The following is an excerpt from Navigant Healthcare’s Pulse Weekly. Click here for a complete copy of this week’s article.
The good news is that cancer care management is improving as new diagnostic and therapeutic strategies are used by providers to accommodate increased demand and complexities in treating the condition. Clinical innovation has progressed from the 12 common non-melanoma cancers to many of the 145 distinct cancers recognized by the National Cancer Institute. As a result, cancer is no longer a death sentence for the overwhelming majority of newly diagnosed patients.
The bad news is that cancer care management faces an urgent challenge: the relative value question. Do the costs of these new innovations outweigh the results? It threatens researchers who develop novel therapies, providers who diagnose and treat, payers who must account for their costs in premiums and benefit planning and policymakers who oversee the structure, rules of engagement and much of its funding for breakthrough therapies.
The issue is not whether we are getting better results from cancer care management. The question is this: are the costs of these diagnostic and therapeutic innovations matched by measurable value for those who pay for it? It’s a relative value question, and it’s tricky. And trends in cancer care suggest it will become a bigger issue for the U.S. system in coming years.
The Trends Shaping the Future of Cancer Care Management
The future for cancer care management is shaped by five trends:
- Increasing prevalence and demand. One in four deaths in the U.S. is attributed to cancer. In 2012, there were 1.6 million new cancer diagnoses, half in individuals over the age of 65. By 2030, the number of new cancer cases in the U.S. will increase by 45% and cancer will become the nation’s leading cause of death, largely as a result of the nation’s aging population. While breast, prostate, lung and colon cancers make up the vast majority of all cancers Liver, kidney and pancreas cancer diagnosis rates have risen dramatically since 2000 and melanoma is among the highest growing diagnoses. The market for cancer care is expanding with no signs of slowing. That’s the reason organizations like Cleveland Clinic and others are expanding their cancer programs, and policymakers are promoting increased funding for the national Cancer Institute’s research.
- Improving survival rates. Cancer is no longer a death sentence. Mortality rates from cancer have fallen 22% since their 1991 peak. The number of cancer survivors in the U.S., now at 13.7 million, will continue to increase. The number of older adults is expected to double between 2010 and 2030, contributing to a 30% increase in cancer survivors from 2012 to 2022 and a 45% increase in cancer incidence by 2030. As seniors age, the likelihood a cancer is among their maladies is heightened: managing cancer as one of several co-morbidities is a looming challenge for the Medicare program and Medicare Advantage plan sponsors, and the providers they use. As cancer survivorship becomes the norm, so do the challenges among providers to manage these populations and payers to incentivize effective means of rewarding their care management.
- Accelerating pace of innovation in diagnostics and therapeutics. Ways to diagnose and treat cancers at various stages are increasing exponentially. 7 of the Institute of Medicine’s top 10 recommended Comparative Effectiveness studies address changes in the diagnosis and treatment for cancer. Genetic research is increasingly pointing providers to promising Immunotherapies and the promised of personalized medicines. Health services researchers are refining risk factors in their algorithms and guidelines while alternative health providers are mainstreaming into integrative oncology. Comprehensive Cancer Centers (CCCs), the frontline for applied cancer research, will see a 30% bump in their base rates to stimulate insights. And drug companies, facing increased pressure about their pricing, are successfully harvesting promising results from their large molecule studies using advanced analytics and adaptive clinical trials to discover promising therapies and their companion diagnostic tests.
- Increased public attention. Cancer care management is in the spotlight. The general public is paying attention to cancer care management. Most know survival odds are improving, but many remain fearful. Consumers are increasingly exposed to direct-to-consumer advertising by Cancer Treatment Centers of America, 21st Century Oncology, Huntsman Cancer Institute and others. They’re seeing ads about drugs that work well, then encouraged to “consult your physician” who may know little about the brand or its costs. Half of cancer patients use some type of alternative treatment as part of their care plan—many so doing without the knowledge of their traditional provider. In many communities, collaboration between nationally branded cancer programs and local health systems are getting attention (i.e. the MD Anderson collaboration with Columbus, Ohio based Ohio Health). And, recognition that Medicare spends 25% of its funding on end of life care is becoming a generational wedge issue for Millennials and Boomers wary of end of life heroics that might erase lifetime savings. A diagnosis of a cancer used to be a death sentence; it’s now a chronic condition that’s manageable, but more complicated and stressful than pills and lifestyle change. The public is increasingly attentive to cancer care and prone to activism when a diagnosis hits close to home.
- Escalating costs. Understandably, the cumulative effect of these four trends is the fifth – annual cancer care costs are projected to rise from $104 billion 2006 to more than $173 billion by 2020. Cancer drug costs have increased 20 times faster than the overall Consumer Price Index since 2000… Of 12 drugs approved by the FDA for various cancer treatments in 2012, 11 had prices of over $100,000 per year. In the past decade, cancer drug prices have almost doubled, from an average of $5,000 per month to $10,000 per month. Hospital and device costs have escalated in price in tandem, as radiation therapies are deployed with medical oncology as standard treatment fare.
The relative value question
The relative value question is a sensitive issue across the health system: each major sector is conflicted by the evolution of cancer care management as an expensive-to-manage population.
- Hospitals and physicians get caught in the crossfire. Physicians are trained to spare no expense in the care of patients. And hospitals face aggressive pressure from payers to control costs.
- Health insurers raise premiums to pay for escalating costs and face criticism when coverage is denied or delayed in favor of step therapies that might be cheaper.
- Consumers can easily see their life savings disappear if they lose the health lottery as a result of a diagnosis of cancer for a family member.
- And drug manufacturers bet a billion on more on each drug, with the majority never gaining market access. The price tags for their life saving drugs get headlines, while their compassionate care efforts often go unnoticed.
The biggest challenge facing cancer care management industry is its relative value: no one doubts we’re doing better, but at what cost? Value is classically defined by the relationship between costs and the perceived or real results from the transaction. Survival rates, or quality adjusted life years, has been a key measure used in cancer care management used to associate costs with “results.” Given a widening variety of diagnostic tools and treatment models, what’s the most efficient way to manage the cancer’s population with the best outcomes? Is a methodology for applying quality adjusted life years easily adaptable to cancer care management? Researchers have observed it’s a question U.S. policymakers must address:
“Compared to Western Europe, for three of the four costliest US cancers—breast, colorectal, and prostate—there were approximately 67,000, 265,000, and 60,000 averted US deaths, respectively, and for lung cancer there were roughly 1,120,000 excess deaths in the study period. The ratio of incremental cost to quality-adjusted life-years saved equaled $402,000 for breast cancer, $110,000 for colorectal cancer, and $1,979,000 for prostate cancer—amounts that exceed most accepted thresholds for cost-effective medical care. The United States lost quality-adjusted life-years despite additional spending for lung cancer: −$19,000 per quality-adjusted life-year saved. Our results suggest that cancer care in the United States may provide less value than corresponding cancer care in Western Europe for many leading cancers.”
In the U.S., there’s no consensus about the “relative value gap” in cancer care… The transition from fee-for-service to alternative payment programs led by Medicare and private payers will no doubt force providers to address the question in their risk sharing arrangements with payers. Cancer care will be ground zero in the health system’s transition of volume to value, and it will force intense discussion about the relative value question.
In response, the industry is making adjustments to address the relative value question: cancer care management will be front and center in the U.S. health system’s transition from volume to value. Medicare is leading the way:
- On February 12, CMS announced a new program, the Oncology Care Model, “a new multi-payer payment and care delivery model aimed at “supporting better healthcare coordination for patients with cancer, part of the department’s efforts to improve the quality of care patients receive, spend health care dollars more wisely, and contribute to healthier communities.” OCM will offer qualified providers a capitated fee ($160 PMPM) to accelerate risk sharing with Medicare. Notably, the American Society of Clinical Oncology (ASCO) expressed concern about OCM citing its use of capitation as a potential issue in implementation among others.
Health plans will follow suit – they’re going beyond Medicare’s OCM program to focus attention on cancer care. Examples:
- Anthem, the No. 2 health insurer in the U.S., rolled out a program in July, 2014 that pays providers $350-per-month for each patient on one of the insurer’s standardized cancer care regimens.
- UnitedHealth Group is paying physicians a set sum of money upfront for each chemotherapy drug regimen, rather than fees tied to medication prices, yielded mixed results— lower spending overall but higher chemotherapy medication costs.
Providers are no less attentive. Collaboration between local health systems and national cancer research centers, participation in Medicare’s bundled payments program, integration of holistic treatment modalities with traditional strategies and tighter coordination between acute and post-acute providers are centerpieces of most efforts.
Each major sector in the U.S. system is impacted by the relative value quest for cancer care management. In each sector, core strategies to demonstrate value vary but have common features—data, transparency, care coordination, cost controls, medication management & adherence programs, team-based clinical processes, shared risk payment mechanisms and consumer branding.
At a high level there are among the foci in key sectors:
The health system’s handling of the relative value challenge in cancer care management exposes the fault line in the U.S. system—collaboration across sectors is not its nature. Cancer care management requires sector co-dependence. Wrestling matches about “who’s the captain” and how dollars flow debilitate otherwise promising collaborations that could address more directly the relative value question in cancer care management.
Cancer care management is an American health system success story. Our innovations benefit the world. Our advances set the standard for care. But our future success is not guaranteed by our rich legacy – until and unless the relative value question about cancer care management is addressed forthrightly in a meaningful public discussion, its future is uncertain, reserved for fewer and fewer who can afford it.
Providers, under risk sharing arrangements with payers including Medicare, large employers, and private plans, will be the frontline for finding the balance between costs and results. That’s the reality. It’s up to doctors, hospitals, post-acute and alternative health providers and their business partners to figure it out.
I have studied healthcare for 40 years – one thing that hasn’t changed is our societal anxiety about cancer. That anxiety is widening as its costs become a factor in the public’s mood. It’s a good news, bad news story.
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The opinions expressed in this article are those of the author and do not necessarily represent the views of Navigant Consulting, Inc. The information contained in this article is a summary and reflects current impressions based on industry data and news available at the time of publication. Any predictions and expectations noted herein are inherently uncertain and actual results may differ materially from those contained in this article. Navigant undertakes no obligation to update any of the information contained in the article.
©2015 Navigant Consulting, Inc.