Melanoma: From Impossible to Treat to Poster Child for Targeted Therapies | Page 6
Published Online: October 23, 2013
Produced by Nicole Beagin
Malin: In the oncology world, there have been a number of folks who have talked about episode-based payments and a proposal of those models. Dr Peter Bach at Memorial Sloan-Kettering has written extensively about it, and I think while conceptually it is appealing, it is very challenging to implement in oncology for a number of reasons. First of all, depending on the disease characteristics and biomarkers that the patient has, the cost of treatment may be $10,000 or $300,000, and so unless you have incredibly large risk pools, how do you account for the fact that just the natural prevalence of those things is going to vary? Then you have this rapid innovation, so how do you adjust the episode payment for when a new drug gets approved that costs an extra $100,000?
Then there is the fact that just the way our system is designed, some drugs are paid for under the medical side, and some drugs on the pharmacy side. Envision how would you construct an episode payment for melanoma when you have ipilimumab that let’s say, just the average sales price is $120,000, but all the B‑RAF inhibitors would be covered under the patient’s pharmacy benefit. Do you say that the practice has to pay for those oral drugs as well out of their episode payment and they have to provide it whether it is IV or oral, which impact or benefit design then? It is very, very complex to try to envision how you would come up with a single payment for an episode, and not have a thousand different types of episodes in order to capture the heterogeneity of these diseases and the cost. A global capitation has certainly been tried and there are some large medical groups that have capitation more globally with stop/loss ratios in California, but again, there aren’t really good data for us to know whether access to innovative therapies is impaired in those kinds of environments, and we have seen some concerning signs regarding use of counterfeit drugs and things like that, in environments where practices are more pressured financially. The approach we are favoring at Well-Point is a pathways approach where we are in the process currently of designing a pathways program and our goal there is to insure that there is parity between more cost-effective treatment options and the higher-cost treatment options to the practice that is treating the patients. One of the vague ways that we reimburse oncology is that most of the revenue for a practice comes from the margin on the drug they prescribe, if you are talking about independent practices and certainly hospitals as well, although the treating physicians and the hospitals may have a less line of sight into that, so if you are looking at 6% of 5FU, that is 17 cents margin. If you are looking at 6% of Herceptin or ipilimumab, Herceptin, the average cost for treatment is probably around $3000 and that is a big difference from 17 cents for 5FU margin when you are talking under $60, and 6% of ipilimumab if you feel you want to undertake the risk of not getting paid. The current reimbursement system really provides no incentive for physicians to select the most cost-effective therapy even if the treatments are equally effective, and so the idea behind a pathways program is you have a group of experts who review the regimens, review the NCCN guidelines, and if there are treatments that are equally effective for a given patient type, then you would have on your pathway the least effective of those treatments and then provide additional funding for the practice so that they stay whole if they are choosing the most effective and most cost-effective treatments.
Fendrick: As we heard in Dr Weber’s complete introduction, oftentimes we don’t have the answers when we have to make decisions on this issue, but you have articulated, almost in an academic way, the imitation of the bundle payment model. Although these have been discussed for quite some time, it is our impression from the AJMC standpoint that it hasn’t slowed the momentum to see these things moving forward, so limitations notwithstanding, I think these are things that you folks in practice are going to have to deal with head-on. I want to ask 1 last general question of the 3 of you, and just to make a point that may make Dr Weber feel better, this week Governor Jack Markel of Delaware signed a bill limiting patients’ out-of-pocket expenditures for specialty drugs to $150 a month. So you can imagine if these bills go forward (in other states) and we end up pushing the other side of the cost of these agents into premiums and other types of things, it will have certainly a much, much different effect than if patients had to continue to pay 10% or 20% coinsurance every time they got these things prescribed. So there at least is some movement on the state policy front, and some initiatives are actually happening on Capitol Hill as well, to actually see copay relief for specialty drugs, at least with some evidence-based requirements as Dr Malin outlined. I want to ask 1 thing that comes up a lot also for our readers—the issue of Sterigen’s Center of Excellence, and what you thought about the idea of a situation where patients would get better coverage or lower cost-sharing if they went to Centers of Excellence for specific types of cancers? Just theoretically say that the Johnson Center and the Adams Center were designated as Centers of Excellence by payer organizations like Dr Malin’s. Do you think it is a good idea or a bad idea for particularly rare cancers to follow a model that we’ve had in place for transplants for decades?
Weber: I guess as long as it is legal, I wouldn’t have a problem with seeing more patients and bringing more business to places that excel at what they do. To be honest, if I had a metastatic melanoma and I were living in some rural location in a large state geographically isolated from the large center, I would probably go to the big center, no question.
Fendrick: You would favor benefit designs encouraging that?
Weber: That is an interesting question. My first query, is that actually legal? Can you actually, financially penalize someone for where they choose to get their treatments?
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