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Data and Collaboration Are Key for Value-Based Care Success

Laura Joszt
Data and collaboration are necessary ingredients to succeed in the transition to value-based care models, and the money saved under these models will create room to pay for unconventional therapies and services in healthcare, according to panelists at The Institute for Value-Based Medicine meeting in Seattle, Washington.
Although the United States now spends almost twice as much on healthcare compared with peer nations, just a few decades ago the country’s spending was much closer to other nations. The biggest culprit: prices, explained Sibel Blau, MD, medical oncologist at Northwest Medical Specialties, PLLC, at the November 7 meeting of The American Journal of Managed Care®’s The Institute for Value-Based Medicine. The dinner discussion, “Advancing Quality in Oncology Care” was held in Seattle, Washington.

Blau kicked off the meeting with an overview of the economics of cancer care in the United States, highlighting that the cancer market is lucrative for investors and that when looking at all healthcare expenditures, cancer care far exceeds any other disease, with drug costs and hospital prices as major contributors to cost inflation.

By 2026, there will be an estimated 20.3 million cancer survivors, an increase of 16% from 2016, and those survivors will be feeling the burden of the cost of their treatments.

“There are a lot of cancer patients that are going to be living longer because of all the discoveries and drugs and advances; but it’s expensive, so up to one-third of those patients will incur medical debt, and up to 78% will face financial hardship,” Blau said.

While CMS has mandated the transition from volume- to value-based care, these programs are not perfect, as the panelists discussed.

The Value Equation
Ray D. Page, DO, PhD, FACOI, medical oncologist at The Center for Cancer and Blood Disorders (CCBD), noted that the old system was definitely not working. Not only did it drive up costs for patients, but the traditional system also led to community oncology practices closing at a fast rate. Data from the Community Oncology Alliance have shown that more than 400 practices closed a site in 2017 and more than 600 were acquired by a hospital.

“In the traditional buy-and-bill system, if you’re going to stay in that system and not make transformational changes…an oncology practice will die under a fee-for-service, buy-and-bill method alone,” Page said.

Currently, practices are stuck between 2 worlds, said Tom Gallo, MS, executive director of Virginia Cancer Institute (VCI) and president of the Association of Community Cancer Centers. As long as the transition to value-based care is incomplete, some of what practices do for value-based care could hurt them in fee-for-service and vice versa. So while people are trying to be encouraged to seek care at lower-cost sites of care, hospitals are still incentivized by having bodies in the beds.

“You really have this dichotomy going on as we go through this transition,” Gallo said.

The challenge, as practices continue to get squeezed between the colliding universes of fee-for-service and value-based care, is that the equation for calculating value has gotten more complicated. The simple, widely held view is that value equals quality at the lowest cost. But the government has far more difficult equations to calculate value according to the Medicare Access and CHIP Reauthorization Act and the Oncology Care Model (OCM).

“It’s not unlike your IRS tax forms,” Page said. The final equation becomes a massive calculation across multiple lines on a spreadsheet with equations to figure out individual aspects of a larger, final equation.

He ran through multiple slides that outlined how if practices want to figure their target price for a given episode, they first have to calculate the baseline price, the trend factor, the novel therapies adjustment, and the OCM discount rate.

What the OCM equation misses are things like the art of medicine, compassion, personalized medicine, and social determinants of health, Page noted.

After 2 performance period results from the OCM, he admitted that his practice, which worked with UnitedHealthcare for an episode fee pilot program, was 1 of 3 practices in Aetna’s Medical Home Shared Savings program, and was 1 of 7 practices in the COME HOME program, was still in the red. While they’re currently in performance period 5, practices just received results from the second period, highlighting the huge lag time until practices receive data about what they’re doing. Once performance period 7 hits, CCBD will have to entertain going into a 2-sided risk model as part of the OCM’s structure that moves practices out of 1-sided risk and into 2-sided risk if they have not achieved performance-based payments by the time of performance period 4 reconciliation (expected to take place around the middle of 2019).

Both Gallo and Page noted that participating in OCM and other value-based models requires large practice transformation in order to be successful.

“When you start thinking about [value-based care], the first question is: do you first go out and get value-based care contracts? Or do you undertake practice transformation and process improvement first?” Gallo asked. “It’s a really difficult question to answer.”

He pointed out that since a lot of programs use historical costs as a benchmark and to create a target, practices with higher costs have the most potential for shared savings.

“So, if you do process improvement first, you reduce your costs, you’ve already taken care of a lot of the low-hanging fruit,” Gallo. “It actually makes it more difficult for you to achieve success, at least financial success, in a number of these models.”

Ultimately, Gallo’s group had made many changes before the first value-based care contracts and well before OCM. The practice introduced financial counselors to help patients make payments, instituted a same-day clinic and weekend hours, utilized National Comprehensive Cancer Network distress assessments, and implemented follow-up calls after the first chemotherapy session.

VCI also formed an accountable care organization with 20 other practices in the market. Not only does this improve care, but it allows practices to stay independent, which maintains a strong referral base.

“What we’ve done through this organization is really be able to communicate much better with each other in terms of looking at our overall costs, brainstorming ways to reduce those costs, and actually implementing it,” Gallo said.


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