Skip to main content

Payment Reform Key to Value-Based Cancer Care

August 2014 Vol 7, Special Issue ASCO 2014 Payers' Perspectives in Oncology

Oncologists should become value-­based providers by eliminating unnecessary tests, prescribing cheaper alternatives when therapeutic equivalents exist, and keep calling for payment reform, said Ezekiel J. Emanuel, MD, PhD, Chair of the Department of Medical Ethics and Health Policy, University of Pennsylvania, Philadelphia, at ASCO 2014. These measures will add value as a bridge to payment reform, which is the ultimate change that will bring value to cancer care, Dr Emanuel emphasized.

“We need to do more at a faster pace to fundamentally change the payment system,” advised Dr Emanuel. ”That and that alone—making it neutral for us whether we give more, test more, or care more for the patient—will be the important item that will change how we practice, and make sure that it is value-based.”

Social and Economic Costs
Dr Emanuel started his discussion on value in oncology by stating that the $3 trillion that the United States spent on healthcare in 2013 is more than the entire economy of France, which is the fifth largest economy in the world. The amount spent on cancer care represents approximately 50% more than what will be spent on expanding health insurance coverage under the Affordable Care Act, he noted. Yet, the median household income is only $51,371.

“One drug for cancer care can wipe out the median income of a household,” Dr Emanuel said.

The annual health insurance premium for a family in the United States in 2013 was $16,000, or approximately 30% of the median household income. Even if most of the cost of premiums is coming from employers, this amount comes out of workers’ paychecks.

“We need to keep these numbers in mind every time we talk about value,” said Dr Emanuel.

Some drugs with high price tags are not adding value, he pointed out. For example, the price of imatinib mesylate has tripled since its introduction, even though there are newly approved drugs in the same drug category, he noted. Part of the problem is the large sums of money being spent on cancer drugs for a few additional months of survival.

But even drugs that provide cures, such as sofosbuvir for the treatment of hepatitis C infection, are coming under scrutiny for their high costs. The $84,000 price tag for sofosbuvir “seems like a good value to me for a one-time treatment over a few months, and yet we’re having a lot of consternation about it, because of the cost,” he said. “We’re concerned about value, but we’re also concerned about absolute total cost.”

Reimbursement Drives Clinical Decisions
When Medicare reimbursement switched from average wholesale price to average sales price plus 6%, the use of more expensive treatments for lung cancer increased. In radiation oncology, per guidelines from the American Society for Radiation Oncology, a single dose of radiation for palliation of bone pain from a bone metastasis in an otherwise incurable patient is equivalent to 10 or more fractions for the same bone metastasis. Yet, single-dose radiation is used less than 5% of the time for this purpose in the United States.

The same applies to hypofractionated radiation for breast cancer, which has been shown to be clinically equivalent to, but only 65% to 70% of the cost of, standard radiation treatment.

Unnecessary testing also contributes to increased cost, said Dr Emanuel. One example is positron emission tomography/computed tomography (PET/CT) in patients with early-stage breast cancer. Despite not being indicated for this patient population, its use varies considerably, ranging from almost 1 PET/CT scan per patient with breast cancer to 0.10 PET/CT scan per patient.

Eliminating incentives to use drugs outside of the evidence base can help to curtail their use, Dr Emanuel said. For example, when UnitedHealthcare indicated that it would only pay for bevacizumab if its use was endorsed by a guideline from a major medical society, the use of the drug decreased by 60%.

Therapeutic Equivalence
In addition to avoiding unnecessary testing, a second obligation is to prescribe the lowest-cost treatment when therapeutically equivalent ones exist. “We have lots of places in cancer where we have therapeutic equivalent and wide variation in cost,” Dr Emanuel pointed out. “Advanced gastric cancer is a very good example. There is a 50-fold difference in price among the preferred options on the National Comprehensive Cancer Network list. In that circumstance, we have an obligation to prescribe the lowest-cost treatment.”

Perhaps the most important obligation for oncologists is a collective one to “rapidly advance off the treadmill system of fee for service,” Dr Emanuel concluded. “We should want to get out of that system, so we can focus on our patients as we claim to want to be.”

Last modified: August 30, 2021