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Using Value-Based Contracts to Manage Oncology Costs While Keeping Focus on the Patient

December 2021 Vol 14, No 4 - AVBCC 2021 Highlights

Managing the costs of oncology care while maintaining focus on outcomes of value to patients is increasingly challenging for health plans and self-insured employers, who are looking to value-based agreements to help them in this regard.

During a panel discussion at the 2021 Summit of the Association for Value-Based Cancer Care, various stakeholders weighed in on the prospectus head for such contracts. Rob O’Brien, RPh, Vice President, Specialty, Real Endpoints, Florham Park, NJ, served as moderator.

Oncologic drugs represent approximately 70% of the cost of cancer management, said Steven Peskin, MD, MBA, MACP, Executive Medical Director, Population Health and Transformation, Horizon Blue Cross Blue Shield of New Jersey, “so it’s ridiculous to talk about value-based agreements without including drugs.” Other components of value-based contracts should include molecular and genetic testing, surgical oncology, and radiation oncology.

Bhavesh Modi, RPh, Vice President of Pharmacy at New York–based Healthfirst, which covers 1.7 million lives, most of whom are covered by Medicaid or Medicare, looks for efficiencies to manage the growing cost of oncologic care, which is approximately 7% of the total spend for the insurer. “As we look at the growing spend, we started to build out infrastructure, inclusive of first working with our pharmacy benefits manager and putting in management approaches there,” he said. “Then we built out a team in our department that focuses solely on the medical side of the cost. As we look forward in better managing the total spend, we are now moving forward toward pathways and how we can implement those. It will give us a better insight into the total cost of care.”

When Mr O’Brien asked what self-insured employers are looking for in oncology management, Magda Rusinowski, BBA, Vice President, Business Group on Health, Washington, DC, responded that employers are strongly committed to a move away from fee for service toward value, but “it’s not an easy change.”

Employers recognize their responsibility to steer patients to the best possible treatment and the appropriate site of care, “but they also need to be able to afford it,” Ms Rusinowski said.

Delivery of virtual medicine, precision medicine, and evidence-based pathways, in addition to value-based payments, are components that employers are exploring, and will require partners to support them in this journey, “because they realize that the opportunity is huge, and the cost of not doing it is ultimately the cost of not giving the best treatment they are trying to secure for their patient,” she said.

“Across our network, we have 44 different value-based care arrangements with various entities [eg, national and regional payers]. We need to focus on developing a level of trust. Can we trust each other to have a deeper relationship to move things toward value that benefits the patient? If we’re going to do value-based care, we have to keep the patient as the focus,” Dr Peskin said.

In executing value-based contracts, building trust between manufacturers and payers is paramount to ensure that their goals are mutual, said Atheer Kaddis, PharmD, Vice President, Pharmacy Services, Blue Cross Blue Shield of Michigan, Detroit. To achieve this end, data must be more readily accessible to health plans.

The lack of data “has held up a lot of the agreements that we have tried to put in place,” Dr Kaddis said. “We’ve been successful with only about 20% of the contracts that we’ve evaluated. Of those 20%, the majority are persistence contracts.”

Blue Cross Blue Shield of Michigan has recently partnered with 4 other Blues’ plans to launch Evio Pharmacy Solutions. A major focus is the use of real-world evidence in discussions with pharmaceutical manufacturers to put into place value-based contracts, said Dr Kaddis.

“The ultimate goal is to reduce our reliance on rebates, focus more on outcomes, and at the end of the day address total cost of care and better care for members,” Dr Kaddis emphasized.

He added, “I believe it’s very important to have another party involved in these discussions. There’s quite a bit of lack of trust between manufacturers and health plans when it comes to value-based contracts, and I believe that having a third party that has an objective view is going to be important today and into the future.”

In addition to Evio, Blue Cross Blue Shield of Michigan is also a member of Real Endpoints, “another entity that helps with value-based contracting,” Dr Kaddis said. “We’re looking at a lot of different partners in helping us bring these value-based contracts to fruition and I do believe that that need will grow over time.”

Comprehensive genomic testing is another important piece to value-based contracting; although it is costly, if used appropriately, it will influence better outcomes and ultimately attenuate costs through avoidance of ineffective treatments, and consequently avoidance of complications, said Dr Peskin.

“I completely agree that genomic profiling is the wave of the future,” said Lalan Wilfong, MD, Vice President, Payer Relations and Practice Transformation, McKesson, Dallas, TX. “We need to be doing it. It needs to happen more readily in our patient population.”

One of the biggest challenges is that genomic profiling typically occurs in the very beginning of a patient’s journey with cancer, when patients have yet to meet their deductible.

“So we have a disconnect between payers saying they cover genomic testing, but the patient is liable for the cost,” said Dr Wilfong. “I see that as a barrier to genomic testing. A lot is the disconnect between benefit design and coverage, and the patient responsibility for payment before they’ve met their out-of-pocket deductibles.”

In the conversation about value, “we’re approaching a point of we’re really not sure where the episode of care starts,” said Ms Rusinowski. “We all would be aligned here to say that value in cancer is driven by early detection and getting people into the right treatment and to right testing as soon as possible.”

She continued, “When we talk about genetic testing, genomic science, and precision medicine, preventive screening and early detection also have to be a component of value, but none of the value-based contracts that we’re talking about capture the value of early detection from more precise, less expensive, and more accessible tests.”

The next wave of innovation from the self-insured employer perspective is comprehensive end-to-end programs that manage the patient starting early in the cancer cycle (from diagnosis), and guide them through the complex system of testing and treatment for their particular cancer, believes Ms Rusinowski.

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Last modified: December 29, 2021