On Friday, November 16, 2012, The American Journal of Managed Care (AJMC) hosted its first annual live meeting, 

Translating Evidence-Based Research into Value-Based Decisions in Oncology

. The conference provided an opportunity for key leaders in managed care and oncology to discuss innovative payment models being used by payers and providers and their future impact on the rapidly evolving healthcare system.

The meeting kicked off with a breakfast presentation on cost-effectiveness in oncology, where experts suggested new approaches to incorporating dynamic and patientcentered considerations into value and cost-effectiveness calculations. Dana Goldman, PhD, director of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, described the relationship between US income and healthcare spending, and explained how the price of cancer therapy is relative to the value of its results (ie, survival). Yuri Sanchez, PhD, a research economist at Precision Health Economics, discussed the option value of innovation in cancer treatment. Darius Lakdawalla, PhD, director of research at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of California, explored the challenges of measuring the cost-effectiveness of a drug and explained how it evolves over the product’s lifecycle. A complete description of the experts’ studies and results was published in a recent supplement to

(November 2012—Vol. 18, No. 11, Sup.), which is available on 

Following opening remarks from A. Mark Fendrick, MD, professor of medicine and health management and policy, Schools of Medicine and Public Health, University of Michigan, and co-editor-in-chief of 

, there was a keynote address from Clifford Goodman, PhD, senior vice president, The Lewin Group, who spoke about evidence requirements to gain market approval and payment, individualized care decisions, and changes in innovation of cancer care.

Dr Goodman’s presentation was followed by a session devoted to defining value in cancer care. Jeffrey D. Dunn, PharmD, MBA, formulary and contract manager at SelectHealth, Inc, described comparative effectiveness research in oncology. Bruce A. Feinberg, DO, vice president and chief medical officer, Cardinal Health Specialty Solutions, discussed the practical application of clinical pathways. Ira M. Klein, MD, MBA, FACP, chief of staff, Office of the Chief Medical Officer, Aetna, outlined quality measures in oncology.

The afternoon session focused on the role of innovative payment models in cancer care. Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes and attending physician, Memorial Sloan-Kettering Cancer Center, presented an overview of evolving payment models. Andrew L. Pecora, MD, FACP, CPE, chief innovations officer and vice president of cancer services at John Theurer Cancer Center at the Hackensack University Medical Center and president of Regional Cancer Care Associates, discussed the evolution of an integrated delivery network. Michael E. Chernew, PhD, professor of health care policy, Harvard Medical School, and co-editor-in-chief of AJMC, described the impact of healthcare reform on plan design.

The day concluded with all speakers participating in a roundtable discussion on the future of payer management in oncology that was moderated by Dr Goodman.

Articles

Evidence-Based Oncology

Introduction

Recently, sanofi-aventis was forced to reduce the cost of its new cancer drug Zaltrap by 50% in response to Memorial Sloan-Kettering Cancer Center’s decision to not use the drug. The cancer center stated that the new drug was twice as expensive as Avastin (manufactured by Genentech) despite similar efficacy. Both drugs improved median survival by 1.4 months.

 article that reported the story, a senior vice president for oncology at UnitedHealthcare stated that “It was the first time physicians have stood up and said, ‘Enough is enough.’” Many believe that this small story in the New York Times was a watershed moment. “It is shifting the fulcrum of the return on investment in oncology innovation,” remarked Dr Clifford Goodman, PhD, senior vice president at The Lewin Group, at the beginning of his keynote address entitled 

Health Care Reform: What Now for Evidence Requirements, Personalized Care, and Innovation in Oncology?

So what are the marketplace trends affecting innovation in oncology? Dr Goodman outlined 14 such trends:

1. Scientific and technical advances (eg, lower costs for genome sequencing)

3. Restructuring and consolidating life science industry

4. Changing research and development roles of big and small companies

5. Shifting relative magnitudes of international markets for oncology interventions

6. Varying and unpredictable international intellectual property protection

7. Global effects of reference pricing and other downward price pressure by national and regional health authorities

8. Complex, variable relationships between the evidence requirements of regulators and payers, and greater reliance on health technology assessment

9. Greater demand for evidence of comparative effectiveness of new interventions (not just absolute efficacy versus placebo)

10. Greater emphasis on discerning heterogeneity of treatment effects

11. Increasing patient centeredness, including greater emphasis on patient-reported outcomes

12. Need to validate companion diagnostics (eg, for personalized medicine), including evidence of their impact on treatment decisions and outcomes

13. Increasingly broad and sensitive postmarket detection of adverse events

14. Increasing yet varying demands of payers for demonstrating costeffectiveness and/or acceptable budget impact

Dr Goodman highlighted why industry faces greater challenges to adding a new oncology drug or procedure into the marketplace. Gaining market approval by the US Food and Drug Administration (FDA) is not the guaranteed ticket to market success. Innovators must pass the scrutiny of regulatory and payment gatekeepers, and the 2

groups often have different evidence requirements (

 According to Dr Goodman, although payer evidence requirements do not substitute for those of regulators, they are increasingly mediating adoption and use in the marketplace. For example, the main question of regulators continues to be: “Does the drug work?” For payers, it is more likely: “How well does the drug work in the community or general practice compared with standard care?” The answers to these questions often require different types of evidence, which can complicate new therapy development and validation. The evidence could be generated using practical (pragmatic) clinical trials, other nonrandomized controlled trials, adaptive clinical trials, and other trial designs (eg, randomized consent, regression discontinuity, combined single- subject [“n of 1”] trials). Prospective and retrospective observational studies should also be considered, such as population-based longitudinal cohort studies, patient registries, claims databases, clinical data networks, electronic health record data analyses, and passive and active postmarketing surveillance. Dr Goodman also noted that payers may draw on syntheses of existing evidence (eg, systematic reviews, meta-analyses, and modeling). These additional types of studies can supplement payers’ understanding of how therapies work in more diverse and representative populations. Dr Goodman emphasized that “This does make it more difficult to innovate. It is more demanding of evidence. It is more demanding of continued data generation, collection, analysis, and feedback.”

Dr Goodman stated that innovation in oncology increasingly calls on researchers to use multiple study designs (as listed above). To illustrate the types of evidence questions posed by payers, he showed a typical analytic framework for diagnostics and therapeutics (

 Dr Goodman stressed that test accuracy is often not sufficient for validating tests in clinical use, and that clinicians, payers, and other decision makers also seek direct or indirect evidence linking tests to clinical decisions and health outcomes.

The most sought end point in oncology studies typically is overall survival, defined as the time from study randomization until death from any cause; it is best measured in the intent-to-treat population. However, the FDA and other parties will analyze other end points, including

º Disease-free survival: time from randomization until recurrence of tumor or death from any cause

º Objective response rate: proportion of patients with tumor size reduction of a predefined amount and for a minimum time period

º Complete response: no detectable evidence of tumor

º Time to progression (TTP): time from randomization until objective tumor progression; does not include death

º Progression-free survival: time from randomization until objective tumor progression or death

º Patient perspective of direct clinical benefit

º Patient symptom assessments and/or physical signs representing symptomatic improvement (eg, weight gain, decreased effusion)

º Time to progression of symptoms: Similar to TTP, a direct measure of clinical benefit rather than a potential surrogate

Important work on identifying and validating surrogate end points for regulatory purposes and clinical decisionmaking continues. A recent example is the 2012 FDA guidance on using pathologic complete response as a surrogate end point in neoadjuvant treatment of high-risk early-stage breast cancer to support accelerated FDA approval that would be linked to requirements for subsequent data collection to demonstrate the relationship of the surrogate to health outcomes.

Dr Goodman noted that the validity of surrogates must be continually scrutinized. For example, although increased bone density has been used as a surrogate end point for osteoporosis medications, it is not necessarily a reliable predictor of decreased fracture rates. Similarly, despite widespread use of prostate-specific antigen levels for clinical decision making, it is often not a reliable predictor of mortality and other outcomes in prostate cancer management.

Genetic testing is also subject to greater scrutiny. Evidence of analytic validity (test accuracy for a genotype) must increasingly be accompanied by evidence of clinical validity (test accuracy for identifying a clinical condition or other phenotype) and, further, evidence of clinical utility (impact on clinical decisions and health outcomes). Although evidence is commonly lacking for clinical utility and clinical validity for assessing risk or otherwise managing disease, it can be lacking for analytic validity as well.

 Dr Goodman noted that even when such evidence is available, payers recognize that the data trail in practice from patient indications for a test to test ordering to test result to indicated clinical decision is typically incomplete and otherwise poorly documented.

Dr Goodman noted that “Personalized medicine is not simply about the genomics.” Personalized medicine is intended to tailor medical care to the particular traits (or circumstances or other characteristics) of a patient that influence response to a healthcare intervention. In addition to genetic traits, these may be sociodemographic, clinical, behavioral, economic, environmental, and other personal traits, as well as personal preferences. Dr Goodman emphasized that, for any form of cancer, there may be a great diversity of such traits—including where and how people live and what their incentives are&mdash;that can affect individual patient response across the broader at-risk population and, therefore, should be weighed in determining optimal care for individuals. Dr Goodman described how the conduct of subgroup analyses in comparative effectiveness research and patient-centered outcomes research to discern heterogeneity of treatment effects reflects, in part, the need to yield evidence to support personalized medicine.

Evidence for the Medicare Evidence Development & Coverage Advisory Committee

To illustrate what types of evidence are of increasing interest to payers, Dr Goodman referred to his recent experience on the Medicare Evidence Development & Coverage Advisory Committee (MedCAC), which advises the Centers for Medicare & Medicaid Services about the quality of evidence pertaining to Medicare national coverage determinations. The questions placed before the MedCAC emphasize whether there is adequate evidence to determine whether a technology, therapeutic, or diagnostic has an impact on patient outcomes and, if the evidence is adequate, what it demonstrates. When the available evidence shows favorable impacts on patient outcomes, the MedCAC asks whether it also applies to community-based settings and to Medicare beneficiaries in particular.

Dr Goodman gave 2 examples from the MedCAC. One was pharmacogenomic testing for 5 types of cancer, including HER2/neu for patients with breast cancer who are candidates for trastuzumab and K-RAS for patients with metastatic colorectal cancer who are candidates for cetuximab and/or panitumumab. Rather than focusing on the accuracy of these tests as such, the MedCAC questions addressed the evidence for whether each pharmacogenomic test improves outcomes for patients with cancer whose anticancer treatment strategy is guided by the test results and how well that evidence pertains to Medicare patients in community settings.

In the second example, Dr Goodman discussed how MedCAC examined evidence for FDA-approved Provenge (sipuleucel-T), an immunotherapy for the treatment of asymptomatic or minimally symptomatic metastatic castrate-resistant prostate cancer. The committee examined available evidence about whether the therapy would improve overall survival, control disease-related symptoms, and minimize patient burdens associated with anticancer therapy, including access to care, delivery, and side effects. The MedCAC was generally confident about the quality of the evidence demonstrating some improvement in overall survival and minimizing patient burdens, but not for control of diseaserelated symptoms. Further, given that physicians in practice can prescribe FDA-approved therapies for other indications, the MedCAC examined whether the evidence pertaining to the FDAapproved indication was generalizable to 3 off-label uses of Provenge: prostate cancer that has not metastasized; metastatic, castrate-resistant disease with more severe symptoms; and metastatic prostate cancer that has not failed hormonal therapy. The MedCAC expressed low confidence in the evidence supporting all 3 off-label indications. Finally, the MedCAC looked at the generalizability of these findings to patient groups that may have been under-represented in the available clinical trials and community settings. Dr Goodman emphasized that these types of questions are asked as well by public and private sector payers.

Oncology, Innovation, and Healthcare

Cancer is extremely political and extremely emotional. That makes a discussion on the economics of cancer treatment tricky. Further, the cost and value of cancer therapies are not discussed properly. But they need to be discussed. Cancer treatments are expensive and the decisions that need to be addressed (end of life care, expensive side effects, quality of life, treatment efficacy) can significantly impact total costs (

To introduce these issues, Jeffrey D. Dunn, PharmD, MBA, formulary and contract manager at SelectHealth, Inc, in Murray, Utah, gave a presentation entitled 

Defining Value in Cancer: Comparative Effectiveness Research in Oncology

. Dr Dunn said that most people in oncology understand that the complexity of the treatment regimens, bioethics of certain treatment regimens, off-label use of drugs, the lack of consensus among guidelines, and patient education tend to be the topics of discussion, but there needs to be an honest discussion about the cost of care. Cancer is very expensive and the model for cancer care is difficult to fit into a traditional cost-management method. In some cases, cancer is an acute condition; in other cases, the cancer is similar to a chronic condition. And in some cases, it is less about cancer and more about end-of-life care. So, Dr Dunn asked, “Can oncology be considered a value-based disease state?”

According to him, the answer is as complex as the disease. The answer is also dependent on whom you ask. Both payers and clinicians believe costs can be reduced. Payers strongly believe that adoption of clinical pathways will reduce costs (80% of payers believe so) and improve cancer care (88% of payers believe so). Oncologists also believe that clinical pathways will reduce costs and improve care (61% and 60%, respectively).

 One way to improve cancer treatment and reduce costs may be the use of comparative effective research (CER).

The purpose of CER is “to improve health outcomes by developing and disseminating evidence-based information to patients, clinicians, and other decision makers, responding to their expressed needs about which interventions are most effective for which patients under specific circumstances.” Historically, clinical pathways for breast, colorectal, and lung cancers have been in place for a number of years,

 and pathways for other cancers are being developed. To date, most pathway initiatives have been a collaborative effort between physicians and payers that have utilized the framework of guidelines from the National Comprehensive Cancer Network. CERs can provide great value, but some people confuse CER with restrictions, rationing, or cost-containment issues. Dr Dunn stated that CER is intended to provide real-world evidence on the most cost-effective therapies in an effort to improve outcomes and reduce costs.

Good CER requires the engagement of local oncologists. Dr Dunn said that regional variations make it imperative for local oncologists to be involved. Also, the engagement of local oncologists helps develop better working arrangements between oncologists and payers that can allow both parties to be more effective. With that being said, there are a few disadvantages to tweaking the guidelines to create CER that is more regional. Dr Dunn noted that evidence may need to be “massaged.” If a local doctor performs a treatment successfully but it is not in the guidelines, it can be tricky to address that issue. As such, it becomes more difficult to defend certain requests where the data are not black and white, but in a gray area. And that gray area is common in oncology. It has been estimated that one-half to three-fourths of all cancer drugs are used off label.

 Dr Dunn stated that there are so many new drugs and new treatment ideas being developed that it is difficult for compendia to keep up. That is why local oncologists’ input is needed; however, it is also why it can be a struggle to balance what physicians know or think is better in comparison with the guidelines or regulatory agencies.

Dr Dunn said that CER evidence should be based on outcomes (not surrogates), be clinically meaningful, have outcomes that are patient centered, and include costs. He also noted that the CER should be translated into language that can be understood by physicians, payers, and patients. If done properly, the use of CER as a decision-support tool should:

• Invest in patients’ health and improve health outcomes

• Reduce wasteful spending by reducing toxicities

According to Dr Dunn, randomized controlled comparative studies are rare in oncology. In most cases, “We end up relying on cohort studies, population studies, predictive studies, and modeling. So, this is not ideal. And even when we do have randomized controlled trials in oncology, a lot of these are short term and use surrogate efficacy outcomes because they are not long enough or powerful enough to show benefits in survival. They are often limited in sample size and they are often not powered to show statistical improvement over [the] existing standard of care.”

CER and Patient-Centered Outcomes Research

Dr Dunn said there is a growing trend to include patients (and payers) in the study design using patient-centered outcomes research (PCOR), in which both parties have input into the study’s comparators and outcomes. Equally important, both parties may have a better idea of the risks and benefits of a treatment compared with parties that traditionally designed studies. He also noted that PCOR is a new idea to oncology; as a result, it is limited. However, Dr Dunn indicated that the studies have a realworld component to them that is often missing in more traditional trials.

Cost is very difficult to estimate in cancer. This is due to many factors, including treatment regimens that are constantly changing, combination therapy, and new algorithms, all of which can extend the life of patients but create new indirect costs. That is why increasing use of PCOR to obtain real-world data is important. PCOR can also help identify subgroups of treatment responders.

Dr Dunn also noted that PCOR does have its limitations and barriers. Data can be inconsistent or unreliable. Other barriers to success include poor communication that impedes constructive feedback, provider pushback, and incentives that may be misaligned. The key for success is for all parties to be in constant communication to make sure that the data being studied will have value for future clinical pathways.

Dr Dunn concluded his presentation by reiterating that efficacy and costs need to be addressed when developing CER, and that all parties need to be involved. However, oncology treatment is very complicated. He used a simple example of 3 oncology drugs with sharp differences in daily versus monthly costs. It is up to the physician, payer, and patient to determine which treatment is best, and that is not an easy task.

1. The Zitter Group. The Managed Care Oncology Index. Winter 2011. http://www.zitter.com/OncologyIndex. html. Accessed November 21, 2012.

2. Danielson E, Demartino J, Mullen JA. Managed care & medical oncology: the focus is on value. J Natl Compr Canc Netw. 2010;8(suppl 7):S28-S37.

3. “Off-label” indications for oncology drug use and drug compendia: history and current status. J Oncol Pract. 2005;1(3):102-105.

Developing Comparative Effectiveness Research in Oncology

The cost of care for any patient generally follows a variation of Parkinson’s Law. “The more you have available to give to a patient, the more the patient will receive and that requires us to be thinking of different paradigms and not applying medical economics to classical economics,” began Bruce A. Feinberg, DO, vice president and chief medical officer, Cardinal Health Specialty Solutions, in his presentation entitled 

Practical Application of Clinical Pathways

. Adding to that belief, the more that is spent on medical care, the more likely there will be increased wasteful spending. One way to get around these problems is to use pathways, because they can provide local peer-reviewed guidelines that allow clinicians to treat patients as they see fit. As a result, local clinicians will be better equipped to avoid unnecessary costs since their reference points for care will be local and they will be cognizant of the best way to efficiently treat each patient.

In that regard, Dr Feinberg compared clinicians with jazz musicians or chefs. A jazz musician will look at sheet music and a chef will look at a recipe before proceeding. But, both will use their training and experience to expand on what they see in front of them to create music or a meal that is unique to the surroundings. That is what guidelines/pathways can provide to clinicians—a means to provide peer-reviewed guidance while still focusing on the individual patient.

“One of the great misconceptions about pathways is that somehow they represent some alternative universe—and they don’t. They are a subset of the universe,” said Dr Feinberg. To clarify, Dr Feinberg showed a graphic representation of the universe with areas that depicted the US Food and Drug Administration, the National Comprehensive Cancer Network (NCCN), and others. According to Dr Feinberg, pathways can stretch across those different regulatory bodies and create treatment guidelines that are specific to the clinician’s and patient’s part of the universe. To illustrate, he said that the NCCN guidelines for adjuvant HER2-negative, node-positive breast cancer has 16 regimens listed. However, most doctors only prescribe 3 or 4 of those regimens on a regular basis. Dr Feinberg’s employer, Cardinal Health, would ask the 300 or so physicians in a given provider network to agree to those same 3 or 4 regimens. By doing that, they believe there will be a reduction in treatment variance that further refines treatment and can lower costs.

Cardinal Health is working with physicians to establish them as democratic representatives of their network. Usually, a representative sample of about 12 local physicians (for a network there could be 100 to 300 physicians across the state or geographic area) will develop their own pathway in collaboration with the payer. Dr Feinberg said, “The goal is always best patient outcome.” Patient compliance is usually set at 80% for each pathway to allow a 20% leeway for those patients who will require a treatment that deviates from the pathway’s suggested treatment options.

Using this setup, all parties should “win.” Patients will see better outcomes with more refined care as physicians will be using a specific list of treatment options for a particular population. Also, payers will benefit from lower variance and less cost. Dr Feinberg thinks that pharmaceutical companies will like this model because it will provide a tremendous opportunity to increase accrual rates in clinical trials. He said, “If you have these networks, you have captive audiences to embrace clinical trials,” adding, “If we can decrease clinical trial accrual time in this country from 12 years to 6 years, we can halve the cost of drugs when they come to market.”

To illustrate the efficacy, safety, and cost savings of the pathways approach to healthcare, Dr Feinberg discussed the CareFirst Program. The program started in 2008 with 177 providers; by 2010, it had grown to 229. The key to the success of the program is compliance. In 2008, 77% of the practices were compliant; by 2012, 92% were compliant. Dr Feinberg added that the program only works if all parties are compliant. Therefore, “If a practice is noncompliant for 2 consecutive quarters, they get dropped, and if they then go back into compliance for 2 consecutive quarters, they’re allowed back in.”

In 2010, the first results from the program were presented at the American Society of Clinical Oncology (ASCO) annual meeting. Scott et al evaluated the potential cost savings of a payer-based “pay for quality” oncology program that applied clinical pathways.

The analysis compared 57 participating practices (176 physicians, 10,432 patients) with 43 nonparticipating practices (194 physicians, 14,137 patients). The study determined that the estimated cost savings for anticancer drugs, supportive care drugs, and non-drug services was over $12 million. After adjusting for additional fees to participate in the program, the total yearly savings was over $8.5 million.

The second generation of CareFirst is a pilot program currently under way that mimics a medical home with the goals of: (1) shifting reimbursement from drugs to cognitive services; (2) aligning incentives; (3) developing a continuous quality improvement (CQI) program; and (4) developing an end-of-life care initiative.

With a reimbursement plan, there is a fee for service, and in oncology those fees are for cognitive patient care, chemotherapy administration, and reimbursement of drug. Given the increasing cost of drugs, those margins have swelled such that the margin on drugs accounts for up to 70% of the oncologist’s income. Policy makers are concerned that such reimbursement design incents more and more expensive (higher-margin) chemotherapy-prescribing behavior. The medical home model realigned incentives by moving the dollars related to drug margin to cognitive services, allowing participating physicians to remain financially whole but without generating income from the sale of drugs.

So far, 14 practices, comprising 31 physicians, in the Maryland/Washington, DC, area have volunteered. Dr Feinberg stated that this pilot program is interesting because there is a possibility that it will dramatically shift how patients are managed and how clinicians treat them. Some of the questions the study was designed to answer include: Will cognitive work increase and at what cost? Will the use of chemotherapy decrease? Will there be a shift away from brand drugs if there are no longer significant margins for brand drug delivery? Will the CQI program decrease emergency department visits and hospitalizations? And will there be an impact on end-oflife care? So far, these questions have not been fully answered, but Dr Feinberg provided some preliminary data from the pilot study. He cautioned, however, that due to the small sample size, the observed results cannot be considered statistically significant. One interesting observation was that the 31 physicians (in the aggregate) received 4.7% more reimbursement money compared with the year before (prior to joining the pilot program). If those physicians had been in the first-generation program, fees would have been 11% higher. However, when one dives deeper into the data from the aggregate to the individual practice level, there were clear winners and losers based on their patient mix. Dr Feinberg said, “This is where it’s really problematic when you look at this kind of modeling, because often it may make sense in the aggregate but it can break down dramatically when you get down to the specifics.” Further analysis demonstrated very little difference in physician prescribing behavior as both patient encounters and chemotherapy prescribing remained essentially the same despite the dramatic differences in reimbursement.

While the results from this pilot program may at first appear counterintuitive, it did provide: (1) validation of the unique medical home model among disparate providers; (2) evidence that significant savings (>3:1 return on investment [ROI]) can be achieved in a provider group already compliant with a mature pathways program (note: this was comparing the 4.7% increase in costs with the 11% increase that theoretically did not occur); and (3) a CQI program that directly and favorably impacted patient outcomes and ROI via reduced toxicities, emergency department visits, and hospital admissions.

Dr Feinberg noted that the pilot program will need further enhancements to sustain further savings, but he is very excited that the program can also be used as a springboard for better dialogue about end-of-life care. Whether or not the medical home concept can be exported across the entire plan remains to be determined, according to Dr Feinberg, but he is optimistic that some aspects of this program will lead to innovative programs in the future.

1. Scott JA, Wong W, Olson T, Fortner BV. Year one evaluation of regional pay for quality (P4Q) oncology program. J Clin Oncol. 2010;28(15 suppl):6013.

“When we ask people to deliver quality metrics and show what they have done, can we bring that information back to them in a usable format? Can we as payers take it and use it to reward? Can we use it to help pharma companies? Can we use it to help our employer sponsors understand what their costs are? Can we take it back to patients and give them action plans based on it?” asked Ira M. Klein, MD, MBA, FACP, chief of staff, Office of the Chief Medical Officer at Aetna. The answers to these questions were the premise for Dr Klein’s presentation entitled

Dr Klein stated the measurement domains for quality metrics: (1) patient experience; (2) value and access; and (3) clinical process and outcome. Furthermore, he noted 6 key questions that help determine the strength of a quality measure

1. How strong is the scientific evidence supporting the validity of this measure as a quality measure?

2. Are all individuals in the denominator equally eligible for inclusion in the numerator?

3. Is the measure result under control of those whom the measure evaluates?

4. How well do the measure specifications capture the event that is the subject of the measure?

5. Does the measure provide for fair comparisons of the performance of providers, facilities, health plans, or geographic areas?

6. Does the measure allow for adjustment of the measure to exclude patients with rare performancerelated characteristics when appropriate?

Dr Klein noted that outcomes can be used to tabulate efficacy and costs of care, but he clarified that more expensive treatment should be given to some patients if it is deemed appropriate. For example, despite similar efficacy, the cost of treatment options for non-small lung cancer and colon cancer vary tremendously; however, some patients will require more expensive regimens (

). While treatment will be tailored to the patient, Dr Klein cautioned that “Uniformity builds efficiency and that is what we want.” He also stated that drug shortages, use of generics, and the price of future treatment regimens will also come into play when deciding what is best for the patient with respect to cost and efficacy.

The key to success with quality metrics is adherence. Not just patient adherence but adherence by the medical professionals to quality metrics and pathwaysbased oncology strategies. According to Dr Klein, adherence should:

• Enhance patient outcomes and costeffectiveness of care by applying evidence- based clinical pathways and aligning oncology drug pricing with guidelines. Proper use of guidelines can promote drug pricing to drive selection of the most cost-effective medications, minimize side effects and toxicities, and support clinically appropriate lines of therapy

• Provide community-based care that continues to enable independent quality of life

• Provide decision support and care coordination for patients and families to help them make informed choices regarding lines of therapy or access to palliative and hospice care

• Align physician and reimbursement policy with clinical guidelines

Adherence to quality metrics also requires a means for the data to be exchanged seamlessly with various parties. At Aetna, Dr Klein said they are planning to use Medicity as an informatics exchange program that allows all parties to have access to the data (

Using a clinical decision support system, both providers and patients can greatly benefit.

• A flexible clinical decision support platform that can be supported by

• Applications that can make work flow easier

• Seamless connection to benefit information

The end result is that physicians get an office “that is a happy office, an efficient office. Time is not wasted finding data…or getting approval for things that should be approved based on the information available,” stated Dr Klein. Similarly, patients get information that helps them understand their disease, guidance for getting referrals, and access to patient organizations.

Dr Klein ended his presentation by stating that for a program to work, patients should always be in the center with all other parties in communication to ensure treatment that is both medically appropriate and cost-effective.

1. Agency of Healthcare Research and Quality. Validity of Clinical Quality Measures. http://www.qualitymeasures.ahrq.gov/tutorial/validity.aspx. Accessed November 24, 2012.

Quality Measures in Oncology

Payment reform is a necessity in today’s healthcare environment. One of the leading experts in payment reform is Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes and attending physician at Memorial Sloan-Kettering Cancer Center. In his presentation entitled Innovative

, Dr Bach stated that there are numerous payment models available but they tend to fall into 1 of 3 categories: episodebased payment, disintermediation, and cost sharing.

In this model, the provider (eg, oncologist) is given a single payment for the care of a patient during an “episode of care.” The oncologist can then disperse the funds as he/she sees fit. In this model, the clinician assumes some of the risk and will look at the costs of care and efficacy and determine a treatment regimen based partially on both. As shown in the 

, the costs of different treatments vary greatly. An oncologist will need to take into account the costs of treatment and other expenses and determine the drug regimen that is best suited for a patient. If a more expensive treatment regimen is used, the oncologist will have a net loss. As such, the oncologist is at risk in this model.

Dr Bach stated there are many concerns for implementing this method. First, it is not clear what the payment should be. The allocated funds may focus on the cost of medication but that may be only a small portion of the overall cost of care. Also, Dr Bach indicated that some cancer treatments have been well studied and compared with others, making it is easier to make an informed decision, while others have not. He also cautioned that some may view this model as the least costly alternative payment. But that is not necessarily the case. To better illustrate how the payment would be determined, Dr Bach said: “Episode-based payments, like patient perspective care or hospital payments, [are] based on average behavior.” If most oncologists use more expensive regimens, then the average will be high and that will determine how much the oncologist will be given for the episode. In other words, the payment is not an arbitrary number but one calculated from recent behavior.

A second payment model discussed by Dr Bach was the disintermediation model, which theoretically should be cheaper since it takes out the “middleman.” Disintermediation in medicine would also take out the profit margin, as consumers buy directly from manufacturers. In 2003, the Medicare Modernization Act included a disintermediation program called the Competitive Acquisition Program (CAP). Dr Bach noted that CAP failed due to administrative reasons, but recently it has garnered renewed interest.

Another disintermediation program is the United Healthcare Demonstration, in which doctors pay invoice prices for cancer medications. In this setup, clinicians can receive a management fee but no profit from the drugs directly. Pathways are an outgrowth of the United Healthcare Demonstration, and represent contracts with providers to use certain regimens (ie, low-cost regimens).

Cost sharing moves the risk away from the provider and places it more on the patient.

1. Consumerism is good. Consumers know how to shop for everything else, so they can shop for healthcare.

2. Consumerism is silly. Because medications are so expensive, the consumer cannot really comprehend how to share the cost.

3. Consumerism is economically of little relevance. Consumers are indifferent to who spends the money since all the money is going toward healthcare instead of somewhere else.

He stated that the RAND Health Insurance experiment found that cost sharing did not work.

 Also, with this model, there is a concern that patients will not go in for regular or routine check-ups due to copays. Dr Bach stated that he is of the mind-set that consumerism is silly and that he is not a strong advocate for this model.

Dr Bach ended his presentation with an overview of the questions that “keep him up at night” while wrestling with how best to create better payment plans.

1. Why can’t we get along? He said that most payment plans require a fundamental agreement on what constitutes the standard of care. That is difficult to achieve.

2. How large could shifts be from payment changes, and should we worry? Dr Bach asked, if the various parties can agree on what constitutes the standard of care, will the shift be large or small? If it is too small, it will not be enough to reduce the total costs that continue to rise. But, if it is too large to allow us to save the money we need to save to fix the system, then will that lead to us to stray from the goal of improving healthcare? Finding that balance is difficult.

3. Can we switch from eliminating “waste” to reducing “marginally beneficial?” Dr Bach said there is constant talk to reduce wasteful spending, but we should focus more on reducing medications that are marginally beneficial. He cited the drug Avastin as a good example of a drug that is marginally beneficial in patients with breast cancer and also illustrates how all parties are not in agreement. In November 2011, the US Food and Drug Administration issued a statement saying that Avastin has not been shown to be safe and effective in patients with breast cancer.

In 2012, the National Comprehensive Cancer Network’s guidelines for breast cancer included Avastin as a preferred agent.

 Dr Bach asked: “How are we going to design programs to save money when we can’t even get agreement between 2 respected bodies?”1. Lohr KN, Brook RH, Kamberg CJ, et al. Use of medical care in the Rand Health Insurance Experiment: diagnosis- and service-specific analyses in a randomized controlled trial. Med Care. 1986;24(9 suppl):S1-S87.

2. FDA Commissioner announces Avastin decision [press release]. US Food and Drug Administration; November 18, 2011. http://www.fda.gov/ NewsEvents/Newsroom/PressAnnouncements/ucm280536.htm. AccessedNovember 21, 2012.

3. National Comprehensive Cancer Network. NCCN Guidelines: Breast Cancer Version 3.2012. http://www.nccn.org/professionals/physician_gls/pdf/breast.pdf. Published September 10, 2012. Accessed November 21, 2012.

Innovative Payment Models in Oncology Care

“I’ve been treating patients since 1983. I’ve never had a patient come up to me and say, ‘I want to die cost efficiently.’ Never. Not once.” Those were the opening remarks from Andrew L. Pecora, MD, FACP, CPE, chief innovations officer and vice president, cancer services, John Theurer Cancer Center at the Hackensack University Medical Center in Hackensack, New Jersey and president of Regional Cancer Care Associates, during his presentation entitled 

Translating Evidence-Based Research into Value-Based Decisions in Oncology- Integrated Delivery Networks

. This statement made it clear that there is a disconnect between patients and payers.

Adding to the problem, the person in the middle, the physician, is being asked to do more and more. To illustrate, Dr Pecora said that as an administrator in the hospital, he has to ask his doctors to be “really good internists because you are giving people chemotherapy that may cause side effects and you have to assess their medical condition, whether they can get their drugs, have a toxicity, and do all those things. You also have to be an oncologist and understand the drugs and write the orders. You have to be a molecular biologist now because of all the pathways and you have to read about these things and really understand them so that you know you are ordering the relevant test so that you give the right drug and not the wrong one. You have to be an informatics expert because everyone is going into electronic medical records and using pathways. You have to be a social scientist and an economist now since society has now made you responsible for the cost of care of delivery. You have to be an end-of-life specialist. You have to be a pre-certification expert and, by the way, you have to meet all of the quality standards that everyone is promoting—there are about 50 of them now. You have to take time to talk to the patient and be nice to them.”

After going through that list of responsibilities, Dr Pecora ended with, “And by the way, don’t make a single mistake.… And do this in 15 minutes. And do it 30 or 40 times a day.” He asked, “How can any human being do that?” Yet, this is what is being asked of physicians and he is concerned that we are continuing to add to their responsibilities.

Instead, Dr Pecora stated, we need a model that lets physicians be physicians and frees them of some of the administrative duties. We also need a model that embraces the multitude of ways that patients are classified and treated. Conventional models may combine patients bluntly, such as “All breast cancer patients are the same.” Instead, Dr Pecora argued for a system that segregates patients into more realistic diagnostic and prognostic groupings. He believes this will be the key to better outcomes and better ways to measure outcomes. For example, Dr Pecora stated that there are 3 pages of tests for leukemia that allow clinicians to place patients in the correct treatment group. “Once you segregate people and better refine your segregation, you have a group of patients where biologic variability goes down and therefore you can measure, with greater fidelity, the outcome of what you are doing,” he said, and that “The absolute key to this is to track in real time the things that matter,” adding that the 2 things that matter are overall survival and progression-free survival. Those are the outcomes that physicians are selling and the patients are buying (ie, survival). And the product of survival needs to be properly tracked and it needs to be tracked in a manner that frees a physician to do his/her job. That is the reasoning  behind Cancer Outcomes Tracking and Analysis (COTA), a point-of-service decision-support tool. It groups patients based on diagnostics and treatment, and tracks them in real time so that the medical staff can make more informed decisions quicker. As a result, the staff has more time to focus on caring for its patients.

COTA tracks patients in groups that are applicable and compares each patient’s outcomes with similar patients. The segregation of patients is based on many factors such as histology, stage, genomics, epigenetics, proteonomics, relapse, and resegregation with new information. Furthermore, patient data are tracked daily with a focus on reporting outcomes that matter the most (ie, progression- free survival, overall survival, and cost). Using this setup, outcomes for each patient and each cancer center can be compared with other centers with similar patient populations (

Dr Pecora stated that COTA, along with its QuantiaMD system, allows physicians to provide (and monitor) point-of-service decision support. He compared the setup to a global positioning system (GPS). The physician knows where they are starting in a patient’s treatment plan and they know the final destination (survival and a reasonable cost). Daily tracking of patients’ cost and outcomes allow physicians to map the progression of treatment. Dr Pecora noted that a good GPS will only make noise if the traveler goes off target. Similarly, a good point-of-service system will remain quiet if the patient is proceeding as planned and red flags will pop up if there is deviation from the target. This can be measured in different ways, but Dr Pecora showed examples in which both outcomes and costs are monitored to allow all parties to know how the patient is progressing compared with similar patients (

Dr Pecora concluded his presentation by cautioning the audience: “We do not want to be in a setting where we are creating that moral double jeopardy for our physicians and nurses where they have to decide between ‘I think this is best’ and ‘I don’t know if they can afford it.’ We don’t need to go there.” But he said he remains optimistic, adding: “I think you will see solutions come into the marketplace that heretofore were not even considered in medicine and I think one of them is that we will move from selling services to selling products. And by selling products you are accountable for the 2 things that matter—the outcome and the cost.”

Data Tracking and Point of Service Decision Support

“Don’t fool yourself into thinking that this debate is about value and cancer care or about healthcare…This is fundamentally a debate about taxes,” stated Michael E. Chernew, PhD, professor of health care policy, Harvard Medical School, and co-editor-in-chief of The

 Controlling Health Care Spending Growth: the Role of Benefit Design and Payment Reform

, Dr Chernew noted that while we can all discuss the various means to improve how we monitor and track outcomes and costs of care, the healthcare system is strongly linked to our national debt. To illustrate, he showed the figures for federal spending on health as a percentage of gross domestic product (

Dr Chernew noted that if we continue to finance higher healthcare spending by taxes, marginal tax rates of high income earners could rise to 70% by 2060.

 He stated that the key is to not reduce spending on healthcare. Instead, we should slow down the growth in spending. According to Dr Chernew, there are several ways to slow growth. The first way is payment reform.

One goal of payment reform is to simply pay less to both providers and plans.

The problem with paying less, according to Dr Chernew, is that it retains many of the pathologies currently present in the healthcare system. The fee-for-service system “is anywhere between inane and unmanageable,” he stated, adding that “Issues about site of care, issues about how many different codes there are for very similar things, issues about how to depreciate big equipment….lowering payments in fee for service does not solve all those issues.”

Another payment reform is bundled payments such as episode bundles (which group patients based on illness) or patient bundles (which group patients based on geography or other demographics). Dr Chernew said that patient bundles are less complicated than episode bundles, and that accountable care organizations are a form of a patient  bundle. He clarified that episode bundles are problematic because many people have comorbidities that overlap into other bundles.

Dr Chernew noted there are numerous problems with any program that reduces spending. First and foremost, there is a concern for reduced medical outcomes.

Another option to slow spending growth is benefit design. Dr Chernew said that some people believe the best way to reform the system is to let consumers vote with their pocketbook instead of the above payment-reform scenarios that are dependent on policies and bureaucrats. Some examples of how to do this include:

 Dr Chernew said this is an easy design to visualize, as customers pay higher premiums while the government pays a fixed amount for care.

Higher copays, co-insurance, or deductibles.

 With this option, the customer pays more at the point of service. One concern with this design is that it will reduce the use of high-value services.

 This design sets prices on various treatments and if patients want additional or alternative care, they have to pay extra.

With this method, patients may be asked to bear an increased share of the costs of care for higher-tier care (ie, higher copays for nonformulary drugs or experimental drugs).

Using this design, copayments are aligned with value. Dr Chernew is in favor of this design but is concerned that it may be difficult to implement.

Dr Chernew noted that benefit design changes can support efforts to control the public spending problem. However, if not designed properly, they can lead to other problems in the end.

Dr Chernew concluded his presentation by pointing out that each of the ideas discussed have pros and cons. Episode-based bundled payment may work for the certain common conditions, but may have limited value in less common ones. He is concerned that bundled payments may become political and pit innovation against higher taxes.

Dr Chernew also stated that costsharing strategies may work, particularly those that reduce payer spending. The major concern with cost-sharing is that it transfers a lot of risk to individuals and it may exacerbate disparities. On the plus side, however, those concerns may be mitigated if a valuebased insurance design is used. Such plan designs will be valuable to address all areas of cancer.

Finally, he said that there are other strategies being examined. It is unlikely they will have substantial effects. Innovations in the future will likely fall under 1 of 2 general categories: (1) more consumerism; or (2) broader payment. Dr Chernew concluded, “The challenge we face is that as we move away from a world in which value was the closing word of every argument…to one in which presumption or proof of value is going to be more important, we must navigate these waters in a way that does not dampen innovation and prevent us from having better treatments in the future.”1. Baicker K, Skinner J. Health Care Spending Growth and the Future of U.S. Tax Rates. http:// www.nber.org/programs/ag/rrc/NB11-14%20Baicker,%20Skinner%20WP.pdf. Published September 2011. Accessed November 30, 2012.

Healthcare, the National Debt, and Taxes

The meeting concluded with all participants on stage to field questions on a variety of topics. The moderator of the event was Clifford Goodman, PhD, senior vice president of The Lewin Group, and the panel included:

Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes, attending physician, Memorial Sloan- Kettering Cancer Center; Michael E. Chernew, PhD, professor of health care policy, Harvard Medical School, and coeditor-in-chief, 

; Jeffrey D. Dunn, PharmD, MBA, formulary and contract manager at SelectHealth, Inc; Bruce A. Feinberg, DO, vice president and chief medical officer, Cardinal Health Specialty Solutions; A. Mark Fendrick, MD, professor of medicine and health management and policy, Schools of Medicine and Public Health, University of Michigan and coeditor-in-chief of 

; Ira M. Klein, MD, MBA, FACP, chief of staff, Office of the Chief Medical Officer, Aetna; and Andrew L. Pecora, MD, FACP, CPE, chief innovations officer and vice president of cancer services, John Theurer Cancer Center at the Hackensack University Medical Center and president of Regional Cancer Care Associates.

 If we are indeed experiencing some kind of turning point or even tipping point in the way oncology care is being priced, what do you expect will be the effect on what is innovated or how it is innovated in cancer care?

Dr Bach answered this question by stating that the most notable innovation in cancer may be less about new treatments than about new delivery systems. Dr Bach said, “On the pharmaceutical side, the returns on investment in research and development are already gone, and most of the big companies are not investing in that and shareholders aren’t giving them credit for it.” Instead, companies will find innovative ways to produce competitive drugs more cheaply. “I think the day of every new drug being simply set to a price that the market will bear, irrespective of the value it delivers, is one that will be seeing its sunset,” speculated Dr Bach.

Dr Chernew added there may be a decline in innovative medicines as it becomes harder to show a drug’s “value.” He said: “The ability to make money on a drug that is perceived as a marginal improvement, I believe, is going to be a lot harder in the future unless the companies can find ways to cut money out from other parts of the system, maybe unrelated to oncology….And I do think that will have an effect on innovation, and I think that’s a shame and something we have to think about going forward.”

Dr Klein was more optimistic and noted that as we continue to subtype various cancers, the drugs will be more specific to a smaller cohort of patients: “The nature of biologic drugs is that they’re going to be applicable to a much narrower cohort of patients. So I think on a just-dollar basis, there’s no such thing as a huge blockbuster drug now because there’s no such thing as a huge applicable population. There’s going to be segments.” He added: “If there is an ability to efficiently generate a good match for a specific tumor subtype, I think those products will be successful.”

What do payers expect to see insofar as the pipeline for innovation?

Dr Klein said that at Aetna, “What we’re trying to do is migrate at least a third of our business from the traditional insurance business over to the healthcare services business. And the way to do that is to be an aggregator and processor of important health information. And the way we’re doing it is with a health information portal.” He added that the goal is to create a system that centers on the clinician and the patient. “What you get out of that is the ability to take lab, claims, pharmacy data, and also genetic testing data, put it through a logic engine filter, and bring it to an oncologist who, at the point of decision for care, can then actually prescribe the tailor-made, personalized medication therapy.”

 Do clinicians feel threatened or constrained by the cost pressure that may affect innovation?

As a clinician, Dr Pecora did not say whether he felt threatened or constrained. He was, however, concerned that the discussion about innovation was focused on innovating payment strategies instead of innovating treatment strategies. Dr Pecora said, “The pace of discovery and our ability to open up the black box now is much greater than it’s ever been and that’s only going to accelerate. So we don’t want to put reimbursement strategies in place that slow that down.” Dr Pecora believes those innovations will lead to more cost efficient ways to treat cancer.

Will new healthcare payment plans still have room for expensive cancer drugs?

Dr Feinberg said that he was not sure how much the new payment plans would be willing to accommodate new innovative but expensive drugs. However, he did caution that we still have much to learn about how all of us pay for certain procedures or medications. Dr Feinberg stated: “As we remove all financial incentives and we see marginally neutral responses to drugs, we’re starting to see behavior that maybe isn’t as predictable. We’re not seeing the shift away from certain things, and I think it’s because it’s driven by habit. It’s driven by psychology. It’s driven by a selective learning process in which it reinforces their worldview that I’m going to treat it that way. And I think that is a piece that we’re not addressing as we continue to focus on the financial modeling.”

 As new drugs enter formularies and old drugs are removed, are the rules of engagement changing?

Dr Dunn of SelectHealth, Inc, stated that the rules are dramatically changing since their business model is changing. He said, “If you look at the estimations on what’s going to happen to the pharmacy budget over the next 3 to 4 years, half our budget is going to be in specialty. And this is different than it was 3 or 4 years ago because there’s been an obvious move toward oral pharmacy specialty drugs….And so how benefits are designed around that has to change.” To adapt to these new trends, Dr Dunn said they have acknowledged that within 5 years they want to have a trend to be consumer price index plus 1%. “So we are heavily jumping into the accountable care organization model, redesigning benefit designs, collaboration, payment reform.”

 What does value-based insurance design mean in the context of specialty pharma now?

, pointed out that this question deals with some very tricky issues that may not be easily measured for cancer care. He said, “For a drug in oncology that will cure cancer 90% of the time, it should not cost the same as a drug that will extend life by 6 weeks to 6 months.” Dr Fendrick further noted that with cancer care, there is a lot of nuance associated with care. “Every stakeholder involved with cancer care understands that clinical nuance is better than the status quo of onesize- fits-all.” Furthermore, “Things that are profitable…are [those] that produce the outcomes that they’re supposed to produce, like better education or transportation or other types of things. In healthcare, that is hardly ever the case. The things that produce the most health for the money, you know them, we’ve known them, they are things that are typically and traditionally underpaid. And those that would have the most marginal cost-effectiveness ratios, or whatever measure you put on them, tend to be the most profitable.”

 Do you see a pathway to implementing value-based insurance design in specialty pharma?

Dr Dunn stated that his company has attempted to apply value-based insurance design (VBID) to conditions such as asthma and diabetes but they did not see an improvement in compliance and employers were reluctant to pay for it. However, Dr Dunn thinks that VBID may work in specialty pharmacies. “I think VBID is more applicable, actually, to specialty than it is in some of those wider, broader categories. But it’s a little bit different definition of VBID. It’s more of the pathway. It’s the more cost-effectiveness/comparative effectiveness research type approach.”

Dr Klein added that VBID is designed to provide incentives to change behavior and while it is a logical means to reduce healthcare costs, employers are reluctant to pay for this arrangement.

Dr Fendrick echoed those sentiments by concluding, “The idea of clinical nuance and value-based insurance design, it’s like apple pie, it’s intuitive, it makes sense. It’s been relatively slow to adopt.”

 Can you comment on the perceived lack of transparency that occurs with pathways?

Dr Feinberg disagreed that there was a lack of transparency: “In our case, every one of our contracts that’s done on a regional basis, the pathways are then disseminated to the entire provider network. The steering committees then meet on a quarterly basis and review new information like new labeling, new drug introduction, black box warnings, etc, and they update accordingly.” In addition, he said that physicians in their group have a “tremendous sense of comfort in knowing that a group of their peers endorses what they’re going to do, that not every situation is a situation that you see 10 times, 100 times a year, sometimes not even a lifetime.”

Dr Dunn also stated that he felt that his company’s pathways are transparent. “The policies and procedures would be publicized and published because our organization is risk averse, and it’s an evidence-based organization. So we’re not going to put out something that is not backed up with evidence,” he said, adding, “What’s not going to probably be shared publicly, initially, is the reporting incentive type piece, how are providers doing.”

Dr Chernew applauded the organizations that promote transparency but was concerned that the fundamental question was not being properly addressed. “I think most patients, for example, won’t be able to evaluate them (pathways). And they certainly won’t be able to evaluate them where they’re making a choice about what delivery system to be in.”

How is cancer care going to change the most as a result of the factors we discussed today?

• “The organizations in which oncologists work are going to be bigger and more heavily managed,” stated Dr Chernew.

• “There will be information and incentives placed on the actual consumer to go to places like centers of excellence,” said Dr Fendrick.

• According to Dr Klein, “People are going to start demanding more value for every dollar they spend. And the only way that can be validated or have it be transparent and uniform for all is to create a cost equivalent so that people can look at what they’re getting for what they pay.”

• “There’s been a meaningful discussion among stakeholders to go beyond price to this issue of value and not just the lowest price provider, which gives me some optimism moving forward,” stated Dr Fendrick.

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