The Lynx Group

WellPoint: Aligning Reimbursement with Value-Based, Patient-Centered Outcomes

May 2012, Vol 3, No 3

Houston, TX—Jennifer Malin, MD, PhD, Manager and Medical Director of Oncology at WellPoint, described new approaches that can help to align reimbursement in oncology to enhance value and patient outcomes by focusing on episode of care rather than on the drugs, by shifting physicians’ incentives to support patient-centered decision-making.

Dr Malin described WellPoint’s new reimbursement programs in oncology at the 2nd Annual Conference of the Association for Value-Based Cancer Care.

In colon cancer, for example, the costs of care are $80,000 with cetuximab (Erbitux) and $91,000 with bevacizumab (Avastin) for less than a 2-month improvement in survival. “We are questioning whether the costs associated with this relatively modest improvement in survival is worth it,” Dr Malin said.

Reimbursement Drives Overutilization

Reimbursement drives overutilization of intensity-modulated radiotherapy (IMRT) and other high-technology therapies. For example, in prostate cancer, IMRT costs approximately $32,000, compared with 3-dimensional conformal radiotherapy at approximately $20,000. Proponents of IMRT point to a reduction in toxicity, but the evidence for this is still lacking.

“Despite a lack of evidence of improved patient outcomes and a 50% higher cost, the uptake of IMRT has been very rapid,” Dr Malin noted. But urologists are investing in IMRT equipment, selectively treating patients at a higher cost, which is then reimbursed by payers.

Largely because of such practices, the cost of cancer care has doubled since 1990; it now approaches $90 billion annually. Patients are bearing the brunt of this in the form of cost-sharing that many cannot afford, even with “good insurance,” Dr Malin said.

These high costs, however, are not the result of “better” patient care, she said. A 2011 study suggested that only 8% of revenue in community oncology practices comes from “evaluation and management,” whereas 69% of reimbursement is related to drug use, 8% to infusion, and the remainder to ancillary services.

New Approaches to Reimbursement

“The question is how to change the way we reimburse physicians to align reimbursement with patient-centered care,” Dr Malin said. Two models under discussion are episode-based payments and value-based benefit designs.

In the latter, cost-sharing is calibrated on the value of the treatment option. Regimens that offer the most improvement in survival would be associated with the lowest copays. Under this model, for example, a treatment with a 2-month increase in median survival would have more out-of-pocket expense for the patient than a drug offering a 2-year improvement.

A 2010 survey of patients showed that for only a 5% improvement in cure rate, 49% of patients would accept a very high copay (level 5 or higher), but for a 20% improvement in cure, 75% of patients would do so (Wong YN, et al. Oncologist. 2010; 15:566-576). WellPoint’s approach is similar and includes the following key components:

  • Increase the margin on lower cost, unprofitable regimens (ie, generics)
  • Require preauthorization for an episode of care
  • Support treatment planning and disease management
  • Develop innovative technologies to help physicians and patients better understand the benefit of treatment and trade-offs between treatment options.

WellPoint’s new web-based approach incorporates evidence-based tools for guiding providers in precertifying episodes of treatment. “We can use this type of approach to give additional reimbursement for preferred treatment options,” Dr Malin suggested.

WellPoint also has an oncology medical home pilot program. Under this program, providers document a comprehensive treatment plan and coordinate care with other specialties; oncology nurses provide proactive telephone support for patients in treatment; and acute events are evaluated in the office, not in the emergency department.

In choosing treatment, the practice prespecifies the most cost-effective choice among evidence-based chemotherapy and supportive-care regimens. Metrics are reported for tracking processes and outcomes.

WellPoint is also partnering with IBM Watson to develop new platforms for utilization management assistance and for oncology decision support. This decision-making platform will draw from medical research, population health information, patient medical history, and laboratory results, and integrate these data with treatment protocols, medical policies, and guidelines. The system will analyze millions of pages per second and arrive at targeted treatment options at the point of care.

“Using IBM Watson, physicians will have up-to-date, synthesized information about the patient, and clinical evidence for various treatment options. The process is automated, [in] real-time, and intelligent,” Dr Malin concluded.

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