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How Do You Establish Value in Cancer Care?

Surabhi Dangi-Garimella, PhD
Conference Coverage: ASCO 2014
While the incidence of cancer increases, survival rates continue to improve for even the deadliest of cancers thanks to the ongoing development of novel and targeted therapies. However, innovations in cancer diagnosis and treatment are associated with high cost. Cancer therapy constitutes nearly 11% of the total healthcare budget, and the number continues to trend upward.1

The National Cancer Institute estimated the costs of cancer therapy at $124.6 billion in 2010, a number projected to touch $207 billion in 2020.2 With an aging population and improved insurance coverage, that figure will almost surely stay on the rise. The result: patients and providers are very often restricted from choosing the highest quality treatment option due to the burden of associated costs.

The problems and possible solutions were the focus of an opening-day Extended Education Session at the 50th annual meeting of the American Society of Clinical Oncology (ASCO), held in Chicago from May 30 through June 3, 2014. The session—titled “Can We Find Common Ground? Stakeholder Perspectives on Value in Cancer Care”—began with remarks from session chair Neal J. Meropol, MD, of Case Comprehensive Cancer Center, Case Western Reserve University.

Meropol recently coauthored an article on best practice approaches for designing decision-support tools.3 The article described the rigorous development process and initial feedback of the PRE-ACT (Preparatory Education About Clinical Trials) Web-based intervention, designed to improve preparation for decision making in cancer clinical trials. In his talk, “Value in Cancer Care:

What’s the Problem?”, Meropol defined value as the ratio of benefit over cost. Benefit, he said, is a combination of survival, progression, quality of life, and avoidance of toxicity, while cost is determined by biomarkers, the therapy received, therapy avoided, management of toxicity, and other indirect costs. “Value versus cost-effectiveness is the elephant in the room,” he said.

Meropol laid out the problems currently facing the United States:

• Drug approvals based on “safety and efficacy,” without cost considerations

• Producer sets the price for new innovation

• Payers cannot negotiate cost

• Consumers cannot be choosers

• Financial protection, historically offered by insurance, is eroding as cost burden shifts to the patient.

“The current system is unsustainable, as it prevents access to high-quality cancer care,” said Meropol. However, he pointed out that economic recession, increased cost sharing, payment reductions to providers, increased provider efficiency, and slowed innovation have somewhat moderated healthcare spending. An uptick in spending growth is anticipated, however, as the economy improves and insurance coverage improves, enabling the aging population to increase healthcare spending.

Oncology drug expenditures lead the way in spending among the various therapeutic areas. In this country, $27.9 billion was spent on oncology drugs in 2013, representing an annual increase of 9.2%, according to a recent IMS Institute for Healthcare Informatics study (Figure 1). High cost of care can increase disparities in care and patient outcomes, exacerbated by steep co-pays, tiered formularies, the part D donut hole in Medicare, and oncology drug shortages.

The result? Patients delay consultations and treatment, and limit or alter their treatment, to the detriment of their health. Hospitals also reduce their spending on charity care. “The stakeholders need to work together,” concluded Meropol, “to find solutions, drive policy, and achieve reform.”

Next, Lowell E. Schnipper, MD, presented “Defining Value: An ASCO Initiative,” to offer insight into ASCO’s strategic initiative to define value in cancer care. Schnipper, chief of hematology/oncology at Beth Israel Deaconess Medical Center in Boston and the chair of ASCO’s Value in Cancer Care Task Force,4 spoke about unsustainable trends in the United States: Medicare, he postulated, is a major reason for deficit projections, in addition to cancer costs, which are rising by 15% to 18% annually.

Schnipper encouraged the oncologists in the audience to discuss the financial implications of therapy with their patients, asserting that patient-centered care, both financial and health outcomes based should be a key element when defining value of care. The main threats to value in healthcare, Schnipper said, include unwarranted variation in quality and outcome; harm to patients; wastefulness of resources and failure to maximize value; health inequalities and inequities; and failure to prevent disease.

A major value initiative introduced by ASCO, the Quality Oncology Practice Initiative (QOPI),5 aims to remedy these ills by evolving a transparent, clinically driven method for defining and assessing the relative value of cancer care options and finding a balance among clinical benefit, toxicity, and cost. The objective of the task force behind QOPI is to afford providers with the necessary skills and tools to meet those goals, and to give patients ready access to essential information, including how to cope with co-pays that are potentially bankrupting.

“We are not caring about the dollars spent, but rather how well we are caring for the patient. Patient-centric is the best way to go,” concluded Schnipper. Representing “The Patient Perspective,”

as her talk was titled, was Diane Blum, MSW, FASCO, a former executive director at CancerCare, an organization that provides emotional and financial support to cancer patients and their


Blum defined value in various terms. Her favorite was crafted by Scott Ramsey, MD, PhD, of the Fred Hutchinson Cancer Research Center in Seattle: An intervention in cancer care can be described as having value if patients, their families, physicians, and health insurers all agree that the benefits afforded by the intervention are sufficient to support the total sum of resources

expended for its use.

“Value is a dynamic process—hopes and expectations change through the continuum of illness and must be assessed regularly, said Blum. “Perception changes from cure to palliation. Value rests not just in clinical response, but also in trying.”

How do you help the patient assess value? ASCO’s Choosing Wisely campaign aids the process, said Blum. Encouraging ongoing conversation between physician and patient, as well as a shared decision-making process, are usually very beneficial as well.

Lee N. Newcomer, MD, MHA, senior vice president of oncology, genetics, and women’s health at UnitedHealthcare, spoke next, providing a payer viewpoint on the increasing cost of diagnosing and treating cancer patients. Newcomer recently published his perspective on innovative payment models and measurements in cancer care, in which he introduced the models being evaluated by payer and physician groups for cost-effective care.1 These include (1) pay-for-performance (P4P) programs that reward physicians for meeting prespecified goals, (2) bundles or episode payments, and (3) capitation.1

Newcomer emphasized the fact that currently, health insurance premiums equal 50% of the average household income, and by year 2033, they are estimated to surpass the average household income (Figure 2).

Addressing insurance benefit design issues, Newcomer said that benefits are not cancer specific, value-based insurance design is hard to implement, and that the site of service distorts benefit. He further added that the valuebased insurance (VBI) plan is trying to create a differential between high-value and low-value services.

Noting that barriers to VBI include access to an external, independent source of measurement lto define value, Newcomer pointed out that the Value in Cancer Care Task Force, spearheaded by ASCO, is working to surmount this obstacle. Emphasizing that consumer literacy is extremely important, Newcomer said that value-based programs compel consumers to digest a lot of information that can be overwhelming, especially when survival decisions are in question. Although demarcating boundaries is extremely difficult, it’s drawing those lines that will help establish value. The most difficult option to choose, he said, would be not to pay at all. For example, the payer could say: no PET surveillance post therapy, no PSA testing for men with less than a 10-year life expectancy, or no targeted therapy without a predictive biomarker.

“Resources are limited, so using high-value resources and/or eliminating resources with limited or no value is the need of the day,” said Newcomer. These decisions, he concluded, are unavoidable. Speaking next and representing the pharmaceutical industry was Gregory P. Rossi, PhD, vice president of payer evidence at AstraZeneca UK, who oversees coverage and reimbursement submissions and is responsible for outcomes studies as well as fulfilling payer evidence requirements.7 In “Industry Perspective: Drug Development, Costs, and Return on Investment,” Rossi discussed the costs of innovation, research and development (R&D) investment decisions, value-based pricing, and patient affordability. He characterized himself

as a proponent of collaboration between research communities and patient communities to advance cancer treatment, he said.

What drives innovation costs and decisions about investments? Rossi noted that success rates in pharmaceutical drug development are about 5%, driving costs per new molecular entity to $3 billion (1 molecule per year for every $3 billion spent). Technical risk, time, and market assumptions all impact investment decisions. Obviously, Rossi noted, treatments directed at small patient populations require higher drug prices to gain returns.

A related issue: value-based pricing. The last 17 oncology drugs approved in the United States offered, on average, 3 months of improvement in survival, but the average monthly cost of each drug, said Rossi, was $65,000. Can this be deemed beneficial? Rossi opined that the National Institute for Health and Care Excellence in the United Kingdom would definitely say “No!” Rossi

explained that cost- effectiveness and the willingness-to-pay threshold are very difficult matters, and suggested developing innovative means to evaluate the cost-benefit ratio of new drugs.

“Patient affordability is obviously a big issue,” said Rossi. “It is inappropriate to tax the patients with high copays.

The pharmaceutical industry has set up assistance programs, but this bandage is not sufficient to fix the current broken system.” Rossi concluded with a slide on ways to find common ground. To confront the burden of illness and the complexity of cancer, he proposed maintaining R&D investment to help discover new targets and develop novel technologies.

For cancer-related reimbursement issues, he had 3 suggestions:

• Maintain reward for meaningful innovation

• Develop a payment process based on indication and clinical pathway adherence

• Continue to refine insurance benefits to reduce the financial risk for patients

The insightful session concluded with “How Should Oncologists Become Value-Based Providers?”, presented by Ezekiel J. Emanuel, MD, PhD, vice provost for Global Initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania’s Perelman School of Medicine. Said Emanuel: “Let’s be honest: it is about cost. We are concerned about value, but we are also concerned about cost. Let’s all be honest as a community about where the real cost of cancer care is.”

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