site of care matters: the value of community oncology the payer value proposition september 2012...
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Site of Care Matters: The Value of Community OncologyThe Payer Value Proposition
September 2012
Prepared for ION Solutions
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Outline
Changing Oncology Landscape
Community vs Hospital-based Oncology Care
Current State of Oncology Management
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The Value of Community Oncology
Patients managed in an office-based setting are less costly than those managed in hospital outpatient settings
Care provided in a community office-based setting is more accessible and less costly for patients
Patients in community settings utilize more generics and less brand therapies, which results in savings for payers
Community practices are more willing to participate in pay-for-quality pathway programs, which will translate into improved outcomes and savings for payers
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Consolidation in the cancer care landscape continues as larger hospital groups acquire, purchase, or merge with private, community-based practices
1. Practice Impact Report. Community Oncology Alliance. April 4, 2012. http://www.communityoncology.org/pdfs/community-oncology-practice-impact-report.pdf Accessed August 23, 2012
241 Clinics Closed
442 Practices Struggling Financially
47 Practices Sending Patients Elsewhere
392 Hospital Agreement/Purchase
132 Merged/Acquired by Another Entity
Changing Business Structure of 1,254 Oncology Clinics/Practices From 2008–20121
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54%
22%
13%
11%
Future (N=106 practices)
For the foreseeable futureFor at least 5 yearsFor another year or so onlyWe are changing now
In 2011, nearly 1 in 4 practices (24%) indicated that they are currently changing their business structure or may only remain viable for another year or so
1. Barr TR, Towle EL. National Oncology Practice Benchmark, 2011 Report on 2010 Data. J Onc Pract. 2011;7(6S):67S-82S.
How long to you expect this business structure will remain unchanged and viable?
24%
86%
10%
3% 1%
Current (N=106 practices)1
Physician-owned practiceHospital-owned practiceOtherAcademic practice
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Payers’ Understanding of the Issue
• Payers understand that oncology is unique and must be approached differently than other specialties
• Payers often consider 2 opposing goals when managing oncology1
– Find ways to more aggressively control oncology spending
– Craft management policies that are politically and clinically defensible
• Payers focus their management attention on the most prevalent and high-cost cancer types to generate the largest return for their efforts in developing and implementing management programs– These cancer types are:
1. McConnell K, Wu J, Dautel N. Payers Must Create Defensible Oncology Management Strategies. Oncology Business Review. 2010
Breast Lung Colon
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Payers prioritize costs before other relevant oncology issues, like site of care
• Although the provider landscape in oncology is rapidly changing, payers prioritize other aspects of oncology care before the movement of community-based care to hospital-affiliated practices
• Priorities remain cost drivers such as the cost of hospitalizations or the cost of high-priced products
1. Xcenda. Managed Care Network. PayerPulse June 2012.
1 - Not at all a priority 4 - Neutral 7 - Extremely high priority0%
10%
20%
30%
40%
50%
60%
70% Payer Priorities in Oncology1
Movement of community-based care to hospital-af-filiated practices
Cost of Hospital-izations
High-priced new products
Payer Priorities in Oncology1
1. High-priced new products2. Cost of hospitalizations3. Ability to compare and analyze
pharmacy and medical benefit4. Need to increase use of generics5. Appropriate use of biomarkers6. Pathway implementation7. Appropriate use of hospice8. Compliance and persistency with
oncology drugs9. Cost of emergency room visits10.Movement of community-based
care to hospital-affiliated practices
11. Role of 340B
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There also appears to be a disconnect between payer and provider preferences for acquiring infused therapies; payers prefer SPP, while providers demonstrate a preference for buy-and-bill
1. Snyder M, Goldberg L, Ryan T. Payer Management of Oncology Gets Serious. Pharmacy Times. http://www.pharmacytimes.com/publications/specialty-pt/2011/May2011/Payer-Management-of-Oncology-Gets-Serious. Accessed August 17, 2012.
42%
53%
2% 3%
Payers’ Preferred Infused Therapy Distribution Channel1
Buy-and-bill Specialty vendorPatient acquisition Other
Providers’ Primary Infused Therapy Acquisition Channel1
• >70% of infused therapies for oncology are distributed via buy-and-bill1
• Average sales price (ASP) used as the primary method of reimbursement by payers
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The Challenge of Establishing the Site of Oncology Care Payer Value Proposition
• There is somewhat of a disconnect between payers and oncology providers
– Payers have other priorities in oncology that supersede site of care, despite the recent market
changes
• Payers lack awareness of the value that community oncology practices bring to the market
– Preferences for product acquisition vary and create an additional point of discussion and
negotiation between the 2 groups
• Payers are seeking additional payment models that make oncology practices’ income independent of drug
selection and reward physicians for improving outcomes and reducing costs
• As heard in a recent payer focus group, smaller regional payers may have different views,
needs, and opinions than larger national payers1
– National payers may have more lucrative contracts with hospitals, particularly larger hospital
systems, than with smaller community practices, and therefore, may see comparable costs in
patients treated in the hospital outpatient department (HOPD) setting
• The opposite being true for smaller payers
• Mid-size plans are more undecided and potentially able to be persuaded either way
• Payers are also looking for a demonstration of quality as part of the value equation1
– ie: Value = Quality / Cost1. Xcenda, data on file. Oncology Site of Care Virtual Payer Council. September 2012.
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While HOPDs often profess to care for sicker patients to justify their higher costs, recent claims analyses show similarities in the demographics of office-managed vs HOPD-managed breast, lung, and colorectal cancer patients1
1. Xcenda, data on file. Site of Care Claims Analysis Report. September 2012.
Male Female0
20
40
60
80
100
Patients by Gender in Select Tumor Types1
Office HOPD
Gender
% o
f p
ati
en
ts
• Patient illness severity is roughly the same in the community practice setting as the HOPD setting across these 3 tumor types
Charls
on c
omor
bidity
inde
x
# of
uniq
ue d
iagno
ses
# of
uniq
ue p
resc
riptio
ns0
5
10
Patient Severity in Select Tumor Types1
Office HOPD
Sc
ore
/Nu
mb
er
• Slightly more females than males are treated in the HOPD compared to community practices
• The mean age of patients in the community practice setting is slightly higher than in the HOPD setting (58.7 years vs 56.9 years, respectively)
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The Value of Community Oncology
• Three separate analyses of managed care claims in commercial and Medicare populations demonstrate that patients managed in a community office setting cost less than patients managed in a hospital-based outpatient setting1-3
– The difference in cost varies for individual tumor types; however, the data suggest that this applies to breast, lung, and colorectal cancer3
• Evidence suggests that patients managed in a community office setting have lower hospitalization rates than patients managed in a hospital-based outpatient setting
• The majority of common breast, colorectal, and lung cancer chemotherapy-specific costs are lower for patients managed in a community setting
Patients managed in an office-based
setting are less costly than those
managed in hospital outpatient
settings
1. Avalere Health Analysis Report of National Association of Managed Care Physicians member data. Total cost of cancer care by site of service: physician office vs outpatient hospital. March 2012.
2. Fitch K, Pyenson B. Site of service cost differences for Medicare patients receiving chemotherapy. Milliman Client Report. 2011.
3. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
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Analysis of 4 large commercial health plans reveals that patients who are managed in an office setting are 24% less costly than hospital-managed patients for common cancer types1
1. Avalere Health Analysis Report of National Association of Managed Care Physicians member data. Total cost of cancer care by site of service: physician office vs outpatient hospital. March 2012.
Types of cancer
Office-managed episodes
HOPD-managed episodes %
difference in average
episode cost
# of episodes
Average episode
cost
# of episodes
Average episode
cost
Prostate 3,503 $21,299 394 $25,504 19.7%
Genitourinary system
3,152 $8,960 655 $19,592 118.7%
Breast 2,252 $30,072 860 $33,391 11.0%
Lung 3,036 $32,913 1,239 $32,382 -1.6%
Colon 973 $45,997 233 $46,220 0.5%
Digestive system
688 $30,018 266 $30,044 0.1%
Leukemia 581 $39,008 350 $43,508 11.5%
Hodgkin’s/ lymphoma
2,131 $39,080 902 $42,537 8.8%
Office-managed chemotherapy
HOPD-managed chemotherapy
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$28,200
$35,000
Average Cost of Chemo-therapy for Most Common
Cancer Types
24% Differ-ence
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There was a 114% difference in the average cost of episodes for office-managed patients ($26,800) vs HOPD-managed patients ($57,400) over 9 months1
1. Avalere Health Analysis Report of National Association of Managed Care Physicians member data. Total cost of cancer care by site of service: physician office vs outpatient hospital. March 2012.
Length of episode in
months
Office-managed episodes HOPD-managed episodes% difference in average
episode costs# of episodesAverage
episode cost# of episodes
Average episode cost
1 4,601 $7,350 1,784 $9,903 34.7%
3 2,502 $19,238 1,091 $24,592 27.8%
5 1,601 $26,979 481 $40,677 50.8%
7 1,091 $26,395 268 $40,879 54.9%
9 734 $26,794 127 $57,384 114.2%
11 302 $47,468 69 $63,366 33.5%
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In a Medicare population, office-managed patients cost $6,500 less per year than hospital-managed patients
1. Fitch K, Pyenson B. Site of service cost differences for Medicare patients receiving chemotherapy. Milliman Client Report. 2011.
Office-managed chemotherapy HOPD-managed chemotherapy$44,000
$46,000
$48,000
$50,000
$52,000
$54,000
$56,000
$47,500
$54,000
Annual cost per patient
$6,500 Difference
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Hospital-managed patients with breast, colorectal, and lung cancer were more costly than community-managed patients1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
Breast Colorectal Lung$0
$5,000
$10,000
$15,000
$20,000
$25,000
$8,344
$11,599$10,272
$12,318
$19,136
$13,577
Mean Chemotherapy Costs – All RegimensCommunityHospital
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Breast cancer patients managed in a hospital-based setting are more costly in all treatment categories1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$9,403
$2,504
$15,545
$2,348
$7,668
$4,831
$10,593
$13,149
$3,052
$20,236
$3,899
$18,493
$12,860
$14,474
Breast Cancer Treatment Costs Community
Hospital
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Colorectal cancer patients managed in a hospital-based setting are more costly in all treatment categories except bone metastasis agents1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$10,345
$1,870
$16,214
$11,644
$5,471
$14,517$15,902
$330
$32,010
$15,033
$5,552
$73,920
Colorectal Cancer Treatment Costs Community
Hospital
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Lung cancer patients managed in a hospital-based setting are more costly in most treatment categories1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$9,580
$4,131
$14,891
$9,565
$13,391 $13,505$13,632
$6,051
$15,050$14,693
$30,665
$12,644
Lung Cancer Treatment Costs Community
Hospital
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In the same analysis, office-managed patients also had fewer hospitalizations during chemotherapy
• An analysis of 3 years of commercial health plan data reveals that oncology patients treated in an HOPD have higher hospitalization rates
1. Avalere Health Analysis Report of National Association of Managed Care Physicians member data. Total cost of cancer care by site of service: physician office vs outpatient hospital. March 2012.
Office-managed
11 out of every 100 patients had at least 1 hospitalization during the chemotherapy
episode
HOPD-managed
14 out of every 100 patients had at least 1 hospitalization during the chemotherapy
episode
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The majority of common breast, colorectal, and lung cancer chemotherapy-specific costs are lower for patients managed in a community setting1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
CTX + DOXO CTX + DTX ZA CTX + DOXO + DTX CPL + DTX + trastuzumab
$0
$5,000
$10,000
$15,000
$2,267 $4,460$909
$5,482$10,518
$1,291
$6,615
$1,033
$7,828
$13,754Breast Cancer Mean Chemotherapy-specific Costs
5-FU + LV + OX 5-FU BEV + 5-FU+ LV + OX 5-FU + LV OX$0
$20,000
$40,000
$60,000
$6,922$824
$13,204 $792 $5,474$5,544 $4,169
$41,482
$534 $5,133
Colorectal Cancer Mean Chemotherapy-specific Costs
PL + PTX/ETO PL + DTX BEV+ PL + PTX/ETO PL + GC PL + VNR/TPT$0
$5,000
$10,000
$15,000
$1,618$4,165
$8,725
$3,111 $1,637$2,901
$8,781
$14,002
$8,869
$1,377
Lung Cancer Mean Chemotherapy-specific Costs
Key: CPL – carboplatin, CTX – cyclophosphamide, DOXO – doxorubicin, DTX – docetaxel, ZA – zoledronic acid
Key: CPL – 5-FU – fluorouracil, BEV- bevacizumab, LV – leucovorin, OX - oxaliplatin
Key: BEV- bevacizumab, DTX – docetaxel, ETO – etoposide, GC – gemcitabine, PL – platinum, PTX – paclitaxel, TPT – topotecan, VNR - vinorelbine
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HOPD costs are 40% to 54% higher than community practices for patients receiving non-targeted chemotherapy in breast, lung and colorectal cancers. This is primarily driven by physician costs being 89% to 1242% higher in HOPD vs community1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
Community Hospital$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Breast Cancer Non-targeted Chemother-
apy Combinations
Community Hospital$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Lung Cancer Non-targeted Chemother-
apy Combinations
Community Hospital$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Colorectal Cancer Non-targeted Chemotherapy
Combinations
$9,403
$13,149
$10,345
$15,902
$9,580
$13,632
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HOPD costs are 30% to 97% higher than community practices for patients receiving targeted chemotherapy in breast and colorectal cancers; however, lung cancer costs are comparable1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
Community Hospital$0
$5,000
$10,000
$15,000
$20,000
$25,000
Breast Cancer Targeted Chemotherapy
Community Hospital$0
$5,000
$10,000
$15,000
$20,000
Lung Cancer Targeted Chemotherapy
Community Hospital$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
Colorectal Cancer Targeted Chemother-
apy
$15,545
$20,236
$16,214
$32,010
$14,891 $15,050
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The Value of Community Oncology
Care provided in community office-based settings is more accessible
and less costly for patients
• Patient out-of-pocket amounts are higher for patients managed in an HOPD setting
• Most common chemotherapy regimens for breast, colorectal, and lung cancers are associated with lower patient out-of-pocket payments in a community office setting
• When patients receive care in an HOPD setting, they are more likely to wait longer for their first chemotherapy treatment
• Patients in rural areas are more likely to visit community office practices, indicating that community care is more accessible to these populations
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In a Medicare population, patient out-of-pocket amounts are 10% higher for patients receiving chemotherapy in hospital outpatient settings1
1. Fitch K, Pyenson B. Site of service cost differences for Medicare patients receiving chemotherapy. Milliman Client Report. 2011.
2. Neumann P, Palmer J, Nadler E, et al. Cancer therapy costs influence treatment: a national survey of oncologists. Health Affairs. 2010;29(1):196-202.
84% of oncologists say that patients’
out-of-pocket spending influences
treatment recommendations2
Cancer Type Office-managed Chemotherapy
Hospital-managed Chemotherapy
Breast $759 $814
Colon $938 $975
Lung $852 $847
Rectal $690 $800
All cancers $700 $773
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With respect to common breast, colorectal, and lung chemotherapy regimens, most patient out-of-pocket costs are higher for hospital outpatient-managed patients1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
CTX + DOXO CTX + DTX ZA CTA + DOXO + DTX CPL + DTX + trastuzumab
$0
$10,000
$224 $561 $310 $344 $571$116$2,305
$176 $725
$5,376
Mean Patient Out-of-Pocket Costs for Breast Cancer Chemotherapy Regimens
5-FU + LV + oxaliplatin 5-FU BEV + 5-FU+ LV + OX 5-FU + LV OX$0
$10,000
$829 $159 $1,051 $120 $1,087$958 $0 $95 $6$1,642
Mean Patient Out-of-Pocket Costs for Colorectal Cancer Chemotherapy Regimens
PL + PTX/ETO PL + DTX BEV + PL + PTX/ETO PL + GC PL + VNR/TPT$0
$10,000
$496 $718$2,466
$471 $441$288
$5,347
$8,342
$1,781$3,270
Mean Patient Out-of-Pocket Costs for Lung Cancer Chemotherapy Regimens
Key: CPL – carboplatin, CTX – cyclophosphamide, DOXO – doxorubicin, DTX – docetaxel, ZA – zoledronic acid
Key: CPL – 5-FU – fluorouracil, BEV- bevacizumab, LV – leucovorin, OX - oxaliplatin
Key: BEV- bevacizumab, DTX – docetaxel, ETO – etoposide, GC – gemcitabine, PL – platinum, PTX – paclitaxel, TPT – topotecan, VNR - vinorelbine
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Access to community clinics is vital for patients in rural areas and Medicare beneficiaries without supplemental insurance1
1. Shea AM, Curtis LH, Hammill BG, et al. Association between the Medicare Modernization Act of 2003 and patient wait times and travel distance for chemotherapy. JAMA. 2008;300(2):189-196.
Location of first chemotherapy course, n (%)
Patients in rural areasn=188
Medicare beneficiaries without supplemental insurance
n=66
Hospital infusion center/clinic 42 (22.3) 14 (21.2)
Hospital inpatient facility 21 (11.2) 6 (9.1)
Infusion center affiliated with private oncology practice 60 (31.9) 21 (31.8)
Private doctor’s clinic 56 (29.8) 22 (33.3)
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The Value of Community Oncology
Patients in community
settings utilize more generics and
less brand therapies, which result in savings
for payers
• Breast, colorectal, and lung patients managed in a community setting are prescribed generic chemotherapy more frequently
• The maturing oncology portfolio will bring savings through competition and higher generic utilization in a community setting
• Breast, colorectal, and lung patients managed in a hospital setting are prescribed brand treatments more frequently
• An active pipeline creates more opportunity for payers to adopt aggressive management policies for hospital-based providers with high brand utilization
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Breast, colorectal, and lung patients managed in a community setting are prescribed generic chemotherapy more frequently1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
Breast Colorectal Lung0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
67% 68%
77%
57% 58%
72%
Proportion of Patients Prescribed Generic Chemotherapy Only
Community
Hospital
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The maturing oncology portfolio will bring savings through competition and higher generic utilization in a community setting
2023Thalomid
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 202340
50
60
70
80
90
100
110
120
Gen
eric
/Pat
ent
Exp
irat
ion
2005Duragesic Transdermal Sandostatin
2006Zofran
2007KytrilGemzar
2008FemaraCamptosarFosamax
2011EtopophosXelodaAromasin FemaraAnzemetIstodaxPlavixAvonexNeumega
2012EloxatinEnbrelVidaza
2013NeupogenZometaXelodaTaxotereTemodarDacogenEpogenProcritRemicade
2014RemicadeLeukineRapamuneEvistaXeloda
2015EpogenAranespRituxanEpogenProcritGleevecAloxiNeulastaPeg-IntronEmend oralAlimta
2017NeulastaSandostatinVelcadeTysabriIressaVelcadeXolair
2018TarcevaAvastinHerceptinClolar
2019RevlimidZytigaExjadeBonivaOrencia
2020NexavarTykerbRevlimidVectibixSprycel
2021SutentSoliris
Generic Introduced Patent Expiration
2016EnbrelErbituxZevalinElitekHumiraPrialt
185% incre
ase in ava
ilable
generics/b
iosimila
rs
By 2020, there will be a robust portfolio of generic and biosimilar treatments
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Breast, colorectal, and lung patients managed in a hospital setting are prescribed brand treatments more frequently1
1. Xcenda, data on file. Site of Care Claims Analysis. September 2012.
Breast Colorectal Lung0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
32% 32%
23%
43% 42%
28%
Proportion of Patients Prescribed Any Branded Chemotherapy
Community
Hospital
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An active pipeline creates more opportunity for payers to adopt aggressive management policies for hospital-based providers with high brand utilization
• The presence of numerous treatment options gives payers the opportunity to adopt more aggressive management policies by leveraging competitive market dynamics
Unspecified cancersOther cancers
Cancer-related conditionsStomach cancer
Solid tumorsSkin cancer
SarcomaProstate cancer
Pancreatic cancerOvarian cancer
Multiple myelomaLymphoma
Lung cancerLiver cancer
LeukemiaKidney cancer
Head/neck cancerColorectal cancer
Cervical cancerBreast cancerBrain cancer
Bladder cancer
0 50 100 150 200 250
78
98
32
24
240
65
21
80
41
49
49
97
98
31
108
31
21
55
9
91
52
14
Nearly 900 drugs in de-velopment for cancer
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The Value of Community Oncology
Community practices are more
willing to participate in pay-for-quality pathway programs, which will translate into
improved outcomes and
savings for payers
• Evidence demonstrates community oncology practices are more likely to participate in pathways or pay-for-quality programs
• Pathway programs result in reduced costs of cancer care by reducing the rate of both drug and nondrug expenses
• High community practice participation rates in pathways programs creates an opportunity for payers to improve care and reduce costs
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An opportunity exists for payers to leverage community oncology practices’ willingness to participate in pay-for-quality pathway programs
• Evidence demonstrates community oncology practices are more likely to participate in pathways or pay-for-quality programs1
– In a study where 362 oncology practices were eligible for participation, the highest participation rate was observed in community oncology practices1
– In a related study, the pathway program resulted in reduced costs of cancer care by reducing the rate of both drug and nondrug expenses2
– Total savings, factoring out the increased fee schedule for participating practices, was estimated at $8,585,1482
• Furthermore, pilot pathways programs suggest that the saliency of pay-for-quality incentives in academic and hospital settings should be further studied1
1. Fortner BV, Wong W, Olson T, et al. Year one evaluation of participation and compliance in regional pay for quality (P4Q) oncology program. Poster presented at: International Society for Pharmacoeconomics and Outcomes Research; Atlanta, GA: May 15–19, 2010.
2. Scott JA, Wong W, Olson T, et al. Year one evaluation of regional pay for quality (P4Q) oncology program. J Clin Oncology. 2010;28(Supl 15):6013.
Overall Community participants
Hospital-based
participants
Academic participants
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
49%
88%
44%
6%
Participation in Pay-for-Quality Pathways by Practice Type (n=362
practices)
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The Value of Community Oncology
• Three separate analyses of managed care claims in commercial and Medicare populations demonstrate that patients managed in a community office setting cost less than patients managed in a hospital-based outpatient setting
• Patients managed in a community office setting have lower hospitalization rates than patients managed in a hospital-based outpatient setting
• The majority of common breast, colorectal, and lung cancer chemotherapy-specific costs are lower for patients managed in a community setting
Patients managed in an office-based setting are less costly than those managed
in hospital outpatient settings
• Patient out-of-pocket amounts are higher for patients managed in an HOPD setting
• Most common chemotherapy regimens for breast, colorectal, and lung cancer are associated with lower patient out-of-pocket payments in a community office setting
• When patients receive care in an HOPD setting, they are more likely to wait longer for their first chemotherapy treatment
• Patients in rural areas and Medicare patients without supplemental insurance are more likely to visit community office practices, indicating that community care is more accessible to these populations
Care provided in a community office-based
setting is more accessible and less costly for patients
• Breast, colorectal, and lung patients managed in a community setting are prescribed generic chemotherapy more frequently
• The maturing oncology portfolio will bring savings through competition and higher generic utilization in a community setting
• Breast, colorectal, and lung patients managed in a hospital setting are prescribed brand treatments more frequently
• An active pipeline creates more opportunity for payers to adopt aggressive management policies for hospital-based providers with high brand utilization
Patients in community settings utilize more
generics and less brand therapies, which results in
savings for payers
• Evidence demonstrates community oncology practices are more likely to participate in pathways or pay-for-quality programs
• Pathway programs result in reduced costs of cancer care by reducing the rate of both drug and nondrug expenses
• High community practice participation rates in pathways programs creates an opportunity for payers to improve care and reduce costs
Community practices are more willing to participate in
pay-for-quality pathway programs, which will translate into improve outcomes and
savings for payers
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Recommendations
• Know your audience: – The value messages (as described on the previous slide) are likely to resonate best
with small to mid-size payers
• Educate on cost and quality outcomes in the community setting compared to the HOPD setting
• Smaller payers are likely more in touch with the local providers already, and therefore likely need less convincing; mid-size payers are likely to need the most education and persuading
• Understand the hospital contracts and other drivers for large plans before approaching with these messages and tailor them accordingly
• Generate and publish outcomes data to complete the value equation:– While it has been demonstrated that community practices are more likely to follow and
participate in pay-for-quality programs, the outcomes of those initiatives have not been widely analyzed and published – more data generation and publication on outcomes are needed