Oncology Organizations Follow the Association for Value-Based Cancer Care’s Lead on Value Discussions

Craig Deligdish, MD

June 2014, Vol 5, No 5 - From the Editor


May was a busy month for those who have made a commitment to addressing cost, quality, and value in cancer care. The Association for Value-Based Cancer Care (AVBCC) held its Fourth Annual Conference in Los Angeles, CA. Consistent with previous meetings, the meeting featured much provocative information and many expert speakers representing different stakeholders: community oncologists, drug makers, patient advocates, employer groups, hospitals, academic medical centers, specialty pharmacy, technology vendors, professional societies, specialty laboratories, and the investment community. Following in the footsteps of AVBCC, the 2014 American Society of Clinical Oncology (ASCO) annual meeting had sessions on value, payment reform, and quality.

As was noted by speakers at both conferences, the increasingly unsustainable cost trends have moved the discussion of value, quality, and cost of care to the forefront, despite the associated complexities and challenges.

Questions remain about whether physicians and other providers should be incentivized or rewarded for providing value-based care. Regretfully, these discussions often occur in the absence of stakeholders who have contributed to the accelerated costs we are experiencing. Much attention has been given to the high cost of novel chemotherapies, biologics, and “drug margins,” but there are many “elephants in the room,” including increased hospital costs that have resulted from provider consolidation, increased hospital utilization of 340B drug pricing, the expansion of specialty pharmacy, the costs of other technologies to include radiation therapy, genomic profiling, and the cost of care at the end of life.

The impact of health information technology on oncology practices, and the number of untested and newly rolled out models—including preauthorization and prior approval programs being mandated by payers and administered through companies whose expertise has been radiology benefit management—are also of concern: many of these initiatives may negatively impact the quality of cancer care for patients.

At the AVBCC and ASCO meetings, potential solutions were proposed. Jeffrey C. Ward, MD, representing the ASCO Clinical Practice Committee Payment Reform Workgroup, discussed ASCO’s payment reform initiative. Although much thought has been given to this approach, the real question is whether an episode-based approach out of the gate is realistic, scalable, and reasonable. Its implementation would be a revolutionary model that would require years of testing and modification before it could be scaled.

More important, however, is whether it is realistic to expect that payers will shift the historical profits generated by drug administration and the margins associated with purchasing and billing for drugs to value-based payments to physicians: this point was raised by Barbara L. McAneny, MD, a community oncologist with much experience in this area. Historically, significant obstacles were experienced during the implementation of the Medicare Modernization Act of 2003 that created the average sales price model. The current problems associated with drug shortages and drugs that the Centers for Medicare & Medicaid Services pays less than the acquisition price for that have resulted from this program suggest that new models should be tested similar to a clinical trial before they are adopted on a large-scale basis.

It is refreshing to see the extent of dialogue regarding the unsustainable cost of cancer treatments, but we need to focus more on the other factors leading to the rising cost trends in oncology. Replacing the current system of reimbursement without adequately testing a new system, simply because drugs now cost significantly more than in the past, would be imprudent. Yet doing nothing is also not an option.

Reform in healthcare has come slowly: despite disagreement, it is important to have collaboration between the government, commercial payers, and community and academic professional organizations if a one-size-fits-all solution is to be identified. Although the commercial health plans have significant interests in addressing the cost of care, the Affordable Care Act has shifted the burden of paying for cancer therapies further toward a government-based payment model.

The real question, in light of the hundreds of drugs in the pipeline (many of which will cost in excess of $10,000/month), is whether the different entities that receive large consulting fees from pharmaceutical companies will be able to move toward a value-based approach. The National Comprehensive Cancer Network (NCCN), which has made a commitment similar to ASCO’s approach, has equal challenges. Other efforts to reform the 340B drug pricing program and the incentives for hospitals that abuse this program could further contribute to cost-savings and move toward value-based care.

The US government bears much of the cost of treatment of cancer in the United States; it is time that our elected leaders look at the solutions that other countries have adopted, specifically in Italy, Germany, France, and England: these countries have used negotiation and competitive bidding to reduce the drug acquisition costs by 20% to 30% compared with our country.

As Co-Director of AVBCC, the official society of Value-Based Cancer Care, I commend ASCO, the Community Oncology Alliance, and the NCCN for following the lead of AVBCC.