Aetna Examines Impact of Site of Service on Chemotherapy Cost

August 2015 Vol 8, Special Issue: Payers' Perspectives in Oncology - Health Economics
Caroline Helwick

Contrary to the notion that chemotherapy infusion has largely become a hospital-based procedure, analysts from Aetna found that approximately 75% of their patients still receive chemotherapy in a community oncology practice setting.

“There’s been much discussion about site-of-service distribution. At least for Aetna, and I think we are representative of national payers, we still have about 75% of patients getting chemotherapy in the office setting,” Michael A. Kolodziej, MD, National Medical Director for Oncology Strategy, Aetna, told American Health & Drug Benefits (AHDB).

“Chemotherapy is expensive, and one of the factors influencing the cost of treatment is site of service,” Dr Kolodziej pointed out. Treatment is increasingly being delivered in hospital-based settings, which costs more, but the reasons are not well-understood, which is an area of concern for payers, he remarked.

“We are presenting data that confirm the site-of-service differential. The most expensive hospital-based site of service was more than 280% more expensive per patient than the most expensive office-based site of service,” Dr Kolodziej reported.

Study Details

Aetna evaluated 56,422 members who received chemotherapy between August 2013 and July 2014, of whom 76% received chemotherapy in an oncologist’s office and 24% in a hospital-based setting.

Significantly more women received treatment in the hospital setting (P <.001), and significantly more elderly patients received chemotherapy in the office (P <.001). Risk scores, measured with a standard risk-adjustment tool, were higher in the hospital-based setting for breast cancer and some other tumor types (P <.001), but there were no differences in site of service for colon and lung cancers.

The cost of chemotherapy and the total cost of care were significantly higher in the commercial population that received treatment in the hospital-based setting for all cancer types before and after risk adjustment (P <.001), Dr Kolodziej said.

The concept that sicker patients are the ones being cared for in hospital outpatient departments “is just not true,” Dr Kolodziej said. “There’s still a substantial impact of site of service,” regardless of comorbidities.

The chemotherapy costs were 50% to 60% higher with hospital-based site of service, and there was tremendous variability in the average chemotherapy allowed and the average total cost of care by site of service.

The average annualized chemotherapy costs ranged from $8788 to $55,820 for hospital-based delivery, and from $7272 to $19,692 for office-based delivery. The total costs of care varied from $81,616 to $293,814, and $51,733 to $106,868, respectively.

The variability from state to state was notable, according to Dr Kolodziej. The most expensive state was Kansas, because “almost all chemotherapy delivery in Kansas has moved to the hospital, and hospitals have leverage,” he said.

The “hospital allowed per patient” was $55,820 in Kansas; other high-cost states included South Carolina, Arizona, Georgia, and New Jersey. By comparison, the states with the lowest “hospital allowed” for chemotherapy included Maine, Connecticut, Florida, Virginia, and Oklahoma, with amounts of less than $20,000.

These differences “largely reflect the leverage at the contracting table,” Dr Kolodziej told AHDB. “These differences are related to contracting. If we level the playing field, insurers save money.”

He suggested potential strategies, such as steering members to low-cost providers or migrating to episode­based models.

“I don’t think there is one solution,” Dr Kolodziej said. “I think there are market-level solutions, and they will be phased in over time.

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Last modified: September 2, 2015
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