Jeremy Schafer, PharmD, MBA is senior vice president and director of the Access Experience Team at Precision for Value.
Not long ago, I received a letter from the clinic where my children see their doctor. The letter informed us that there would be a new procedure whereby children with appointments would get a wrist band just like they would get if being admitted to the hospital. This change was due to the clinic’s affiliation with a local hospital. The average person would largely disregard the notice, seeing only the minor impact of the addition of disposable, plastic jewelry. For me, however, with a background in insurance and healthcare, the implication was clear: my family and my employer soon would be paying more for the same clinic visits, simply because of the flip from physician office to hospital billing.
The complexity of hospital vs clinic billing on medical services has largely gone unaddressed as the media has hammered away on drug prices. However, recent studies show that there is little rationale for why patients and employers pay more for the same treatments. This may represent an opportunity to reduce drug cost without sacrificing care. Nowhere is this issue more pressing than in cancer care. But is it safe? Would outcomes be sacrificed for savings?
A study conducted by the Employee Benefit Research Institute (EBRI) Center for Research on Health Benefits Innovation, and supported by funds from employers, health plans, and pharmaceutical manufacturers, analyzed the difference in infused oncology costs between physician practices and hospital outpatient departments (HOPD) for commercially insured members.1 This study analyzed data from a sample of over 1.7 million members under age 65 enrolled in employment-based health coverage and commercial insurance plans in the 2016 MarketScan® Commercial Claims and Encounters database. The group analyzed data for the top 37 infused oncology products. The study controlled for multiple variables including drug mix, treatment intensity, and unit price in order to provide a balanced comparison between the 2 sites of care.
The study found that hospital prices for the drugs in question averaged 86.2% more per unit than in physician offices. The mean annual reimbursement per user was $13,128 in physician offices compared to $21,881 in hospitals. The authors stated that employers would save approximately 45% if physician and hospital prices were the same. Patients, too, are feeling the pinch as higher hospital charges are translating into higher cost share.2
The administration of cancer therapies in settings like hospital outpatient departments has made historic sense from a clinical perspective. Cancer patients, particularly when metastatic, may be in poor physical condition. Chemotherapy has toxic side effects like nausea, vomiting and neutropenia, which made more intensive monitoring a necessity. However, the revolution of new therapies has brought forward more ways to treat patients. Oral cancer agents are now common and used across a variety of cancers including CML, NSCLC, breast, and skin malignancies. The advent of the checkpoint inhibitors has led to patients benefiting from better tolerability, reduced need for supportive care medications like antiemetics and products like epoetin and filgrastim, and durations of therapy that can go for years.
The question is, with new treatments and enhanced tolerability, is there an opportunity to drive site of care to lower cost settings like the clinic, infusion center, or even the home?
Before cancer patients can be redirected to sites of care with less intensive monitoring, 2 core issues need resolution: a lack of study data on outcome impact and the identification of the appropriate patients. There are limited comparative data on the safety of treating cancer patients with IV agents in settings beyond the hospital or clinic, so these studies would need to be conducted. Pharmaceutical manufacturers could consider funding such studies in patients well-established on therapy. Creating opportunities for home care could help patients stay on therapy, and would be a win for patients in rural areas or those with limited transportation options to hospitals.
Eligibility criteria for patients to receive treatment at less intensive sites of care would need input from oncologists and leading oncology guideline bodies. Only select drugs might be candidates and would give manufacturers an opportunity to showcase how a new drug, while possibly more expensive, could create value through tolerability and flexibility in site of care. Even if only a minority of patients and drugs were eligible, it could improve patient satisfaction and reduce costs.
The evolution of value-based healthcare will require that more value be demonstrated in order to justify increased cost. As health systems move into alternative payment models, leveraging lower cost sites of care will be critical to success. Manufacturers and other healthcare stakeholders should consider studying additional ways, and settings, to deliver cancer drug therapy and how these changes impact costs and outcomes. Doing so may increase patient options, maintain outcomes, and reduce wasteful spending.