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The American Journal of Managed Care June 2019
Reports of the Demise of Chemotherapy Have Been Greatly Exaggerated
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Anita Chawla, PhD; Kimberly Westrich, MA; Angela Dai, BS, BA; Sarah Mantels, MA; and Robert W. Dubois, MD, PhD
Understanding Price Growth in the Market for Targeted Oncology Therapies
Jesse Sussell, PhD; Jacqueline Vanderpuye-Orgle, PhD; Diana Vania, MSc; Hans-Peter Goertz, MPH; and Darius Lakdawalla, PhD
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Cancer Care Spending and Use by Site of Provider-Administered Chemotherapy in Medicare
Andrew Shooshtari, BS; Yamini Kalidindi, MHA; and Jeah Jung, PhD
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Cancer Care Spending and Use by Site of Provider-Administered Chemotherapy in Medicare

Andrew Shooshtari, BS; Yamini Kalidindi, MHA; and Jeah Jung, PhD
Differences in cancer care spending and utilization between Medicare beneficiaries receiving chemotherapy in hospital outpatient departments versus physician offices vary by service type.

Objectives: To compare cancer care spending and utilization by site of provider-administered chemotherapy in Medicare.

Study Design: A retrospective analysis using 2010-2013 Medicare claims.

Methods: The study population was a random sample of Medicare fee-for-service beneficiaries with cancer who initiated provider-administered chemotherapy in a hospital outpatient department (HOPD) or physician office (PO). We assessed the following outcomes during the 6-month follow-up period: (1) spending on cancer-related outpatient services excluding chemotherapy, (2) spending on cancer-related inpatient services, (3) utilization of select cancer-related outpatient services (evaluation and management, commonly used expensive billing codes, and radiation therapy sessions), and (4) the number of cancer-related hospitalizations. We used regression analyses to adjust for patient health risk factors and market characteristics.

Results: During the 6-month follow-up period, risk-adjusted spending on nonchemotherapy outpatient services was slightly lower among patients receiving chemotherapy in HOPDs than in POs ($12,183 [95% CI, $12,008-$12,358] vs $12,444 [95% CI, $12,313-$12,575]; P <.05). Risk-adjusted cancer-related inpatient spending was higher in the HOPD group than in the PO group ($3996 [95% CI, $3837-$4156] vs $3168 [95% CI, $3067-$3268]; P <.01). The HOPD group had fewer visits in all select outpatient services but had a higher number of hospitalizations than the PO group.

Conclusions: Differences in cancer care spending by site of chemotherapy (HOPDs vs POs) vary by service type. Those differences are partially driven by utilization differences. As the site of chemotherapy shifts from POs to HOPDs, spending and utilization patterns in both settings need to be monitored.

Am J Manag Care. 2019;25(6):296-300
Takeaway Points

Our study examined risk-adjusted differences in cancer care spending and utilization for the 6-month follow-up period after initiation of provider-administered chemotherapy by site of chemotherapy in Medicare. We found that:
  • Risk-adjusted spending on outpatient cancer services other than chemotherapy was slightly lower for patients who received chemotherapy in hospital outpatient departments (HOPDs) versus physician offices (POs).
  • Risk-adjusted inpatient cancer care spending was higher for patients who received chemo­therapy in HOPDs versus POs.
  • Although utilization of select outpatient services was higher among patients who received chemotherapy in POs, the number of hospitalizations was higher in the HOPD group.
Medicare shoulders a large burden of the costs for cancer care delivered in the United States. In 2014, cancer care costs exceeded $87 billion,1 with costs projected to increase to more than $173 billion in 2020.2 Medicare’s share is roughly one-third.1 A main treatment modality for cancer is chemotherapy,3 which is mostly administered by providers.4

Provider-administered chemotherapy is usually covered by medical benefits. In Medicare, Part B (coverage for outpatient medical services) pays for provider-administered chemotherapy. In recent years, there has been a shift in the site of provider-administered chemotherapy from physician offices (POs) to hospital outpatient departments (HOPDs).5-9 In 2016, nearly 50% of Part B chemotherapy administration claims occurred in HOPDs, a rise from less than 25% in 2008.10 A concern has been raised that this trend may lead to increased cancer care spending because of potential differences in spending patterns between HOPDs and POs.

Spending differences by site of chemotherapy have been extensively studied among commercially insured patients.11-14 Prior studies using commercial claims consistently found cancer-related spending on outpatient services among patients receiving chemotherapy in HOPDs to be substantially higher than that in POs.11,13,14 However, patients receiving chemotherapy in HOPDs were found to have only a slightly smaller number of office visits and outpatient services than those in POs.12 Thus, prior discussions of spending differentials in outpatient cancer spending by site of chemotherapy focused on differences in payments for outpatient cancer services between HOPDs and POs, especially in the commercially insured population.6,11-15 However, in Medicare, differences in payments for outpatient chemotherapy services by site of care are not profound.5,6,16 For example, Medicare pays the same for chemotherapy drugs between HOPDs and POs,17 whereas among commercial insurers, the average cost per chemotherapy drug claim was more than $2000 higher in HOPDs than in POs ($3799 vs $1466) after controlling for different distributions of chemotherapy drugs between HOPDs and POs.14 Thus, in Medicare, part of the difference in outpatient cancer care spending between HOPDs and POs may come from differences in utilization.

Two prior studies compared Medicare spending on provider-administered chemotherapy in HOPDs and POs and reached conflicting conclusions.9,18 A report by The Moran Company found that average per-patient spending on chemotherapy drugs was higher in HOPDs than in POs.9 However, Kalidindi et al found that spending per beneficiary was higher among patients receiving chemotherapy in POs, driven by higher chemotherapy utilization.18 It is important to note that Kalidindi et al used more rigorous risk adjustments than The Moran Company. For example, Kalidindi et al accounted for differences in the distribution of cancer type between the 2 care settings, whereas The Moran Company did not. However, both studies were limited to analyzing chemotherapy claims only. Neither study considered other services used by patients receiving chemotherapy. Patients who visit physicians to receive provider-administered chemotherapy often use additional services (eg, radiation therapy, computed tomography scans). Thus, analyzing only chemotherapy costs paints an incomplete picture of cost differences by site of care.

One report attempted to examine total care spending by site of chemotherapy in Medicare. The Milliman group analyzed 2006-2009 claims and found that patients receiving chemotherapy in HOPDs had approximately $6500 higher total annual costs than those receiving chemotherapy in POs.5 However, the Milliman study had the following limitations and did not allow us to identify sources of its main finding. First, the Milliman report calculated total costs by cancer type but did not adjust for other risk factors, such as metastasis or other chronic conditions. Second, it analyzed all care spending and not just the costs associated with chemotherapy and cancer care. Finally, it did not look at utilization differences between care settings. Thus, its estimates of cost differentials could result from (1) differences in Medicare payments for outpatient services between care settings, (2) differences in utilization of outpatient services, (3) differences in utilization of inpatient services, or (4) a combination of any of the aforementioned factors. Thus, drivers of cancer care cost differentials by site of chemotherapy in Medicare remain to be examined.

Our study fills this gap by expanding the study by Kalidindi et al of chemotherapy services to include other cancer services.17 For outpatient cancer care, we complement their study by focusing on spending on services other than chemotherapy. We also compare utilization of select outpatient cancer services by care site to understand whether site-specific cancer care spending in Medicare is entirely driven by payment differences or partially due to utilization differences. Further, because differences in utilization could affect patient outcomes, which can lead to hospitalizations, we examine cancer-related inpatient care spending and use. These analyses are important because they help us identify drivers of differential cancer care spending by site of chemotherapy in Medicare and thereby offer implications for patient care.

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