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Oncology Care Model Not Immune to the Need for Intervention

Rita E. Numerof, PhD, is the president of Numerof & Associates, a firm that helps businesses across the healthcare sector define and implement strategies for winning in dynamic markets. For more than 25 years, she has helped executives understand the implications of an evolving healthcare market. Working with leaders in the healthcare space, she has consulted with everyone from top academic and community hospital systems, payers, and Fortune 500 pharmaceutical, device, and diagnostics companies. She is the coauthor of several books, most recently, "Bringing Value to Healthcare: Practical Steps for Getting to a Market-Based Model" (2016).
In July 2016, the Centers for Medicare and Medicaid Services launched the Oncology Care Model (OCM), a voluntary 5-year bundled payment program designed to “provide higher quality, more highly coordinated oncology care at the same or lower cost to Medicare.” With the evaluation period for the program now at its midway point, there is an opportunity to discuss how the OCM and other bundled payment programs can better deliver on those aims.

The OCM, which has enrolled approximately 25% of US oncologists, shares some of the same design flaws as the federal government’s other reimbursement-based initiatives. By focusing too narrowly on established treatments, it misses the mark on novel, but potentially more costly, approaches that may demonstrate significantly better patient outcomes. With target prices too low to cover these superior treatments, doctors face strong disincentives to using therapies that might be clinically superior.

The good news is that making these programs work as intended requires just 3 fixes: (1) focus on outcomes—not price tags—as the most meaningful measure of success; (2) expand the types of care the model is able to include; and (3) extend the time horizon for evaluating treatment outcomes.

Today’s newest and most promising immuno-oncology interventions boast a higher survival rate than traditional chemotherapy. Because of their novel status, however, these new drugs often come with a heftier price tag and a lengthier administration period than the current OCM will allow. While CMS established a provision that would allow price targets to be adjusted based on the use of novel cancer therapies, the scope of this provision has limitations (eg, not all newly approved therapies may be eligible) and enforcement is complex (eg, practices may not understand whether an adjustment will be applied until well after the novel therapy has been used). 

For instance, one of the greatest disruptors in cancer treatment over the past few decades has been CAR T-cell therapy. In this procedure, doctors extract disease-fighting T cells from patients and, in a laboratory setting, modify these cells to recognize and bind exclusively to tumors. Doctors then reinsert the cells into the patient’s body, where they seek out and destroy the cancer cells.  

It isn’t science fiction, but mainstream use of CAR T cells won’t come quickly or cheaply. The treatment costs about $475,000 a patient, leaving entities like the British National Health Service (NHS) refusing to cover it.

Although the CMS would never directly admit to coordinating its policies toward a similar bias, the consequences of the current OCM framework have had the same effect as NHS’ outright refusal to support these innovations. In fact, the first 2 approved and marketed CAR T therapies are not currently eligible for the “novel therapy” adjustment. By compensating physicians based only on whether they can narrow their spending, on a narrow list of treatments, over a narrow period of time (dictated by the start of chemotherapy), today’s OCM places what could be tomorrow’s immuno-oncology interventions at a prohibitive disadvantage. We cannot move cancer treatment forward with such backward policies.

And because the OCM’s reimbursements only cover a set catalogue of existing cancer therapies, the current model indirectly disincentivizes the use of other, more effective therapies. When all we do is reward lower spending on a given service, we only increase the probability of that service becoming the de facto “gold standard” in treatment—whether it deserves the designation or not.

We also need to elongate the time horizon for each episode’s treatment and evaluation period. While it seems simpler in the short term to delimit the focus or duration of a bundle to a very narrow scope, it’s far easier to measure the long-term value of these federal programs and the services they cover when we’re able to gauge their long-term effects. What we should be focused on are better measures of outcomes—like 5-year survival rates.

Bundled pricing can work in cancer treatment, but only if CMS builds better bundles. A comprehensive, integrated and patient-specific cancer treatment plan should be controlled by cancer type and stage. It should not be exclusively triggered by the onset of outpatient chemotherapy, and it should focus on more than just cost reductions.  

Measuring the cost of one finite and discrete intervention against its standard fee-for-service price is not going to move us closer to a value-based model. Even more fundamentally, it is not going to get us nearer to pioneering and investing in the life-saving drugs and discoveries that will eventually eradicate cancer. We need to be reporting on more meaningful outcomes in more meaningful ways. Only then can we give consumers and physicians a meaningful choice in the treatments they pursue.

 
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