Medical costs associated with cancer have increased dramatically, and they are projected to rise much further—to more than $173 billion per year by 2020.1 Many factors are responsible for this rapid rise: greater use of specialty drugs, more patients with cancer as the population ages, and more costly care environments, as more cancer care moves out of community settings and into hospitals.2 Another challenging factor—the variability in costs of care as well as practice—is being addressed through the evolution of oncology practice guidelines into oncology clinical pathways.
The wide variation in treatment patterns and costs among oncologists has been long documented and is apparent in many cancer types.3—5 In the treatment of thyroid cancer, for example, Haymart and colleagues5 found significant variation in multiple aspects of management, in central lymph node dissections, in pre-treatment scans before radioactive iodine treatment, and in all aspects of long-term thyroid cancer management. This included different applications of ultrasound and radioactive iodine scans. Another group of researchers found high variation among physicians in basic items, such as how often surveillance occurred after initial therapy in breast cancer.6
Researchers from the Dartmouth Institute found important differences among patients being treated within the final 2 weeks of life with active chemotherapy (Figure 1),4 which has important implications for the cost of care.
The Growth of Oncology Clinical Pathways
The move from oncology practice guidelines to clinical pathways in the commercial sector is under way, judging from the deals being announced and consummated. Vendors like McKesson (which owns US Oncology), Via Oncology, and Cardinal Health have been active for several years in the clinical pathways arena. Twenty-eight percent of health plans responding to a 2013 survey indicated that they currently utilize oncology clinical pathways. Another 50% indicated that they would do so within 3 years.7 According to McKesson, up to 1500 oncologists are using its oncology pathways, and Aetna has been a customer for its clinical pathways for about 7 years.
The reason for this move toward clinical pathways may be that the treatment options listed by today’s practice guidelines are too broad, and these guideline recommendations are not usually based on adequate evidence (see Highlight Box). As an example, Bruce A. Feinberg, DO, chief medical officer of Cardinal Health Specialty Solutions, reported in the National Cancer Institute
Bulletin that of the 16 possible ways to treat metastatic HER2-negative, estrogen-receptor negative breast cancer, “most of them will never be tested head-to-head to determine which are the most effective, least toxic, and least costly.”8 The idea is to not to wring all variation out of oncology practice, but, according to Via Oncology, to strive for 80% adherence to any single pathway.8
In general, oncology clinical pathways are programs that clinicians can access in real time, during consultations with the patient. For example, McKesson’s “Clear Value Plus” pathway product can connect and work automatically with any electronic health record (EHR).
As more genomic information is deciphered on a patient-by-patient basis, it makes sense that oncology pathways may become even more popular, to help guide clinicians in their treatment of individual patients with different genetic tumor characteristics. In this case, the number of options in a specific pathway will narrow further to those known to be most effective for a patient with a particular tumor genotype. This can only occur with more evidence-based medicine and comparative effectiveness research. Even traditional providers of oncology practice guidelines, the professional associations, have started to look toward clinical pathways. Recently, McKesson has partnered with the National Comprehensive Cancer Network (NCCN), whose guidelines drive
government reimbursement. “McKesson has partnered in the last year with NCCN to deliver clinical decision support, including NCCN guidelines and Value Pathways with our Clear Value Plus product,” said Matt Brow, McKesson’s vice president for business development and public policy. “With ready access to NCCN guidelines and Value Pathways Powered by NCCN in the physician’s work flow, physicians and practices have more ways to demonstrate quality when working with payers.” He added that payers would gain more value in this setting if use of oncology clinical pathways means that clinicians are always “green lighted” through the prior authorization system when on pathway.
Getting Medicare’s Ear
A busy oncology practice may have commercial, Medicare, and Medicaid patients. Today, there is little standardization, and this is a difficult problem for community there is little standardization, and this is a difficult problem for community oncologists. As pathways become more popular, there’s a recognition that practices will face administrative challenges if every payer works off a different clinical pathway type. Therefore, it would be preferable to have a common pathway format and approved approach. But so far, the biggest payer of all, the Centers for Medicare & Medicaid Services (CMS), has not moved in this direction.
In 2011, Medicare spent $34.4 billion for cancer care.9 This represents 10% of its total fee-for-service payments for the year. As Figure 2 shows, the majority of patients being diagnosed with cancer are Medicare beneficiaries9; some estimate that 65% of all patients with cancer may be covered by Medicare by 2020. It is well known among payers that commercial plans generally follow Medicare’s lead on reimbursement and coverage, in part to reduce the confusion surrounding distinct and separate policies for many technologies.
“Most of the progress in reimbursement around clinical pathway development and adoption has been on the private payer side,” according to Brow. As McKesson supports the US Oncology Network, its influence extends throughout this oncology network. “But the federal market is a bit behind the times,” Brow said. “We’ve been pushing CMS to do this for years,” he said, “but they had been more focused on primary care.”
Finally, CMS is reviewing a proposal by McKesson and NCCN to utilize their oncology clinical pathways. If the proposal is accepted, McKesson believes that CMS will roll it out as a pilot project in certain oncology practices and hospital settings sometime in 2014. “We may be able to work on a framework in the first quarter, and start organizing the pilot perhaps 6 months later,” Brow said. If the pilot is successful after 2 or 3 years, “We hope Medicare will look to roll it out more broadly.”
McKesson and others are working with CMS to develop a structure for Medicare value-based reimbursement that can be used across oncology practices, using the clinical pathways. Brow also suspects that, if its shared savings programs in primary care are successful, CMS will shift this structure to work with specialty care, like oncology and cardiology, in an effort to drive efficiency and cost-effectiveness in these and other specialties. “We think that, for the most part, the oncologist acts like a primary care provider (or at least a principal care provider) for the patient with
cancer. A narrower clinical focus may help yield more savings than seen with the primary care model,” he said.
Aligning Incentives to Use Clinical Pathways
By following clinical pathways, or practice guidelines for that matter, under historical fee-for-service reimbursement structures, community oncologists may be jeopardizing the health of their own
group practices, based on the type of therapy, where it is administered, and how it is reimbursed. If one considers the usual prompt pay discount of 2% on chemotherapy, and generally a 2-quarter lag in reimbursements, Medicare’s reimbursement formula of average sales price (ASP) + 6% makes it difficult to break even if chemotherapy is administered in the physician’s office.2 The effect of the federal budget sequester has been to lower reimbursement to ASP + 4.2%, forcing many practices to either take a financial loss or direct patients to receive care at an infusion center or hospital outpatient facility, which costs taxpayers more than if the care took place in a community practice.2,10
“A number of providers could be financially penalized for doing the right thing. If you consistently choose the right drugs,” said Brow, “you could lose money on your business—if the reimbursement system is set up so that using a more expensive drug can be more profitable, or a loser than using a less-expensive drug. The solution is to align across the payment spectrum for efficacy first, safety second, and cost-effectiveness third,” he stated. The incentives in the system, especially on the fee-for-service commercial side, are currently to use more expensive products, services, and drugs, and receive more in reimbursements. Even in Medicare, where hospitals get bundled part A payments and don’t receive additional fees for more diagnostic testing, for example, the hospitals don’t receive financial bonuses for doing the right thing, such as improving readmission rates.
Brow noted, “Drugs account for about 25% to 35% of the cost of cancer care. The hospital is the greatest cost center. Therefore, we shouldn’t focus on drugs alone. It is not productive to put blinders on and forget that the other 60% exists; all of these costs can be effectively managed.” Clinical pathways must therefore be incentivized across the cancer care spectrum to produce their most beneficial improvements, both in care and expenditures.
A 2013 study pointed out the potential savings from the use of an oncology pathways program. Using Cardinal Health’s pathways solution, CareFirst Blue Cross and Blue Shield found that total
costs for cancer care were 15% lower than anticipated costs (without the use of oncology clinical pathways). Inpatient admissions were projected to be 7% lower using the oncology pathways, a major contributor to cost savings.11
However, the question of whether clinical pathways improve care, through reduced variation in oncology care methods, has not been answered. Feinberg, at Cardinal Health, had stated previously that this is “largely an act of faith… You have to look for behavioral changes that you believe represent better care.”8 There’s hope that through the use of an oncology pathway system, one can support the use of evidence-based interventions, and these proxies for quality care may lead to real, documented proof that more personalized oncology care guidelines do translate to better outcomes.
1. Smith TJ, Hillner BE. Bending the cost curve in cancer care. N Engl J Med. 2011;364(21):2060- 2065.
2. Brow M, Okon T, Brooks B, Thompson M. Policy prescriptions to fix our ailing delivery system. Community Oncology. 2013;10:368-370.
3. Dilts DM. Practice variation: The Achilles’ heel in quality cancer care (editorial). J Clin Oncol. 2005;23(25):5881-5882.
4. Goodman DC, Fisher ES, Chang C-H, et al. Quality of end-of-life cancer care for Medicare beneficiaries: regional and hospital-specific analyses. Dartmouth Institute for Health Policy and Clinical Practice. http://www.dartmouthatlas.org/ downloads/reports/Cancer_report_11_16_10.pdf. Published November 16, 201. Accessed December 18, 2013.
5. Haymart MR, Banerjee M, Yang D, et al. Variation in the management of thyroid cancer. J Clin Endocrinol Metab. 2013;98(5):2001-2008.
6. Parmeshwar R, Margenthaler JA, Allam E, Chen L, Virgo KS, Johnson FE. Patient surveillance after initial breast cancer therapy: variation by physician specialty. Am J Surg. 2013;206(2):218-222.
7. Clinical pathways: an evolutionary approach to cancer care. Oncology Business Review. http:// www.onclive.com/publications/oncology-business-news/2013/april-2013/clinical-pathwaysan-
evolutionary-approach-to-cancer-care/1. Published June 14, 2013. Accessed December 18, 2013.
8. Phillip C. Clinical pathways in cancer care catching on. NCI Cancer Bulletin. 2012;9(17):1-5.
9. Stockdale H, Guillory K. Lifeline: why cancer patients depend on Medicare for critical coverage. American Cancer Society Cancer Action Network 2013. http://www.acscan.org/content/wp content/uploads/2013/06/2013-Medicare- Chartbook-Online-Version.pdf. Accessed December 23, 2013.
10. Mehr SR. Sequester forcing chemo treatments into hospitals costing taxpayers more in the end. Am J Manag Care. 2013;19(SP6):SP207-SP208.
11. Feinberg BA, Milligan S, Cooper J, et al. Third-party validation of observed savings from an oncology pathways program. Am J Manag Care. 2013;19(SP4):SP127,153-157.