwys into their oncology mngement progrm: Objections to use by network oncologists Lck of resources Hve not evluted which pthwy is the best for different cncers o mechnism to monitor complince 38% 36% 36% 20% Use of cncer tretment pthwys by network oncologists Mndtory, oncologist reimbursement tied to their use 14% Voluntry, oncologist incentives tied to their use 34% (n=35) Voluntry 52% MCOs incentivize oncologists to follow cncer tretment pthwys, primrily through: Reduced PA or precertifiction requirements Fster processing of PAs/precertifictions Lump-sum bonus pyments Per-member monthly fee Improved/higher E&M fees nd drug reimbursement 23 of the 35 MCOs with cncer tretment pthwys progrms reported tht they re internlly mnged. The remining 12 MCOs identified vriety of other mngers of their tretment pthwys progrm, including PBMs nd/or SPs or locl oncologists. MCOs rted the effectiveness of pthwys in enbling their orgniztion to improve both the qulity nd cost of cncer cre. Those tht re mesuring their effectiveness, most frequently described them s slightly effective in meeting these gols. MCO rtings of cncer pthwys progrm effectiveness (n = 35 ) Impct of pthwys on QUALITY of cre Impct of pthwys on COST of cre ot mesuring impct t this time 23% 20% Still mesuring progrm impct 26% 40% ot t ll effective 0% 0% Slightly effective 23% 17% Modertely effective 14% 11% Very effective 14% 9% Extremely effective 0% 0% Unsure/do not know 0% 3% 18 Words in green typefce indicte glossry item. indictes responses to new survey questions. E&M, evlution nd mngement; CC, tionl Comprehensive Cncer etwork; PA, prior uthoriztion; PBMs, phrmcy benefit mngers; SPs, specilty phrmcies.

21 MAAGED CARE ORGAIZATIOS Adherence to clinicl pthwys nd/or guidelines is one of the mesures used to ssess oncology prctices by 11 of the 28 MCOs tht hve implemented or hve pilot pyment progrm/demonstrtion under wy using qulity performnce incentives s pyment option. erly ll of the 103 MCOs greed tht cncer tretment pthwys should be updted in timely mnner to reflect the ltest scientific knowledge nd insights from clinicl experience nd PROs (95%) nd should be integrted into the EHR to id in individul ptient cre (85%). Do you gree with the following sttements relted to cncer tretment pthwys? Strongly gree/gree Undecided Strongly disgree/disgree Pthwys should be updted in timely mnner to reflect the ltest scientific knowledge nd insights from clinicl experience nd PROs 95% 4% 1% Pthwys should be integrted into the EHR for individul ptient cre 85% 14% 1% The gol of clinicl pthwys should be to blnce clinicl vlue with cost All pthwys should be held to uniformly high levels of comprehensiveness to reduce cre vrition cross the entire cncer cre continuum nd ddress the emerging science of moleculr dignostics/genomics Oncologists should communicte to ptients their prticiption in clinicl pthwys nd discuss the choice of on-pthwy options nd off-pthwy lterntives supported by guidelines Pyers, providers, ptients/ptient dvoctes, nd/or pthwy vendors should collborte to develop stndrds nd pthwy certifiction process On-pthwy tretment selection should be considered utomticlly uthorized, thereby eliminting the PA dministrtive burden Oncologists should not need finncil incentives to mke evidence-bsed tretment decisions but should be pid fee to prticipte in the pthwy process b The bility to reduce cre vrition nd increse clinicl efficiency to optimize cre is undermined by pthwy prolifertion c 81% 13% 6% 78% 15% 7% 77% 19% 4% 71% 21% 8% 64% 25% 11% 64% 17% 19% 57% 28% 15% Pthwys re here to sty nd re n integrl tool for APMs d 56% 32% 12% It should be possible to crete single or ntionl pthwy for ech type of cncer/stge tht ll pyers cn dopt 44% 34% 22% It is possible for comprehensive pthwy to ddress the full rnge of clinicl circumstnces, comorbidities, nd therpeutic gols encountered by clinicins 41% 33% 26% From erly cncer detection to survivorship or end of life. b As compenstion for dt input, reporting, nd outcomes mesures. c Including pyer-, cdemic-, nd/or vendor-developed cncer tretment pthwys. d Such s bundled pyments. indictes responses to new survey questions. APMs, lterntive pyment models; EHR, electronic helth record; PA, prior uthoriztion; PROs, ptient-reported outcomes. 19

22 Cncer tretment guidelines Cncer tretment guidelines re comprehensive nd multidisciplinry clinicl lgorithms nd supporting documents tht represent the universe of integrted interventions bsed upon high-level evidence nd expert judgment. They offer oncologists brod rnge of options nd redy ccess to synthesized informtion to support clinicl decision mking. The 85 MCOs (83%) tht follow cncer tretment guidelines to inform coverge criteri for oncology nswered vriety of questions tht explore their use. Similr to the previous study period, the 85 MCOs tht currently follow cncer tretment guidelines most frequently use: CC Clinicl Prctice Guidelines in Oncology (CC Guidelines ) Americn Society of Clinicl Oncology Clinicl Prctice Guidelines tionl Cncer Institute Clinicl Prctice Guidelines in Oncology 89% 46% 20% Use of cncer tretment guidelines by network oncologists Mndtory, with oncologist reimbursement tied to their use 15% Voluntry, with oncologist incentives tied to their use 19% (n=85) Voluntry 66% 13% of these 85 MCOs develop their own guidelines in collbortion with network oncologists; 7% do so in collbortion with MCO-employed oncologists. Another 6% use guidelines developed by network oncologists, independent of the MCO. ew this survey, 18 MCOs (four ntionl nd 14 regionl) identified the resons their orgniztion does not currently incorporte cncer tretment guidelines s prt of their oncology mngement progrm. ine noted lck of resources, seven hve not evluted which guideline is the best for different cncers, nd six re encountering objections to their use from network oncologists. MCOs incentivize oncologists to follow tretment guidelines, primrily through: Reduced PA or precertifiction requirements Shre of cost svings Improved/higher E&M fees nd drug reimbursement Fster processing of PAs or precertifictions Per-member monthly fee erly two-thirds (65%) of the 85 MCOs with tretment guidelines progrms reported tht they re internlly mnged. For the other 30 MCOs, their progrms re mnged by PBMs nd/or SPs or locl oncologists or re outsourced. MCOs rted the effectiveness of guidelines in enbling their orgniztion to improve both the qulity nd cost of cncer cre. Almost two-thirds re not mesuring or re in the process of mesuring their impct t this time. MCO rtings of cncer guidelines progrm effectiveness (n = 85 ) Impct of guidelines on QUALITY of cre Impct of guidelines on COST of cre ot mesuring impct t this time 39% 28% Still mesuring progrm impct 26% 29% ot t ll effective 0% 0% Slightly effective 9% 20% Modertely effective 15% 13% Very effective 5% 5% Extremely effective 0% 0% Unsure/do not know 6% 5% 20 Words in green typefce indicte glossry item. E&M, evlution nd mngement; CC, tionl Comprehensive Cncer etwork; PA, prior uthoriztion; PBMs, phrmcy benefit mngers; SPs, specilty phrmcies.

23 MAAGED CARE ORGAIZATIOS Drug mngement strtegies Surveyed MCOs reported on strtegies they employ to mnge the cost of oncology drugs, s well s how effective the strtegies re. More thn one-hlf of MCOs identified efforts under wy t their orgniztions to integrte oncology drug mngement cross the medicl nd phrmcy benefits. MCOs employ vrious strtegies to mnge the cost of cncer drugs. The two tctics most used re drug quntity or dys supply limittions (92%) nd PA/precertifiction (91%). The use of PA/precertifiction is considered the most effective mens of mnging drug costs. Chnge in MCO use of PA/precertifiction under the medicl benefit since 2015 o chnge 47% Decresed 3% (n=94) Incresed 50% Though only 58 MCOs (56%) integrte oncology drug mngement cross the medicl nd phrmcy benefits, this is considered one of the more effective strtegies used to control drug costs. Tools MCOs use to control oncology drug costs 5-point scle, 1 = not t ll effective, 5 = extremely effective Effectiveness rting ( = 103) Drug quntity/dys supply limittions 92% 2.9 PA/precertifiction 91% 3.3 Fee schedule mngement to lower drug expenditures 79% 3.0 Formulry tiering 77% 2.8 Member cost shring vi dollr copys nd percent coinsurnce 77% 2.7 Formulry/preferred drug list for oncology drugs covered under the phrmcy benefit 73% 2.8 Preferred drug therpy 68% 2.8 Step therpy 67% 3.0 Clims editing/repricing 60% 2.9 Benefit design recommendtions to ddress specilty drug nd site of cre/service 56% 2.9 Integrtion of oncology drug mngement cross the medicl nd phrmcy benefits 56% 3.1 Split-fill progrm (ie, short fill) for orl oncology drugs 48% 2.7 Formulry/preferred drug list for oncology drugs covered under the medicl benefit 33% 2.9 MCO efforts under wy to integrte oncology drug mngement cross the medicl nd phrmcy benefits Integrte the PA process cross the medicl nd phrmcy benefits Aggregte dt cross both benefits with the help of the internl PBM/SP Anlyze dt with the help of the internl PBM/SP Aggregte dt cross both benefits with the help of the externl PBM/SP Implement clims vlidtion process for medicl benefit oncology drugs Anlyze dt with the help of the externl PBM/SP Anlyze dt with the help of medicl benefit mngement vendor to improve dt visibility Words in green typefce indicte glossry item. (n=58) 21% 31% 31% 28% 38% PA, prior uthoriztion; PBM, phrmcy benefit mnger; SP, specilty phrmcy. 48% 74% indictes responses to new survey questions. ew this survey, 58 MCOs (56%) identified the efforts under wy t their orgniztions to integrte oncology drug mngement cross the medicl nd phrmcy benefits. The most frequently used strtegy, by 74% of these MCOs, is to integrte the PA process cross the medicl nd phrmcy benefits. Step-therpy protocols re used with cncerrelted drugs by 69 of the surveyed MCOs. These protocols re most often pplied to djunctive drugs used to tret nuse nd vomiting (67%; n = 46), nemi ssocited with cncer therpy (58%; n = 40), nd hyperclcemi (52%; n = 36), nd to cncer gents, such s tyrosine kinse inhibitors (52%; n = 36) nd romtse inhibitors (43%; n = 30). 21

24 Cse study of biosimilr mngement Zrxio (filgrstim-sndz) ws pproved by the FDA in Mrch 2015 nd is the first biosimilr mediction to be mrketed in the United Sttes. It is pproved for the sme indictions s eupogen (filgrstim). 4 MCOs identified inititives their orgniztions hve undertken in response to the lunch of Zrxio. Though Zrxio hs only been on the mrket for short time, MCOs hve undertken number of inititives to mnge it. One-hlf of MCOs hve dded the drug to n existing formulry tier, nd 46% mnge it under the phrmcy benefit. As of July 2016, the biosimilrs pipeline included nerly 800 biosimilrs nd bout 500 biobetters (drugs designed to improve the clinicl profile of reference product), totl of nerly 1,300 follow-on products in the development pipeline for more thn 100 currently mrketed biophrmceuticl reference products. 5 Inititives MCOs hve undertken to mnge Zrxio Inititives in purple re ll new this survey (=103) Added it to n existing formulry tier Mnged it under the phrmcy benefit Applied PA to Zrxio 46% 44% 50% Applied PA to the origintor product Mnged it under the medicl benefit Added it to pproprite stndrds of cre (eg, guidelines, pthwys) Added it to formulry s preferred sttus 37% 35% 32% 31% Developed physicin eduction mterils bout biosimilrs Instituted step edit, estblishing Zrxio s first-line compred with origintor Set member cost shre t prity cross both benefits, if mnged under both benefits Implemented site-of-cre steerge by requiring ptient ccess vi SP Set physicin reimbursement t prity with the origintor product Contrcted with PBM/SP to monitor/collect PROs regrding side effects nd tolernce Developed member/ptient eduction mterils bout biosimilrs Added it to new formulry tier for specilty drugs tht includes or is exclusively for biosimilrs Set physicin reimbursement higher thn the origintor product 9% 9% 8% 7% 6% 6% 3% 18% 17% The Americn College of Physicins believes tht biosimilr drug policy should im to limit ptient confusion between origintor nd biosimilr products nd ensure sfe use of the biosimilr product in order to promote the integrtion of biosimilr use into clinicl prctice. 6 Zrxio is registered trdemrk of ovrtis AG. eupogen is registered trdemrk of Amgen Inc. 22 indictes responses to new survey questions. FDA, Food nd Drug Administrtion; PA, prior uthoriztion; PBM, phrmcy benefit mnger; PROs, ptient-reported outcomes; SP, specilty phrmcy.

25 MAAGED CARE ORGAIZATIOS Site-of-cre & network mngement Two strtegies tht MCOs employ to mnge oncology cre nd control drug costs re site-of-cre/service inititives nd network mngement. Of the 58 MCOs tht hve mde benefit design recommendtions to ddress specilty drug nd site-of-cre/service issues, 21 hve implemented site-of-cre/service steerge tctics or pln to implement such tctics over the next 12 to 18 months to ensure tht the most cost-effective site is being used by members. Another 19 MCOs re discussing such tctics. Most of the 103 surveyed MCOs (77%) employ nrrow SP network, though only 25% hve nrrow oncology provider network. Both of these mngement strtegies re considered modertely effective t mnging oncology cre nd controlling drug costs. To enble network providers to compre themselves ginst top performers in terms of prctice/provider efficiency, 24% of the 103 MCOs use episode-of-cre tools to compre cost nd utiliztion mngement dt. Another 15% pln on dopting this strtegy in of the 103 MCOs (34%) employ dt nd/ or tools tht mke cncer drug costs more trnsprent to members, with n dditionl 10% plnning to employ them in ew this survey, the trnsprency inititives the 35 MCOs hve implemented to mke cncer drug costs more trnsprent to members include: Offer Explntion of Benefit detils (n = 25) Provide tretment cost estimtor on the helth pln s Web site (n = 21) Educte/shre cost informtion with providers (n = 19) Site-of-cre/service steerge tctics most frequently used by MCOs 8-point scle, 1 = not t ll likely, 8 = very likely Likely to be (n = 21) implemented Alredy over the next Tctics implemented months Mndte tht ptients use SPs for some/ll self-dministered specilty oncology drugs 71% 4.8 Contrct exclusively with single SP for oncology services 62% 4.0 Contrct with in-home infusion services 62% 6.4 Apply PA/precertifiction to ensure lowest cost of site selection 52% 5.2 Contrct with outptient infusion clinics 52% 5.5 egotite fee schedules with hospitls for their outptient infusion services 52% 5.3 Develop nd promote drug list pproprite for in-home cre or self-dministrtion 43% 5.5 Recommend the most cost-effective sites nd infusion suites to oncologists 43% 4.9 Mnge member cost shring to influence cost-effective site selection 38% 4.3 Direct cse mngement referrls to costeffective settings 38% 4.6 Contrct with/designte nrrow or preferred networks of service sites 33% 5.1 Crete site-specific rules for certin conditions nd services 29% 5.1 Increse cost trnsprency to members nd encourge site-of-cre discussions 29% 4.5 with oncologists Identify nd direct to cost-effective COEs 24% 5.1 Set hospitl outptient reimbursement t prity with in-prctice drug dministrtion 19% 5.2 Move infusion services to 340B-covered hospitl infusion centers to reduce drug costs 14% 3.6 Enter risk-shring rrngements or lterntive pyment models with oncology medicl home providers to control referrls 14% 4.9 Develop dtbses to mke drug costs more trnsprent to members (n = 18) Publish pricing informtion on the member portl (n = 17) COEs, centers of excellence; PA, prior uthoriztion; SP, specilty phrmcy. 23

26 Controlling drug cost Surveyed MCOs reported on strtegies they employ to control the cost of cncer drugs nd the likelihood of implementing those strtegies over the next 12 to 18 months. Similr to the previous study period, the lrgest number of MCOs (49%) hve integrted cse mngement cross medicl nd phrmcy benefits to help with mnging costly cncer drugs. This is the strtegy most likely to be implemented over the next 12 to 18 months, s well. Oncology drug mngement strtegies under wy nd predicted for future implementtion (continued on next pge) 8-point scle, 1 = not t ll likely, 8 = very likely ( = 103) Strtegy Formulry nd benefit design Currently implemented Men likelihood of implementtion over next months Introduce tiering for preferred nd nonpreferred generics 34% 4.0 Introduce fourth or fifth tier for commercil plns tht includes high-cost specilty drugs for cncer 31% 3.5 Institute formulry exclusions regrding select products with low vlue 27% 3.9 Equlize cost shring (ie, prity) for drugs covered under both the medicl nd phrmcy benefits 26% 4.0 Develop seprte specilty drug benefit 25% 3.2 Set mximum dollr copy for oncology drugs 18% 3.1 Increse ptient out-of-pocket mximums 17% 4.3 Shift coverge of infused/injectble oncology drugs from the medicl to the phrmcy benefit 5% 3.1 Introduce seprte tier for oncology drugs 2% 2.2 Clinicl utiliztion mngement Integrte cse mngement cross medicl nd phrmcy benefits 49% 5.5 Require tionl Drug Code for billing medicl benefit drugs 34% 4.7 Integrte oncology drug dt cross medicl nd phrmcy benefits to improve utiliztion mngement nd clinicl cre mngement 34% 5.0 Restrict drug coverge to fvorble moleculr/biomrker test results 30% 4.7 Offer cre mngement progrm for select cncer dignoses 28% 4.5 Require prior uthoriztion/precertifiction for moleculr/biomrker tests 28% 5.3 Offer cre mngement progrm for ny cncer dignosis 27% 4.3 Restrict moleculr/biomrker test coverge bsed on evidence supporting its vlidity nd cost-effectiveness 24% 5.0 Require evidence of disese progression before pproving use of nonpreferred drug 21% 4.3 Institute/increse peer-to-peer tretment pln reviews with oncologists 16% 4.6 Pricing (the bse price of drug before negotitions, rebtes, nd discounts) Cost (the ctul dollr mount pid by ptients, helth plns, or the government for drug) re intertwined. All 3 issues must be considered to understnd the broder implictions of policies or regultory ction. 6 Vlue (the benefit of drug reltive to its cost) 24 indictes responses to new survey questions.

27 MAAGED CARE ORGAIZATIOS Though only 9 of the 103 MCOs use rebte contrcting for oncology drugs under the medicl benefit, 35 re very likely nd 34 re somewht likely to implement such strtegy over the next 12 to 18 months. Oncology drug mngement strtegies under wy nd predicted for future implementtion (continued) 8-point scle, 1 = not t ll likely, 8 = very likely ( = 103) Strtegy Oncologist incentives nd reimbursement Currently implemented Men likelihood of implementtion over next months Incentivize oncologists to use generic oncology drugs 13% 4.5 Incentivize oncologists to use preferred oncology drugs 9% 4.3 Chnge oncologist drug reimbursement from ASP-plus to drug cquisition cost plus cre mngement fee 8% 4.0 Incentivize oncologists to use lower-cost biosimilrs indicted in cncer cre/supportive cre 7% 4.8 Implement nd/or expnd clinicl pthwys incentive pyment progrm 6% 4.4 Pyer/mnufcturer contrcting Institute rebte contrcting for oncology drugs covered under the medicl benefit 9% 5.0 Institute rebte contrcting for drugs bsed on cncer indiction 4% 4.5 Enter risk-bsed or outcomes-bsed contrcting with drug mnufcturers 3% 4.2 Other mngement strtegies MCOs re currently using or pln to use within the next 12 to 18 months to mnge reltively expensive oncology drugs include: Plce drugs newly pproved by the FDA on 6-month witing list before coverge considertion Direct ptients to ptient ssistnce progrms nd provide copy-crd eduction for members nd providers Top resons 57 MCOs hve implemented or will likely implement tiering for preferred nd nonpreferred generics used in cncer cre: Generic drug price infltion 72% Mnge drug purchses nd prescribing decisions of network medicl groups through the EHR Limit/deny buy nd bill Implement third-prty medicl benefit mngement progrm Prticipte in CMS s Oncology Cre Model s privte prtner Institute more-focused cre coordintion Incorporte oncology into ACO greements Incresed member cost shring for high-cost generics Rebte strtegies Efficcy Drug shortges 60% 47% 12% 9% Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; ASP, verge sles price; CMS, Centers for Medicre & Medicid Services; EHR, electronic helth record; FDA, Food nd Drug Administrtion. 25

28 Specilty oncology drug chnnels & SP services Pyers re mnging orl cncer drugs by shifting mngement to their PBMs tht then further control costs by limiting dispensing through specific specilty/mil-order phrmcies. As more orl drugs hve become prt of the stndrd therpy for mny cncers, recent trend within community oncology prctices hs been to estblish in-prctice drug dispensing services or retil phrmcies. 7 According to the surveyed MCOs, more thn one-hlf of in-prctice infused/injected drugs re sourced through physicin offices. Considering the totl prescription volume for oncology drugs covered by their MCO lst yer (2015) under the medicl nd phrmcy benefits, MCO executives estimted the percentge of oncology drugs by type tht flowed through vrious distribution chnnels. Similr to the previous study period, more thn one-hlf of orl oncolytics nd selfinjectbles re distributed vi SPs, nd more thn one-hlf of in-prctice infused/injected drugs re sourced through physicin offices (eg, n in-prctice dispensry or prcticeowned closed-door licensed phrmcy or infusion services/shot clinic). Percentge of oncology drugs distributed through vrious chnnels (=103) Specilty phrmcy 63% 7% Physicin office 60% 13% 21% 4% 18% 4% 5% 5% Orl gents Self-injectbles Retil phrmcy 19% 56% 21% Mil service 3% 1% In-prctice infused/injected gents Hospitl outptient services 29% 34% 18% 16% 3% Adjunctive/ supportive gents MCO estimtes for shre of network prctices tht dispense orl oncology drugs Some prctices, but unble to provide n informed estimte 17% >50% of prctices 12% 41% 50% of prctices 4% 21% 30% of prctices 6% 11% 20% of prctices 15% (n=51) o prctices 4% 1% 10% of prctices 42% 51 MCO executives estimted the percentge of oncology prctices within their network (including privte, community, nd hospitl/helth system-owned or ffilited) tht dispense orl oncology drugs from their prctices by operting n in-prctice physicin dispensry nd/or closed-door licensed phrmcy. Of these 51 MCOs, 42% estimted tht this represents 1% to 10% of their network prctices. In-prctice dispensing my support ptient continuity of cre by llowing prctice stff to mnge ll spects of drug therpy Refers to privte, community, nd hospitl/helth system-owned or ffilited oncology prctices within the MCO network. from initil fill to completion of therpy though qulity stndrds nd guidelines re needed Words in green typefce indicte glossry item. PBMs, phrmcy benefit mngers; SP, specilty phrmcy.

29 MAAGED CARE ORGAIZATIOS As mens of mnging oncology prctices use of buy nd bill, 25% of the 103 MCOs require oncologists to use n SP to cquire some oncology drugs & 8% require oncologists to use n SP to cquire ll oncology drugs, which the MCO hs designted s specilty drugs, for in-prctice dministrtion. MCOs top unmet needs for SP dt describing oncology drug use Types of reports nd nlytics (n = 61) Discontinution rtes 44% Adherence/complince mesures 39% Adverse event rtes 34% Disese progression nd vlue of therpy continution 33% Cost svings/voidnce tied to SP services/interventions nd UM 33% Emergency deprtment/hospitliztion rtes 31% Percentge of one-time-only fills 31% Use of mnufcturer copy coupon/ssistnce progrms 31% Suggestions/strtegies for cost-sving opportunities 31% Averge length of therpy by cncer type 30% Therpy comprisons of cost nd outcomes by cncer type nd stge 30% Physicin complince with evidence-bsed stndrds by member nd condition 23% Most of the 34 MCOs tht require oncologists to use n SP to cquire ll or some oncology drugs for in-prctice dministrtion reported tht the number of drugs under this requirement incresed since 2015 nd will continue to increse in MCOs identified unmet needs regrding dt describing oncology drug use provided to them by their contrcted SPs 44% would like to receive dt bout discontinution rtes. 65 MCOs described chnges they envision in contrcting strtegies with SPs relted to cncer drugs/services, which will evolve over time. These chnges include contrcting bsed on clinicl outcomes; greter focus on ptient-reported outcomes; more detiled reporting on mesures, such s complince, refill rtes, discontinution rtes, nd complince with guidelines; nd more rigorous performnce gurntees relted to clinicl outcomes. contrcting but lso re considering more rigorous performnce gurntees, not only for oncology but for specilty performnce overll. We envision pursuing outcomes-bsed We will sk the SPs to provide better reporting on oncology, especilly using clinicl outcomesbsed contrcting, where we would py less for mediction tht hs poorer outcomes for the dignosis being treted. Currently, there is little clrity provided by the SP. Incresed reporting is must nd will hve to incorporte more rigorous performnce gurntees. We would like to hve more specific check system before strting therpy nd n ongoing check system to show improvement in tumor regression during therpy. SP, specilty phrmcy; UM, utiliztion mngement. 27

30 Cncer cre issues MCOs ddress vrious cncer cre issues s prt of their cncer helth benefit strtegy. This involves dequte ccess to brod rnge of services, from cncer screening to survivorship cre nd dvnce cre plnning. MCOs rted the level of priority tht their orgniztion plces on number of cncer cre issues s prt of their overll helth benefit strtegy for cncer. On verge, their highest priorities re specilty drug mngement nd cncer screening nd erly detection. Level of priority MCOs plce on select cncer cre issues 10-point scle, 1 = very low priority, 10 = very high priority Specilty drug mngement Cncer screening nd erly detection Pllitive cre Advnce cre plnning/hospice cre Cse mngement nd cre nvigtion Stndrdiztion of drug therpy vi guidelines/pthwys Men priority level (=103) Access to cncer cre cn be n issue in certin geogrphic res bsed on cncer incidence, size of the oncologist workforce, the complexity of services needed, nd prctice nd hospitl consolidtions. Of the 103 MCOs, 41 do not mesure ccess to cncer cre, nd nother 22 re not wre of ny cncer cre ccess issues in their service re. However, new this survey, 40 MCOs reported on specific wys they monitor/ mesure the timeliness nd dequcy of ccess to cncer cre: 63% 55% 53% 53% 40% Trck ccess complints from members/fmily cregivers through the grievnce deprtment Monitor in-network ccess nd out-of-network exceptions Assess ptient ccess through member services ptient stisfction surveys nd inquiries Survey providers on stisfction Assign cse mngers to highcost ptients to coordinte cre 35% 30% 28% 25% 25% Trck distnce members trvel to nerest prctice by service re Assess the provider-toptient rtio Anlyze cse mngement questionnires Evlute cse/cre mnger ccess thresholds tht trigger intervention(s) Follow up on lerts from providers to MCOs bout ccess issues Shred decision mking Centers of excellence tem-bsed cre Stndrdiztion of rdiologic cre services vi guidelines/pthwys Precision medicine vi moleculr/ biomrker testing nd genetic counseling Survivorship cre Of the 103 surveyed MCOs, 32 (up from 22 MCOs in 2015) hve forml progrm to support the provision of high-qulity, cost-effective survivorship cre. The inititives most often implemented by these MCOs re cse mnger eduction nd resources (n = 23), encourgement of network oncologists (n = 16) nd network PCPs (n = 13) to follow CC Guidelines for Survivorship, member/survivor eduction nd resources (n = 14), nd PCP eduction nd resources (n = 11). Top MCO inititives in pllitive cre nd dvnce cre plnning (n = 79) Cse mnger/nurse communiction nd telephonic support 71% Ptient eduction mterils 44% Ptient eduction by interction with pllitive cre specilist 43% Physicin trining on how to discuss pllitive cre with ptients 35% Expnded hospice cre coverge 33% Cretion of pllitive cre tem 30% Individulized, high-touch cse mngement 30% Expnded member medicl benefits for pllitive cre 29% About three-fourths (n = 79) of the surveyed MCOs hve undertken inititives in the res of pllitive cre nd dvnce cre plnning. Most often, this involves cse mnger or nurse communiction nd telephonic support. 28 CC, tionl Comprehensive Cncer etwork; PCPs, primry cre providers.

31 MAAGED CARE ORGAIZATIOS Physicin reimbursement for oncology drugs For yers, mngement of oncology gents hs been the exception, not the rule, with regrd to physicin reimbursement. However, tht is poised to chnge s mrket dynmics continue to shift, nd oncology becomes more of mngement priority for helth plns. 8 Surveyed MCOs responded to questions centered on how they reimburse physicins for in-prctice dministered oncology drugs. The 103 surveyed MCOs reported tht ASP is the most frequently used drug pricing bsis to reimburse physicins who buy nd bill brnded, generic, nd biosimilr cncer drugs with cncer tretment/supportive indictions covered under the medicl benefit. In 2017, pproximtely 90% of MCOs do not pln to revise the bsis they use to reimburse physicins under buy nd bill for these cncer drug types. Of the 55 MCOs tht moved to n ASP-bsed physicin reimbursement for drugs 55% 27% 18% Did not increse professionl fees Incresed professionl fees Are evluting whether or not to increse professionl fees Bsis for physicin drug reimbursement under buy nd bill for cncer drug types ( = 103) Brnd Generic Biosimilr Averge sles price 51% 42% 46% Averge wholesle price 28% 22% 29% Wholesle cquisition cost 10% 9% 10% Mximum llowble cost 1% 17% 3% Other 11% 11% 13% Includes cpittion, fee schedule, no reimbursement becuse physicins re employees, nd vries by physicin contrct. Medicre Prt B Drug Pyment Model The Centers for Medicre & Medicid Services nnounced proposed rule to test new wys to support how physicins nd clinicins select drug therpy. It ws designed to test different physicin nd ptient incentives to drive the prescribing of the most effective drugs nd test new pyment pproches to rewrd positive ptient outcomes. 9 However, CMS did not finlize the Medicre Prt B Drug Pyment Model. 10 How effective would the proposed inititives within the Medicre Prt B Drug Pyment Model be on driving the most cost-effective drug selection? Very effective Modertely effective Slightly effective ot t ll effective Unsure/do not know Reference pricing Indictions-bsed pricing Risk-shring greements bsed on outcomes Discounting or eliminting ptient cost shring Feedbck on prescribing ptterns nd online decision-support tools Medicre Prt B drugs pyment djustment to ASP+2.5%+$16.80 per drug per dy 8% 8% 7% 17% 17% 24% 24% 27% 25% The Oncology Trend Report surveys were fielded prior to the decision to bndon the Medicre Prt B Drug Pyment Model; however, responses to the question were considered to be of interest to the reder. 30% 28% 38% 32% 35% 45% 29% 32% 21% 14% 10% 8% 27% 4% 14% 13% 14% 15% 20% 6% 8% Most MCOs reported tht the proposed inititives within the Medicre Prt B Drug Pyment Model would be slightly to modertely effective in driving the prescribing of the most cost-effective drug. erly twothirds (62%) of MCOs reported tht reference pricing would be modertely to very effective. Words in green typefce indicte glossry item. indictes responses to new survey questions. ASP, verge sles price. 29

32 Integrted pyer/provider & qulity inititives Few MCOs hve pursued new cncer cre delivery models involving network oncologists, though they re under discussion. Similrly, few MCOs re pursuing APMs or other pyment options for network oncologists tht re lterntives to trditionl fee-for-service pyments. ew this survey, MCO respondents indicted the sttus of their orgniztion s pursuit of new cncer cre delivery models involving their network oncologists. Other thn PCMHs orgnized round PCPs, the doption of most models is either under discussion or ws not being pursued t the time MCO executives were surveyed. Similrly, few MCOs re pursuing APMs or other pyment options for network oncologists tht re lterntives to trditionl fee-for-service pyments. Oncology Cre Model In June 2016, CMS initited the Oncology Cre Model, which enters Medicre providers into pyment rrngements tht include finncil nd performnce ccountbility for episodes of cre surrounding chemotherpy dministrtion for cncer ptients. Most notbly, providers must choose to prticipte in the two-sided risk trck of the model in order to meet certin requirements relted to dvnced APMs under the Medicre Access nd CHIP Reuthoriztion Act. Almost 200 physicin groups nd 16 commercil pyers re prticipting. To prticipte in the Oncology Cre Model, ll physicin groups must provide chemotherpy, meet specific prctice trnsformtion requirements (eg, EHR, cre coordintion, ptient nvigtion services nd ntionl tretment guidelines for cre), nd report on vrious qulity mesures Sttus of new cncer cre delivery models nd APMs involving network oncologists ( = 103) Currently implemented Plnned for 2017 Chrcteristics of successful APM 14 Under pilot/ demonstrtion Under discussion ew cncer cre delivery models PCMH orgnized round PCPs 38% 3% 10% 24% Oncology medicl home 10% 4% 10% 40% Oncology ACO in the commercil spce 9% 5% 13% 37% Oncology ACO in the Medicre/Medicid spce 9% 4% 9% 35% APMs or other pyment options Qulity performnce incentives 19% 7% 8% 34% Mngement fees for specific clinicl services 18% 4% 5% 29% Prtil cpittion/ risk shring, with no 18% 5% 4% 30% qulity incentives Shred svings pyments 15% 4% 9% 28% Globl pyments, with no qulity incentives 14% 4% 7% 42% Bundled pyments 7% 7% 14% 42% Flexibility: Gives physicins the bility to deliver needed ptient services in the most efficient nd effective wy Adequcy nd predictbility of pyment: Enbles physicin prctices to cover the costs of delivering high-qulity cre to ptients Accountbility only for costs nd qulity tht physicins cn control: Holds individul physicins ccountble only for the spects of spending nd qulity tht they cn control or influence 30 Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; APMs, lterntive pyment models; CHIP, Children's Helth Insurnce Progrm; CMS, Centers for Medicre & Medicid Services; EHR, electronic helth record; PCMHs, ptient-centered medicl homes; PCPs, primry cre providers.

33 MAAGED CARE ORGAIZATIOS Qulity performnce incentives re either being implemented or they re prt of pilot progrm or demonstrtion tht is under wy by 27% (n = 28) of surveyed MCOs. The rewrds or risks shred with the prticipting oncologists primrily include only finncil rewrds (n = 21) or shred risk (n = 11). Types of qulity performnce mesures most often used by MCOs to ssess oncology prctices Hospitliztions nd ED visits Cre coordintion/nvigtion Pllitive cre/pin mngement (n=28) 46% 46% 50% Hospitliztions nd ED visits re the mesures most often used to ssess oncology prctices by 14 of the 28 MCOs tht hve implemented or hve pilot pyment progrm or demonstrtion under wy using qulity performnce incentives. Ptient stisfction Cncer screening Hospice cre Adherence to clinicl pthwys nd/or guidelines Overll cncer costs per ptient Advnce cre plnning Generic drug use Preferred drug use Shred decision mking 46% 43% 43% 39% 39% 36% 36% 36% 32% Mngement fees pid to oncologists for specific clinicl services (n = 58) Ptient cre mngement during tretment 53% urse cre mngement/nurse nvigtion support 41% Oncology cre coordintion 40% Second-opinion consulttions/coordintion 38% Ptient cre monitoring during ctive monitoring phse following tretment 31% Orl oncology drug eduction nd dherence monitoring 31% Advnce cre plnning 26% Telemedicine visits 26% ew this survey, some of the 58 MCOs tht re pursuing or plnning to pursue APMs or other pyment options re pying or considering pying mngement fees for specific clinicl services, in ddition to the existing services tht prctices bill for under trditionl feefor-service. Ptient cre mngement during tretment is currently reimbursed by 53% of the 58 MCOs. Telemedicine in oncology Only one-fourth of the 58 MCOs pursuing APMs py oncologists for telemedicine visits. H. Jck West, MD, medicl oncologist nd Director of the Thorcic Oncology Progrm t Swedish Cncer Institute, in Settle, Wshington, ws interviewed by The ASCO Post. He noted tht telemedicine offers huge cost- nd time-sving opportunities. Proctive telemedicine hs been shown to reduce costs, for exmple, in preventing unnecessry ED visits for ptients with cncer who need dvice on how to mnge tretment-relted side effects. However, reimbursement for telemedicine compred with n in-person oncology consulttion is not only much less, but in some cses, it doesn t exist. 15 Words in green typefce indicte glossry item. APMs, lterntive pyment models; ED, emergency deprtment. indictes responses to new survey questions. 31

34 Member drug cost shring More members hve oncology drug cost-shring requirements, especilly commercilly insured members nd those covered under mnged Medicre, compred with the previous study period. According to recent HIRC report, commercil pyers re working to optimize their cost-shre structures in the form of deductibles, higher fixed-dollr copy mounts, nd greter coinsurnce for specilty drugs, while still keeping ptients engged in helth cre decision mking. 16 The percentge of commercil members with drug cost shring incresed from 70% under the medicl benefit in 2015 to 79% in 2016 nd from 79% under the phrmcy benefit in 2015 to 86% in 2016, s reported by surveyed MCOs. Medicre members sw even greter increses: from 76% in 2015 to 92% in 2016 under the medicl benefit nd from 79% in 2015 to 93% in 2016 under the phrmcy benefit. Averge percentge of members with drug cost shring in 2016 Benefit Medicl Phrmcy Commercil (n=84) 79% (n=62) 86% (n=73) Mnged Medicid (n=44) 49% (n=10) 70% (n=13) Mnged Medicre (n=62) 92% (n=43) 93% (n=51) Most common level of member cost shring for oncology gents in commercil nd mnged Medicre benefits in 2016 Commercil (n = 84) Mnged Medicre (n = 62) Medin fixed-dollr copy Medin coinsurnce Medin fixed-dollr copy Medin coinsurnce Medicl benefit $55 ($0 $1,000) 20% (10% 100%) $62.50 ($25 $200) 20% (15% 33%) Phrmcy benefit $57.50 ($10 $300) 20% (10% 100%) $40 ($7.50 $150) 33% (20% 33%) Most MCOs expect no chnge in cost shring in 2017 versus Incresed cost shring in the form of higher dollr copy mounts nd/or incresed use of percent coinsurnce to define the members oncology drug OOP costs under the phrmcy benefit were forecst most often by MCOs cross their commercil nd/or mnged Medicre lines of business. MCO forecsts for incresed oncology drug cost shring in 2017 compred with % 23% 23% 23% 24% 26% 25% 26% 16% 18% Commercil (n=84) Medicl benefit Phrmcy benefit Shre of membership with n oncology drug cost-shring requirement Use of dollr copys to define the member s oncology drug cost shre Dollr copy mounts required for oncology drugs Use of percent coinsurnce to define the member s oncology drug cost shre Percentges required s coinsurnce for oncology drug cost shre Mnged Medicre (n=62) 13% 13% 15% 16% 19% 19% 21% 15% 19% 24% 32 HIRC, Helth Industries Reserch Center; OOP, out-of-pocket.

35 MAAGED CARE ORGAIZATIOS According to survey of cncer ptients by the Cncer Support Community, ptients top concerns relted to helth insurnce were ssocited minly with cost. Most ptients experienced concerns bout high OOP costs for services (48.7%), high deductibles (47.7%), high premiums (47.2%), nd high copy costs for medictions (41.7%). 17 ew this survey, 61% of the 103 MCOs offer plns with combined deductible for their members, mening their medicl nd phrmcy oncology drug spending ccrues to single deductible per benefit yer. This ffects n verge of 68% of members nd is set t medin of $2,000. For 21% of MCOs, some members must stisfy two deductibles per benefit yer one for the medicl benefit oncology drugs nd nother for the phrmcy benefit oncology drugs. This ffects n verge of 63% of their members. The medin medicl benefit deductible is $1,250, nd the medin phrmcy benefit deductible is $500. Benefit plns with no deductible requirements re offered by 24% of MCOs. The 81 MCOs tht currently do not offer benefit plns tht pply seprte deductible for both the medicl nd phrmcy benefits, indicted whether they hve plns to do so in the future. MCO forecsts regrding implementing seprte deductibles for medicl nd phrmcy benefits Unsure/do not know 30% Are likely to offer in % Under discussion 22% (n=81) Will not do 46% ew this survey, 13 of the 78 plns with deductibles include deductibles tht re pplied only to brnd drugs. Regrding members with deductibles nd the dollr mount per deductible, bout one-hlf of the 78 MCOs with deductible forecst no chnge in 2017 compred with However, number of MCOs forecst more members with deductibles nd higher dollr mount for these deductibles in MCO forecsts regrding deductibles pplied to oncology drugs in 2017 compred with 2016 (n = 78) Percentge of membership with deductible pplied to oncology drugs Dollr mount of the deductible pplied to oncology drugs 14% 41% 14% 31% Increse Sty the sme Decrese ot pplicble 3% 24% 38% 35% Seprte deductible for the medicl benefit 16% 47% 9% 28% 23% 45% 32% Seprte deductible for the phrmcy benefit Combined deductibles cross both benefits 3% 41% 50% 6% 1% 45% 49% 5% 62 of the 93 MCOs with commercil nd/or mnged Medicre lives reported tht their current benefit designs tht require member drug cost shring lso estblish member OOP spending mximum tht is pplied to drugs, including oncology drugs. The medin nnul OOP mximum pplied to ll drugs is $5,000. Of these 62 MCOs, 42% expect the shre of membership with n OOP spending mximum to increse in 2017 compred with 2016, while 57% expect it to sty the sme. Similrly, 53% expect the dollr mount of the OOP spending mximum to increse in 2017 compred with 2016, while 45% expect it to sty the sme. OOP, out-of-pocket. 33

36 mhelth & telemedicine strtegies Mobile helth lso known s mhelth hs gret potentil for linking ptients, cregivers, nd helth cre professionls; for enbling erly detection nd intervention; for lowering costs; nd for chieving better qulity of life. This is prticulrly relevnt for cncer nd for cncer supportive cre, since ptients nd cregivers hve key roles in mnging side effects. 18 mhelth services ( = 103) Offered in 2016 Generl mhelth services 62% ot offered 38% mhelth refers to the use of mobile communiction devices for helth services nd informtion. MCOs were surveyed on their generl mhelth strtegy. erly two-thirds of MCOs (62%) eight ntionl, 42 regionl, nd 14 sttewide plns provided mobile technology services to their members in Cncer-specific mhelth services 15% 85% Most mhelth pplictions (pps) offered by the MCOs include retil phrmcy loctors, formulry serching, refill nd ppointment reminders, nd physicin finders/directory, which sometimes mirror wht is found on plns Web sites. Some unique services being offered include: Physicin ccess vi telehelth for ll members App tht provides rel wit times for prescription fills t ech clinic phrmcy App tht llows cre mngers to send direct messges to members Mobile mediction therpy mngement Drug pricing tool Adherence gp informtion App-bsed eduction Video counseling Prescription cost comprisons bsed on members benefit designs 16 MCOs, up from 4 in the previous study period, currently offer or pln to offer cncer-specific mhelth pps or services, including: Reimbursement of network oncologists for lternte visit types ( = 103) An eductionl tool kit on cncer screening nd erly detection Links for cncer therpy results nd possibilities 24-hour ccess to online helth nd emergency cre Additionl cse mngement round chemotherpy support Survivorship resources Links to oncology centers of excellence Cncer nurse nvigtionl tool Few MCOs reimburse network oncologists for lternte visit types, though 26% of MCOs reimburse for telemedicine visits (eg, rel-time vocl nd video interction between the oncologist nd ptient) nd 11% for visits using e-communiction (eg, vi e-mil without video nd/or through the prctice s EHR ptient portl). More thn one-fourth of MCOs re developing mhelth reimbursement strtegies for lternte visit types. Yes o Plnned for 2016 Strtegy under development 11% 29% 26% 28% 3% 3% 34 Words in green typefce indicte glossry item. EHR, electronic helth record. 42% Telemedicine visits 58% E-communiction between oncologists nd ptients

37 =28 Specilty Phrmcies 36 Demogrphics & opertions 37 Provision of drugs & services to hospitls 38 Ptient support services 39 Split-fill services 40 Finncil ssistnce for t-risk ptients 41 Ptient eduction & mediction mngement 42 Helth pln/pyer-focused services 43 Outcomes dt & phrmcogenomic support 44 Contrcting strtegies 46 Physicin services 47 Ongoing chllenges 48 ew & innovtive service offerings by SPs HIGHLIGHTS SPs send 62% of cncer drugs directly to ptients or their cregivers for self- or in-home dministrtion (p. 36) 71% of the 17 SPs pursuing contrctul reltionships with hospitls identified limited ccess to orl oncology drugs vi exclusive/limited-distribution rrngements s the primry fctor driving the trend (p. 37) Four SPs reported tht they hve contrcts in plce with hospitls to provide outsourced oncology phrmcy services, nd nother two SPs pln to pursue such prtnerships/ opportunities in 2017 (p. 37) 82% of SPs reported tht requirements by helth plns for ptient use of n SP to cquire orl cncer drugs hve incresed over the pst 12 months, nd 78% predict more increses in requirements over the next 12 months (p. 38) 22 SPs provide services to ptients nd/or their fmily cregivers regrding pllitive cre nd dvnce cre plnning; 55% provide counseling by SP oncology stff nurse specilists (p. 38) Split-fill services to reduce wste nd retil pickup of specilty drugs were the most frequently provided ptientsupport services by SPs in 2016, beyond their core competencies (p. 39) Overll, 23 SPs (82%) hd split-fill progrms tht included n verge of 19 oncology drugs in 2016; however, ntionl SPs verged 24 oncology drugs nd regionl SPs verged nine drugs (p. 39) 15 ntionl nd seven regionl SPs (79% overll) hve inititives in plce to help them identify ptients who re t risk for finncil hrdship (p. 40) All SPs fcilitte finncil support nd/or provide ptient dvoccy for ptients who cnnot fford their cncer drug costs. Most (96%) refer ptients to mnufcturers ptient ssistnce progrms (p. 40) 24 SPs (86%) offer clinicl mngement progrms for cncer ptients; 75% uto-enroll ptients who cn then opt out (p. 41) 61% of SPs primrily deliver ptient eduction vi clinicl stff outbound ptient contct (p. 41) 75% of SPs monitor key revisions to drug compendiums/ ntionl guidelines for their pln/pyer customers (p. 42) All of the 12 SPs tht collect outcomes dt regrding the oncology drugs tht re dispensed nd mnged by their orgniztions routinely monitor mediction discontinution rtes nd/or resons (p. 43) 54% of the 24 SPs tht chnged their contrcting strtegy with drug mnufcturers employed more ggressive discounting on drug products, nd 50% expnded contrcts to include dditionl services (p. 45) 15 SPs (54%) provided consulttion/eduction/support services to prescribing oncologists in 2016, nd two pln to in 2017 (p. 46) SPs identified specilty drug cost control, blncing tretment stndrdiztion with personliztion, overll cncer cre cost control, escltion in ptient out-ofpocket costs, nd effective cre coordintion nd ptient nvigtion s the top 5 most pressing chllenges fcing cncer cre in 2016 (p. 47) 35

38 Demogrphics & opertions 28 mngers working t SP orgniztions tht provide oncology services completed n online survey fielded from mid-july through September The respondents described their SP opertions, contrcting, nd cncer cre services provided to MCOs, oncology prctices, nd ptients in 2015, 2016, nd forecst for Of the 28 surveyed SPs, 17 (61%) re multiregionl or ntionl nd 11 (39%) re regionl. Most SPs re owned by PBM (25%) or re independently owned (21%). SP ownership (=28) ID/ACO 7% Retil phrmcy/ grocery chin 11% Physicin group/ oncology prctice 11% Helth pln 11% Wholesler 3% Hospitl/ hospitl system 11% PBM 25% Independent 21% umber of lives served by SPs in % 100, , ,000 42% 500,001 1,000,000 8% 2,000,001 5,000,000 5,000,001 10,000,000 14% >10,000,000 4% 7% (=28) Types of cncer prescriptions filled by surveyed SPs ( = 28) Administrtion method Men percentge of cncer drug prescriptions Orl 63% Physicin in-prctice 19% Ptient self-injectble 8% In-home infused 10% Percentge of totl SP cncer prescriptions by source of pyment ( = 28) Commercil helth plns Medicre 31% Medicid 18% Chrity nd indigent progrms/foundtions 3% 46% In 2016, drugs used to tret cncer ccounted for n verge of 23% (rnge, 2% 80%) of ll SP prescriptions, nd djunctive/supportive drugs ccounted for 13% (rnge, 1% 65%) of SP prescriptions. Ptient self-py Including drugs to tret cncer nd djunctive/supportive therpies, but excluding ncillry/ dministrtion supplies. Commercil helth plns ccount for nerly one-hlf of the SPs pyer mix for both ntionl plns (49%) nd regionl plns (41%). 2% SPs serve ptients in the following regions West 11% Midwest 7% 61% Multiregionl/ntionl (=28) South 21% orthest (served by ntionl SPs) 39% Regionl The 28 SPs deliver cncer drugs to vriety of destintions: 62% 14% 11% 8% 5% re sent directly to ptients or their cregivers for selfor in-home dministrtion re vilble for ptient or fmily cregiver pickup re delivered to oncology prctices for tretment of ptients (white bgging) re sent to the hospitl outptient fcility re delivered to the ptient for tretment in n oncologist s office or mbultory tretment center (brown bgging) Including drugs to tret cncer nd djunctive/ supportive therpies, but excluding ncillry/ dministrtion supplies. 36 Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; ID, integrted delivery network; MCOs, mnged cre orgniztions; PBM, phrmcy benefit mnger.

39 SPECIALTY PHARMACIES Provision of drugs & services to hospitls Few SPs currently supply oncology drugs or provide outsourced oncology phrmcy services to hospitls. Such reltionships re driven primrily by drug ccess issues resulting from exclusive or limiteddistribution rrngements. Only three of the surveyed SPs, two of which re ntionl, occsionlly or routinely supply oncology drugs to hospitls; 11 do so rrely. These 14 SPs supply cncer drugs to hospitls under the following situtions: Limited-distribution rrngements (n = 10) Upon request by physicin (n = 8) Upon request by helth pln (n = 5) In cses of drug shortges (n = 4) Relted to the 340B Drug Pricing Progrm (n = 3) As prt of ptient ssistnce progrm (n = 2) Bsed on stnding contrcts with hospitls s outsourced vendors (n = 1) Similr to the lst study period, four SPs reported tht they hve contrcts in plce with hospitls to provide outsourced oncology phrmcy services, nother two SPs pln to pursue such prtnerships/opportunities in 2017, nd 11 re discussing or investigting such reltionship. For 10 of these 17 SPs, these prtnerships include covered entities under the 340B Drug Pricing Progrm. 5 SPs supply cncer drugs to hospitls s prt of the services of the hospitl system-owned SP The most frequently noted fctor driving the pursuit of hospitl contrcts for outsourced oncology phrmcy services is limited ccess to orl oncology drugs vi exclusive/limited-distribution rrngements, by 12 of the 17 SPs pursuing such rrngements. Top fctors driving the pursuit of contrctul reltionships with hospitls by SPs Limited ccess to orl oncology drugs vi exclusive/limited-distribution rrngements Hospitl expnsion of 340B progrm-relted outptient services Hospitl lcks cpbilities Hospitl entry into SP mrket (n=17) 41% 53% 53% 71% ACO formtion by hospitls 35% ew this survey, complince with the USP <800> stndrd for sterile compounding nd hzrdous drug hndling is key fctor driving current contrcts with hospitls for one SP tht is operted by n integrted helth cre system. Pyer strtegy to crete medicl specilty network Hospitl/ACO cquisition of community-bsed oncology prctices 24% 35% Including infrstructure, contrcts, nd expertise in clinicl, opertionl, reimbursement, nd dvoccy services. Helth systems hve entered into the SP business s wy to ssert some control over outptient specilty drug spending. Incresingly, insurnce contrcts nd Medicre inititives tie pyments to qulity metrics tht hold providers ccountble for ptients totl medicl costs. Helth systems tht own SPs rgue they cn do better job of overseeing the use of the drugs they dispense thn externl commercil entities. 1 Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; USP, US Phrmcopei. 37

40 Ptient support services The use of SPs for distribution of cncer drugs to ptients is incresingly required by helth plns. Services SPs provide to support ptients include pplictions vi mobile technology nd services relted to pllitive cre nd dvnce cre plnning (ACP). More helth plns require their members to use SPs to cquire their cncer drugs, prticulrly orl nd self-injectble drugs, ccording to the surveyed SPs. Mny SPs noted incresed requirements regrding orl (82%) nd self-injectble (61%) drugs over the pst 12 months, nd looking hed, nerly s mny SPs predict more increses in requirements over the next 12 months. Chnges in required ptient use of n SP to cquire vrious types of oncology drugs ( = 28) Chnge over the pst 12 months Type of oncology Chnge forecst for the next 12 months Incresed o chnge Decresed drug/dministrtion Increse o chnge Decrese 82% 18% 0% Orl 78% 18% 4% 61% 39% 0% Ptient self-injectble 68% 25% 7% 21% 61% 18% In-prctice injectble/infused 32% 54% 14% 36% 50% 14% Adjunctive/supportive 53% 36% 11% Pllitive cre nd ACP services offered to ptients nd/or fmily/cregivers Services (n = 22) Counseling by SP oncology stff nurse specilists 55% Counseling by clinicl phrmcists with trining in pin mngement nd pllitive cre 50% Pin mngement services in ddition to oncology drugs 46% Referrl to helth pln s oncology-trined cse mngers 46% Integrl prt of the SP s oncology MTM services 41% Referrl to externl pllitive cre specilists 41% Eductionl resources regrding dvnce directives 32% Referrl to behviorl helth services 27% Perspectives on Pllitive Cre nd Advnce Cre Plnning, n Issues in Focus report sponsored by Genentech, tkes closer look t the benefits, chllenges, nd opportunities for ptient-centered communiction nd shred decision mking s they relte to pllitive cre, ACP, nd timely hospice referrls SP respondents described the cncer ptient support pplictions vi mobile technology they currently provide nd/or pln to provide in Most offer online ordering, sttus nd delivery coordintion/notifiction, refill reminders, nd proctive messging. Severl SPs provide dily pill reminders. One ntionl SP hs incorported telemedicine visits/video consults into its cre of cncer ptients. Such consults re being piloted or re in the plnning stges for nother nine SPs. 22 SPs reported on services they provide to ptients nd/or their fmily cregivers regrding pllitive cre nd ACP. More thn one-hlf (55%) provide counseling by SP oncology stff nurse specilists. Words in green typefce indicte glossry item. 38 MTM, mediction therpy mngement.

41 SPECIALTY PHARMACIES Split-fill services Most SPs offer split-fill services to their ptients, which ffect number of oncology drugs. Most of the SPs expect the number of oncology drugs in their split-fill progrm to increse over the next 12 months; none expect it to decrese. Top ptient services offered by SPs in 2016 (=28) The most frequently provided ptientsupport service tht SPs provided in 2016, beyond their core competencies, ws split-fill services to reduce wste. Split-fill (ie, short fill) to reduce wste Retil pickup of specilty drugs Cregiver support services Home-cre drug dministrtion Mobile technology ptientsupport pplictions 46% 43% 39% 54% 82% Ptient Web-bsed trining nd support regrding drug dministrtion 39% Referrls to other cre progrms (eg, behviorl helth, depression screening) 39% In ddition to core services, such s 24/7 support, disese nd device eduction, orl oncology therpy mngement, complince monitoring, nd billing nd delivery, which re provided by ll SPs. Overll, 23 SPs hd split-fill progrms tht included n verge of 19 oncology drugs in tionl SPs in the smple verged 24 oncology drugs in their splitfill progrms, while regionl SPs verged nine oncology drugs. Overll, most of the 23 SPs (70%) expect the number of oncology drugs in the progrm to increse nd seven SPs (30%) expect it to remin the sme over the next 12 months. Top performnce/outcomes metrics collected for oncology drugs in split-fill progrms Clcultion/dollr vlution of wste voidnce Percentge of split-fill Rxs by drug tht indictes the need for therpy chnges umber of split-fill Rxs by drug Ptient prticiption in progrm (n=23) 52% 65% 61% 74% Durtion of split-fill fter initil fill 1 month 2 months 3 months Unlimited Depends on the drug or helth pln 43% 26% 9% 13% 9% (n=23) The most common dys supply delivered when splitting fills in 2016 ws 14 dys, by 20 of the 23 SPs. ew this survey, the length of time these 23 SPs continue to split-fill fter the initil fill vries. Ptient stisfction 30% Words in green typefce indicte glossry item. Rxs, prescriptions. indictes responses to new survey questions. 39

42 Finncil ssistnce for t-risk ptients SPs re undertking vrious strtegies to fcilitte finncil support nd/or ptient dvoccy for ptients who cnnot fford their cncer drug costs. Since cost of tretment cn impct dherence, SPs re pursuing solutions to drug-relted finncil hrdship. ew this survey, 15 ntionl nd seven regionl SPs (79% overll) hve inititives in plce to help them identify ptients who re t risk for finncil hrdship. Most of these 22 SPs screen ll ptients for their bility to py drug costs, though for some SPs finncil dvoccy services re triggered when ptient copys or OOP spending exceeds predetermined levels (eg, copys greter thn $50 or $75). Percentge rnge of SP ptients t risk for finncil hrdship Unble to provide n informed estimte 21% 1% 20% of ptients 18% All SPs fcilitte finncil support nd/or provide ptient dvoccy for ptients who cnnot fford their cncer drug costs. Most (96%) refer ptients to mnufcturers ptient ssistnce progrms. Ptient dvoccy services offered most often in 2016 (=28) Refer to mnufcturer s ptient ssistnce progrm Refer to chritble orgniztion s ptient ssistnce progrm Assist in PA requests/submissions Offer finncil ssistnce through mnufcturer s copy coupon progrm Assist in benefit coordintion cross multiple pyers Offer finncil ssistnce through free drug progrm Assist providers in identifying less-expensive, lterntive tretments Offer deferred pyment pln Reserch/coordinte ptient ssistnce progrms pperwork Counsel regrding federl/stte nd indigent ssistnce progrms Assist in the ppels process to obtin drug coverge 61% 57% 54% 54% 50% 64% 61% 71% 79% 79% ew this survey, 25 SPs estimted the medin percentge rnge of orl oncolytics nd oncology self-dministered injectbles tht hve copy coupon/offset progrm s 71% to 80%. 96% All ptients 4% 81% of ptients 11% 61% 80% of ptients 14% (=28) 41% 60% of ptients 14% 21% 40% of ptients 18% ew this survey, the most common solutions these 28 SPs use to reduce finncil hrdship include chritble foundtion ssistnce (43%), copy ssistnce progrms (43%), free drug progrms (11%), s well s billing djustments, such s deferred pyments or pyment pln (4%). 23 SP respondents estimted the medin percentge rnge of ptients eligible for ptient ssistnce s 41% to 50%; 22 SPs reported medin percentge rnge of pproved pplictions for finncil ssistnce s 71% to 80%. Most SPs estimted the verge OOP cost per prescription pid directly by the ptient, fter considertion of vilble coupons nd finncil ssistnce, s $0 $50 $51 $100 $101 $150 3 SPs 7 SPs 13 SPs 40 Words in green typefce indicte glossry item. OOP, out-of-pocket; PA, prior uthoriztion. indictes responses to new survey questions.

43 SPECIALTY PHARMACIES Ptient eduction & mediction mngement SPs provide ptient eduction using vrious mens primrily through discussions between clinicl stff nd ptients nd the SP s oncology MTM resources. SPs re invested in helping ptients with mediction dherence nd persistence through clinicl mngement progrms. Clinicl stff primrily deliver ptient eduction through discussions with ptients vi telephone nd e-mil (61%) nd by using the SP s oncology MTM resources (29%). 16 SPs noted tht ll or some (rnge, 5% 80%) of the clinicl phrmcists who re responsible for ptient eduction t their orgniztions re bord-certified in oncology. Cncer therpy-relted discussions between SP stff nd ptients Men frequency rting (=28) 10-point scle, 1=low frequency, 10=very high frequency Lbortory testing Disposl of leftover or unused drugs Pin/pllitive tretment mngement Physicl sttus/functioning Psychologicl/socil issues Drug shortges nd how they re hndled Clinicl mngement progrms for cncer ptients re offered by 24 SPs (86%). Ptients enroll in these progrms in vriety of wys. Methods of ptient enrollment in SP clinicl mngement progrms (n = 24) Ptient is uto-enrolled nd cn then opt out 75% Helth pln cse mnger/disese mnger refers/ recommends ptient 29% Ptient cn opt in 25% Physicin refers/ recommends ptient 21% Overll, n verge of 70% of cncer ptients prticipte in the clinicl mngement progrms offered by the 24 SPs. Ptient prticiption in clinicl mngement progrm by tretment type Orl cncer drugs Ptient self-injectble drugs Adjunctive/supportive drugs In-home infusions In-prctice injectbles/infusibles 72% 55% 42% 34% 27% Fctors tht cn negtively impct ptient mediction dherence nd persistence Men significnce rting ( = 28) 5-point scle, 1 = low significnce, 5 = high significnce Adverse events/tolerbility 4.2 Cost of tretment/finncil hrdship 4.1 Complexity of tretment regimen/frequency of tretment 3.8 Ptient inttention/lck of enggement due to medicl nd/or psychosocil issues 3.6 Lck of coordintion of orl nd infused regimens due to different ccess chnnels 3.3 Lck of fmily/cregiver support 3.3 Poor helth litercy 3.2 Lck of understnding of medicl nd/or phrmcy benefits 3.1 indictes responses to new survey questions. MTM, mediction therpy mngement. 41

44 Helth pln/pyer-focused services SPs support the provision of qulity cncer cre through vriety of helth pln/pyer-focused oncology cre services, in ddition to their core services. A number of SPs coordinte drug tretment cross the medicl nd phrmcy benefits nd ssist helth plns with site-of-cre mngement of injectble/infusible cncer drugs. Monitoring key revisions to drug compendiums/ntionl guidelines ws offered by 75% of SPs in 2016 compred with 65% of SPs in the previous study period, primrily by independent SPs. oncore pln/pyer-focused services offered by SPs in 2016 (=28) Monitoring key revisions to drug compendiums/ ntionl guidelines Complince/persistence/dherence nd side-effect reporting Dt nlytics nd reports Coordintion cross medicl nd phrmcy benefits with respect to cncer drug mngement Delegted PA mngement Drug pipeline monitoring, reporting, nd cost projections Oncology specilist stff support Coordintion with MCO cse mngers Online reporting tools Therpeutic interchnge Automted UM tools using evidence-bsed cncer guidelines 29% 36% 46% 46% In ddition to core services, such s clims processing, contrcting, complince monitoring, 24/7 support nd delivery, nd cost/use reporting nd trending. 75% 71% 68% 64% 61% 57% 54% ew this survey, 18 SP respondents described how their orgniztion helps pyers coordinte drug mngement cross the medicl nd phrmcy benefits: Site-of-cre mngement Dt nlytics Recommend benefit crve-out Trnslte J-codes (submitted under medicl benefit) to DCs Find lowest member cost shre cross the benefits nd identify lternte therpies Bill drugs vi the phrmcy benefit to stremline billing nd reduce costs Coordinte between pyer PA, SP distribution, nd cre mnger needs Work with pyers nd reinsurers to cover costs of high-priced drugs Severl ntionl SPs described the services they provide to help helth plns ensure tht the highest-vlue site is being used. 42 How do you help helth plns mnge site of cre for oncology injectbles/ infusibles? Words in green typefce indicte glossry item. ptients who my be pproprite for home infusion, rech out to the provider nd ptient to explin the option, nd trnsition where pproprite. We cn route ptient to the lest costly site of cre, including specified infusion centers nd home-infusion services, if we re involved in the dispensing of infused products for tht client. We work with helth plns to identify MCO, mnged cre orgniztion; DC, tionl Drug Code; PA, prior uthoriztion; UM, utiliztion mngement. This is hndled on cse-by-cse bsis through vendor tht coordintes cre with the provider nd the home helth gency. Dt nlytics is the key for mnging site of cre nd directing ptients to the most cost-effective site of dministrtion.

45 SPECIALTY PHARMACIES Outcomes dt & phrmcogenomic support Outcomes dt regrding the oncology drugs tht re dispensed nd mnged re collected by 12 surveyed SPs, nd eight dditionl SPs pln to collect such dt beginning in SPs (10 ntionl nd two regionl) detiled the primry types of outcomes dt they routinely collect regrding their oncology ptients. Mediction discontinution rtes nd/or resons re collected by ll 12 SPs. Source of outcomes dt SP clims (n=12) 29% Types of outcomes dt collected by SPs Mediction discontinution rtes nd/or resons (n=12) 100% Ptient/ cregiver SP s clinicl phrmcist interventions Oncology prctice Pyer ursing home stff 3% 7% 11% 24% 26% Side-effect dt Mediction switch rtes nd/or resons Lbortory dt Adjunctive therpy needs Pin scores Qulity-of-life dt Phrmcoeconomic dt Response rtes Survivl dt 92% 83% 58% 50% 33% Remission rtes 25% These 12 SPs described how their orgniztion plns to grow/expnd its outcomes dt cpbilities: Add technology for reporting cpbilities Increse nd stndrdize the use of ptient-reported outcomes Expnd the number of drugs for which dt re collected Improve the qulity nd quntity of clinicl interrogtives sked by the clinicl phrmcists Collborte more with pyers nd oncologists to gin insight into ptient outcomes Prtner with n ACO in 2017 or 2018 Offer two-wy text messging nd enhnce reporting cpbilities Cpture more dt on side-effect issues nd trck the number of follow-up clls to monitor dherence nd therpy effectiveness Seven SPs (six ntionl nd one regionl) provide or pln to provide in 2017 phrmcogenomic support to mnged cre clients s prt of their oncology specilty support services; nother 11 SPs (five ntionl nd six regionl) re investigting this option. Phrmcogenomic support is provided primrily through enforcing cncer tretment guidelines nd/or pthwys tht require moleculr/biomrker testing. Additionlly, some SPs mnge the PA process for cncer drugs with compnion dignostic test. Ultimtely, the vlue of outcomes will be determined by how pplicble they re to rel life, how mesurble they re, nd how quntifible they re, so tht they my be ggregted nd exmined to improve ptient cre. 3 Words in green typefce indicte glossry item. ACO, ccountble cre orgniztion; PA, prior uthoriztion. 43

46 Contrcting strtegies SPs enter into contrctul rrngements with drug mnufcturers nd/or pyers for vriety of services. More thn one-hlf of the SPs tht re chnging their contrcting strtegies with drug mnufcturers nd/or pyers re employing more ggressive discounting on drug products. The 17 ntionl SPs reported on contrctul rrngements they hd with one or more drug mnufcturers for services in 2016, including the verge number of contrcts. erly ll of them forecst more contrcting for their services over the next 12 months. Few regionl plns hve entered into such contrctul rrngements in Contrctul rrngements mde by ntionl SPs with drug mnufcturers Service (n = 17) Administer complince/ dherence progrms Mnge ptient-services hub progrms for cncer drugs Increse mrket shre for preferred cncer drugs Contrct with drug mnufcturer(s) in % (n = 11) 59% (n = 10) 47% (n = 8) Men number of contrcts 15 (rnge, 3 42) 6 (rnge, 2 12) 4 (rnge, 1 7) The 11 ntionl SPs tht dminister complince/dherence nd persistence progrms for drug mnufcturers identified the types of compenstion they receive: Service fees Reimbursement purchse discounts Innovtive outcomes-bsed pyments Rebtes ew this survey, three of the ntionl SPs tht hve innovtive outcomes-bsed contrcts described similr outcomes mesures: Achievement of specific level of therpy per tretment (vries by drug nd mnufcturer) Ptient dherence nd persistence to therpy (eg, mediction possession rtio) Ptient completion of tretment Chnges in disese trjectory Mngement of side effects When 15 SPs expnded contrcts with drug mnufcturers nd/or pyers to include dditionl services, most often these involved dding reporting cpbilities. Other services include: customized brnd-type progrms, clinicl services for ptients, tretment pthwy dherence informtion, nd drug interchnges. 44 Words in green typefce indicte glossry item. indictes responses to new survey questions.

47 SPECIALTY PHARMACIES Chnges to drug contrcting strtegies with drug mnufcturers 24 SP respondents (15 ntionl nd nine regionl) noted chnges in their contrcting strtegy with drug mnufcturers. Overll, 54% of the 24 SPs employed more ggressive discounting on drug products. One-hlf of them expnded contrcts to include dditionl services. When considered by loction, the nine regionl SPs were more likely to employ more ggressive discounting on drug products thn the 15 ntionl SPs (67% vs 47%) nd to explore outcomes-bsed rebtes (56% vs 33%). Percentge of SPs chnging strtegies with drug mnufcturers (n = 24) Percentge of SPs chnging strtegies with pyers (n = 16) 54% More ggressive drug discounting 56% 50% Expnding contrcts to include dditionl services (eg, clinicl progrms, dt services) 25% 46% Expnding contrcts to therpeutic res not previously under contrct 31% 42% Exploring outcomes-bsed rebtes 6% 38% Including price-protection thresholds 38% 25% Including performnce gurntees 38% 8% Expnding contrcts in the infused mrket 31% Chnges to drug contrcting strtegies with pyers 16 SPs noted chnges in their contrcting strtegy with pyers within the pst 12 months regrding oncology products. Similr to contrcting strtegies with drug mnufcturers, more ggressive discounting on drug products ws the top strtegy employed with pyers, by 56% of the 16 SPs tht mde chnges. ew this survey, 10 SPs (seven ntionl nd three regionl) identified the performnce/ service metrics tht re gurnteed in the performnce contrcts they hve entered into with drug mnufcturers nd/or pyers. Performnce/service metrics gurnteed in performnce contrcts Ptient drug dherence Clim processing ccurcy Ptient intervention reporting/mesurement Time to process Dys on therpy Account mngement Cost mngement Drug wste mngement Prior uthoriztion follow-up Generic shre of ncillry/supportive drugs Percentge of drugs dispensed in defined mrket bsket (n=10) 80% 60% 40% 30% 20% indictes responses to new survey questions. 45

48 Physicin services SPs ssist oncologists in number of wys, including prior uthoriztion (PA) completion, ptient drug dherence monitoring, nd use of tretment guidelines nd pthwys. Some SPs re responsible for utiliztion mngement (UM) edits, PA, nd clims djudiction for drugs covered under the medicl benefit nd dministered by oncologists. SP services most frequently offered to oncologists nd their prctices in 2016 or plnned for 2017 Pyer PA completion support Feedbck/reports on ptient drug dherence Consulttions with oncologists bout ptients vi HIPAA-complint secure e-mil or texting Evidence-bsed tretment guidelines nd/or pthwys Clinicl in-services on SP progrms nd drugs Mobile technology pps In-person consulttion t oncologist prctices Admixture, storge, nd hndling (n=17) 35% 53% 47% 65% 59% 59% 82% 15 SPs (54%) provided consulttion, eduction, nd support services to prescribing oncologists in 2016, nd two pln to provide them in The top three services offered re the sme s the previous study period. 94% Seven SP respondents described physicin services they currently provide nd/or pln to provide in 2017 using mobile technology. Physicin services using mobile devices Expnded communictions vi mobile pp, including formulry reviews nd monogrphs for new drugs An pp to help providers choose the most effective ntibiotics Ptient complince nd drug history informtion with cse mngement involvement Secure texting nd electronic prior uthoriztion (epa) vi mobile pp Guidelines provided electroniclly Similr to the previous study period, more thn one-hlf of the 28 SPs reported hving responsibility for UM edits nd PA for ll or some oncology drugs under the medicl benefit, s well s for djudicting medicl clims for oncology drugs. SP responsibilities for UM edits, PAs, nd djudicting medicl clims under the medicl benefit in 2016 (=28) SPs responsible for UM edits nd PAs for drugs Oncology drugs Oncology drugs All 32% SPs responsible for djudicting medicl clims for drugs All 29% Some 32% Some 36% Totl 61% Totl 68% The 19 SPs responsible for UM edits nd PAs for ll or some cncer drugs covered under the medicl benefit indicted their bility to support epa with ny oncology prctice vi the tionl Council for Prescription Drug Progrms SCRIPT Stndrd. SP support of epa vi the SCRIPT Stndrd IT deprtment is working towrd this cpbility 42% ot currently, but plnned for % (n=19) o 16% Yes 21% Words in green typefce indicte glossry item. 46 Apps, pplictions; HIPAA, Helth Insurnce Portbility nd Accountbility Act; IT, informtion technology.

49 SPECIALTY PHARMACIES Ongoing chllenges Similr to the previous study period, SPs identified the control of cncer specilty drug costs s the gretest chllenge in cncer cre in They described pressures relted to helth cre reform nd their most effective cost control strtegies. Top three strtegies SP respondents reported s the most effective in grnering better cost control (=28) egotiting with mnufcturers for better pricing/rebtes Implementing split-fill/quntitylimits progrms to reduce wste Ptient finncil dvoccy 36% 50% 54% Implementing progrms to reduce wste is on of the top three strtegies to control costs, similr to the previous study period. However, SPs re more likely to negotite with mnufcturers for better pricing nd rebtes nd dvocte for ptients finncil needs in 2016 thn in From list of 14 cncer cre issues presented to them, the 28 SPs identified the top 5 most pressing chllenges fcing cncer cre in Control of cncer specilty drug costs 82% 2 Blncing tretment stndrdiztion 57% with personliztion b 3 Control of overll cncer cre costs 57% 4 Escltion in ptient OOP costs 57% 5 Effective cre coordintion nd 46% ptient nvigtion Refers to tretment guidelines nd pthwys. b Refers to moleculr/biomrker testing. SP respondents identified the most significnt impct of helth cre reform on their oncology cre business. Most often mentioned ws the expnsion of ptients with coverge nd the need to mnge them. Severl SP respondents noted tht due to high OOP costs nd the high cost of insurnce premiums, ptients re hving difficulty buying plns tht will help to cover the cost of cncer medictions. Other concerns mentioned include: The rising cost of medictions nd lower reimbursements, including high-cost drugs tht only extend life for short period with minimlly better outcomes Erlier dignosis of ptients, which results in greter length of time on tretment Trnsition of some oncology tretments by third prties from the medicl benefit to the phrmcy benefit Protected drug sttus within Medicre Prt D 340B Drug Pricing Progrm requirements nd contrct retil phrmcies Orl chemotherpy prity lws Hospitls shifting billing to higher contrcted rtes for services provided by hospitl-owned community prctices, even with no chnge in site of cre Centers for Medicre & Medicid Services Oncology Cre Model requirements Open-network requirements Protected drug sttus within Medicre Prt D Prt D sponsor formulries must include ll or substntilly ll drugs in the immunosuppressnt (for prophylxis of orgn trnsplnt rejection), ntidepressnt, ntipsychotic, nticonvulsnt, ntiretrovirl, nd ntineoplstic clsses 4 OOP, out-of-pocket. Definitions Orl chemotherpy prity lws Group or individul helth plns must provide coverge of prescribed, ptient-dministered medictions on prity with physicin-dministered chemotherpy; such lws hve been implemented in 42 sttes nd in the District of Columbi 5,6 With high OOP costs nd the high cost of insurnce premiums, ptients re hving difficulty buying plns tht will help to cover the cost of cncer medictions. Medictions re getting more expensive, while coverge hs decresed. 47

50 ew & innovtive service offerings by SPs SP respondents described new nd innovtive services tht their orgniztion offered to cncer ptients, helth plns, nd oncologists in 2016 or plns to introduce in SP respondents described new nd innovtive services for cncer ptients: Advnced complince specilty pckging Benefits investigtion for ptients, regrdless of the SP utilized Cse mngement referrls for behviorl helth nd cregiver ssistnce A complince/pill reminder pp Free online ccess to dietitin for nutritionl support Frequent nurse nd phrmcist follow-up to ssess drug tolernce, side-effect issues, nd complince Text messging during split-fills to monitor side effects nd complince Genomic testing support services Mediction-specific welcome pckets Drug counseling nd phrmcy collbortive cre plns vi Skype Secure two-wy text messging SP respondents described new nd innovtive services for helth plns: Direct collbortion with physicins for timing of refills to ensure mediction continution t sme dose/schedule Improved nlytics with the ddition of the provider perspective Risk-shre greement to provide n ROI of $2 for every $1 invested in comprehensive MTM progrm A dt nlytics progrm customized for the SP s pln prtners Advnced pipeline monitoring to include the PMPM impct of expected new drug lunches Continued expnsion of site-of-cre strtegies Expnded UM to include cre pln interventions Expnsion of comprehensive MTM to lrge locl employers Specific MTM progrms for medictions with low dherence nd/or high side effects Use of tools to report on dherence nd cost svings SP respondents described new nd innovtive services for oncologists: An Investigtionl Drug Service Dedicted phrmcy finncil counselors responsible for ll PAs, ppels, nd free drug/grnt pplictions for providers/cse mngers Integrtion of SP documenttion into the EHR Support for guidelines, especilly on new products nd new indictions A comprison of ntionwide tretment vrition within line of cncer tretment A provider portl tht gives insights into order sttus nd complince nd persistency rtes 48 Words in green typefce indicte glossry item. A progrm tht gurntees notifiction to physicin offices within 2 hours whether their referred ptients cn be dmitted pending insurnce qulifictions or re triged to nother phrmcy Complete dt regrding cost nd dherence to orl drugs compred with infusion lterntives Genomic testing reminders Incorportion with the Oncology Cre Model pyment structure Physicin office stff eduction for closed-system drug trnsfer devices nd the USP <800> stndrd for hndling hzrdous drugs App, ppliction; EHR, electronic helth record; MTM, mediction therpy mngement; PAs, prior uthoriztions; PMPM, per-member-per-month; ROI, return on investment; UM, utiliztion mngement; USP, US Phrmcopei.

51 =202 Oncologists 50 Oncologist demogrphics & prctice environment 51 Oncologist personl worklod 52 Workweek & ptient volume 53 Prctice stffing 54 Screening for distress & finncil hrdship 56 Survivorship 57 Prehbilittion & pllitive cre 58 Precision medicine 59 Surrogte endpoints & outcomes 60 Cncer tretment guidelines & pthwys 62 Prescribing trends & tretment restrictions 63 Prctice opertions & reorgniztion 64 Income & lterntive pyment models 66 Prctice-bsed infusion therpy 67 Specilty phrmcy & in-prctice drug dispensing 68 Prctice utomtion HIGHLIGHTS 49% of surveyed oncologists experienced personl worklod growth in 2016; higher service intensity for more ptients remins the leding worklod driver (p. 51) 37% of oncologists sw higher ptient volume in 2016; on verge, oncologists worked 54 hours weekly, sw ptients during 4 clinic dys weekly, nd worked 47 weeks in 2016 (p. 52) 70% of oncologists employ APPs; 37% reported higher level of independent functioning by APPs in 2016; t lest 40% of oncologists ttributed improvements in the qulity of ptient encounters, their job stisfction, nd ptient stisfction to tsks delegted to APPs (p. 53) Distress screening of ll/some ptients routinely or when suspected is performed by 87% of oncologists, most often t the time of cncer dignosis (p. 54) 61% of oncologists rted finncil hrdship s very to extremely significnt negtive influence on drug dherence, nd 48% reported OOP cost escltion to be mong the 5 most pressing chllenges to cncer cre (p. 55) 45% of oncologists provide some level of survivorship progrm cre to ll ptients; number strtify ptients by criteri to focus on subsets of survivors (p. 56) Prehbilittion ssessments re conducted in-prctice nd/ or vi referrl by 53% of oncologists nd most often result in nutrition counseling nd physicl therpy (p. 57) 179 oncologists (89%) discuss pllitive cre with ll/some ptients during tretment plnning, nd 27% of them only discuss it with dvnced cncer ptients who re closer to the end of life (p. 57) 55% of oncologists order severl moleculr dignostic tests simultneously per order logistics nd pyer coverge; reflex testing is ordered for specific cncer types (48%) or on cse-by-cse bsis (32%) (p. 58) 42% of oncologists use both tretment guidelines nd pthwys, 6% use only guidelines, nd 3% use only pthwys; following guidelines nd/or pthwys continues to be lrgely voluntry (p. 60) Oncologists re most divided bout the possibility of creting single or ntionl pthwy for ech cncer/stge tht ll pyers cn dopt nd one tht is ble to ddress the full rnge of circumstnces encountered mong their ptient popultions (p. 61) Oncologists noted incresed peer-to-peer tretment pln reviews with pyers regrding second- nd third-line dvnced cncer tretments (36%) nd off-pthwy regimens bsed on moleculr testing (37%) (p. 62) 128 oncologists nticipte dding/reducing services or opertions to improve their prctice s finncil performnce within the next 2 to 3 yers. Mjor drivers for this chnge: improve competitive position (74%), bility to ttrct/recruit tlent (60%), nd nrrowing of provider networks (57%) (p. 63) About 30% of oncologists ttributed smll shre of prctice revenue collected in 2015 to APMs, such s bundled pyments or globl pyments (p. 65) 79% of oncologists rted the lck of coordintion of orl nd infused drug regimens due to different ccess chnnels s modertely to extremely significnt negtive influence on ptient dherence (p. 67) 173 oncologists (86%) work with EHRs; bout one-hlf re oncology-specific, nd 62% offer ccess vi ptient portl. Leding unmet EHR needs include customiztion, oncology specificity, nd integrted tretment guidelines nd pthwys (p. 68) APMs, lterntive pyment models; APPs, dvnced prctice providers; EHRs, electronic helth records; OOP, out-of-pocket. 49

52 Oncologist demogrphics & prctice environment 202 oncologists from cross the United Sttes completed n online survey fielded from lte July to erly September To prticipte in the reserch, respondents hd to be prcticing oncologists who spend 1 or more dys per week on prctice-bsed ptient cre. The respondents described the stte of their prctices in 2015 nd 2016, nd forecst their expecttions for 2017 nd beyond. Oncologist ge by prctice setting 27% 37% 36% 45% 42% 13% 45% 35% 20% 44 yers yers 55 yers old Most respondents described their primry specilty s hemtology/oncology (55%) or medicl oncology (38%). Three-fourths of the 202 oncologists re younger thn 55 yers of ge, similr to the 2015 smple. Communitybsed, privte (n=86) Hospitlbsed (n=60) Acdemic/ medicl center-bsed b (n=56) Includes hospitl-integrted, privte nd hospitl-owned, noncdemic prctices. b Includes privte nd institution-owned prctices. More oncologists tret cncer ptients in hospitl-bsed (ie, noncdemic) prctices (30%) compred with the previous smple (24%). The lrgest prctice in the 2016 smple is n institution-owned, cdemic/medicl center-bsed prctice with 300 oncologists treting ptients cross 10 sites. Oncologists tret ptients in the following regions West 22% Midwest 23% (=202) South 32% orthest 23% 2016 smple by prctice setting nd select demogrphics Prctice setting Community-bsed, privte (n = 86) Percentge of smple Men number of sites (rnge) Men number of oncologists per prctice (rnge) 42% 3 (1 16) 10 (1 125) Solo (n = 7) 3% 1 1 Single oncology-specilty group (n = 43) Multi oncology-specilty group (n = 36) 21% % 4 13 Hospitl-bsed (n = 60) 30% 3 (1 35) 9 (1 55) Hospitl-owned, noncdemic (n = 17) Hospitl-integrted, privte (n = 43) Acdemic/medicl center-bsed (n = 56) 9% % % 4 (1 15) 32 (2 300) Physicin-owned (n = 9) 5% 3 22 Hospitl/institution-owned (n = 47) 23% % of the community-bsed respondents & 53% of the hospitl-bsed respondents work in prctice settings with 5 or fewer oncologists 55% of the cdemic/medicl center-bsed respondents work in prctices with more thn 12 oncologists Words in green typefce indicte glossry item. 50

53 OCOLOGISTS Oncologist personl worklod One-hlf of oncologists reported worklod growth over the lst yer. More ptients requiring higher levels of service intensity remins the leding worklod driver for oncologists, regrdless of prctice setting. Additionlly, reimbursement issues/ptient finncil dvoccy services, referrls, stff retirement, nd clinicl tril prticiption drive the worklod of oncologists in prticulr settings. 113 oncologists (56% overll) reported worklod chnges over the pst 12 months. erly one-hlf of the surveyed oncologists (49%) experienced n increse in worklod, while only 7% sw decrese in worklod in When nlyzed by prctice setting, t lest 40% of the surveyed oncologists in ech setting reported greter worklod (37 community-bsed, privte; 35 hospitlbsed; nd 26 cdemic/medicl center-bsed). Chnges in personl worklod: 5-yer trend 60% 55% 57% 48% 40% 36% 35% 31% 13% 9% 10% 8% 49% 44% 7% Incresed o chnge Decresed 2012 (=159) 2013 (=200) 2014 (=200) 2015 (=205) 2016 (=202) Oncology Trend Report study yer Requirements to meet ptient volume trgets fuel worklod for oncologists in hospitl-bsed prctices 27% & cdemic/medicl center-bsed prctices 20% Higher service intensity for more ptients remins the leding driver of worklod for oncologists, regrdless of prctice setting. Additionlly, community-bsed oncologists re more likely to identify the demnds of ptient finncil dvoccy, while cdemic/ medicl center-bsed oncologists cited growing referrls nd clinicl trils prticiption. Mjor worklod drivers cross ll prctice settings Mjor worklod drivers by prctice setting More ptients requiring higher service intensity Cre coordintion with collegues Ptient communictions bout cre Qulity progrm reporting requirements b Keeping up with emerging science nd new gents (n= 113) Includes e-mils, text messging, telephone. 22% 22% 21% 20% 34% Community-bsed, privte (n = 46) 35% Reimbursement issues & finncil dvoccy for ptients Hospitl-bsed (n = 37) 30% Incresed mrket competition 27% More referrls to the hospitl Acdemic/medicl center-bsed (n = 30) 53% Incresed clinicl trils prticiption 23% More referrls to the hospitl; Stff loss/retirement of clinicins b Includes EHR meningful use. indictes responses to new survey questions. EHR, electronic helth record. 51

54 Workweek & ptient volume Weekly hours nd clinic dys nd weeks per yer worked Men hours worked per week 2016 Men clinic dys per week 2016 Men weeks per yer 2016 OVERALL ( = 202) Prctice setting Community-bsed, privte (n = 86) Hospitl-bsed (n = 60) Acdemic/medicl centerbsed (n = 56) Weekly hours nd clinic dys nd weeks per yer worked: 2016 compred with 2015 (=202) Weekly hours Clinic dys per week More Sme Less 30% 62% 8% 7% 88% 5% Weeks per yer 12% 74% 14% 55% of oncologists forecst stedy ptient volume by yer-end 2016 compred with 2015, while 37% forecst growth. Oncologists estimted the number of ptients they personlly sw during typicl week in 2016 s follows: community-bsed, privte (106 ptients); hospitl-bsed (92 ptients); nd cdemic/medicl center-bsed (55 ptients). Averge number of ptients seen in-prctice in typicl week in 2016 Men new ptients Men estblished ptients Men survivorship cre ptients OVERALL ( = 202) Prctice setting Community-bsed, privte (n = 86) Hospitl-bsed (n = 60) Acdemic/medicl center-bsed (n = 56) Ptients seen in typicl week: 2016 compred with % More Sme 55% Less 8% Overll, 32% of oncologists see less-thn-idel new ptient volume, often ttributed to lck of referrls nd, new this survey, due to medicl record demnds nd lck of n overll growth strtegy to scle up services. Averge time spent by oncologists during typicl week by prctice setting Ptient cre continues to consume the mjority of typicl week for the surveyed oncologists cross ll settings. Time spent on clinicl trils is highest mong the cdemic/ medicl center-bsed oncologists. Community-bsed, privte (n = 86) Hospitl-bsed (n = 60) Acdemic/medicl center-bsed (n = 56) Ptient cre 86% 81% 71% Ptient communictions nd cre documenttion b 7% 10% 7% Prctice dministrtion c 3% 3% 2% Teching nd other ctivities d 2% 4% 7% Reserch e 2% 2% 13% Includes new ptient visits/consults, estblished ptient visits, survivorship progrm visits, in-hospitl cre, nd in-prctice procedures nd infusions. b Includes electronic helth record updting/mintennce nd ptient telephone trige nd e-mils. c Includes dministrtion, finnces, improvements, nd qulity nd performnce reporting. d Includes teching, tumor bord prticiption, hospitl committee prticiption, nd other ctivities. e Includes clinicl trils nd lbortory reserch. 52

55 OCOLOGISTS Prctice stffing The oncologist workforce remins stble in the fce of growing demnd for services driven prtly by n ging popultion nd rising numbers of cncer survivors. 1 Mny prctices employ dvnced prctice providers (APPs), nd some oncologists encourge more independent ssistnce from their APPs. Employment of APPs overll nd by prctice setting Yes o Plnned for 2017 Employ 5% APPs Community-bsed, privte (n = 86) 62% 25% 70% Hospitl-bsed (n = 60) 63% Acdemic/medicl center-bsed (n =56) 89% Oncology experience level of n APP upon hire (n =141) one 29% Little/some 55% Experienced 55% Certified in oncology nursing 28% Overll (=202) Includes nurse prctitioners nd/or physicin ssistnts. The prctice provides oncology trining. ew this survey, 43% of the 141 oncologists with APPs predict higher rtio of APPs per oncologist deployed in 5 yers compred with current prctice levels. Rtio of APPs per oncologist 63% 36% Currently 22% 35% Defined s full-time APP per full-time oncologist. Forecst in 5 yers 15% < APP per oncologist (n=141) 29% 30% of oncologists, overll, cross ll prctice settings, experience difficulty recruiting or retining oncologists nd/or APPs to their prctices. The top five responsibilities fulfilled by APPs in the 141 oncologists prctices were identified s follows: estblished ptient in-prctice visits (48%), ptient eduction (45%), low-mintennce ptients (40%), sick nd urgent-cre ptient visits (32%), nd ptient telephone trige (28%). ew this survey, 19% of oncologists rely on their APPs to discuss wellness issues (eg, exercise, nutrition, stress reduction) with their ptients. Performnce improvements over lst yer due to APP deployment Overll Slightly Significntly improvement greter greter Oncologists overll productivity Prctice-level totl ptient volume Prctice-level qulity of cre (n = 141) 58% 43% 15% 52% 40% 12% 47% 33% 14% More oncologists reported higher level of independent functioning by APPs under their supervision over the lst yer (37% in 2016 compred with 30% in 2015). As result of tsk delegtion, the lrgest numbers of oncologists ssisted by APPs reported improved performnce mesures. At lest 40% of oncologists reported improvements in the qulity of ptient encounters their job stisfction nd ptient stisfction with the prctice Oncologists bility to see more new ptients 42% 31% 11% over the lst yer, s result of tsks delegted to APPs. Words in green typefce indicte glossry item. indictes responses to new survey questions. 53

56 Screening for distress & finncil hrdship Rtes of psychologicl distress mong ptients vries by cncer site. Filure to identify nd tret high-risk ptients for elevted distress levels cn negtively ffect ptients tretment outcomes, qulity of life, nd helth cre costs. 2 Most surveyed oncologists (87%, n = 175) reported routinely screening ll or some of their cncer ptients for signs of distress nd evidence of behviorl/psychosocil issues or only when distress is suspected. Distress screening t time of cncer dignosis ws reported most often by 71% of these 175 oncologists. Cncer ptient distress screening Predetermined points of cre nd/or triggers for distress screening (=202) (n=175) All ptients routinely b 37% At time of cncer dignosis 71% Some ptients routinely b,c 20% At ptient request 51% Only when suspect/observe signs of distress 30% After discussion of tretment pln 50% o screening ot currently, but developing process, tools, nd stff trining 2% 11% At fmily/cregiver request At tretment trnsition points 42% 37% Includes depression, sleep disturbnce, cognitive dysfunction/ chemo brin, nd/or spiritul issues. b At predetermined points of cre. c Includes ptients with dvnced cncer, with certin cncers, or undergoing noncurtive tretment. ew this survey, these 175 oncologists reported tht screening for distress most often results in discussion of tretment gols (69%), dditionl ptient eduction (57%), nd/or tretment pln modifiction (50%). When suspected by infusion nurse After chemotherpy chnges At trnsition from ctive tretment to survivorship cre Bsed on APP/nurse telephone trige When suspected by cre nvigtor During survivorship cre Per ptient communiction vi portl or ptient-reported outcomes 34% 33% 26% 26% 24% 23% 22% Distress screening results in dditionl services vi referrls to : (n = 175) 43% Psychologist Socil worker 41% After ED visit nd/or hospitl dmission When suspected by finncil counselor Bsed on knowledge of trnsporttion issues Triggered by pyer-contrcted qulity inititive 4% 21% 19% 17% Such s surgery, rdition, chemotherpy, nd pllitive cre. 39% Cre nvigtor Finncil counselor 33% 17% Clinicl oncology phrmcist Rehbilittion specilist 16% 54 Words in green typefce indicte glossry item. APP, dvnced prctice provider; ED, emergency deprtment. indictes responses to new survey questions.

57 OCOLOGISTS Overll, 62 oncologists (22 community-bsed, 20 hospitl-bsed, nd 20 cdemic/medicl center-bsed) hve not undertken specific inititives to identify nd screen their ptients for finncil hrdship. A few oncologists (12%) include finncil hrdship mesures in their distressscreening tools. How stff members screen ptients t risk for finncil hrdship o specific inititives Finncil counselors meet with ll ptients t tretment initition Trin stff to refer ptients to finncil counselors when hrdship is suspected Specific high-cost tretments trigger ptient discussion Finncil counselors hve developed screening questions b Trget ptients with high-deductible helth plns for screening Discussing how best to incorporte into workflow (=202) 12% 16% 15% 14% 17% 26% 31% Such s immunotherpy. b Such s shre of household income ttributed to helth-relted spending. Oncologists rted the significnce of fctors tht cn negtively impct drug dherence or persistence Very to extremely significnt fctor (=202) 70% Adverse events/ tolerbility 61% Cost of tretment/ finncil hrdship Feelings of distress, being overwhelmed, denil. 56% 54% 53% 53% Poor helth litercy Lck of enggement due to medicl nd/or psychosocil issues Complex regimen/ tretment frequency Lck of fmily/ cregiver support 47% Lck of understnding of medicl/ phrmcy benefits 61% of oncologists rted finncil hrdship s very to extremely significnt fctor tht negtively influences drug dherence. erly one-hlf of the 202 oncologists believe escltion in ptient OOP costs to be mong the mjor chllenges fcing cncer cre in Some oncologists trget ptients with high-deductible helth plns: 14% nondherence to medictions: 11% qulity-of-life issues: 9% dvnced disese: 7% for discussions bout finncil hrdship. From list of 14 cncer cre issues presented to them, the 202 oncologists identified the top 5 most pressing chllenges fcing cncer cre in Control of overll cncer cre costs 63% 2 Control of cncer specilty drug costs 57% 3 Effective cncer therpies 57% 4 Escltion in ptient OOP costs 48% 5 Access to cncer cre 37% Words in green typefce indicte glossry item. OOP, out-of-pocket. indictes responses to new survey questions. 55

58 Survivorship Cncer survivorship refers to the brod rnge of experiences of n individul who hs lived with, through, nd beyond cncer dignosis. 3 These experiences include helth nd psychosocil issues relted to ctive, lte, nd long-term tretment effects. ot ll prctices provide survivorship progrm cre to ll their ptients. A number of oncologists strtify their ptients by criteri to enble the oncologists to focus on subsets of survivors; others re rethinking their strtegy in light of the demnd for such cre. As of Jnury 1, 2016, there re n estimted 15.5 million cncer survivors in the United Sttes. The mjority (67%) hve survived 5 yers or more fter dignosis; 44% hve survived 10 yers or more; nd 17% hve survived 20 yers or more. 4 More oncologists (40% in 2016 compred with 34% in 2015) reported n increse in ptients undergoing survivorship progrm cre over the lst yer, which ws described s slight (25%), moderte (10%), or significnt (5%). An individul is considered cncer survivor from the time of cncer dignosis through the blnce of his or her life, ccording to the CI Office of Cncer Survivorship. 5 Prctices pproches to survivorship progrm cre ( = 202) Provide ll ptients some level of posttretment cre 45% Strtify ptients into curtive vs metsttic intent; lrgely focus cre on posttretment curtive ptients 30% Currently rethinking survivorship cre strtegy 13% Strtify ptients into low, intermedite, nd high risk for long-term nd lte effects or recurrence; lrgely focus on intermedite- nd high-risk ptients, nd comnge low-risk ptients with primry cre Regrdless of long-term helth/recurrence risk or tretment intent. 12% At lest 50% of the oncologists in ech setting identified their prctice s primrily responsible for providing survivorship progrm cre. ( = 202) Oncology prctice 55% Oncology prctice in coordintion with primry cre 21% Clinicin ppointed t the hospitl tht the prctice is integrted with/owned by 10% Survivorship clinic of the hospitl tht the prctice is integrted with/owned by 8% Primry cre prctice tht cres for the ptient 6% Refers to physicin, APP, or cre nvigtor. Among the 110 oncologists whose prctice is primrily responsible for providing survivorship cre, 55%, overll, provide ll (28%) or some (27%) of their cncer ptients with written or printed SCP. SCPs re phsed-in requirement for certifiction of cncer center progrms by the Commission on Cncer. Provision of written/printed SCP by prctice setting Community-bsed, privte (n=48) Hospitl-bsed (n=30) Acdemic/medicl center-bsed (n=32) By Jnury 2016, SCPs must be provided to 25% of eligible ptients nd expnded nnully until Jnury 2019, when ll eligible ptients must receive them. 6 All ptients Some ptients Pilot progrm under wy o Plnned for % 27% 6% 25% 13% 23% 30% 4% 30% 13% 44% 25% 6% 22% 3% 56 Words in green typefce indicte glossry item. indictes responses to new survey questions. APP, dvnced prctice provider; CI, tionl Cncer Institute; SCPs, survivorship cre plns.

59 OCOLOGISTS Prehbilittion & pllitive cre Interventions bsed upon prehbilittion nd pllitive cre ssessments my ese symptom burden nd improve ptient s bility to function during tretment nd support survivl with good qulity of life. 7,8 Overll, 53% of the surveyed oncologists conduct prehbilittion ssessments in-prctice (n = 88) nd/or vi referrl (n = 19). ew this survey, mong the 88 prctices providing in-prctice ssessments, the need for prehbilittion is most often ssessed by trined nurse Prehbilittion ssessments Refer to licensed rehbilittion center for ssessment 3% Refer to hospitl for ssessment 7% Do not ssess 41% ot currently, but plnned for % (=202) All new ptients routinely 20% Some new ptients 23% Such s ptients with dvnced cncer, certin cncers, or those undergoing surgery. nvigtor (34%), the oncologist (31%), nd/or n APP (22%). Few of them hve cncer rehbilittion specilist or physicl therpist on stff. As prt of tretment plnning nd gol setting, 89% (n = 179) of the surveyed oncologists discuss pllitive cre with ll or some of their ptients, similr to the previous study period. More oncologists (33% in 2016 compred with 18% in 2015) routinely discuss pllitive cre with ll ptients. Follow-up interventions resulting from prehbilittion ssessments utrition counseling Physicl therpy Behviorl/mentl helth counseling Smoking-cesstion progrm enrollment Exercise/strength conditioning Occuptionl therpy Speech therpy Medittion/yog/guided imgery trining Respirtory therpy (n=107) 25% 22% 21% 47% 44% 39% 36% Timing of pllitive cre consult fter dvnced-stge dignosis 62% 61% Pllitive cre discussions Closer to end of life (n=172) 24% 33% Discuss routinely, with ll cncer ptients At trnsition from ctive tretment to pllition 19% 26% Discuss with only dvnced cncer ptients regrdless of life expectncy 4% Discuss only fter development of tretment symptoms, side effects, nd/or emotionl issues (n=179) 27% Discuss with only dvnced cncer ptients with short life expectncy 10% Discuss only with ptients with ctive disese symptoms in need of tretment nd monitoring When symptomtic complictions develop Immeditely When there re no other therpeutic options Within first month fter dignosis After first-line therpy filure Prior to first tretment 6% 6% 5% 11% 10% 18% One-hlf of the oncologists refer their ptients to the pllitive cre clinic in the hospitl they re ffilited with/owned by (31%) nd/or home helth service tht hs n integrted pllitive cre progrm (22%). More thn one-fourth of oncologists (26%, n = 53) overll (17 community-bsed, privte; 10 hospitl-bsed; nd 26 cdemic/medicl center-bsed) work in prctices tht employ physicins who re bord-certified in pllitive cre; dditionlly, 14% of the prctices pln to hire one in A number of prctices lso employed n APP (24%) nd/or n oncology phrmcist (10%) certified in pllitive cre in Words in green typefce indicte glossry item. APP, dvnced prctice provider. indictes responses to new survey questions. 57

60 Precision medicine Emerging science describes cncers s diseses of the humn genome tht my require dvnced testing methods to identify the precise bnorml gene vritions tht contribute to tumor development nd ptient s response to vrious tretments. 9 At lest 60% of oncologists feel moleculr/biomrker testing nd next-genertion sequencing (GS) hve moderte to significnt impct on ptient outcomes when used to identify: ( = 202) Muttions for prognosis & tretment plnning Muttions fter tretment filure Trgeted tretments Fmilil risk 65% 64% 63% 76% Most oncologists frequently (58%) or lwys (24%) discuss moleculr testing with their ptients. GS-bsed testing hs been ordered for 10% or fewer ptients with dvnced cncer, s estimted by 65% of oncologists. This is similr to the percentge of cncer ptients undergoing genetic counseling. About one-hlf of the oncologists order severl tests t time for cncer cses involving multiple muttions. The number of moleculr dignostic tests ordered is most often influenced by the logistics of test ordering nd pyer coverge. How moleculr dignostic testing is ordered (=202) 12% One test t time 55% Some/severl tests t first 26% All tests t once According to GS pltforms nd/or pthology deprtment policy. 1% 6% Other Unsure ( = 202) Fctors tht drive moleculr dignostic test ordering Order logistics Pyer coverge Ptient out-of-pocket costs Prctice policy Clinicl fctors, vilble tissue mount, pthology policy 45% 26% 18% 9% 2% Oncologists often order relevnt reflex tests to clrify initil test results. The lrgest shre of oncologists cross the different prctice settings hve policies regrding reflex testing for specific cncer types. Prctice policy on reflex testing Stisfction with testing turnround time Unsure 7% Testing policy under development 5% Cse-by-cse bsis 32% All ptients, regrdless of cncer type 8% Disstisfied 14% Stisfied 38% Frequency of tretment delys while witing test results Frequently/lwys 21% Ptients with specific eutrl Occsionlly cncer types 48% 48% 57% (=202) (=202) (=202) ever/rrely 22% 58 Words in green typefce indicte glossry item. indictes responses to new survey questions.

61 OCOLOGISTS Surrogte endpoints & outcomes Overll survivl (OS) hs long been considered the gold stndrd in cncer drug clinicl trils, but is incresingly replced by surrogte endpoints, such s progression-free survivl (PFS), time to progression (TTP), objective response rte (ORR), nd emerging surrogtes, such s immune-relted response criteri (irrc) nd miniml residul disese (MRD). 10 Oncologists communicted their level of greement with sttements regrding these endpoints nd the Response Evlution Criteri in Solid Tumors (RECIST). They lso described their rediness to evlute trditionl nd emerging surrogte endpoints. Most oncologists (81%) strongly gree or gree tht n improved understnding of cncer requires new tools nd types of evidence in oncology drug reserch, such s biomrkers nd surrogte endpoints. However, 36% re undecided nd 21% strongly disgree or disgree tht drug developers understnd the evidence pyers need for reimbursement decisions regrding new cncer drugs. Do you gree with the following sttements regrding evidence in cncer clinicl trils nd the use of surrogte endpoints? Improved understnding of cncer requires new tools nd evidence in drug reserch, such s biomrkers nd surrogte endpoints Potentilly beneficil cncer drugs should be brought to mrket quickly, nd this often requires surrogte endpoints (eg, PFS, TTP, ORR) in regultory nd pyer decisions Cncer is too complex for one-size-fits-ll, gold stndrd endpoint. Together, pyers & phrm should design studies to meet evidentiry needs for mrket pprovl nd reimbursement ew metrics beyond RECIST re needed for clinicl, regultory, nd reimbursement decision mking regrding new trgeted drugs, ntingiogenics, nd immunotherpy in light of their unique progression kinetics OS is incresingly difficult to show, s therpies grow in number/complexity, ptients live longer, nd trils excluding crossover from control to experimentl rms re difficult to justify/recruit Emerging endpoints, such s irrc nd MRD, require further testing/vlidtion before they cn ct s true surrogtes for survivl Stndrd surrogte endpoints, like PFS, re pproprite for pyer decisions, if vlidted s n OS substitute, prticulrly for novel drug studies in smller, moleculrly trgeted popultions A vlue-bsed system of drug reimbursement is needed tht recognizes tht cncer drug my give different levels of benefit depending on cncer, stge, nd line of tretment Emerging endpoints, such s irrc nd MRD, re pproprite surrogtes for OS in relevnt cncer types Drug developers understnd the evidence pyers need for reimbursement decisions regrding new cncer drugs Strongly gree/gree Undecided Strongly disgree/ disgree 81% 14% 5% 80% 11% 9% 78% 15% 7% 73% 21% 6% 70% 18% 12% 66% 24% 10% 66% 24% 10% 64% 26% 10% 57% 30% 13% 43% 36% 21% How do you describe your comfort/rediness to evlute these trditionl nd emerging surrogte endpoints? Redy Progression-free survivl Time to progression Objective response rte Miniml residul disese Immune-relted response criteri Somewht redy ot redy Solicit outside expertise Unsure 74% 20% 3% 2% 1% 68% 21% 7% 2% 2% 62% 25% 9% 2% 2% 35% 38% 18% 4% 5% 27% 38% 23% 6% 6% Words in green typefce indicte glossry item. indictes responses to new survey questions. 59

62 Cncer tretment guidelines & pthwys Tretment plnning is often guided by cncer tretment guidelines nd cncer tretment pthwys. Following them continues to be lrgely voluntry nd is encourged by prctices nd pyers. Overll, 53% (n = 107) of the surveyed oncologists used cncer tretment guidelines, nd 45% (n = 91) used cncer tretment pthwys in Additionlly, 18% (n=37) pln to use guidelines nd/or pthwys in Oncologists use of cncer tretment guidelines nd/or pthwys either guidelines nor pthwys 31% Both guidelines nd pthwys 42% Only guidelines 6% Only 1% Only guidelines pthwys 3% Only pthwys 3% (=202) ot currently, but plnned for % (n=37) 9% Both guidelines nd pthwys 5% Add pthwys to current guideline use Source of guidelines (n = 107) CC Clinicl Prctice Guidelines in Oncology (CC Guidelines ) 62% Internlly developed 29% ASCO Clinicl Prctice Guidelines 28% Source of pthwys (n = 91) Internlly developed 44% Vlue Pthwys powered by CC 35% Hospitl/cncer center 19% Following guidelines nd pthwys is lrgely voluntry nd is encourged by pyers nd prctices, similr to the previous study period. Few oncologists reported required use of guidelines (n = 16) nd/or pthwys (n = 14) by their prctices or pyers. The number of oncologists cross prctice settings who hve contrcts with pyers tying their reimbursement to following specific guidelines (31% overll; n = 33) nd/or pthwys (36% overll; n = 33) remins smll, similr to the previous study period. 44% of oncologists using guidelines & 34% of oncologists using pthwys indicted no enforcement of dherence to them by their prctice nd/or pyer. Studies under wy to mesure impct of guidelines nd pthwys on qulity nd cost of cncer cre Qulity of cre Guidelines (n=107) Pthwys (n=91) Cost of cre Guidelines (n=107) Pthwys (n=91) Yes o ot currently, but plnned for 2017 Unsure 37% 34% 17% 12% 42% 30% 17% 11% 38% 33% 15% 14% 44% 26% 16% 14% Approximtely one-hlf of the 107 oncologists following cncer tretment guidelines nd bout 60% of the 91 oncologists following cncer tretment pthwys hve studies under wy or plnned for in 2017 to mesure the impct of guidelines nd pthwys on qulity nd cost of ptient cre. Words in green typefce indicte glossry item. 60 ASCO, Americn Society of Clinicl Oncology; CC, tionl Comprehensive Cncer etwork.

63 OCOLOGISTS Enforcement of tretment guidelines nd/or pthwys includes: Individul or group pyment tied to complince Incentives oncologists (n = 33) receive from pyers to encourge guideline nd/or pthwy use include: Individul or group bonus pyments Improved drug nd E&M reimbursement Complince reports shred with peers Discussions during tumor bords Shre of cost svings Per-ptient monthly fee Reduced PA requirements/ fster PA processing Consensus mong oncologists bout tretment pthwys ws highest regrding timely updting (72%) nd provider compenstion for pthwy progrm prticiption (64%). Oncologists opinions re most evenly split regrding the possibility for comprehensive pthwy to ddress the full rnge of circumstnces encountered mong their ptient popultions. Do you gree with the following sttements relted to cncer tretment pthwys? Strongly gree/gree Undecided Strongly disgree/disgree Pthwys should be updted in timely mnner to reflect the ltest science nd insights from clinicl experience nd PROs Oncologists should not need finncil incentives to mke evidence-bsed tretment decisions, but should be pid fee to prticipte in the pthwy process On-pthwy tretment selection should be considered utomticlly uthorized, thereby eliminting the PA dministrtive burden Oncologists should communicte to ptients their prticiption in clinicl pthwys nd discuss the choice of on-pthwy options nd off-pthwy lterntives supported by guidelines All pthwys should be held to uniformly high levels of comprehensiveness in order to reduce cre vrition cross the cre continuum b nd ddress emerging moleculr dignostics/genomics Pthwys should be integrted into the EHR for individul ptient cre 72% 21% 7% 64% 25% 11% 64% 26% 10% 64% 27% 9% 62% 25% 13% 61% 29% 10% The gol of clinicl pthwys should be to blnce clinicl vlue with cost 57% 26% 17% Pyers, providers, ptients/ptient dvoctes, nd/or pthwy vendors should collborte to develop stndrds nd pthwy certifiction process 55% 35% 10% Pthwys re here to sty nd re n integrl tool for lterntive pyment models c 53% 34% 13% The bility to reduce cre vrition nd increse clinicl efficiency in order to optimize cre is undermined by pthwy prolifertion d It should be possible to crete single or ntionl pthwy for ech type of cncer/stge, which ll pyers cn dopt It is possible for comprehensive pthwy to ddress the full rnge of clinicl circumstnces, comorbidities, nd therpeutic gols encountered by clinicins 50% 41% 9% 43% 26% 31% 38% 31% 31% As compenstion for dt input, reporting, nd outcomes mesures. b From erly cncer detection to survivorship or end of life. c Such s bundled pyments. d Including pyer-, cdemic-, nd/or vendor-developed. indictes responses to new survey questions. EHR, electronic helth record; E&M, evlution nd mngement; PA, prior uthoriztion; PROs, ptient-reported outcomes. 61

64 Prescribing trends & tretment restrictions Tretment plnning is influenced by restrictions imposed by the cncer ptient s helth cre insurer. These restrictions often cll for precertifiction or PA of tretment bsed upon dignosis nd my require certin tests nd/or identify specific sites of cre/service. Oncologist-reported chnge in pyer restrictions to oncology tretment decisions in the lst 12 months Leding pyer restrictions frequently encountered by oncologists ( = 202) Incresed o chnge Decresed % 4% 43% Increse 6% Significnt 11% Moderte 26% Slight PA/precertifiction dependent on ptient dignosis 41% PA/precertifiction dependent upon pthology, tumor typing, or genomic mrker testing 38% o coverge of FDA off-lbel drug use not supported by compendiums/ guidelines 34% Mndtory use of specilty phrmcy 34% (=202) Occsionlly, 46% of oncologists hve encountered reimbursement restrictions tied to compendium sttus nd ctegory-level evidence; 45% hve encountered no coverge for drug indictions tht re FDA off-lbel use but re supported by compendiums/guidelines. 72% of oncologists hve encountered conditionl PAs or precertifictions occsionlly (44%) or frequently (28%), whereby pprovl for services my be lter reversed during retrospective utiliztion reviews. Reimbursement limited to specific drug regimens ccording to formulry sttus, step edits, nd/or pthwys re occsionlly frequently & encountered encountered by 40% of by 30% of oncologists oncologists. More oncologists re reporting frequent encounters with restrictions relted to precision medicine compred with the previous study period. Oncologist encounters with pyer restrictions regrding precision medicine Chnge in peer-to-peer tretment pln reviews in the lst 12 months (=202) Incresed o chnge Decresed Frequent Reimbursement of whole genome sequencing studies Genetic counseling requirement prior to genetic testing Restrictions on genetic counseling to specific services, independent of ny commercil testing lb Restrictions on moleculr testing to specific lbs Drug restrictions ssocited with positive compnion biomrker testing results (=202) Occsionl 32% 35% 30% 35% 29% 36% 28% 40% 28% 41% 36% 59% 37% 60% 5% 3% Second- nd Off-pthwy third-line tretment tretment regimens in dvnced cncer bsed on moleculr testing results 62 Words in green typefce indicte glossry item. FDA, Food nd Drug Administrtion; PA, prior uthoriztion. indictes responses to new survey questions.

65 OCOLOGISTS Prctice opertions & reorgniztion A number of oncologists reported on plns to expnd or reduce services nd/or restructure their prctices over the next 2 to 3 yers to meet demnd nd improve their finncil performnce. Oncology prctice trends trcked by the Community Oncology Allince included 172% increse in prctices cquired by hospitls (or those with hospitl greement) nd 54% increse in prctices tht merged or were cquired by corporte entity between Jnury 2008 nd September % of oncologists representing ll prctice settings (n = 128) nticipte dding or reducing services or opertions over the next 2 to 3 yers to improve their prctice s finncil performnce. More thn one-hlf of the 128 oncologists consider bility to ttrct/recruit tlent (60%) nd/or the nrrowing of provider networks (57%) s modertely to very importnt fctors in their previous or future decisions to reorgnize their prctices. Includes oncologists, APPs, nd clinicl oncology specilty phrmcists. Prctice chnges nticipted in the next 2 to 3 yers to improve finncil performnce (n = 128) Add or expnd the following: Clinicl guidelines implementtion 38% Clinicl pthwys implementtion 37% In-prctice drug dispensing vi physicin s PI 20% Clinicl tril prticiption 19% ASCO s QOPI progrm prticiption 17% Pursue ASCO s QOPI prctice certifiction 16% CMS s PQRS progrm prticiption 15% Reduce or restrict the following: Buy nd bill for drugs 15% Contrcting with certin commercil pyers 14% Clinicl tril prticiption 11% ew this survey, the competitive dvntge of covered entity under the 340B Drug Pricing Progrm is considered modertely to very importnt fctor by 59% of the 63 surveyed oncologists who hve sold or will consider selling their prctice to hospitl. Improving competitive mrket position remins leding driver of reorgniztion, described s modertely to very importnt by the 128 oncologists. Improving prctice efficiency nd oncologists time for clinicl cre re importnt drivers for two-thirds of these oncologists. Reorgniztionl strtegies currently implemented nd/or under considertion over the next 2 to 3 yers Join or combine with nother prctice Join/restructure s n oncology ACO Sell prctice to hospitl Integrte/joint venture with hospitl Join/restructure s n oncology medicl home 43% 35% 34% 31% 27% 35% 50% 45% 42% 38% 36% 39% 21% 43% 34% Vi physicin services greement. Community-bsed, privte (n=86) Hospitl-bsed (n=60) Acdemic/medicl center-bsed (n=56) Mjor drivers of reorgniztion rted modertely to very importnt (n = 128) 1 Improve competitive position in locl mrket 74% 2 3 Withstnd Medicre s overhul of the physicin pyment system 68% Improve prctice utomtion, worklod, nd efficiency 67% 4 Improve finnces nd bility to tke on risk 66% 5 6 Improve oncologists clinicl productivity/ time for ptient cre 65% Withstnd the implictions of insurnce indequcy nd helth cre unffordbility b 65% Includes Merit-bsed Incentive Pyment System, dvnced lterntive pyment models, nd Oncology Cre Model. b In light of trends towrd high-deductible helth coverge nd employer helth benefits funding vi defined contribution. Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; APPs, dvnced prctice providers; ASCO, Americn Society of Clinicl Oncology; CMS, Centers for Medicre & Medicid Services; PI, tionl Provider Identifiction; PQRS, Physicin Qulity Reporting System; QOPI, Qulity Oncology Prctice Inititive. 63

66 Income & lterntive pyment models Income remined stedy for one-hlf of the oncologists over the lst 12 months. Smll shres of prctice revenue were bsed on APMs for minority of prctices. About 20% of the oncologists tht provide prcticebsed chemotherpy re prticipting in the episode-of-cre bsed Oncology Cre Model. Overll, bout one-hlf of the surveyed oncologists (54%) reported stedy individul income over the lst 12 months. Communitybsed oncologists were most likely to report lower income (39%) nd cdemic/medicl center-bsed oncologists were most likely to report higher income (25%) when compred with collegues bsed in other settings. Most often, increses nd/or decreses in income were estimted to be less thn 19%. Similr results re expected when oncologists look hed to the next 12 months. Chnge in oncologists individul net income by prctice setting Community-bsed, privte (n=86) 61% 55% 48% 39% 28% 25% 17% 13% Increse o chnge Decrese Pst 12 months Hospitl-bsed (n=60) 14% Chnge in oncologists individul net income: 5-yer trend 41% 32% 27% 2012 (=159) Acdemic/medicl center-bsed (n=56) 61% 57% 47% 38% 28% 30% 15% 13% Increse o chnge Decrese ext 12 months Incresed 47% 32% 22% 2013 (=200) 11% o chnge 50% 33% 18% 2014 (=200) Oncology Trend Report study yer Decresed 49% 30% 21% 2015 (=205) 54% 29% 17% 2016 (=202) 74% of the 116 oncologists working in hospitl-bsed or cdemic/medicl centerbsed prctices re employed by the institution with which their prctice is integrted or owned. Compenstion ws described s fixed slry nd clinicl productivity-relted bonus (49%), fixed slry (33%), RVU-bsed (10%), or fixed slry with bonus tied to qulity metrics or pthwys complince (8%). In 2016, 43% of oncologists received only FFS pyments; 38% received compenstion vi APMs, such s bundled pyments or globl pyments; nd 27% were unble to provide n informed nswer. ew this survey, 13 oncologists (6%) received qulity performnce incentives in 2016, which included finncil rewrds (n = 7), upside nd downside shred risk (n = 5), nd/or downside risk only (n = 1). Oncologists receiving lterntive pyments to FFS in 2016 ( = 202) Bundled pyments 19% Globl pyments full cpittion, no qulity inititives 13% Globl pyments prtil cpittion, no qulity inititives 6% Mngement fees for specific clinicl services 6% Qulity performnce incentives 6% Shred svings pyments 4% Excluding trditionl E&M, chemotherpy dministrtion, nd drug reimbursement fees. Words in green typefce indicte glossry item. 64 APMs, lterntive pyment models; E&M, evlution nd mngement; FFS, fee-for-service; RVU, reltive vlue unit.

67 OCOLOGISTS Percentge of 2015 collected prctice revenue ttributed to APMs Unsure 15% <5% of revenue 8% 5% 10% of revenue 23% ew this survey, 13 oncologists (6% overll) currently receive mngement fees, in ddition to fees for E&M, drug reimbursement, nd chemotherpy dministrtion for specific clinicl services. Most often these services include: ew ptient tretment plnning 46% 16% 20% of revenue 23% (n=61) 11% 15% of revenue 31% Oncologists were presented with specific revenue rnges from which to select. 30% of oncologists (n = 61), representing ll prctice settings, estimted the shre of prctice revenue collected in 2015 ttributed to APMs. Orl oncology ptient eduction nd dherence monitoring Oncology cre coordintion Ptient cre mngement during tretment Ptient monitoring during ctive monitoring phse following tretment Advnce cre plnning Prehbilittion ssessments nd interventions 38% 31% 31% 31% 31% 31% The Medicre Access nd CHIP Reuthoriztion Act (MACRA) creted the Merit-bsed Incentive Pyment System (MIPS). Strting in 2019, MIPS will combine existing incentive nd qulity-reporting inititives into single progrm. MACRA lso estblishes incentives nd requirements for prticiption in certin APMs. 12,13 How would you describe your understnding of MIPS nd APMs under MACRA nd its potentil impct on your prctice? How prctices re prepring for MIPS ( = 202) othing t this time/not on rdr 44% Poor Fir 26% 25% Awre, but witing for finl rule before committing resources 20% Prticipting in EHR meningful use 19% Prticipting in PQRS 13% Attending seminrs 13% Good Very good Excellent 1% 10% 22% Working with consultnts to understnd finncil impct 11% Unsure 16% Includes first-time prticiption in 2016 nd continued prticiption focused on mximizing processes nd performnce. 47 surveyed oncologists (23%) reported prticiption in the Oncology Cre Model, nd 24 pplied nd were either not ccepted or withdrew becuse of requirements. The Oncology Cre Model is multipyer model initited by the Centers for Medicre & Medicid Services in June 2016 tht reimburses prctices for episodes of cre surrounding chemotherpy for cncer ptients. To prticipte, ll physicin groups must provide chemotherpy, meet specific prctice trnsformtion requirements (eg, EHR, cre coordintion, ptient nvigtion services, nd ntionl tretment guidelines for cre), nd report on vrious qulity mesures. Most notbly, providers must choose to prticipte in the two-sided risk trck of the model in order to meet certin requirements relted to dvnced APMs under MACRA. Almost 200 physicin groups nd 16 commercil pyers re prticipting. 12,14,15 Words in green typefce indicte glossry item. indictes responses to new survey questions. APMs, lterntive pyment models; CHIP, Children s Helth Insurnce Progrm; EHR, electronic helth record; E&M, evlution nd mngement; PQRS, Physicin Qulity Reporting System. 65

68 Prctice-bsed infusion therpy The mjority of oncologists work in prctices with in-prctice infusion chirs/beds nd use them to dminister the mjority of tretments prescribed for their ptients. Ptient ffordbility nd indequte reimbursement continue to drive hospitl referrls for infused tretment. 16 Prctice-bsed infusion services o 9% ot currently, but plnned for % (=202) Yes 86% 18% of prctices reported n increse in the number of chirs/beds over the lst yer 173 oncologists (86%) overll (72 communitybsed, 49 hospitl-bsed, nd 52 cdemic/ medicl center-bsed prctices) hve in-prctice infusion services tht re utilized to dminister the mjority shre (overll medin: 90%) of cncer drug infusions prescribed for their ptients. More thn one-third of oncologists (36%, n = 73) with in-prctice infusion services will refer ptients to hospitl outptient infusion centers in specific situtions. ew this survey, 17% of oncologists refer ptients to the hospitl due to ptient preference, nd 14% do so when insurnce out-of-pocket costs re more fvorble for the ptient. When the in-prctice dministrtion of n infused/injectble drug will result in significnt revenue loss, oncologists most often look for ssistnce from chritble foundtion (27%), refer the ptient to the hospitl (24%), use lterntive mediction if vilble (23%), nd/or dminister the mediction nd bsorb the loss (23%). Top situtions driving hospitl referrls for infusions Ptient ffordbility Insufficient prctice reimbursement from pyer b In-prctice infusion chir/bed vilbility Expediency of needed tretment Clinicl sitution nd need for monitoring Includes uninsured nd insured ptients who cnnot fford their cost shre. b Includes Medicre, Medicid, nd select commercil pyers. The Centers for Medicre & Medicid Services did not finlize the Medicre Prt B Drug Pyment Model designed to test whether lterntive provider pyments for drugs dministered under Medicre Prt B would incentivize use of less-costly drugs nd reduce spending. 17,18 Oncologists rted the effectiveness of inititives under the proposed Medicre Prt B Drug Pyment Model to drive cost-effective drug selection Very to extremely effective Pyment djustment per drug per dy to ASP+2.5%+$16.80 fee Feedbck on physicin prescribing nd decision-support tools Discount/eliminte ptient cost shring for high-vlue drugs Risk-shring with drug mnufcturers linking price djustments with ptient outcomes Reference pricing tht stndrdizes pyments for therpeuticlly similr drugs Indictions-bsed pricing where drug pyments re bsed on clinicl effectiveness Slightly to modertely effective Ineffective Unsure/need more detils 9% 48% 22% 21% 10% 16% 16% 16% 13% 58% 17% 15% 53% 15% 16% 48% 14% 22% 54% 13% 17% 58% 12% 17% The Oncology Trend Report surveys were fielded prior to the decision to bndon the Medicre Prt B Drug Pyment Model; however, responses to the question were considered to be of interest to the reder. Words in green typefce indicte glossry item. 66 ASP, verge sles price. indictes responses to new survey questions.

69 OCOLOGISTS Specilty phrmcy & in-prctice drug dispensing As n dditionl revenue source nd for ptient convenience, one-third of the oncologists reported in-prctice orl drug dispensing. Driven by fctors, such s limited distribution nd pyer requirements, one-hlf of the oncologists source drugs through externl specilty phrmcies (SPs), insted of through buy nd bill. 67 oncologists (34 community-bsed, 11 hospitl-bsed, nd 22 cdemic/medicl centerbsed prctices) dispense orl oncology drugs from their prctices. Similr to the previous study period, one-fourth of these oncologists reported tht their ptients prefer to obtin their orl drugs nd eduction from members of the oncology prctice cre tem. In-prctice orl oncology drug dispensing ot currently, but plnned for % Did previously, but closed the dispensry Currently 1% investigting 8% (=202) Yes 33% o 47% Oncologist-reported dvntges (n = 67) Ptient convenience 66% Revenue source 43% Better control over cost of cre 34% Shorter wit times for ptients to get oncology drugs 33% Control nd delivery of ptient orl oncology drug eduction 33% Monitor nd improve therpy dherence 30% Improve drug ccess in light of prctice s finncil counseling 28% Monitor side effects nd pllitive cre needs 25% Improve ptient sfety by mintining complete tretment profile 21% 55% of oncology prctices represented by the surveyed oncologists use externl SPs, insted of buy nd bill, to source some or ll drugs for in-prctice dministrtion, similr to the previous study period. Use of externl SPs (=202) Yes, some drugs Yes, ll drugs o ot currently, but plnned for % 14% 41% 39% ew this survey, 15% of the 111 oncologists sourcing drugs through externl SPs do so for select ptients (eg, uninsured), while only 11% do so if the pyer does not llow sourcing the drug through the prctice-owned dispensry or closed-door licensed phrmcy. 79% of surveyed oncologists rted the lck of coordintion of orl nd infused drug regimens due to different ccess chnnels s modertely to extremely significnt fctor tht negtively ffects ptient dherence. Leding drivers of externl SP use (n = 111) Pyer requirements Drug mnufcturer limited/exclusive distribution rrngements Prctice mngement orgniztion requirements When it benefits the ptient 51% 30% 23% 21% According to prctice policy, in cses of significnt revenue loss ssocited with in-prctice dministrtion of infusions or injections, 15% of the 173 prctices with infusion services refer the ptient to n SP nd/or 11% obtin the drug from n SP to void buy nd bill. Words in green typefce indicte glossry item. indictes responses to new survey questions. 67

70 Prctice utomtion Most oncologists re working with EHRs. Oncology specificity nd interoperbility with other systems remin mong the most frequently desired functionlities. Tblet nd smrtphone technology hve been integrted into some prctices to improve opertionl efficiency nd mintin remote contct with the EHR, collegues, stff, nd ptients. 86% of oncologists (n = 173) work in prctices with EHRs; 51% of the systems re oncologyspecific nd 36% hve decision support integrtion nd/or links to guidelines nd pthwys. 61% of the oncologists reported unmet EHR needs. erly one-hlf (47%, n = 81) described some level of interoperbility with other deprtments nd/or prctices. Leding unmet needs regrding EHR functionlity Interoperbility with other providers systems Orl drug regimen trcking Survivorship cre pln genertion Ability to customize Oncology specificity Integrtion with tretment guidelines nd pthwys Integrtion with clinicl trils registries nd protocols Voice recognition/dicttion cpbility 62% of oncologists reported EHR ccess vi ptient portls. Overll, 34 oncologists (10 community-bsed, 15 hospitl-bsed, nd nine cdemic/medicl center-bsed prctices) provided telemedicine visits in 2016, nd n dditionl 16 oncologists pln to provide them in Extent of EHR dt exchnge (n = 81) Across multiple prctice sites 53% Within single site 51% With re hospitl(s) outside of prctice 32% With other oncology prctices 17% With out-of-re hospitls nd COEs 14% Refers to some or ll deprtments. mhelth-relted cpbilities in 2016 or plnned for 2017 HIPAA-complint secure e-mils HIPAA-complint secure texting Smrtphones Tblet devices Telemedicine visits (=202) 25% 37% 36% 42% 62% 20% of the 75 oncologists who use smrtphones in their prctices reported text messging with their ptients regrding ppointment reminders, prescription drug filling, nd dherence issues. A few prctices use text messging to collect ptientstisfction informtion (16%) or to encourge completion of ptient-stisfction surveys (11%). A few oncologists (16%) use smrtphone chrge cpture pp. Leding uses of tblet technology EHR remote ccess Drug prescribing EHR ccess/updting during ptient visits E-mil consults with other providers Ptient check-in Leding uses of smrtphones Text messging with stff/ other physicins nd ptients EHR nd ptient portl remote ccess Pger replcement Accessible decision-support tools Drug prescribing Leding uses of telehelth Follow-up visits (eg, routine, chemotherpy, posthospitl dischrge) Ptient mediction dherence monitoring Ptient eduction Clinicl reserch Stem-cell trnsplnt consulttions Socil work visits 68 Words in green typefce indicte glossry item. indictes responses to new survey questions. App, ppliction; COEs, centers of excellence; EHRs, electronic helth records; HIPAA, Helth Insurnce Portbility nd Accountbility Act; mhelth, mobile helth.

71 =201 Oncology Prctice Mngers 70 Oncology prctice demogrphics 71 Prctice revenue 72 Billing & ptient ssistnce 74 Contrcting & lterntive pyment models 76 Prctice opertions & reorgniztion 77 In-prctice drug dispensing 78 Buy nd bill & specilty phrmcy 80 Pllitive cre & survivorship 81 Prctice stffing cre nvigtors & medicl scribes 82 Prctice stffing dvnced prctice providers 84 Ptient cll volume & clinicl support 85 Prctice hours of opertion 86 Prctice-bsed infusion services 88 Prctice utomtion HIGHLIGHTS Two-thirds of OPMs expect revenue growth by yer-end 2016; 56% experienced n increse in the number of ptients with high-deductible commercil insurnce nd, in light of this trend, one-hlf of OPMs hve modified or re discussing collection policy chnges. All drug copyments re successfully collected from n verge of only 25% of ptients (pp ) Some OPMs trget ptients with high-deductible helth plns, qulity-of-life issues, nondherence to drugs, nd/or dvnced disese for finncil hrdship discussions; lmost one-hlf of OPMs identified escltion in ptient OOP costs to be mong the top 5 most pressing cncer cre chllenges in 2016 (pp ) 55% of OPMs (n = 110) ttributed smll shre of 2015 prctice revenue to APMs, such s bundled or globl pyments. Few prctices receive mngement fees in ddition to E&M fees for specific services (n = 43) nd/or qulity performnce incentives (n = 38) from pyers (pp ) Most OPMs expect to dd/reduce services (n = 145) nd/or reorgnize (n = 159) their prctices over the next 2 to 3 yers; fctors driving reorgniztion include cre coordintion improvement (71%), bility to ttrct/recruit tlent (58%), nd nrrow provider networks (50%) (p. 76) In-prctice orl drug dispensing continues to grow mong the prctices (n = 116) in light of the ptient convenience, control of ptient eduction, nd revenue it offers; 44% of these OPMs believe it eses the bility to meet the Oncology Cre Model s requirements for ptient follow-up nd side-effect mngement, nd 53% reported their ptients prefer it (p. 77) Overll, most in-prctice dministered drugs continue to be purchsed vi buy nd bill under the medicl benefit, lthough 70% OPMs obtin drugs from externl SPs if required by pyers or due to internl finncil pressures, nd one-third forecst incresed relince on SPs in 2016 (pp ) 57% of OPMs mnge prctices tht provide some level of survivorship progrm cre to ll ptients, while one-third strtify ptients by criteri to focus on subsets of survivors; 62% of prctices provided some or ll ptients with n SCP in 2016 (p. 80) 40% of OPMs use medicl scribes, nd more thn one-hlf ttributed improvement in oncologists job stisfction nd overll productivity during clinic dys to medicl scribe services (p. 81) 127 OPMs (63%) employ APPs, nd one-third hve encountered difficulty recruiting or retining them; 67% reported higher ptient volume hndled by APPs, nd 62% delegte on-cll nd hospitl-rounding responsibilities to them. Hiring nurses, APPs, nd stff to process PAs is top of mind for mny OPMs expnding stff in 2017 (pp ) One-hlf of OPMs hve undertken inititives to hire or ssign stff for proctive ptient contct t predetermined points of cre to void complictions, ED visits, nd/or hospitliztions in 2016 or pln to in 2017 (p. 84) A minority of OPMs offer weekdy hours pst 6 pm (21%) nd re open 6 or 7 dys weekly (19%) for in-prctice visits; 39% of OPMs expnded weekly hours in 2016 (p. 85) Most OPMs surveyed (74%) mnge prctices with infusion chirs/beds; ownership, volume of prescribed infusions dministered in-prctice insted of being referred to hospitls, nd reports of declining drug mrgins re highest mong community-bsed, privte prctices (pp ) 168 OPMs (84%) mnge prctices with EHRs nd most offer ptient portls; mny OPMs hd integrted secure e-mils nd text messging, tblet devices, nd smrtphones into opertions in 2016 or plnned to in 2017; 68 OPMs currently offer telemedicine visits (p. 88) APMs, lterntive pyment models; APPs, dvnced prctice providers; ED, emergency deprtment; EHRs, electronic helth records; E&M, evlution nd mngement; OOP, out-of-pocket; PAs, prior uthoriztions; SCP, survivorship cre pln; SPs, specilty phrmcies. 69

72 Oncology prctice demogrphics 201 OPMs from cross the United Sttes completed n online survey fielded from lte July to mid-october To prticipte in the reserch, respondents hd to work for n oncology prctice in mngement or dministrtive cpcity nd hve knowledge of prctice opertions, including stffing, billing nd reimbursement, nd infusion services. The prctices represented here nd in the Oncologists section re not the sme. The respondents described the stte of their prctices in 2015 nd 2016, nd forecst their expecttions for 2017 nd beyond. erly three-fourths of the OPMs mnge multi oncology-specilty prctices cross ll settings. Fewer OPMs mnge hospitl-bsed prctices (25%), prticulrly hospitl-owned, compred with the previous study period (31%). More OPMs represent cdemic/medicl center-bsed prctices (30%), prticulrly physicin-owned, compred with the previous smple (27%) OPM smple by prctice setting nd select demogrphics Percentge Prctice setting of smple Community-bsed, privte (n = 91) 45% 9 (1 150) 15 (1 420) Solo (n = 4) 2% 1 1 Single oncology-specilty group (n = 23) Multi oncology-specilty group (n = 64) Men number of sites (rnge) Men number of oncologists per prctice (rnge) 11% % Hospitl-bsed (n = 50) 25% 6 (1 37) 15 (1 250) Hospitl-owned, noncdemic prctice (n = 19) Hospitl-integrted, privte (n = 31) Acdemic/medicl center-bsed (n = 60) 10% % % 8 (1 100) 35 (1 500) Physicin-owned (n = 20) 10% 4 28 Hospitl/institution-owned (n = 40) 20% Overll, 48% of the OPMs mnge prctices with five or fewer full-time oncologists, 30% mnge prctices with six to 12 oncologists, nd 22% mnge prctices with more thn 12 oncologists. Across the different prctice settings, sites of cre/service rnged from 1 to 150. umber of full-time oncologists in prctices mnged by OPMs 13 oncologists 22% 6 12 oncologists 30% Surveyed OPMs work in prctices in the following regions (=201) (=201) 5 oncologists 48% The lrgest prctices in the smple include n cdemic/medicl center employing 500 oncologists cross three sites nd communitybsed, privte prctice employing 420 oncologists cross 150 sites. orthest 26% West 19% Midwest 20% South 35% Words in green typefce indicte glossry item. 70

73 OCOLOGY PRACTICE MAAGERS Prctice revenue Medicre is mjor pyer mong the vrious insurers tht provide oncology prctice revenue for cncer cre. In ddition, mjority of surveyed prctices re cring for growing number of ptients with high-deductible commercil helth insurnce. The number of OPMs with positive forecsts for revenue growth in 2016 differed by prctice setting. OPMs estimted tht more thn 40% of their ptients re insured by Medicre; this is consistent cross prctice settings. Most OPMs reported tht their prctices tret Medicid ptients or hve contrcted s network providers with stte or federl HIX plns. Across the prctice settings, 56% of OPMs hve experienced growth in ptients with high-deductible commercil helth insurnce, nd 45% reported growth in ptients eligible for Medicid over the lst yer. Ptient popultion by pyer type in 2016 Self-py/csh py 5% Medicid 10% HIX 5% Commercil (privte) medicl insurnce 37% (=201) Other b <1% Medicre 43% Includes FFS nd mnged Medicid. b Includes chrity. With supplementl pln 22% Without supplementl pln 12% Medicre Advntge pln 9% Chnge in select ptient popultions over the lst 12 months ( = 201) Incresed Decresed 56% Ptients with high-deductible commercil plns 18% 45% Ptients with FFS nd mnged Medicid 38% Ptients with HIX pln coverge 25% 15% 10% 22% Ptients without insurnce Fewer OPMs reported nnul growth in ptients with HIX pln coverge (38%) compred with the previous study period (59%). How hs worklod ssocited with insurnce verifiction for ptients churning between Medicid nd subsidized HIX pln coverge chnged over the lst 12 months? Decresed 17% Unsure 3% Incresed 51% Overll, two-thirds of OPMs forecst totl collected revenue growth in 2016 compred with performnce in Positive forecsts were less likely from community-bsed, privte prctice mngers compred with OPMs in other prctice settings. Totl collected revenue forecst by prctice setting for 2016 compred with 2015 Community-bsed, privte (n=91) Increse o chnge Decrese 53% 26% 21% o chnge 29% (n=177) Hospitl-bsed (n=50) Acdemic/medicl center-bsed (n=60) 90% 2% 8% 72% 20% 8% FFS, fee-for-service; HIX, helth insurnce exchnge. 71

74 Billing & ptient ssistnce In light of the trend in high-deductible helth pln coverge, OPMs hve revised their collection policy. Mny work with ptient ssistnce progrms (PAPs) nd screen their ptients for finncil hrdship. OPMs viewed escltion in ptient OOP costs s one of the most pressing chllenges fcing cncer cre providers. ew this survey, nerly ll OPMs (n = 195) reported cring for low-income ptients in their prctice; 72% of them estimted tht between 11% nd 40% of their ptient popultions hve low incomes. Estimtes re similr when nlyzed by prctice setting. These 195 OPMs re modertely (62%) or highly (21%) concerned bout ptients bility to continue prescribed tretments. However, bout one-third of these OPMs reported occsionl (32%) or frequent (6%) delys or discontinution of tretment due to ffordbility issues. Assistnce provided to low-income ptients in light of drug tretment ffordbility issues (n = 195) Refer to ptient ssistnce & copy/coupon foundtions 56% Offer pyment pln 46% Refer to finncil counselor 42% Refer to privte, chritble foundtions 41% Refer to socil worker 38% Chnge therpy to lower-cost lterntives 30% Do not collect drug copyment 18% One-hlf of the OPMs hve modified (22%) or re discussing (29%) policy chnges in OOP drug pyment collection, in light of the trend in high-deductible helth plns. Similr to previous studies, prctice policies vry widely regrding full or prtil collection of OOP drug costs prior to ordering drugs, scheduling ppointments, nd/or dministering tretments. OPMs estimted collecting ll of the required drug copyments from only 25% of ptients, on verge. Success in collecting ptient OOP drug costs, 2012 through 2016 Shre of ptients copy one 1% 50% 51% 99% All 32% 30% 25% 14% 2012 (=100) 31% 29% 26% 15% 2013 (=210) 33% 30% 27% 11% 2014 (=198) 35% 29% 25% 11% 2015 (=200) Oncology Trend Report study yer periods 32% 30% 25% 13% 2016 (=201) Estimtes for ptient ssistnce eligibility nd ppliction pprovl (n = 173) of ptients re eligible for ptient ssistnce 40% 55% of pplictions re pproved Most OPMs work with PAPs, including mnufcturer-sponsored progrms (77%), copy-ssistnce foundtions (75%), free drug progrms (65%), nd new this survey, third-prty intermediries for mnufcturer- or GPO-ffilited progrms (49%). From list of 14 cncer cre issues presented to them, the 201 OPMs identified the top 5 most pressing chllenges fcing cncer cre in 2016, bsed upon their experiences. 1 Control of overll cncer cre costs 54% 2 Control of cncer specilty drug costs 52% 3 Escltion in ptient OOP costs 47% 4 Effective cncer therpies 41% 5 Blncing tretment stndrdiztion with personliztion b 40% Refers to tretment guidelines nd pthwys. b Refers to moleculr/biomrker testing. 72 Words in green typefce indicte glossry item. indictes responses to new survey questions. GPO, group purchsing orgniztion; OOP, out-of-pocket.

75 OCOLOGY PRACTICE MAAGERS One-hlf of OPMs expect stff time for processing precertifictions nd PAs (48%) nd ppeling clims (52%), including documenttion nd peer-to-peer discussions, to hve incresed by yer-end 2016 compred with To better understnd worklod regrding clims ppels, OPMs estimted the percentge of clims submitted to privte nd public pyers in 2015 tht were incorrectly pid or denied on the first pss. Estimtes vried widely cross the prctices. Clims processing estimtes for services rendered in 2015 Totl clims incorrectly pid on first pss Totl clims denied on first pss Medin 20% 15% Some prctices trget ptients with high-deductible helth plns 17% qulity-of-life issues 14% nondherence to medictions 11% nd/or dvnced disese 10% for discussions bout finncil hrdship. 40% of prctices mnged by the surveyed OPMs either do not specificlly screen ptients for finncil hrdship or they re currently discussing how to incorporte this into their workflow. A few OPMs (16%) include finncil hrdship mesures in their distress screening tools. Cncer ptient screening for finncil hrdship o specific inititives Finncil counselors meet with ll ptients t tretment initition Stff re trined to refer ptients to finncil counselors when hrdship is suspected Specific high-cost tretments trigger ptient discussion Finncil counselors hve developed some questions b Prctice is discussing how best to incorporte into workflow Clinicins screen ll chemotherpy ptients (=201) Such s immunotherpy. b Such s shre of household income ttributed to helth-relted spending. 14% 21% 25% 24% 22% 21% 19% OPMs rted the significnce of fctors tht cn negtively impct drug dherence or persistence Very to extremely significnt fctor (=201) 41% Poor helth litercy 39% Adverse events/ toxicity Feelings of distress, being overwhelmed, denil. 36% 35% 35% 34% Cost of tretment/ finncil hrdship Lck of enggement due to medicl nd/or psychosocil issues Lck of understnding of medicl/ phrmcy benefits Lck of fmily/ cregiver support 27% Complex regimen/ tretment frequency 36% of OPMs rted finncil hrdship s very to extremely significnt fctor tht negtively influences drug dherence. 47% of OPMs believe escltion in ptient OOP costs to be mong the mjor chllenges fcing cncer cre in indictes responses to new survey questions. OOP, out-of-pocket; PAs, prior uthoriztions. 73

76 Contrcting & lterntive pyment models One-hlf of the surveyed OPMs ttributed smll shre of prctice revenue to APMs. A minority of prctices hve received mngement fees for specific clinicl services nd qulity performnce incentives. One-third of the prctices re prticipting in the episode-of-cre bsed Oncology Cre Model. More OPMs cross ll prctice settings reported prctice-specific contrcting (n = 98) with one or more commercil pyers, s well s direct contrcting (n = 78) with self-insured employers, in 2016 compred with the previous study period. Contrcting with pyers ( = 201) egotite prctice-specific contrcts Contrct directly with self-insured employers 49% 39% One-fourth of the prctices hve been excluded from nrrow or preferred commercil provider network s consequence of the Affordble Cre Act. Contrct with metls plns offered by stte/federl HIXs In contrst to stndrd pyer contrcts regrding fee schedules nd drug pyments. 39% Alterntive pyments to FFS in 2016 ( = 201) Bundled pyments 29% Globl pyments full cpittion, no qulity inititives 23% Mngement fees for specific clinicl services 21% Qulity performnce incentives 19% Globl pyments prtil cpittion, no qulity inititives 16% Shred svings pyments 11% 25% of OPMs reported tht their prctices only received FFS pyments in 2016, while 55% (n = 110) of mngers representing ll prctice settings ttributed smll shre of prctice revenue collected in 2015 to APMs, such s bundled pyments or globl pyments. Excluding trditionl E&M, chemotherpy dministrtion, nd drug reimbursement fees. Percentge of 2015 collected prctice revenue ttributed to APMs >20% of revenue 1% 16% 20% of revenue 18% 11% 15% of revenue 31% Unsure 11% <5% of revenue 12% (n=110) 5% 10% of revenue 27% OPMs were presented with specific revenue rnges from which to select. ew this survey, 43 mngers (21%) reported tht their prctice currently receives mngement fees, in ddition to fees for E&M, drug reimbursement, nd chemotherpy dministrtion, for specific clinicl services. Most often these services include: Oncology cre coordintion Ptient cre mngement during tretment End-of-tretment summry genertion Prctice-bsed phrmcy services ew ptient tretment plnning 40% 40% 40% 37% 35% Tretment pthwy prticiption Advnce cre plnning 35% 33% Words in green typefce indicte glossry item. 74 APMs, lterntive pyment models; E&M, evlution nd mngement; FFS, fee-for-service; HIXs, helth insurnce exchnges.

77 OCOLOGY PRACTICE MAAGERS ew this survey, 38 OPMs reported tht their prctice received qulity performnce incentives for chievement of qulity gols in 2016, bsed most often on upside nd downside shred risk. Most expect revenue from these incentives to increse slightly (29%), modertely (37%), or significntly (13%) compred with % of mngers (25 community-bsed, privte; 18 hospitl-bsed; nd 24 cdemic/medicl center-bsed prctices) prticipte in qulity performnce progrm pursunt to the terms of joint venture rrngement or comngement services greement with hospitl. An dditionl 38 mngers (19%) pln to prticipte in progrm in Qulity performnce incentives in 2016 (n = 38) 53% Shred risk upside nd downside 42% Finncil rewrd only 8% Finncil risk only 11% Unsure The Medicre Access nd CHIP Reuthoriztion Act (MACRA) creted the Merit-bsed Incentive Pyment System (MIPS). Strting in 2019, MIPS will combine existing incentive nd qulity-reporting inititives into single progrm. MACRA lso estblishes incentives nd requirements for prticiption in certin APMs. 1,2 How would you describe your understnding of MIPS nd APMs under MACRA nd its potentil impct on your prctice? How prctices re prepring for MIPS ( = 201) Prticipting in EHR meningful use 48% Prticipting in PQRS 34% (=201) Poor 7% Fir 21% Attending seminrs 28% Working with consultnts to understnd finncil impct 23% Proctively prepring to report on qulity mesures 23% Awre, but witing for finl rule before committing resources 21% othing t this time/not on rdr 16% Good Very good Excellent Unsure 5% 10% 22% 35% Includes first-time prticiption in 2016 nd continued prticiption focused on mximizing processes nd performnce. 62 OPMs (31%) cross ll prctice settings reported prticiption in the Oncology Cre Model & 42 pplied nd were either not ccepted or withdrew becuse of requirements. The Oncology Cre Model is multipyer model initited by the Centers for Medicre & Medicid Services in June 2016 tht reimburses prctices for episodes of cre surrounding chemotherpy for cncer ptients. To prticipte, ll physicin groups must provide chemotherpy, meet specific prctice trnsformtion requirements (eg, EHR, cre coordintion, ptient nvigtion services, nd ntionl tretment guidelines for cre), nd report on vrious qulity mesures. Most notbly, providers must choose to prticipte in the two-sided risk trck of the model in order to meet certin requirements relted to dvnced APMs under MACRA. Almost 200 physicin groups nd 16 commercil pyers re prticipting. 1,3,4 Words in green typefce indicte glossry item. indictes responses to new survey questions. APMs, lterntive pyment models; CHIP, Children's Helth Insurnce Progrm; EHR, electronic helth record; PQRS, Physicin Qulity Reporting System. 75

78 Prctice opertions & reorgniztion A mjority of OPMs identified plns to djust services nd/or restructure their prctices over the next 2 to 3 yers to meet cre demnds nd improve performnce. Between Jnury 2008 nd September 2016, the Community Oncology Allince noted 172% increse in prctices cquired by hospitls (or with hospitl greement) nd 54% increse in prctices tht merged or were cquired by corporte entity OPMs representing ll prctice settings (72%) nticipte dding or reducing services or opertions over the next 2 to 3 yers to improve finncil performnce. 159 OPMs (79%) identified reorgniztionl strtegies under wy or for future considertion to improve finncil performnce. Improving cre coordintion is the leding driver of reorgniztion, described s modertely to very importnt. ew this survey, the competitive dvntge of covered entity under the 340B Drug Pricing Progrm is considered modertely to very importnt fctor by 58% of the 61 surveyed OPMs whose prctice hs been sold to hospitl or under future considertion to be sold. Mjor drivers of reorgniztion rted modertely to very importnt (n = 159) 1 Improve cre coordintion 71% Withstnd the implictions of insurnce indequcy nd helth cre unffordbility 69% Improve oncologists clinicl productivity nd increse time for ptient cre 67% Withstnd Medicre s overhul of the physicin pyment system b 67% 5 Improve billing nd collection 67% 6 Improve prctice utomtion, worklod, nd efficiency 66% In light of trends towrd high-deductible helth coverge nd employer helth benefits funding vi defined contribution. b Includes MIPS, APMs, nd Oncology Cre Model. Prctice chnges nticipted over the next 2 to 3 yers to improve finncil performnce (n = 145) Add or expnd the following: Clinicl tril prticiption 36% Clinicl guidelines implementtion 29% Clinicl pthwys implementtion 29% Clinicl phrmcy services 26% In-prctice, high-complexity lb for moleculr/biomrker testing 26% ASCO s QOPI progrm prticiption 25% EHR system 24% Ptient finncil counseling/dvoccy services 23% Reduce or restrict the following: Buy nd bill for drugs 17% Contrcting with certin commercil pyers 17% Infusion/shot clinic services 16% One-hlf or more of the 159 OPMs consider the bility to ttrct/recruit tlent (58%) nd/or the nrrowing of provider networks (50%) s modertely to very importnt fctors in their previous or future decisions to reorgnize their prctices. Includes oncologists, dvnced prctice providers, nd oncology clinicl specilist phrmcists. Reorgniztionl strtegies currently implemented nd/or under considertion over the next 2 to 3 yers Join or combine with nother prctice Integrte/joint venture with hospitl Sell prctice to hospitl Join/restructure s n oncology ACO Join/restructure s n oncology medicl home Vi physicin services greement. 54% 58% 47% 44% 52% 45% 29% 34% 30% 54% 60% 52% 42% 54% 47% Prctice settings Community-bsed, privte (n=91) Hospitl-bsed (n=50) Acdemic/medicl center-bsed (n=60) 76 Words in green typefce indicte glossry item. indictes responses to new survey questions. ACO, ccountble cre orgniztion; APMs, lterntive pyment models; ASCO, Americn Society of Clinicl Oncology; EHR, electronic helth record; MIPS, Merit-bsed Incentive Pyment System; QOPI, Qulity Oncology Prctice Inititive.

79 OCOLOGY PRACTICE MAAGERS In-prctice drug dispensing In-prctice drug dispensing of orl oncology drugs continues to grow in light of the ptient convenience, control of ptient eduction, nd revenue it offers. Some OPMs find ptient eduction nd dherence monitoring to be chllenging services to provide nd hve negotited seprte service fees with insurers. In-prctice orl oncology drug dispensing continues to grow. Overll, 58% of OPMs (n =116) cross ll prctice settings (47 community-bsed, privte; 30 hospitlbsed; nd 39 cdemic/medicl center-bsed) reported in-prctice dispensing in 2016, up from 34% in % of the 116 OPMs believe in-prctice dispensing eses the bility to meet the Oncology Cre Model s requirements for ptient follow-up nd side-effect mngement. In-prctice orl oncology drug dispensing Currently investigting 9% ot currently, but plnned for % o 26% Did previously, but closed the dispensry 1% (=201) Yes 58% 26% 11% 21% Drug dispensry under the PI Closed-door licensed phrmcy Both Advntges nd chllenges of in-prctice dispensing of orl oncology drugs OPM-reported dvntges (n = 116) Ptient convenience 66% Control nd delivery of ptient orl oncology drug eduction 62% Revenue source 56% Monitor nd improve therpy dherence 54% Better control over cost of cre 53% Shorter wit times for ptients to get oncology drugs 49% Improve ptient sfety through complete therpy informtion 45% Monitor side effects nd pllitive cre needs 43% Improve drug ccess in light of prctice s finncil counseling 42% OPM-reported chllenges Regultory requirements 37% Reimbursement/pprovl by insurers 35% More ptients in need of finncil ssistnce 35% Fulfillment limittions 31% Cost control 28% Inventory mngement nd storge 27% Mnging wit times s ptient volume grows 27% Due to exclusive/limited distribution nd/or preferred specilty phrmcies. Words in green typefce indicte glossry item. indictes responses to new survey questions. APPs, dvnced prctice providers; E&M, evlution nd mngement; PI, tionl Provider Identifiction. Ptient convenience remins the leding dvntge for the 116 prctices tht dispense drugs, nd 53% of OPMs reported tht their ptients prefer to receive drugs nd eduction from prctice stff. While mny mngers find it dvntgeous to control eduction nd dherence monitoring, 22% of OPMs identified them s mjor chllenges. 60% of the 116 OPMs engge multiple stff, including oncologists, APPs, nurses, nd phrmcists, in ptient eduction, while 40% delegte it to single clinicin, who most often is the prescribing oncologist. One-third of the 116 OPMs hve negotited seprte fees with pyers for dherence monitoring, nd nerly s mny re currently investigting or re plnning to do so. OPM-negotited fee with pyers for: (n = 116) Orl oncolytic ptient eduction Orl oncolytic dherence monitoring Fee seprte from the usul E&M fee. 35% 33% 77

80 Buy nd bill & specilty phrmcy OPMs continue to buy nd bill for the lrgest shre of drugs dministered in-prctice. However, relince on externl specilty phrmcies (SPs) for some or ll of the injectble/infused oncology nd djunctive/ supportive drugs continues to grow, driven by pyer requirements. The lrgest shres of drugs for in-prctice dministrtion re purchsed vi buy nd bill under the medicl benefit (ie, buy nd bill medicl). Shre of in-prctice dministered drugs purchsed in 2015 by source Buy nd bill medicl Prctice setting Community-bsed, privte (n=91) Hospitl-bsed (n=50) Buy nd bill phrmcy (ie, prctice-owned) Purchsed by externl SP nd supplied to prctice (ie, per pyer mndte) Purchsed by hospitl nd supplied to prctice 46% 22% 20% 12% 26% 18% 22% 34% Acdemic/medicl center-bsed (n=60) 25% 19% 18% 38% OPM forecsts regrding sources of in-prctice dministered drugs in 2016 compred with 2015 ( = 201) Increse o chnge Decrese Buy nd bill medicl 26% 48% 21% Buy nd bill phrmcy (ie, prctice-owned) 41% 41% 17% Purchsed by externl SP nd supplied to prctice (ie, per pyer mndte) 32% 51% 10% Purchsed by hospitl nd supplied to prctice 25% 57% 10% Bsed on 116 OPMs mnging prctices with dispensry/closed-door licensed phrmcy. There is growing trend in sourcing some or ll drugs for in-prctice use vi externl SPs s n lterntive to trditionl buy nd bill. 70% of OPMs (n = 141) did so in One-hlf of the 141 OPMs using externl SPs do so occsionlly to cquire injectble/infused oncology drugs (54%) nd/or injectble/ infused djunctive/supportive drugs (47%). Sourcing some or ll drugs through externl SPs 2014 (=198) 47% 44% 9% 2015 (=200) 64% 32% 4% 2016 (=201) 70% 21% 9% Yes o ot currently, but plnned for next yer Frequency of drug types obtined from externl SPs for in-prctice use (n = 141) ever/rrely Occsionlly Frequently/Alwys Injectble/infused oncology drugs 26% 54% 20% Injectble/infused djunctive/supportive drugs 20% 47% 33% Words in green typefce indicte glossry item. 78

81 OCOLOGY PRACTICE MAAGERS Leding situtions driving the use of externl SPs to source in-prctice dministered drugs (n=141) Required by pyer 38% OPM forecsts regrding use of externl SPs to source injectble/infused drugs in 2016 compred with 2015 (n=141) Increse o chnge Decrese When it works best for ptients 31% 27% 32% Required by mnufcturer Required by prctice mngement orgniztion 30% 27% 59% 52% Positive impct on prctice finnces For select ptients b 26% 23% 14% Injectble/infused oncology drugs 16% Injectble/infused djunctive/ supportive drugs When nticipting coverge issues Prt of strtegy to shift wy from buy nd bill More convenient thn ordering/mintining drug inventory Pursunt to limited/exclusive distribution rrngements. b Such s uninsured, Medicid beneficiries, undocumented workers. 22% 20% 20% Pyer requirements remin the most frequently cited reson tht the 141 OPMs use externl SPs to obtin drugs for in-prctice dministrtion. ew this survey, mong the 116 prctices with drug dispensries nd/or closed-door phrmcies, 20% will use n externl SP only in situtions in which the pyer will not llow them to use their own phrmcy. Percentge of drug purchses in 2015 by drug type Cncer drugs 54% Includes chemotherpy, biologics. b Includes ntiemetics, growth fctors, hemtology gents. c Includes IVIG, hydrtion, infused biologics to tret MS or RA. (n=149) Cncer djunctive/ supportive drugs b 27% oncncer drugs c 19% 74% of the prctices (n = 149) in the smple (73 communitybsed, privte; 36 hospitl-bsed; nd 40 cdemic/medicl center-bsed prctices) re responsible for purchsing drugs for in-prctice dministrtion. OPMs cross the prctice settings ttributed the lrgest shre of nnul drug purchses to cncer drugs. The number of OPMs (n = 15) who lowered their nnul forecst for the shre of prctice expenses ttributble to drugs remins smll. One-third of these OPMs expect to lower drug spending through more relince on externl SPs (n = 5) nd/or prctice reorgniztion (n = 4) by yer-end 2016 compred with OPM forecsts for drugs s percentge of totl prctice expenses in 2016 compred with 2015 o chnge 27% Unsure/do not know Decrese 1% 10% Increse 62% Estimted percentge of prctice expenses ttributed to drug costs 45% indictes responses to new survey questions. (n=149) IVIG, intrvenous immunoglobulin; MS, multiple sclerosis; RA, rheumtoid rthritis; SPs, specilty phrmcies. 79

82 Pllitive cre & survivorship Pllitive cre my improve ptient s functionlity during tretment nd support survivl with good qulity of life. ot ll prctices employ pllitive cre specilist. A number of prctices strtify their ptients by criteri to focus resources regrding survivorship progrm cre in light of demnd for such services. 37% of OPMs overll do not employ pllitive cre specilist. The employment of clinicins who re bord-certified in pllitive cre nd pin mngement (ie, physicins, APPs, phrmcists) is most often reported by OPMs t cdemic/ medicl center-bsed prctices compred with other settings. Overll, 12% of OPMs (10 community-bsed, privte; eight hospitlbsed; nd seven cdemic/medicl centerbsed prctices) expect to hire pllitive cre specilist for the first time in How prctices meet ptient need for pllitive cre specilists ( = 201) 16% 13% 11% Employ physicin Employ APP Refer ptients to hospitl-bsed pllitive cre clinic b Refer to home helth service with pllitive cre progrm Pln to hire specilist in 2017 Employ oncology clinicl specilist phrmcist Bord-certified in pllitive cre/pin mngement. b Hospitl clinic tht the prctice is ffilited with or owned by. 25% 14% 12% Prctices pproches to survivorship progrm cre ( = 201) All ptients re provided some level of posttretment cre 57% Strtify ptients into low, intermedite, nd high risk for long-term or lte effects or recurrence; lrgely focus on intermedite- nd highrisk ptients, nd comnge low-risk ptients with primry cre 19% Strtify ptients into curtive vs metsttic/pllitive intent; lrgely 15% focus cre on posttretment curtive ptients Currently rethinking survivorship cre strtegy 9% Regrdless of long-term helth/recurrence risk or tretment intent. Survivorship progrm cre is primrily provided by the oncology prctice (39%), coordinted with the ptient s PCP (26%), delivered by the ptient s PCP (11%), referred to hospitl survivorship clinic (9%), or new this survey, provided by clinicin ppointed to survivorship counseling t the hospitl tht owns or is ffilited with the prctice (14%). 21% of OPMs expect to either dd survivorship progrm services or expnd their services over the next 2 to 3 yers. As of Jnury 2016, ny cncer center progrm seeking certifiction by the Commission on Cncer must provide SCPs to 25% of eligible ptients. The phsed-in requirement expnds nnully until Jnury 2019 when ll ptients must receive n SCP mngers overll (62%) provided some or ll of their ptients with written or printed SCP in Provision of written/printed SCPs by prctice setting Community-bsed, privte (n = 91) Hospitl-bsed (n = 50) All ptients Some ptients Pilot progrm under wy o Plnned for 2017 Acdemic/medicl center-bsed (n = 60) 36% 18% 7% 32% 7% 56% 18% 12% 8% 6% 52% 13% 12% 12% 11% 80 Words in green typefce indicte glossry item. indictes responses to new survey questions. APPs, dvnced prctice providers; PCP, primry cre provider; SCPs, survivorship cre plns.

83 OCOLOGY PRACTICE MAAGERS Prctice stffing cre nvigtors & medicl scribes Efficient coordintion of ptient cre nd mximizing oncologist productivity re top-of-mind opertionl issues for OPMs. Providing resources, such s ptient nvigtors, becme prerequisite of ccredittion for cncer centers s of 2015, ccording to mndte by the Americn College of Surgeons Commission on Cncer. 7 OPMs who use medicl scribes to provide their oncologists with collbortive EHR documenttion support reported improvements in ptient nd oncologist stisfction. Mny OPMs rely on cre nvigtors to coordinte cre between their prctice, referring physicins, nd multidisciplinry tem members involved in ctive tretment nd survivorship cre. Two-thirds of the OPMs overll (n = 130) employ nvigtors in their prctice nd/or rely on hospitl-employed nvigtors. Prctices employment of cre nvigtors by prctice setting Rtio of cre nvigtors per oncologist (n=130) 2.5 nvigtors 4% 2 nvigtors 17% <1 nvigtor 32% Overll, 40% of OPMs (30 community-bsed, privte; 26 cdemic/medicl center-bsed; nd 25 hospitl-bsed prctices) employed medicl scribes nd/or subcontrcted with medicl scribe service in 2016, similr to the previous study period. ew this survey, 10% of the OPMs (n = 21), representing ll prctice settings, hve tried medicl scribes in the pst but bndoned the ide. Employment of stff s medicl scribes Employ Subcontrct with service Tried but lter bndoned the ide 25% 15% 10% (=201) 5% 5% 40% Communitybsed, privte prctices (n = 91 ) Plnned for 2017 Under discussion one Hospitl- nd cdemic/ medicl center-bsed prctices (n = 110) Employ nvigtors in prctice 41% 39% Use hospitl-employed nvigtors in prctice 27% 40% 1.5 nvigtors 21% 1 nvigtor 26% Defined s full-time nvigtor(s) per full-time oncologist. Includes nvigtors employed by the prctice, s well s hospitlemployed nvigtors utilized by the prctice. The rtio of nvigtors per full-time oncologist vries. More thn one-hlf of the OPMs hve one or fewer full-time nvigtor per full-time oncologist. Performnce chnges relted to medicl scribe services Slight to significnt improvement o chnge Slight to significnt decline Oncologists job stisfction Overll oncologists productivity during clinic dys Ptient stisfction regrding interction with oncologist Amount of time for discussion during visit Qulity of oncologists fce-to-fce ptient interction during visit umber of ppointments for ptient visits included in the schedule (n=81) 55% 35% 10% 53% 38% 9% 47% 38% 15% 43% 41% 44% 44% 16% 12% 41% 42% 17% indictes responses to new survey questions. EHR, electronic helth record. 81

84 Prctice stffing dvnced prctice providers Relince on APPs remins high cross prctice settings to support oncologists with in-prctice ptient encounters, on-cll, nd hospitl rounding. A number of OPMs reported difficulty recruiting or retining APPs. Hiring more nurses nd APPs tops the list of positions to be recruited for in 2017 to hndle nticipted worklod. 127 OPMs (63% overll) employed APPs in 2016 employment ws highest mong the surveyed cdemic/medicl centerbsed prctices (78%) compred with the hospitl-bsed (60%) nd community-bsed, privte (55%) prctices. Oncology experience level of n APP upon hire (n = 127) one 16% Little/some 44% Experienced 62% Certified in oncology nursing 23% The prctice provides oncology trining. OPMs reported difficulty recruiting/retining Bsed on 201 OPMs who employ oncologists. Oncologists 30% APPs b 33% Oncology clinicl specilist phrmcists c 24% b Bsed on 127 OPMs who employ APPs. c Bsed on 100 OPMs who employ phrmcists. Most of the 127 OPMs described moderte (50%) or slight (18%) vribility in the responsibilities of their APPs, depending upon the oncologists to whom they re ssigned. This is consistent cross prctice settings. ew this survey, 9% of the OPMs djust roles pursunt to prctice needs. APP tsks during typicl dy ew this survey, 43% of the 127 OPMs who employed APPs in 2016 predict higher rtio of APPs per oncologist deployed in 5 yers compred with current prctice levels. Rtio of APPs per oncologist Percentge of time spent (n=127) In-person ptient encounters Cre coordintion resulting from encounters 18% EHR mintennce, notes, test results 13% Telephone trige with 13% ptients on clinicl issues E-mil with ptients on 12% clinicl issues b Other 3% 41% Currently 31% 18% Forecst in 5 yers 24% 28% < APP per oncologist (n=127) Defined s full-time APP per full-time oncologist. 45% 54% Includes scheduled or urgent cre, hospitl inptient, ptient eduction, nd procedures. b Includes e-mil responses directed to APP nd/or on behlf of oncologist(s) vi ptient portl. 67% of the 127 OPMs reported n increse in the number of ptients seen per APP during typicl clinic dy over the lst yer n overll medin of 16 ptients per APP in Ptients seen per clinic dy by n APP by prctice setting Community-bsed, privte Hospitl-bsed 15 (n=50) (n=30) 24 Acdemic/medicl center-bsed (n=47) 16 Medin during typicl clinic dy in indictes responses to new survey questions. 82 APPs, dvnced prctice providers; EHR, electronic helth record.

85 OCOLOGY PRACTICE MAAGERS 62% of OPMs reported tht their APPs hve on-cll nd hospitl-rounding responsibilities. (n = 127) ew this survey, 43% of OPMs (n = 86) (25 community-bsed, privte; 28 hospitlbsed; nd 33 cdemic/medicl center-bsed prctices) employed APPs s hospitlists in 2016, nd 39% of the 86 OPMs will hire more in Additionlly, nine OPMs will dd APPs s hospitlists to their prctice stff for the first time in On-cll nd hospitl-rounding responsibilities of APPs On cll Hospitl rounding During the week On weekends 7 dys per week ot currently, but plnned for 2017 (n = 127) Compenstion for APPs 35% 30% 18% 14% Slry + incentives Slry only Stright incentives Hourly rte Under discussion 12% 15% 35% 4% 3% 31% 18% 11% 33% 6% 2% 30% Metrics driving level of compenstion incentive (n = 55) Ptient stisfction (56%) Prctice profitbility (55%) one Growth in prctice-level ptient visits/encounters (44%) Encounter volume ttributed to APP (42%) Work RVUs (36%) Stff chnges to hndle prctice worklod in 2017 compred with 2016 (n = 152) Expect to dd Prctice stff Expect to reduce 55% urse 7% 53% APP 5% 51% Stff to process precertifictions, PAs, nd predetermintions 6% APP compenstion/reimbursement for select services (n = 127) Cell phone & use 35% On cll 33% Involvement in new services (33%) Attitude/prctice citizenship (27%) Trvel to sites 31% Work on nights/ weekends/ holidys 25% 49% Medicl ssistnt 9% 47% Oncologist 13% 47% Billing/coding/collections 9% 45% Administrtive nonbilling b 12% 44% Cre nvigtor 6% 41% Finncil counselor 7% 35% Lbortory stff 7% 35% Pllitive cre physicin 7% 34% Socil worker 5% 32% IT specilist 10% 32% Medicl scribe 9% 32% Genetic counselor 4% 30% Phrmcy technicin chemotherpy compounding Percentges bsed on number of prctices djusting pplicble stff positions. b Includes scheduling nd front desk stff. 7% More thn one-hlf of the OPMs forecst higher numbers of ptients seen weekly for in-prctice visits with oncologists (58%) or with APPs (64%) in 2016 compred with Overll, 152 OPMs (76%) expect to dd or reduce their stffing levels pertining to one or more of the positions surveyed to hndle nticipted worklod in 2017 compred with For one-hlf of these OPMs, hiring nurses, APPs, nd stff to hndle precertifictions nd PAs re top of mind. ew this survey, lmost one-hlf of OPMs (47%, n = 95) (26 community-bsed, privte; 25 hospitl-bsed; nd 44 cdemic/medicl center-bsed prctices) employed licensed dietitins in 2016, nd 31% of them will hire more in Additionlly, 15 OPMs will dd dietitins to their prctice stff in indictes responses to new survey questions. APPs, dvnced prctice providers; IT, informtion technology; PAs, prior uthoriztions; RVUs, reltive vlue units. 83

86 Ptient cll volume & clinicl support Ptients nd cregivers often hve mny cliniclly relted questions tht they communicte vi text, e-mil, nd telephone between in-prctice visits. Few OPMs trck ptient cll volume nd hire nurses who re dedicted to triging ptient communictions. To void ptient complictions, number of prctices hve identified predetermined points of cre nd/or clinicl situtions tht trigger proctive ptient contct. One-third of OPMs, overll, trck cll volume nd hve hired nurses dedicted to the trige of ptient clinicl inbound clls, most commonly t rtio of 1 fulltime trige nurse per full-time oncologist. Ptient clinicl cll volume trcking one Inbound clls Both inbound nd outbound clls Outbound clls 2% 67% 13% (=201) 18% urses dedicted to inbound ptient telephone cll trige 50% 16% (=201) 34% Yes o Plnned for 2017 Inititives undertken to expnd ptient contct to void complictions (n = 72) Hired/ssigned stff for proctive outbound ptient contct t predetermined points during tretment 44% Incresed contct vi EHR ptient portl 44% Incresed e-mil nd text communiction 40% Designted set times during workflow to mnge ptient contct 38% Expnded schedule for wlk-ins/urgent cre 32% Hired stff for outrech to trgeted ptients t high risk for complictions Hired outsourced service for proctive outbound ptient contct t predetermined points during tretment 32% 24% One-hlf of the 201 OPMs hve undertken inititives (n = 72; 36%) or pln to undertke them in 2017 (n = 34; 17%) to hire or ssign stff for proctive ptient contct t predetermined points of cre to void potentil complictions, ED visits, nd/or hospitliztions. ew this survey, 21% of OPMs re sending secure text messge responses involving stndrdized follow-up queries nd informtion to reduce the number of followup telephone clls. Predetermined points of cre tht trigger proctive ptient contct (n = 40) 63% 60% 58% 50% 50% 50% 48% 45% 38% Chnge in tretment dosge or regimen Chnge in ptient sttus Follow-up to hospitl dischrge, urgent cre, nd/or ED visit indictes responses to new survey questions. Initition of new tretment b 84 ED, emergency deprtment; EHR, electronic helth record. Follow-up for missed ppointments, testing, or surgery referrls yet to be scheduled After first new ptient visit Any dvnced cncer ptients nd those with severe symptoms At strt, midpoint, nd end of tretment Initition of emetogenic chemotherpy Percentges bsed on 40 OPMs who employ stff nd/or outsource for proctive ptient contct. b Includes orl or injectble chemotherpy, rdition, surgery, pllitive cre, nd hospice cre.

87 OCOLOGY PRACTICE MAAGERS Prctice hours of opertion Most oncology prctices re open 5 dys nd 40 hours per week for in-prctice visits nd infusion services, s pplicble. A growing number, lbeit minority, hve weekdy hours pst 6 pm nd re open 6 or 7 dys weekly. Oncology prctices dys nd hours of opertion Dys per week Ptient visits 11% 73% 16% 14% 66% 20% 17% 60% 23% Hours per week <5 dys per week 5 dys per week >5 dys per week Prctice setting Community-bsed, privte (n=91) Hospitl-bsed (n=50) Acdemic/medicl center-bsed (n=60) Infusion services b 15% 66% 19% 18% 53% 29% 23% 51% 26% <40 hours per week 40 hours per week >40 hours per week Ptient visits Prctice setting Infusion services b 29% 36% 35% Community-bsed, privte (n=91) 37% 30% 33% 30% 38% 32% Hospitl-bsed (n=50) 47% 24% 29% 32% 32% 36% Acdemic/medicl center-bsed (n=60) 39% 28% 33% Ptient visits include scheduled ptient visits with oncologists nd/or APPs. b Infusion services include infusions nd shot clinics for cncer nd noncncer ptients, s pplicble. Hours of opertion vry by prctice setting. A growing number of prctices, lbeit minority mong the different prctice settings, re open 6 or 7 dys per week for in-prctice visits (n = 39; 19% overll) compred with the previous study period (n = 29; 15% overll). 38% of mngers overll, representing ll prctice settings, hve expnded new ptient ppointment slots in Averge led times to schedule ptients for cre re similr to the previous study period, lthough the rnges hve nrrowed. Averge led times for ptient ppointments (=201) Men number of dys Rnge ew ptients 11 dys 1 60 dys Estblished ptients 6 dys 1 30 dys Infusion center visit 5 dys 1 30 dys Survivorship progrm cre 7 dys 1 45 dys Ptient scheduling performnce in 2016 compred with 2015 ( = 201) Weekly hours open for in-prctice visits Appointment slots for new ptients ew ptients led time Estblished ptients led time Survivorship progrm cre led time Infusion center visit led time Incresed o chnge Decresed 32% 30% 39% 38% 36% 35% 53% 54% 61% 61% 56% 58% 3% 6% 11% 11% 7% 9% 79 mngers cross the prctice settings expnded weekly hours in Most prctices re not open pst 6 pm. Prctice closed fter 9:00 PM 8:00 PM 2% 6% 4:00 PM 18% 7:00 PM 13% 6:00 PM 23% 5:00 PM 38% Ltest time prctice is open for in-prctice visits with oncologists nd/or APPs. APPs, dvnced prctice providers. 85

88 Prctice-bsed infusion services Most surveyed OPMs mnge prctices with infusion chirs/beds, which re used to dminister ll or some of the prescribed infusions for their cncer ptients. A number of prctices lso use their fcilities to dminister infusions to noncncer ptients. 148 OPMs (74% overll) cross prctice settings mnge in-prctice infusion services. Acdemic/medicl center-bsed prctices were most likely to report growth in chir/bed cpcity compred with other settings. Prctice-bsed infusion services ot currently, but plnned for % Yes 74% o 19% (=201) Ownership of infusion chirs/beds by prctice setting Refers to the entity tht buys the infused drugs nd erns the revenue. b Refers to integrtion vi joint venture. 39% 40% of OPMs reported n increse in chirs/beds in 2015 Ownership of infusion chirs/beds is highest mong the surveyed community-bsed, privte prctices. of OPMs reported n increse in chirs/beds in 2016 More thn one-hlf of the surveyed hospitl-bsed nd cdemic/medicl center-bsed prctices re required to use the infusion services of their institution for some or ll prescribed infusions. OPM forecsts for infusion/shot clinic ptient volume in 2016 compred with 2015 (n = 148) Privte prctice Hospitl/cncer center the prctice is integrted with b or owned by Community-bsed, privte (n=63) 91% 9% Hospitl-bsed (n=34) Acdemic/medicl center-bsed (n=51) 35% 65% 16% 84% 84 Increse o chnge Decrese Cncer ptients 53% 38% 9% oncncer ptients 45% 45% 10% Types of infusions/injections (n = 148) 50% Only cncer ptients 50% Cncer nd noncncer ptients oncncer infusions/injections (n = 74) Iron for nemi 77% Hydrtion 76% Intrvenous immunoglobulin 72% Blood trnsfusions 55% Osteoporosis 54% Antibiotics 53% Posttrnsplnt growth fctors 50% Rheumtoid rthritis 45% Multiple sclerosis 42% Inflmmtory bowel disese 38% Enzyme deficiency 32% Includes chemotherpy nd djuvnt/supportive tretment. urse-to-ptient rtio in infusion center t ny given time Prctice setting Community-bsed, privte (n=63) Hospitl-bsed (n=34) Acdemic/medicl center-bsed (n=51) Ptients per single infusion nurse 6 (rnge, 1 50) 5 (rnge, 1 20) 6 (rnge, 1 50) Includes infusions nd shot clinic for cncer nd noncncer tretments. Excludes complex tretments, such s chemotherpy desensitiztion. 86 indictes responses to new survey questions.

89 OCOLOGY PRACTICE MAAGERS Community-bsed, privte prctices re more likely to experience declining drug mrgins compred with other settings. To mitigte the decline, OPMs most often focus on wste reduction. Per prctice policy, in cses of significnt revenue loss, the 148 prctices most often use n lterntive mediction if vilble (30%) nd/or pursue ssistnce from chritble foundtion (27%) or mnufcturer (24%), hospitl referrl (22%), or peer-to-peer discussion with the pyer (22%). The prctice my void buy nd bill nd obtin the drug from n SP directly (21%) or refer the ptient to n SP (18%). OPM forecsts for extending infusion service opertions (n = 148) b Evening hours (pst 6 pm) 30% 24% Weekdy hours 30% 10% Dys per week 25% 10% Weekend hours for supportive infusion services/shot clinic 24% 10% Weekend hours for scheduled chemotherpy 24% 6% Chnge in drug mrgin over the lst 12 months Incresed o chnge Decresed Unsure/ 4% do not know Forecst for 2016 compred with b Forecst for 2017 compred with Leding inititives to mitigte declining drug mrgins Reduce drug wste Mximize GPO contrcts (n=42) 50% 43% 24% Slight 6% Moderte 1% Significnt 31% 29% 36% (n=144) 20% Slight 7% Moderte 2% Significnt Use SP for drugs with lower mrgins egotite higher drug reimbursement nd dministrtion fees with privte pyers In-prctice dispensing of orl drugs Expnd in-prctice dispensing to include injectble nd infused drugs 33% 26% 21% 148 mngers estimted the volume of prescribed infusions dministered in their own infusion fcilities; verging 59% overll. While estimtes vried, the shre of infusions dministered in-prctice ws highest mong community-bsed, privte prctices (medin: 75%) compred with hospitl-bsed (medin: 63%) nd cdemic/medicl centerbsed (medin: 50%) prctices. ew this survey, some prctices pursue hospitl referrls due to ptient preference (18%) nd/or more fvorble out-of-pocket costs for ptients (14%). Averge volume of prescribed oncology infusions by site of cre In-prctice dministrtion 59% Referred to hospitl outptient deprtment Admitted/referred to inptient hospitl Referred to infusion center/mbultory tretment center Referred to homeinfusion services 8% (n=148) 14% 10% 9% Includes uninsured nd insured ptients who cnnot fford their cost shre. b Includes Medicre, Medicid, nd select commercil pyers. Top 3 situtions driving drug infusions to hospitls Ptient ffordbility Insufficient prctice reimbursement from pyer b Clinicl sitution nd need for monitoring Wht is your prctice doing to prepre for USP <800> stndrd complince? 26% Hve lredy met the stndrds 18% Witing to see how stte bords of phrmcy will enforce 12% Attending seminrs Working with consultnts to clculte cost of complince 24% othing t this time 14% Words in green typefce indicte glossry item. indictes responses to new survey questions. GPO, group purchsing orgniztion; SP, specilty phrmcy; USP, US Phrmcopei. Reding resources to improve understnding 11% Renovting the dmixture fcility The USP <800> stndrd on hndling hzrdous drugs in helth cre settings goes into effect July

90 Prctice utomtion The mjority of OPMs re mnging prctices with EHRs, nd mny systems include ptient portls. Oncology specificity, PA utomtion, nd bility to customize re mong the unmet needs. Tblet nd smrtphone technology hs been integrted to improve opertionl efficiency nd remote ccess to the EHRs. 84% of OPMs (n = 168) mnge prctices with EHRs; 58% of the systems re oncologyspecific. Of the 168 OPMs, 62% described some level of interoperbility with other deprtments or prctices. About 60% of the mngers reported unmet EHR needs. Leding unmet needs regrding EHR functionlity Ability to customize Automted precertifiction/pa submissions Orl drug regimen trcking Integrtion with registries nd protocols for clinicl trils SCP genertion Voice recognition/dicttion cpbility Oncology specificity Electronic consent forms 82% of mngers reported EHR ccess vi ptient portls. ew this survey, few portls (29%) support ccess to SCPs nd/or input of ptient-reported outcomes (15%). One-third of prctices (n = 68) provided telemedicine visits in 2016, nd n dditionl 22 prctices pln to provide them in Extent of EHR dt exchnge (n = 104) Across multiple prctice sites 58% Within single site 55% With re hospitl(s) outside of prctice 34% With other oncology prctices 29% With out-of-re hospitls nd COEs 17% mhelth-relted cpbilities in 2016 or plnned for in 2017 (=201) HIPAA-complint secure e-mils Tblet devices Smrtphones HIPAA-complint secure texting Telemedicine visits 34% 45% 56% 53% 76% Refers to some or ll deprtments. A minority of prctices reported text messging with their ptients to remind them bout ppointments (30%), ddress drug refill/dherence issues (25%), nd/or encourge completion of stisfction surveys (21%). A few prctices collect stisfction dt vi text messging (16%); 36 OPMs (30%) utilize chrge cpture smrtphone ppliction. Leding uses of tblet technology Ptient check-in Administer ptient surveys EHR remote ccess E-mil consults with other providers EHR ccess/updting during ptient visits Ptient eduction Drug prescribing Leding uses of smrtphones Text messging with stff/ other physicins nd ptients EHR nd ptient portl remote ccess Pger replcement Drug prescribing Access decision-support tools Leding uses of telehelth Follow-up visits (eg, routine, chemotherpy, posthospitl dischrge) Rurl ptient outrech Ptient eduction Pllitive cre/pin mngement Ptient mediction dherence monitoring Words in green typefce indicte glossry item. indictes responses to new survey questions. 88 COEs, centers of excellence; EHRs, electronic helth records; HIPAA, Helth Insurnce Portbility nd Accountbility Act; mhelth, mobile helth; PA, prior uthoriztion; SCP, survivorship cre pln.

91 =200 Employers 90 Demogrphics 91 Helth benefit sponsorship & dministrtion 92 Benefit eligibility & employee prticiption 93 Consumer-directed helth pln offerings 94 Funding of helth benefits 96 Helth benefit mngement & defined contribution 98 Retiree helth benefit coverge 99 Cncer cre impct on compny & workforce 100 Vendor reports & unmet cncer dt needs 101 Access to second opinions & centers of excellence 102 Addressing cncer cre in benefit design 104 Cncer specilty drug mngement 106 Preference-sensitive, survivorship & end-of-life cre 108 Popultion helth mngement progrms 109 Wellness & well-being inititives HIGHLIGHTS 42% of employers hve dopted wit-nd-see pproch to helth benefit plnning in light of the impending Cdillc tx nd future sttus of the Affordble Cre Act (p. 91) For 77% of compnies, helth benefit eligibility requirements for ctive employees hve remined unchnged (p. 92) Looking hed, 51% of compnies will not discontinue helth benefit sponsorship entirely, but bout 45% my consider eliminting coverge in the ner future for working spouses nd dult dependents with ccess to coverge elsewhere (p. 92) 51% of employers offered their employees consumer-directed helth plns (CDHPs) in 2016, either mong multiple pln options (33%) or s the only pln option (18%) (p. 93) 52% of the 101 compnies sponsoring CDHPs offer voluntry benefits, such s cncer insurnce (p. 93) 32% of compnies dopted unitized pricing, in which worker premiums re bsed per dependent, in 2016 or re likely to dopt it in 2017, nd n dditionl 35% will consider dopting it over the next 2 to 3 yers (p. 94) 41% of employers linked their employees helth benefit costs to prticiption in helth interventions in 2016 or re likely to link them in 2017 (p. 95) One-hlf of employers indicted the vlue they plce on direct involvement in helth benefit mngement hs remined unchnged over the lst yer, while 34% indicted they plce greter vlue on it (p. 96) About 60% of employers trck cncer cre s shre of totl helth cre nd/or high-dollr cse spending (p. 100) 34% of the 143 employers receiving vendor reports need better dt bout cncer cre cost, use, nd qulity detils; 28% need better understnding of qulity nd cost improvements from high-performnce networks (p. 100) 35% of employers required second opinions for preferencesensitive tretment options in 2016 or re likely to require them in 2017, nd 30% of employers will consider dding this requirement over the next 2 to 3 yers (p. 101) 32% of employers incorported site-of-cre steerge into their 2016 benefit designs or re likely to incorporte it in 2017 (up from 22% in the previous study period) (p. 102) One-third of compnies required oncology nurse nvigtion to steer site of cncer cre in 2016 or re likely to require it in 2017 (p. 102) 57 employers (29%) work with their vendors on tctics to specificlly ddress rising specilty drug cost trends; two-thirds of these employers integrted cncer drug mngement cross the medicl nd phrmcy benefits in 2016 or re likely to integrte it in 2017 (p. 104) One-third of employers implemented risk- or outcomesbsed contrcts with specilty phrmcies in 2016 or re likely to implement them in 2017, nd n dditionl 39% will consider doing so over the next 2 to 3 yers (p. 105) The top 5 most pressing chllenges in cncer cre in 2016, s indicted by employers, re overll cncer cre cost control, effective cncer therpies, cncer specilty drug cost control, escltion in ptient out-of-pocket costs, nd developing better cncer dignostics (p. 105) 63% of employers provide ccommodtions to employees who wnt to work while undergoing cncer tretment, but only 11% offer resources nd trining to supervisors nd coworkers on how to support employees with cncer (pp ) 61% of compnies (n = 121) use helth or well-being ssessments in their benefit strtegy, nd most of them (60%) incentivize completion with monetry rewrds (p. 108) 89

92 Demogrphics 200 self-insured employers (with >100 employees) completed n online survey fielded from mid-july to mid- August The respondents described their current (2016) workforce nd sttus regrding generl helth benefits, coverge of cncer cre services, wellness nd well-being inititives, nd their expecttions for 2017 nd the next 2 to 3 yers. Compny nd workforce demogrphics re similr to the 2015 study smple but include slightly higher proportion of compnies with ntionl service res, lrge nd jumbo workforces, nd prt-time workers. The verge number of employees tht composed the workforce of surveyed employers by compny size: Smll: 272 (rnge, ) Lrge: 1,627 (rnge, 505 4,750) Jumbo: 39,346 (rnge, 5, ,000) Workforce size, ge, nd gender Size Smll Lrge Jumbo Age 19 yers yers yers yers 65 yers 4% 5% 17% 27% 39% 34% 32% 42% Gender Mle Femle 46% 54% Smll ( employees); Lrge (501 4,999 employees); Jumbo ( 5,000 employees). Comprison of 2016 nd 2015 smples More compnies re & lrge/jumbo (73% vs 65%) slightly more employees work prt-time (21% vs 18%). Most compnies (75%) re bsed in serviceproviding industries, similr to the previous study period, nd 25% represent goodsproducing industries. Surveyed employers reported the percentge of their workforce by job sttus Surveyed employers reported covering workers in the following regions Job sttus Full-time/permnent (ie, 35 hours per week) Prt-time (ie, 30 hours per week) Prt-time (ie, <30 hours per week) Overll ( = 200) Smll (n = 55) Lrge (n = 78) Jumbo (n = 67) 79% 86% 79% 73% 12% 10% 12% 14% 9% 4% 9% 13% West 16% Midwest 16% South 20% orthest 15% (=200) Multiregionl/ntionl 33% 90

93 EMPLOYERS Helth benefit sponsorship & dministrtion All surveyed compnies self-insure their medicl nd phrmcy benefits. Mny compnies rely on helth pln nd/or third-prty dministrtor to dminister their medicl benefit. A number of compnies hve crved out the specilty drugs in their prescription plns to vendors tht specilize in their mngement. A number of fctors influence these compnies continued commitment to helth benefit sponsorship. Some compnies hve dopted wit-nd-see pproch to their benefit plnning in light of the Cdillc tx dely nd future sttus of the ACA. All surveyed employers self-insure their medicl benefit offerings to employees nd their dependents. Mny seek the ssistnce of n insurnce crrier/helth pln (74%), third-prty dministrtor (36%), nd/or privte exchnge vendor (12%) to help them dminister these benefits nd process clims. ew this survey, number of compnies hve crved out specilty drug mngement to vendors tht specilize in their mngement. Do you crve out specilty drugs from the vendor dministering the phrmcy benefit? Under discussion 12% Will likely implement in % o 41% (=200) Yes 42% 19% (n=84) Vendor tht mnges only cncer drugs 81% Vendor tht mnges multiple therpies Employers ssigned ner-neutrl rtings, on verge, to how strongly the vilbility of privte exchnges nd public exchnges influences their commitment to continue helth benefit sponsorship, similr to the previous study period. ew this survey, dministrtive requirements of the ACA ws mong the top five fctors tht influence employers commitment to helth benefit sponsorship. Employers continued commitment to sponsor helth benefits remins strongly influenced by Compny finncil helth Worker helth & well-being Worker recruitment & retention Insurnce cost trends ACA dministrtive requirements Under the ACA, 40% excise tx will be ssessed on the cost of coverge for helth plns tht exceed certin vlue. These plns, clled Cdillc plns, will ffect helth pln coverge vlued bove $10,200 for individuls nd $27,500 for fmilies. To void the Cdillc tx, employers will look for wys to chnge their benefit designs to keep the vlue below the txtion level. The implementtion of the Cdillc tx under the ACA hs been delyed from 2018 until Jnury 1, ,2 ew this survey, employers described how the tx hs ffected their helth benefit plnning. How hs the impending Cdillc tx ffected your helth benefit plnning? Tke wit-nd-see pproch regrding the future of the ACA Evlute benefits nnully, regrdless of tx sttus Chnged benefits in 2016 but put future chnges on hold Expect to chnge benefits in 2017 to void the tx 10% 18% 30% 42% Words in green typefce indicte glossry item. ACA, Affordble Cre Act. indictes responses to new survey questions. 91

94 Benefit eligibility & employee prticiption Active workforce eligibility for nd prticiption in compny-sponsored helth benefit plns remined unchnged in 2016 compred with 2015 for most compnies. A number of compnies will consider future chnges to eligibility requirements for working spouses, dult dependents, nd prt-time workers. However, 51% of the surveyed compnies will not consider the discontinution of helth benefits sponsorship entirely. About 80% of surveyed compnies provide both medicl nd phrmcy benefits to their full-time/permnent workforce nd their dependents; fewer thn 20% of them exclude dependent coverge. Smll employers re less likely thn lrge or jumbo employers to provide benefits to prt-time workers, prticulrly those working fewer thn 30 hours weekly, similr to previous study periods. Across the 200 surveyed employers, 83% of employees, on verge, qulified for their compny s helth benefits in 2016, nd 77%, on verge, enrolled in the plns offered. Eligibility, prticiption, nd forecsts for chnge ( = 200) 2016 eligibility compred with % Active employees eligible for coverge in % Eligible ctive employees who enrolled in % 77% 7% Lower Sme Higher 2016 enrollment compred with % 68% 14% Lower Sme Higher Percentge of compnies tht WILL OT ( = 200) Eliminte fmily coverge Discontinue helth benefit sponsorship entirely Adopt strtegy tht lowers the number of employees who qulify for benefits 54% 51% 42% More thn one-hlf of the compnies re commited to helth benefit sponsorship nd will not consider eliminting fmily coverge nd/or discontinuing helth benefit sponsorship entirely in the future. Defined under the ACA Employer Shred Responsibility provision s full-time employee working 30 hours per week. Looking hed, number of employers will reconsider coverge eligibility for prt-time workers, working spouses, nd, new this survey, dult dependents with ccess to coverge elsewhere. Coverge eligibility chnges likely in 2017 or to be considered over the next 2 to 3 yers Adult dependents 47% Eliminte coverge of Working spouses 44% Prt-time employees b 34% With ccess to coverge elsewhere. b Working <30 hours per week. 92 ACA, Affordble Cre Act.

95 EMPLOYERS Consumer-directed helth pln offerings Rising deductibles s wy to slow the growth in helth cre costs by incresing consumers exposure to costs nd decisions to seek cre emerged in the employer mrket in Oncology Trend Report reserch shows growth in the number of compnies tht hve offered consumerdirected helth plns (CDHP) over the yers or will consider offering them in the future. Some compnies lso offer nd contribute to helth benefit ccounts to help their employees sve nd py for qulified medicl expenses. Others my offer voluntry benefits, such s cncer insurnce, s wy to supplement their sponsored helth benefits. Employers my shift helth cre costs on to employees through deductibles s wy to void the Cdillc tx, which will be encted in 2020 under current lw. 1,2 Almost one-third of covered workers (29%) were enrolled in CDHPs with svings options in 2016, ccording to recent study by the Henry J. Kiser Fmily Foundtion. 3 33% of employers offered CDHP mong multiple pln offerings Employers offering CDHPs to their eligible employees 29% 35% 2012 (=101) 2013 (=210) 54% 52% 51% 2014 (=201) 2015 (=200) Oncology Trend Report study yer 2016 (=200) 18% offered one s the only pln option & for their employees in Overll, 51% of employers (n=101) (46% smll, 47% lrge, nd 58% jumbo) offered CDHP to their eligible employees in 2016, similr to the previous study period. One-third of the compnies in 2016 offered CDHP s n option mong multiple options offered. Employer forecsts for future CDHP offerings ( = 200) 17% 10% 9% Add to multiple pln options offered Voluntry cncer insurnce Employers offered voluntry cncer insurnce to employees in 2016 (n=101) Will likely offer in % o 33% Under discussion 11% Yes 52% 3% Add s only pln option offered Shre of employees who purchsed insurnce in 2016 (n=52) Will likely dd in 2017 Will consider over the next 2 to 3 yers 8% one 27% 1% 10% of employees 25% 11% 20% of employees 19% 21% 30% of employees 2% 31% 40% of employees 8% >40% of employees 11% Unble to provide informed estimte ew this survey, three-fourths of these 101 employers with CDHPs offer their employees ccess to HRAs, HSAs, nd/or FSAs with compny contributions towrd the ccount/ rrngement. One-hlf (n = 52) of these compnies offering CDHPs in 2016 lso offered voluntry (ie, elective) benefits, such s cncer insurnce, s wy to supplement coverge, similr to the previous study period. Words in green typefce indicte glossry item. indictes responses to new survey questions. FSAs, flexible spending ccounts; HRAs, helth reimbursement rrngements; HSAs, helth svings ccounts. 93

96 Funding of helth benefits A number of compnies hve undertken or will consider future chnges to their generl helth benefit design tht pss on more of the costs to workers. This is likely to be problemtic for low-wge workers. 4 Investing in tools to help workers become better helth consumers is top priority for mny of these employers. Medin shre of helth benefit costs funded by surveyed employers, by beneficiry type, in % 50% Active employee ( = 200) Spouse/dependent/fmily (n = 163) Chnges in employers contributions in 2016 vs % 13% Incresed Active employee Spouse/dependent/fmily 71% 73% o chnge 18% 14% Decresed Growth in helth benefit costs outpced wge growth between 2015 nd 2016 for nerly onehlf of these employers (45%) overll. Reported medin growth in helth benefit costs rnged from 5% for jumbo employers to 10% for smll employers, while medin wge growth rnged from 3% for jumbo employers to 5% for smll employers. The percentge of helth benefit costs pid by surveyed employers in 2016 vried by orgniztion nd beneficiry type (rnge, 3% 100%). ew this survey, while 71% of employers held their contribution towrd employee benefits stedy, 18% covered smller shre of the costs in 2016 compred with Mny employers hve revised their helth benefit designs to shift more costs to the worker or will consider doing so in the future. The commitment to subsidizing coverge for spouses nd dependents my be fding for some compnies. ew this survey, 32% of employers hve lredy dopted or will consider dopting in 2017 unitized pricing for the worker contribution to the helth insurnce premium. Time frme for helth benefit chnges tht shift costs to workers ( = 200) Premium Implemented in 2016 or likely in 2017 Will consider over the next 2 to 3 yers Increse worker contribution to the helth insurnce premium 46% 33% Increse worker contribution towrd spouse nd dependent coverge, compred with single coverge Apply surchrge or eliminte subsidies for spouses when coverge is vilble elsewhere Adopt unitized pricing for worker contribution to the helth insurnce premium Deductible 45% 29% 38% 34% 32% 35% Rise deductibles for office visits nd hospitliztion 44% 32% Apply seprte deductible for prescription drugs 42% 36% Apply combined medicl/phrmcy deductible 40% 32% Copy/Coinsurnce Rise prescription drug out-of-pocket costs 41% 35% Rise office visit copys/coinsurnce 38% 35% Shift drug cost shring from dollr copys to percent coinsurnce 35% 35% 94 Words in green typefce indicte glossry item. indictes responses to new survey questions.