Seeking Value in Oncology Care

Caroline Helwick

October 2013, Vol 4, No 8 - AVBCC 2013 3rd Annual Conference

Hollywood, FL—“How do different stakeholders define value in oncology? This is a complex question, and definitely a mainstream, though at times controversial, issue,” according to Pamela Morris, Director, Syndicated Research, Zitter Health Insights. Ms Morris discussed the search for value in oncology care, informed by results from the Zitter Group’s research, at the 3rd Annual Conference of the Association for Value-Based Cancer Care.

“Everyone views value differently,” Ms Morris said. Patients are faced with the economic impact of their treatment. Employers must cover these costs and oversee the well-being and productivity of their employees. Payers seek to balance the cost with appropriate clinical care across a wide population for which all healthcare costs are rising, she said.

“This conversation isn’t just about cost, and it’s not limited to a specific stakeholder. It’s becoming a mainstream conversation. Payers are saying they’re fed up, oncologists are saying they’re fed up, and patients are saying they’re fed up, too,” Ms Morris commented.

Value from the Payer’s Perspective
When Zitter Health Insights asked 100 payers to name their top management priority, the “unequivocal” response was “cancer care.” In the same survey of 100 employers, cancer care was the second highest priority.

But a gnawing concern is cost relative to outcomes, and payers see plenty of waste in cancer treatment. When asked to estimate how much excess cost could be eliminated from cancer treatment without negatively impacting health outcomes, 44% of payers said 11% to 20%, and another 21% estimated 21% to 30%. “That’s quite a bit of cancer care,” Ms Morris noted.

A survey of 100 oncologists found less agreement, with 73% estimating that only 1% to 10% of excess cost could be eliminated without compromising outcomes. Altogether, though, “payers and oncologists agree there is room to eliminate costs from the system,” especially in end-of-life care and unnecessary diagnostic testing.

Payers’ Efforts to Manage Cost
How are payers managing these costs? Yearly surveys indicate that payers are starting to succumb to employer pressures and are reevaluating their oncology management policies. This is resulting in some changes in employee cost-sharing, utilization management policies (such as prior authorization and step edits), therapy coverage decisions, and physician reimbursement.

“When payers are getting squeezed more by employers, patients ultimately get squeezed as well,” Ms Morris suggested.

Figure 1
Figure 1: Prior Authorizations Are Ubiquitous.
View larger version

Prior authorization may be the most common cost-management tool, used by virtually all payers. Zitter analyzed the content of prior authorization policies of more than 200 health plans and found that the percentage of plans not requiring prior authorizations is dwindling (Figure 1). In breast cancer, for example, 1 year ago 37% of plans surveyed had few or no prior authorization requirements, but this figure dropped dramatically to 10% in 2013.

Prior authorizations encompass quantity limits, diagnostic testing, and to a lesser degree step edits, preferred products, and clinical treatment pathways. Payers, oncologists, and practice managers apply these tools differently.

Another approach to value, not only by payers but increasingly also by oncologists, is to shun the most expensive agents when less expensive, and essentially comparable, agents are available. One recent example was the decision by Memorial Sloan-Kettering Cancer Center’s oncologists not to offer ziv-aflibercept (Zaltrap) for colo­rectal cancer treatment, because of cost concerns relative to the drug’s efficacy and the availability of comparable

Payers and oncologists agree on which of the “wonder drugs” are clinically desirable, despite cost. In a Zitter survey, both groups listed imatinib (Gleevec), trastuzumab (Herceptin), rituximab (Rituxan), and bevacizumab (Avastin). Among their list of overly expensive or overhyped drugs were bevacizumab, sipuleucel-T (Provenge), and ziv-aflibercept; the oncologists added nab-paclitaxel (Abraxane), and the payers added ipilimumab (Yervoy) and cetuximab (Erbitux).

Oncologists’ View of Value
Although half of oncologists report a decline in revenue (10%-20%) as a direct result of average sales price (ASP) reimbursement contracts, payers believe that “they can squeeze more out of” the ASP, Ms Morris said.

“We asked payers, ‘If Medicare were to cut reimbursement from ASP + 6% to ASP + 4%, would you follow suit for your commercial population?’ Nearly half said they would likely negotiate for a decrease at their next contract discussion with physicians or would likely institute a decrease, because their reimbursement rates are linked to the Medicare rate,” Ms Morris reported.

The adoption of clinical pathways as an avenue toward value receives mixed reviews from oncologists, she continued. Only 42% of oncologists surveyed believe that the adoption of pathways has improved patient outcomes, whereas 50% said that pathways had not changed patient outcomes, or they were unsure about their value.

Figure 2
Figure 2: Payers Believe ACOs and PCMHs are on the Horizon for Oncologists.
View larger version

The Value of ACOs in Oncology
Accountable care organizations (ACOs) are intended to provide value for the entity that is bearing the risk and provide value to the patient. At a Zitter-sponsored ACO leadership summit, 14 leaders in the ACO movement predicted that within the next 3 to 4 years, more than 50% of all care in the United States will be delivered through an integrated delivery system and financial risk-bearing model, such as ACOs. They also said that they are facing challenges in terms of physician alignment, but they do see more and more oncologists starting to practice within an ACO type of contract (Figure 2).

The Power of Copay
With the average American family earning in the $50,000 range annually, a $200 monthly copay can affect adherence to treatment recommendations. In a recent Zitter survey, 50% of patients indicated that they would stop taking the prescribed drug if the benefits from a copay-offset program were discontinued; only 24% said they would remain using the treatment as planned.

In making these decisions, patients take into account their income level, disease stage, current health status, impact of the treatment on the family, and whether the treatment provides true clinical or only supportive-care benefits. “We know that the availability of copay programs does matter, and it changes patients’ value equation,” Ms Morris suggested.

Copay programs alter the value equation not only for patients but also for oncologists and ultimately for payers as well. Most oncologists (80%) surveyed indicated to Zitter that copay programs influence their decision to prescribe a newly approved oncology drug; 47% said they had prescribed a cancer drug solely because of its relationship to a copay benefit program. Although payers are typically critical of copay programs, they will cooperate with them, given the need and the right situation, Ms Morris pointed out.

“Some payers do see value in copay programs when there’s an appropriate unmet need from the patients,” such as for orphan diseases and in expensive specialty categories, Ms Morris concluded.