Evidence-Based Oncology

Impact of the Affordable Care Act on Cancer Care

Published Online: August 21, 2014
Based on presentations by Rena M. Conti, PhD; Lawrence N. Shulman, MD; Blase N. Polite, MD, MPP
May 31, 2014, the second day at the 50th Annual Meeting of the American Society of Clinical Oncology (ASCO), ended with a session entitled “Health Care in America in 2014: Current and Future Implications of the Patient Protection and Affordable Care Act” (ACA). The presenters provided an overview of the recent and anticipated changes related to the ACA as well as its timeline. The panelists also explored how federal budget sequestration might affect 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, opened the session with, “Bracing

for the Future: Impact of Changes in Healthcare Policy on Drug Development.” Healthcare spending in the United States is already 17.7% of current gross domestic product (GDP), and is projected to rise to 22% in 6 years, she said. About 1 of every 20 healthcare dollars is spent on cancer care, said Conti, although estimates vary among

private insurers.

Conti affirmed that cancer care costs are rising faster than overall healthcare and cancer care is outpacing all other healthcare spending, with the current costs estimated at $125 billion. The ACA will increase that level of spending, and a population that is increasingly older will add to the financial burden.

So where is the problem? It manifests in the skirmish between the average value of new innovations and their application to individual patients. There result: although improvements in survival benefit are observed (due to various contributing factors such as improved screening techniques, treatment advances, and behavioral changes) (Figure), there is overuse and misuse of therapies. This is in addition to the off-label and unapproved use of drugs.

There is no argument that drug costs have seen a substantial increase, although the newer molecules have improved precision and thus response to therapy. But are these costs sustainable?

“So the fundamental question remains, how do we improve access and cost-effectiveness of these therapies while maintaining innovation?” asked Conti.

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, co-payment assistance is widely available for branded therapies. This, however, acts as a lever to inflate prices.

Consequently, 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 healthcare organizations or covered entities at significantly reduced prices1—this Domino effect has

resulted in a major consolidation of practices.

Conti highlighted the “how” of reform:

1. Change drug reimbursement policy: maintain the current system but make efforts to closely match reimbursements with acquisition costs.

2. Change the locus of risk bearing from physicians and hospitals to pharmacy benefit managers and insurers.

3. Change reimbursement models to include novel drugs.

Use of generic therapies is an obvious opportunity to exploit, she said. For example, Gleevec is going off-patent in 6 months, and replacing it with a generic will cause a drastic drop in drug price. “Each stakeholder—the provider, the payer, and the manufacturer—has a role to play in bringing about this payment reform,” concluded Conti.

Lawrence N. Shulman, MD, chief of staff and senior vice president for medical affairs at Dana-Farber Cancer Institute, and associate professor, department of medicine, Harvard Medical School, presented his perspective on “The Impact of Accountable Care Organizations on Oncology Practice.” He explained what accountable care

organizations (ACOs) are and what can be done to best position oncologists in that environment.

He started off with the CMS definition of an ACO.2 ACOs are groups of doctors, hospitals, and other healthcare providers who come together voluntarily to deliver 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 delivering high-quality care and spending healthcare dollars more wisely, it will share in the savings it achieves for the Medicare program.

Shulman then delineated the characteristics of an ACO. Patients participate in an ACO if their primary care physician (PCP) is enrolled in it. Patients are not restricted to

seeking care from predetermined providers, although PCPs may try to direct care. Although the payment is fee-forservice, the actual cost is still determined by CMS.

The question remains, though, “What do patients want? Access to treatment for best chance of survival, an improved quality of life, high ficiently, and of course affordable care,” said Shulman. Payers are interested in high-quality care, at a reasonable cost, and they want affordable premiums that are 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.

Shulman then said that cancer care is different with regard to ACOs. PCPs manage or co-manage patients with diabetes, heart failure, and other ailments 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 noninformed 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 only provides weak evidence to help decide between treatments. “But,” emphasized Shulman, “that cost must be factored in when making treatment decisions.” Pathways, he said, must include the total cost of care, and the oncologist must carefully evaluate the cost of imaging, the selection of a testing laboratory, and other factors, based on what is absolutely needed.

Shulman’s concluding remarks were that pathway developers need to make tough decisions. Partnerships between providers and payers 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.

“Healthcare Reform 101: Summary of the Recent and Planned Changes Related to the Patient Protection and Affordable Care Act” was presented by Blase N. Polite, MD, MPP. Polite, an assistant professor of medicine in the section of hematology/oncology at the University of Chicago and chair of the ASCO Government Relations Committee, offered an overview of the impact of the PPACA on patients and providers.

Polite discussed ASCO’s policy on Medicaid expansion, which has been the source of controversy in some states due to the US Supreme Court ruling that upheld ACA but allowed states to opt out of extending Medicaid to Americans in the low-income tier just above the poverty level. ASCO’s policy, Polite said, 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 ensures, 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 ACA 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 those covered by “grandfathered” health plans, and they do not allow out-of-network coverage. Polite emphasized that oncologists need to monitor the implementation of these policies by health plans.

Polite concluded by saying that the ACA-implemented provisions are good news for cancer patients overall, although there are a few concerns with regard to coverage and penalties on physicians caring for the poorest and sickest patients. EBO

References

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.