The second day at the 50th annual meeting of the American Society of Clinical Oncology ended with a session entitled “Health Care in America in 2014: Current and Future Implications of the Patient Protection and Affordable Care Act” (PPACA). The presenters provided an overview of the recent and anticipated changes related to the PPACA as well as its timeline. Additionally, they explored the potential effect of the federal budget sequestration on reimbursement, Medicare, and funding of research and drug development.
Rena M. Conti, PhD, a health economist and assistant professor in the section of hematology/oncology at The University of Chicago, was the first on stage during this session with “Bracing for the Future: Impact of Changes in Health Care Policy on Drug Development.”
She began her talk by providing the statistics on healthcare spending in the United States–17.7% of current GDP and projected to rise to 22% in 6 years. About $1 of every $20 healthcare dollars is spent on cancer care, although various private insurers quote the value at $1 of $4 to $5.
Cancer care costs are rising faster than overall healthcare and they are outpacing all other healthcare spending. The PPACA will increase the level of spending, and the aging population and longevity add to the financial burden.
So where is the problem? The skirmish between the average value of new innovations and its application to individual patients. There is a good and a bad of course: improvements in survival benefit are seen but there is also overuse and misuse of therapies. This is in addition to the off-label and unapproved use of drugs.
“So the fundamental question remains, how do we improve access and cost-effectiveness of these therapies while maintaining potency?” asked Dr Conti.
Dr Conti laid out the political economy of reform. The cost of a drug is 2-pronged: if patients are well insured, they don’t face very steep bills. Additionally, copayment assistance is widely available for branded therapies. This, however, acts as a lever to inflate prices.
Physician practices face significant pressures to find deep discounts on acquisition prices of these therapies, and the 340b drug pricing program, which requires drug manufacturers to provide
outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices,1
has resulted in a major consolidation of practices.
Dr Conti highlighted the “How” of reform:
1. Change drug reimbursement policies-maintain the current system but make efforts to closely match reimbursements with acquisition costs
2. Change the locus of risk baring from physicians and hospitals to pharmacy benefit managers and insurers
3. Change reimbursement models to pull in novel drugs
Use of generic therapies is an obvious opportunity to exploit, she said. For example, Gleevec is going off-patent in 6 months. Replacing it with a generic will cause a drastic drop in drug price.
“Each stakeholder, the provider, the payor, and the manufacturer has a role to play in cost-effectiveness of therapies.”
Lawrence N. Shulman, MD, Dana-Farber Cancer Institute, presented his perspective on “The Impact of Accountable Care Organizations on Oncology Practice.” He explained what accountable care organizations (ACOs) are and what we can do to best position oncologists in that environment.
He started off with the CMS definition of an ACO.2
Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to their Medicare patients.
The goal of coordinated care is to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds both in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.
Dr Shulman then delineated the characteristics of an ACO. Patients participate in a ACO if their primary care physician (PCP) is enrolled in it, It’s not a closed-panel practice and patients are free to seek care with any provider, although PCPs may try to direct care. Payment is still fee-for-service based. Estimation of cost, though, is with the CMS.
The question remains though, “What do patients want? Access to treatment for best chance of survival, best quality of life, high quality of care delivered safely and efficiently, and of course affordable care. The payors too want cost-efficient care–bend the healthcare cost curve. They are interested in high quality care, which is almost less costly, and they want affordable premiums acceptable to their clients. The third stakeholder in the equation, the oncologist, wants freedom to provide the best care, fair compensation, and freedom from administrative burdens to be better able to focus on care.
Dr Shulman then said that cancer care is different with regard to ACOs. PCPs manage or co-manage patients with diabetes, heart failure etc, with specialists, and influence the cost of care. But they cede care of the cancer patient to a specialist and so are out of the cost equation. However, PCPs would share the risk and benefit of ACO performance when employed by a hospital or by multi-specialty practices.
The challenges with cost include non-informed decision making. Oncologists are not very good at measuring patient outcomes, managing cost of care, and factoring in cost of treatment during care. Much of what they do daily in the clinic is only weak evidence to help decide between treatments. But he emphasized that cost must be factored in when making treatment decisions
Pathways must include the total cost of care and the oncologist must carefully consider imaging, testing laboratories to choose etc, based on what is really needed,
Dr Shulman’s concluding remarks were that pathway developers need to make tough decisions. Partnerships between providers and payors can control costs and improve care. “We should aspire to do these things with the patient in mind,” said Shulman. The current system is not patient-centered.
How oncology practices will fit into and interact with ACOs is not very clear yet. Oncology practices should play an active role in the control of cancer care costs to fit into the quality metrics of care.
The last speaker of the evening talked about “Health Care Reform 101: Summary of the Recent and Planned Changes Related to the Patient Protection and Affordable Care Act.” Blase N. Polite, MD, MPP, is an assistant professor of medicine in the section of hematology/oncology at The University of Chicago and chair of the ASCO Government Relations Committee. He provided an overview of the impact of the PPACA on patients and providers.
He started off by an overview of ASCO's policy on Medicaid expansion states and the coverage, and who would be the patients eligible for Medicaid if the states expanded. ASCO’s policy is that “all states should expand their Medicaid program to provide coverage at least for individuals with incomes below the poverty level or should come up with an alternate strategy that provides comprehensive subsidized health coverage that ensure, among other benefits, access to high quality cancer care, measured by cancer specific quality metrics, delivered by a cancer specialist.”
The suggested changes are:
expand the list of cancer risk syndromes covered
clarify that follow-up testing should be covered without cost-sharing
clarify that coverage for risk reducing surgeries is covered
The clinical trial provisions under PPACA state that health plans cannot
deny an individual participation in a clinical trial
deny, limit, or impose additional conditions on the individual associated with participation in a trial
discriminate against the individual for participation in a trial
However, these provisions are not yet backed by strong regulations, they do not apply to Medicaid patients or grand-fathered plans, and they do not allow out-of-network coverage. Dr Polite emphasized that oncologists need to monitor the implementation of these policies by health plans.
Dr Polite concluded by saying that the PPACA-implemented provision are good news for cancer patients overall, although there are a few concerns with regards to coverage and penalties on physicians caring for the poorest and sickest patients.
1. 340B Drug Pricing Program. HHS website. http://www.hrsa.gov/opa/. Accessed June 1, 2014.
2. Accountable Care Organizations. CMS website. http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/. Accessed May 31, 2014.