AJMC

Oncology Patient–Centered Medical Home

Published Online: May 18, 2012
John D. Sprandio, MD, FACP
This article was published as part of a special joint issue and also appears in the Journal of Oncology Practice.
In the current dynamism of health system restructuring in the aftermath of healthcare reform, community-based oncology practices and institutionally based cancer programs have a significant opportunity to lead positive change that will position them better in the new world order. This article presents the oncology patient–centered medical home as a physician-driven, patient-focused value proposition that can really make a difference for patients, oncologists, and the cost of healthcare.

Before 2008, approximately 85% of all cancer care in the United States was delivered in a community setting by independent practitioners. The remaining patients received care from institutionally based cancer programs. An admittedly flawed chemotherapy reimbursement model provided medical oncology practices a steady revenue stream that allowed practices to assume an increasing degree of responsibility and expense for supporting, educating, and navigating patients through an increasingly complex cancer care delivery system. Private and institutionally based practices flourished, and in many cases, patient care was enhanced.

Times have changed. The Medicare Modernization Act passed in 2003 put into motion fundamental changes in the methodology of chemotherapy drug reimbursement. These changes fully impacted oncology practices in 2008, with independent community-based practices being the most economically vulnerable.1 It is now widely recognized by providers and payers that the current net reimbursement to independent practices for evaluation and management services, plus the remnants of the buy-and-bill method of paying for chemotherapeutic agents, has not kept pace with the complexity of tasks required of medical oncologists if they are to maintain existing levels of service. More importantly, the current reimbursement model virtually eliminates the ability of community-based oncology practices to answer the urgent call of healthcare reform to deliver improved quality and value while focusing on patient needs and the delivery of consistent care. Many institutional programs, on the other hand, still have the resources to focus on care coordination, patient safety, evidence-based guidelines, and preparing for more integrated payment models, including participation in accountable care organizations (ACOs).

In March 2011, the Community Oncology Alliance (COA) reported a significant shift in the site of care delivery from the community to institutionally based cancer programs with a further trend in the closure of private practice sites and the pervasive financial instability of those still operating.1 Best guesstimates today from COA suggest that 65% of cancer care is delivered by independent communitybased physicians and 35% by their institutionally based counterparts (T. Okon, personal communication, January 2012). In retrospect, before 2008, one could argue that neither site of care was optimally delivering consistent, standardized, coordinated cancer care to the most vulnerable segment of our healthcare system’s patient population. Many stakeholders would argue that cancer care has become more fragmented and less coordinated in both settings since 2008.

The Response

Community-based physicians have not led the response to the current economic challenges confronting their practices. Third-party vendors promoting chemotherapy pathway programs and institutionally based cancer programs are seizing that opportunity.

Pathway Programs

The chemotherapy pathway programs have had some positive effects in partially addressing quality of care and cost issues.2 However, this approach can only provide a limited advancement of the value proposition from a patient service, disease management, and long-term payer perspective as a result of the inherent need to design the pathway intervention to be minimally disruptive to a practice’s operations to promote physician acceptance and implementation. The payers and the pathway vendors have largely enjoyed the positive economic effect; the impact for the practices, which have already been economically deflated by the effects of the Medicare Modernization Act, is often neutral. Pathway programs offer the opportunity to lock in to current reimbursement levels, but this, unfortunately, does not support current or future practice infrastructure needs. This strategy is still effectively centered around a modified buy-andbill drug reimbursement model, devoid of a patient- centered value proposition. It has become clear that the impact of a pathways program on the total cost of cancer care delivery is finite—in the 1% to 3% range, according to a 2011 analysis by McKinsey & Company.3 This, alone, is not the answer to the escalating total cost of cancer care.

Hospital- and Academic-Based Programs. By leveraging existing favorable contracts with payers and extending the 340B chemotherapy pricing program to extended—and unintended—patient populations, institutional programs are consolidating their markets by virtue of their ability to offer economic shelter to independent practices. According to COA, the number of community-based physicians entering into employment or management arrangements with institutionally based programs accelerated in 2011.1 This shift in the site of care delivery has been accompanied by substantial—sometimes spectacular—increases in the cost of care, often without demonstrable enhancement of quality and with a resulting diminution of value. This is not the answer to the escalating total cost of cancer care.

Independent Community-Based Practices. Independent practices are considering several strategic options in the search for economic predictability or a sustainable business model: contractual alignment (employment, management arrangement) with community or academic institutions, integrated delivery systems, or accountable care organizations; participation in vendor-driven programs to stabilize revenue; association with a larger regional/national network of medical oncologists for negotiating purposes; regional consolidation under a single tax ID for the purpose of negotiations with payers; alignment with a multispecialty, physician-centric ACO; participation as an individual practice in a regional ACO; and engagement in physician-directed care transformation to deliver a new value proposition to payers and begin to define and demonstrate value in cancer care.

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Issue: Special Issue: Payer/Provider Relationships in Oncology
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