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The American Journal of Managed Care July 2018
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Differences in Spending on Provider-Administered Chemotherapy by Site of Care in Medicare
Yamini Kalidindi, MHA; Jeah Jung, PhD; and Roger Feldman, PhD
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Differences in Spending on Provider-Administered Chemotherapy by Site of Care in Medicare

Yamini Kalidindi, MHA; Jeah Jung, PhD; and Roger Feldman, PhD
Spending on chemotherapy drugs was lower among Medicare beneficiaries who received chemotherapy in hospital outpatient departments than among comparable beneficiaries receiving chemotherapy in physician offices.
RESULTS

Figure 1 shows the distribution of cancer types among Medicare chemotherapy users in HOPDs and physician offices. Six cancers accounted for more than 90% of all chemotherapy users in both HOPDs and physician offices, but the distribution of cancer types differed by setting. Prostate cancer accounted for 25% of chemotherapy users in HOPDs but more than 55% of chemotherapy users in physician offices. The bottom panel of Figure 1 indicates that physician offices were the dominant place of services for all cancer types. Eighty-four percent of patients with prostate cancer received chemotherapy in physician offices, and about 60% of patients with other cancers used physician offices.

Figure 2 shows that unadjusted average chemotherapy drug spending per beneficiary in the entire sample was about 34% higher in HOPDs than in physician offices ($15,058 vs $11,219). However, chemotherapy drug spending for patients with the same cancer type was higher in physician offices than in HOPDs for most cancer types except prostate cancer (bottom panel of Figure 2).

Figure 3 depicts descriptive data on chemotherapy administration spending per beneficiary. Unadjusted average chemotherapy administration spending per beneficiary was higher in HOPDs compared with physician offices, both in the full sample and among patients with the same cancer type.

Figure 4 presents risk-adjusted chemotherapy spending in each setting based on the regression results. Risk-adjusted chemotherapy drug spending showed very different patterns than unadjusted spending. Chemotherapy drug spending per beneficiary after risk adjustment was $2451 lower in HOPDs than in physician offices ($10,658 vs $13,109). Risk-adjusted chemotherapy administration spending per beneficiary was $322 higher in HOPDs compared with physician offices ($1543 vs $1221).

The Table reports the number of claims per beneficiary and spending per claim on chemotherapy drugs and administration by cancer type. These data help explain why chemotherapy drug spending was lower in HOPDs compared with physician offices after controlling for cancer type. The frequency of chemotherapy among chemotherapy users with the same cancer type was higher in physician offices than HOPDs for most cancer types except prostate cancer. For example, patients with colon cancer had 19 chemotherapy drug claims per beneficiary in physician offices versus 13 in HOPDs, on average. On the other hand, spending per claim among patients with colon cancer was $367 higher in HOPDs compared with physician offices. For other cancers, spending was between $257 and $737 higher in HOPDs than in physician offices. Thus, the difference in spending per claim between HOPDs and physician offices is much smaller compared with the difference in spending from adding 1 more claim, which exceeds $1000 across all cancer types in both settings. These data imply that additional drug claims are an important driver of total chemotherapy drug spending per patient, and more frequent use of chemotherapy led to higher spending in physician offices than HOPDs, after controlling for cancer type.

Similarly, the number of chemotherapy administration claims per beneficiary was higher in physician offices than in HOPDs for most cancer types, except prostate cancer. On the other hand, average spending per administration claim was almost twice as high in HOPDs compared with physician offices for most cancer types. For example, spending per chemotherapy administration claim for colon cancer was $182 in HOPDs compared with $100 in physician offices. This difference in spending per claim is large, considering that most administration claims were less than $200. Thus, higher chemotherapy administration costs per beneficiary in HOPDs compared with physician offices are largely driven by more costly administration claims in HOPDs.

The results of the sensitivity analysis supported the findings described above. Across all years, risk-adjusted chemotherapy drug spending per beneficiary was lower in HOPDs than in physician offices, and risk-adjusted chemotherapy administration spending per beneficiary was consistently higher in HOPDs compared with physician offices (eAppendix Table). Results from the analysis of each cancer (eAppendix Figure 1) were also consistent with the main analysis. The analysis using only separately reimbursable chemotherapy produced very similar results to the primary analysis (eAppendix Figure 2). Risk-adjusted chemotherapy drug spending per beneficiary was $2245 lower in HOPDs than in physician offices, driven by the smaller number of separately reimbursable chemotherapy claims in HOPDs. The analysis using patients undergoing a cancer-related surgery also produced results consistent with the main analysis.


 
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